This week's Arizona Republic story about moving historic buildings, such as the Morin House on Second Street, had me wondering if the Sun Mercantile building could be transported to another site, settling the W Hotel/Sun Merc controversy once and for all. Unfortunately, there's no such compromise available. In this case, the site of the building is at least as important as the building itself (as the last building standing in Phoenix's second Chinatown), and regardless, the City of Phoenix Historic Preservation office doesn't believe the building would even survive a move.
So we'll continue to wait and see what happens with the ongoing litigation. If I had to bet on the outcome of the lawsuit, I'd guess the city and Suns are going to win. The legal case boils down to whether the city council exhibited an improper bias when it had ex parte contacts with constituents via e-mail, and whether that bias materially affected the outcome of the "case." That's going to be really tough for the Sun Merc plaintiffs to prove, even though their lawyers have done a great job thus far. (The case itself is approaching month number 18, although the city has another motion for summary judgment well in progress).
But looking even further beyond that, is the W Hotel another phantom project? The developer has clearly been content to ride out the litigation and the soft real estate market-- and has not been too interested in a settlement-- not the behavior of a guy who wants to get his project going. At the very least, I wouldn't be too surprised to see the Suns and the city win the lawsuit and the project continue to sit idle.
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The W Hotel by itself would be a "go" but the "residences" are not. The problem here is that there is not much of a market for high-rise condos downtown. The principals in the project kept in close contact with 44 Monroe's sales' staff, and the slow sales on similarly priced units made an impression on them.
As you noted, the lawsuit by itself is largely meaningless. The annex that would "mar" the Sun Merc building is hardly that critical to the project. But it does serve as a fig leaf of sorts since Sarver and company can blame it and not the market for their failure to move forward.
The downtown market is not deep enough to support more than a few high-rise condo buildings. Moreover, the deflating housing bubble ensures that it will be several years before the next project breaks ground. It is too bad about the W, however. Had it been announced year earlier, it would probably be nearing completion by by 2008.
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