On November 15, 1994, at 0805 hours mountain standard time, a Thundercolt TC-180 hot air balloon, N738TC, sustained a hard landing on 51st Street, south of the Carefree Freeway, at Peoria, Arizona. The pilot was conducting a local visual flight rules sightseeing balloon flight. The balloon, operated by Joseph Fendler, d.b.a. "A Balloon Experience," sustained substantial damage. The certificated commercial pilot and six passengers were not injured; one passenger sustained serious injuries. Visual meteorological conditions prevailed. The flight originated 20 miles north of downtown Phoenix, Arizona, at 0705 hours. The pilot called the National Transportation Safety Board and reported this accident on November 16, 1994. He said that he obtained a preflight briefing from the Federal Aviation Administration (FAA) Prescott [Arizona] Automated Flight Service Station. He said the briefer told him that the surface winds were forecasted to be between 6 and 7 knots until 0900 hours. After departing on the accident flight, the pilot observed that the upper and surface winds began to increase. The pilot elected to execute a precautionary landing. During the landing, the surface winds were from the north at 15 knots. On the touchdown, the balloon bounced and then landed about 20 yards from the initial touchdown point. The surface winds then dragged the basket about 100 yards before coming to a stop. The pilot said that the balloon operated normally and that he had prepared the passengers and the balloon for a high wind landing. The balloon did not experience any preimpact malfunctions or failures. The pilot also said that the balloon envelope sustained some minor tears. The basket sustained substantial frame and wicker damage. The accident site is about 25 miles north of Phoenix Sky Harbor Airport (PHX), Phoenix, Arizona. PHX reported surface winds at 0756 hours were calm.