Well, its been confirmed – according to an article in the Arizona Republic – the W Hotel Phoenix is dead.. At least for now.

The hotel was proposed to be built by Sun’s Legacy Partners which is owned by the Phoenix Sun’s owner Robert Sarver, as part of a mixed use development which would contain both a 39 story W Hotel and an 11 story office tower built on top of a historic 1920’s warehouse – preserving the historic structure from being demolished.

Sarver was sued by a preservationist group who argued that Sarver’s company and the City of Phoenix had improper talks giving Sarver the ability to redevelop the historic warehouse. The preservationist committee thought that the city (which owns the historic warehouse) should have given the warehouse to another developer who would have preserved it better, or just redeveloped it themselves.

A Superior Court Judge ruled that the case has to be brought to trial and heard by a Jury – causing the project to be held up at least 6-months to a year.. The killer? The contract with Starwood Hotels had a stipulation that ground had to be broken by July 30th or the contract would expire.

Apparently Sarver is trying to continue with the project and is going through with the trial – but the question is whether Starwood will allow him to build the W once the issues have been resolved.

I don’t think that Starwood would walk away from the project – unless there is another developer who is ready to move on a W Hotel in Phoenix, so I think that there is still a very good chance that the W will be built on that site if the lawsuit is resolved in Sarvers favor.

Phoenix is a huge convention center town, and with the Suns & Diamondbacks located right in downtown, a W Hotel would be great. I know one thing – if the W is or isn’t built, I’m sure Marriott/Schrager’s hotel will, as well as a 1 Hotel, etc.

Its a great market.

andrew@alconic-inc.com

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