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Landmark day • Saturday, October 1, 1988

October 1988: The Phoenician Opens

A savings-and-loan tycoon opens the most expensive resort in Arizona history on the ruins of two old inns — a year before the government seizes it.

Illustrated plaque for October 1, 1988 in Scottsdale history OCTOBER 1 1988 THE RESORT METROPOLIS

What happened

The Phoenician opened in October 1988 on 250 acres below Camelback Mountain, assembled by financier Charles Keating's American Continental Corporation from the grounds of the 1926 Jokake Inn and the 1946 Paradise Inn. Built at a reported cost of roughly a quarter-billion dollars and financed largely through Keating's Lincoln Savings and Loan, it featured Italian marble, crystal chandeliers, a mother-of-pearl-tiled pool, and a 27-hole golf course. The Jokake's 1936 bell towers were kept on the lawn.

Why it matters

The Phoenician set the ceiling for Scottsdale luxury and, after Lincoln Savings collapsed in 1989 in the nation's biggest S&L failure, became the era's symbol of borrowed money — seized by regulators, run by the government, and eventually refinanced into the city's definitive luxury resort.

Two old inns and a very large check

The land had been resort ground for sixty years. Painter Jessie Benton Evans’s family had opened the Jokake Inn as a tearoom in 1926 and grown it into one of winter Scottsdale’s defining addresses, its twin adobe bell towers going up in 1936; the Paradise Inn opened beside it in 1946 for the postwar trade. By the mid-1980s both were aging, and Charles Keating — a Cincinnati lawyer turned Phoenix developer whose American Continental Corporation owned Lincoln Savings and Loan of California — bought them and the parcels around them for something no one in the Valley had attempted: a resort that would out-luxury anything between Palm Springs and Dallas.

He spent accordingly. The Phoenician’s budget ran toward a quarter-billion dollars, lavished on Italian marble, crystal, gold leaf, a pool tiled in mother-of-pearl, a 27-hole golf course, and a private art collection, all arranged up the slope of Camelback so that every room faced the mountain. The Jokake’s bell towers were the one thing preserved, left standing on the lawn as a nod to what had been there. In October 1988 the resort opened, and the Valley’s papers ran out of adjectives.

The bill

The money was not entirely Keating’s. Lincoln Savings had poured depositors’ funds into American Continental’s ventures, the Phoenician among them, and in April 1989 the thrift collapsed in what was then the largest savings-and-loan failure in American history — a scandal that reached the U.S. Senate through the “Keating Five” and sent Keating to prison. Federal regulators seized the resort within a year of its opening and ran it for years before it was refinanced under new owners. The most opulent hotel in Arizona spent its infancy as government property.

It survived its origin story. Under Starwood and then Marriott’s Luxury Collection the Phoenician matured into Scottsdale’s definitive luxury resort, renovated top to bottom in the late 2010s, the scandal laundered into legend. Its full history is in the resort guide; the rest of the year, including Sunday A’Fair’s first season on the Civic Center lawn, is at 1988, and the decade’s resort boom in the 1980s chapter.