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With Hotel Deal Dead, the Lawsuits Begin

PHOENIX-A deal to build a resort adjacent to the state's biggest manmade lake has apparently sunk, but the first of what could be several lawsuits has floated to the surface.

By D.J. Burrough | Updated on September 13, 2000

PHOENIX-A deal to build a big hotel adjacent to Arizona’s largest manmade lake has apparently sunk, but the first of several lawsuits involving the deal has floated to the surface.

Officials in the suburb of Tempe have filed a lawsuit in Maricopa County Superior Court against the proposed project’s developer, Ciudad del Lago, seeking unspecified damages and a termination of the contract. Ciudad del Lago–a consortium of lead developer Belz Enterprises, Peabody Hotel Group and Fluor Daniel Inc.–failed after more than three years to obtain financing to build the $220-million, 1,000-room hotel.

The hotel was to be the centerpiece of a two-mile long lake, Tempe Town Lake, which runs near Downtown Tempe. The Peabody Hotel was eventually expected to create 4,300 jobs and contribute $1.3 million toward the annual operating expenses, the city’s lawsuit says.

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