Officials in the suburb of Tempe have filed a lawsuit inMaricopa County Superior Court against the proposed project'sdeveloper, Ciudad del Lago, seeking unspecified damages and atermination of the contract. Ciudad del Lago--a consortium of leaddeveloper Belz Enterprises, Peabody Hotel Group and Fluor DanielInc.--failed after more than three years to obtain financing tobuild 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 Hotelwas eventually expected to create 4,300 jobs and contribute $1.3million toward the annual operating expenses, the city's lawsuitsays.

An attorney representing lead developer Marty Belz says he plansto file a multimillion-dollar lawsuit against Tempe for terminatingthe agreement. Belz had sought a $40-million settlement from tempeto walk away from the project, but Tempe declined the proposal.