Hyatt sees it as an opportunity to renovate and upgrade a big resort in an increasingly important market, Scottsdale/Phoenix. They refer to Scottsdale as a "leisure market" in the release, so it seems like they think a non Hyatt Regency brand is a better fit. At close to 500 rooms, maybe they didn't see something like Andaz or Park Hyatt as feasible - and there is already an Andaz in Scottsdale. So by process of elimination they probably got to Grand Hyatt. Xenia is a big Hyatt partner and probably got some incentives here.

More context here - Hyatt Regency is officially "upper upscale," which puts it in the Hilton / Westin / Sheraton / Marriott / Intercontinental tier. I would agree.

https://www.hyatt.com/development/ourbrands

They also say that Grand Hyatt is "luxury." There are not that many outside of Asia though, so Hyatt probably also sees this as an opportunity to jumpstart the brand as a luxury option for developers