In the Lyons' den: From commercial to retail to residential, how one family has changed the Phoenix landscape … – Phoenix Business Journal

The Valley has a long history of some of the country’s best hotels, premier shopping malls and multi-million-dollar homes.
Much of it is thanks to one family.
The Lyon family was at the forefront of transforming the Valley into what it is today through development and real estate, dating back to the end of World War II, when Russ Lyon moved here and got his real estate license.
His sons Dennis and Rusty carried on the legacy, not only helping to establish Paradise Valley’s reputation as an enclave for the wealthy, but creating the Valley’s first shopping malls as well, some of which were the largest in the country at the time they opened.
“Honestly, he was a role model. He cared about all of us and he knew all of us,” said Jack Rasor, a former Westcor partner and current partner at WDP Partners. “It was more of a family than a company.”
Russ Lyon’s grandsons carry on the family’s work today, with Jim Lyon keeping its real estate business more profitable than ever, and Scott Lyon extending the family’s business into hotels, where he and his company are behind some of the Valley’s most upscale resorts and vacation spots.
“We’re embedded in the community. We’ve seen Phoenix grow from the size of Scottsdale to what it is today,” said Scott Lyon. “Just being in this family has opened up so many opportunities, but that’s just the nature of Phoenix, and it’s grown tremendously.”
This is the Valley of the Sun, but the Phoenix metro area and what it has become is in many ways the Lyon’s den.
“There is a quote about great leaders, (though I am) not sure who said it first: ‘You manage things, you lead people.’ Rusty and Dennis did both exceptionally well,” said Mark Stapp, director of Master of Real Estate Development at Arizona State University’s W.P. Carey School of Business.
“They also lead their community and their respective industries through action and giving. Selfless, kind, smart, thoughtful and ethical. They both left more than they gained and we see it all over metro Phoenix. There is no better reflection of Rusty than his son Scott, who, like his dad, is passionate about what he does, pays attention to detail, treats everyone equally and with kindness, will only do the right thing and is a good businessman,” he said.
Building a home
Russ Lyon didn’t start out in real estate — he was a band leader who stopped in Phoenix on his way to Los Angeles.
Because the weather was great and the city was still young, he saw opportunity and decided to stay, earning his real estate license and opening Russ Lyon Realty in 1947.
“It was a very small operation,” said Jim Lyon, Russ’ grandson and the company’s chairman. “It started off in a small barn in downtown Phoenix.”
Perhaps it was because of his humble beginnings, but Russ — and his sons — were modest men.
“My grandfather always told me to never judge somebody by the way they look,” Jim Lyons said.
That didn’t stop Russ Lyon from making big deals, selling such palatial digs as the McCune mansion, which was built in the 1960s for Pennzoil heir Walker McCune in Paradise Valley. The home is one of the most well-known in the Valley, and its massive 52,000 square feet makes it one of the largest homes in the U.S., at one time ranking as high as 12th largest.
“If you’ve been around Phoenix long enough, you remember when a huge, well-landscaped billboard at 24th and Camelback had a lion on it advertising Russ Lyon Realty, which was the premier home sales agency in the Valley,” said Grady Gammage Jr., a long-time Valley land-use attorney and partner at Gammage & Burnham in Phoenix. “The Lyon family is really royalty in the Arizona real estate world.”
Russ’ son Dennis took over the real estate practice in 1968 as the company’s president, continuing to dominate the luxury market, primarily in Scottsdale and Paradise Valley, and growing the company to about 350 agents.
Dennis’ son Jim bought the company from his father in 2008, and merged it with Sotheby’s International Realty.
“It was a perfect match for us,” said Jim Lyon. “Russ Lyon is locally renowned, but it didn’t have as much exposure nationally and internationally.”
Now, Russ Lyon Sotheby’s is one of the largest luxury residential brokerages in the Southwest. Jim grew the company to about 1,000 agents and made more than $3.2 billion in sales last year.
The company is now statewide, but is still dedicated to its humble roots — partly because the majority of its market share is in Scottsdale and Paradise Valley.
“It’s amazing to see what we started with and how far we’ve come, but it’s still a family company,” said Jim.
Starting the malls
The Valley’s shopping scene likely would not exist as it does today if it weren’t for Russ Lyon’s son, Rusty.
While his father and brother were dominating the Valley’s residential real estate market, Rusty wanted to branch out.
“My grandfather tried to talk my dad out of getting into development,” said Rusty’s son, Scott. “Grandpa never thought he’d make it.”
