One of the things unique to Saint John compared to many other cities in North America is the Saint John Throughway and a lack of any by-pass highways in the urban area. Compared locally to Moncton, Fredericton or Halifax, all through-traffic (visitors, overnighters, trucking, etc.) must and does go through the downtown core. This has many advantages for the city in terms of what is developed and where given proximity to downtown.
Considering the Denny's debate, I think an ideal location would be attached to one of the two hotels on Main Street just adjacent to Uptown. It would service the needs of these hotels and be central enough for multiple consumers to easily access it. Better yet, a new hotel along Main Street or next to TD Station and the highway would be even better.
But I don't think it should stop there. The city should look at attracting more off-highway employment through hotel/restaurant chains focused on this corridor to increase and centralize traffic from the east and west. Compared to Moncton, which has clusters all around its downtown along the TCH (Magnetic Hill, the Airport, Mapleton, etc), Saint John could focus development of these "destination" retail and hospitality developments exclusively within the area between Rothesay Avenue through to Catherwood, with the Main Street area being an ideal area for adding more density to service through-travellers. Think the same sprawl, but in a more dense/urban construct.
Now before everyone yells "but what about the small businesses in Uptown????" hear me out.
The addition of more capacity will draw more people into the core, and not everyone is a Denny's, IHOP, or Burger King only consumer. The more centralized the focus on these developments, the more people it attracts. The more people, the more foot and vehicle traffic to support more independent and small businesses. So, by strategically placing these closer to the core it only enhances it as a destination and benefits the current growth focus on the Uptown and CBD.
Look at Moncton's downtown core. Recent stories of drug issues, lack of customers, and more as suburban developments make the centre of the city a potential ghost town are becoming more and more frequent. Saint John has a unique geographic and road infrastructure scenario it could seriously use to its advantage compared to most cities in North America. I hope that they take advantage of that!