In this paper we address the problem of synthesizing controllers that have to be implemented distributively and have structure. The effect of sub-controller to sub-controller communication noise on stability and performance is considered. Using an observer based controller parameterization, we provide suitable stabilizing sub-controller architectures that directly take into account the effect of communication noise on performance. In particular, the overall performance optimization can be cast as a convex problem in the Youla-Kucera parameter Q. Similar results hold for banded controller structures, i.e., when there is also a delay in the subsystem to subsystem communication.