But Rusty pursued it, founding Westcor in 1964, and building the Valley’s first major shopping mall, Los Arcos, in south Scottsdale five years later.
Westcor went on to create shopping malls throughout the Valley, such as Metrocenter in west Phoenix, which was the largest shopping mall in the western U.S. in 1973. That mall was built when Rusty was only 41 years old.
“I don’t think there was anyone as influential as him,” said Rusty’s nephew, Bob Williams, a former Westcor partner and current principal at Vintage Partners. “The guy was absolutely a genius and a pioneer. He created an urban village.”
Rusty maintained a humble nature, just like his father.
“He used to say ‘A spouting whale gets harpooned.’ He was a quiet giant, not a Donald Trump with his name on everything,” said Williams. “He came into the office in shorts and treated everyone the same. You checked your ego at the door when you worked at Westcor.”
Despite that humility, Rusty knew a good deal when he saw one, and he wouldn’t let anyone tell him different.
“All of our votes were generally unanimous or we would keep talking and negotiating until they became unanimous, except for once, when none of us wanted to do a particular deal,” said Rasor. “But Rusty did so after lengthy discussion, Rusty finally announced,‘OK, the vote is 8 to 1 against, but the ones have it!’ And of course it turned out to be a great deal.”
Westcor continued its mall developments by taking over Scottsdale Fashion Square in the early 1980s, where Rusty and his company, along with his son Scott, connected the buildings on either side of Goldwater Boulevard and turned it into the Valley’s premiere shopping mall.
“I never would have dreamed it would be the powerhouse it is today,” said Scott Lyon.
Despite that work, Rusty and his eight partners weren’t seeing a profit — a choice they themselves made.
“When the interest rates were low in the ’80s, the Westcor executives didn’t take any pay for two years,” said Williams. “He could have made more money, but that wasn’t important to him.”
The success of Westcor — which developed more than 15 million square feet of retail — led California-based Macerich, the third-largest owner and operator of shopping centers in the country, to acquire it for $1.5 billion in 2002.
“Rusty changed the face of Phoenix after developing Metrocenter and turning Westcor into the most important owner of shopping centers in the Valley,” said Gammage. “Westcor reached its zenith with the acquisition and redevelopment of Scottsdale Fashion Square into one of the best regional malls in America. It’s even possible to trace the origin of the city of Phoenix Village Planning system to the influence of Westcor’s malls.”
Under the Macerich umbrella, Westcor now operates 20 shopping mall properties, two of which are in Colorado.
“To be honest I had no idea what he did, he was just a dad to me. I still marvel at what he accomplished on his own,” said Scott Lyon. “I knew he was in real estate, we grew up in a real estate family, so it seemed normal to me to talk about real estate, but I really didn’t understand in my youth what a pioneer he was at the time. He was a calculated risk taker and incredibly confident, and just a lover of people more so than anything else.”
Moving into hospitality
When Scott Lyon joined Westcor in the 1980s with the improvements of Scottsdale Fashion Square, the company was branching off into hotel development as well, namely with the Boulders Resort & Spa in Carefree — consistently named one of the best resorts in the Southwest.
That experience — as well as the work of his father and the rest of his family — inspired Scott to form his own company, Westroc, with some people he worked with at Westcor in 1998.
The company’s first venture was transforming John Gardiner’s Tennis Ranch into the Sanctuary on Camelback Mountain Resort & Spa in 2000, a project that cost more than $30 million.
“There was nothing in the Phoenix area at that time where there was a contemporary boutique resort,” said Scott. “That really distinguished us from our competitors and led to its early success.”
Renovating historic properties became something of a practice for Westroc. In 2005, the company reopened the Hotel Valley Ho in Scottsdale after an $80 million makeover, and this month, the company is resurrecting Mountain Shadows in Paradise Valley for $75 million.
“It’s not by design. It wasn’t our intention to stick with historic, but as we got involved in Sanctuary, that was unique,” said Scott Lyon. “We said, ‘Let’s search for others like this,’ where we create a designed and affordable experience.”
Westroc is now working on revamping Castle Hot Springs near Lake Pleasant, the state’s first resort.
The first phase of renovations on the property will cost $10 million.
The company now has about 1,000 employees and about 500 guest rooms throughout the state, but Westroc is still very much a family affair.
Scott Lyon is working with his cousin Jim Lyon to market the condominiums at Mountain Shadows, and the resort’s golf lounge will be called Rusty’s, in honor of his father.
“Dad loved the game, and he had a sense of humor we’re trying to capture,” said Scott Lyon. “We want people to come out and enjoy his legacy.”
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