Before you all get your hopes up... this project is already dead.
I got a chance to speak with the Project Lead Architect for the AC hotel. PEG development had initially planned to construct a multiuse residential and hotel tower on the base of the cascade (as can be seen in the photo). However, because of the parking garage entrance, the lobby was too small to accommodate both the residential and Hotel portions, and would have required extensive rebuilding of the elevator bays to accomadate this. Thus, the AC hotel moved to its current location.
According to him, PEG and City Creek have no plans to develop the cascade site. If it were to be developed, it would have to be entirely residential, hotel, or other. It’s layout and design makes it difficult and expensive to become mixed use.