It sounds like the Madcap will likely become an AMC, so yes, this proposal is from the boom when DMB was looking to tear down most of Centerpoint and replace it with a hotel and condos.

I hadn't ever seen the hotel design, though, and love it. I have always thought that was the perfect spot for a hotel, and a health club available to the public would be a fantastic addition. Retail will always struggle just a bit since that area is the most inward facing plaza in downtown Tempe so several of the spots are almost hidden. Having high rise residential (W6) and mid rise hotel so close would eradicate any issues with visibility.
The height is great, too. The more 10+ buildings around W6, the better. It also looks a bit more upscale, and I really do want to see this area house more than students and seniors, even if it's temporary hotel guests. It's interesting that Whole Foods is coming... Fry's would probably be a better match to the existing demographics and there haven't been many proposals that imply an impending shift.
Having the theatre back will be a great asset, but too bad we can't have both.