$200M W Hotel proposal is dealt a killing blow by ruling; Lawsuit arose in bid to save Sun Merc

[Source: Jahna Berry, Arizona Republic] — A proposed $200 million boutique hotel in downtown Phoenix was on life support, but a judge’s Tuesday ruling has effectively killed the existing deal, the developer said.  Phoenix Suns majority owner Robert Sarver was poised to build a 39-story W Hotel near US Airways Center.  The development would have included an 11-story office and condo tower built on top of a historic 1920s warehouse.

Maricopa County Superior Court Judge Peter Swann ruled that a jury should decide whether the Phoenix City Council had improper talks with Sarver before it decided the fate of the warehouse on the hotel site.  That litigation could drag on for a year or two years on appeal, said Robert Yen, an attorney who represents several groups that want to protect the Sun Mercantile Building, which is considered by many to be the last vestige of Phoenix’s once thriving Chinatown.  “It was a building built by a very prominent Chinese family,” Yen said of the Sun Mercantile.  Back in the 1920s, the property housed a wholesale grocery store owned by Shing Tang, a Chinese immigrant.  The Tang descendents, many of whom still live in Phoenix, include the late Thomas Tang, a former Phoenix City Councilman and federal judge.

The hotel project had another problem, Sarver said Tuesday.  The agreement with Starwood Hotels and Resorts Worldwide Inc.’s W Hotel brand expired because the project didn’t break ground by June 30, he said.  “It’s too bad, because that’s a part of Phoenix that needs development,” Sarver said.

[Click here to download Maricopa County Superior Court Judge Peter Swann’s ruling of September 17, 2007.]

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