WATERLOO — A developer is suing the city of Waterloo and Ramada Hotel over his failed attempt to buy and renovate the Five Sullivan Brothers Convention Center.
LK Waterloo filed a lawsuit Wednesday in U.S. District Court in Cedar Rapids against the city and Watermark Hotel Equities, which owns the downtown hotel.
LK Waterloo, headed by Edwin Leslie, of Omaha, Neb., claims it suffered financial damages because the city and Watermark breached deals for LK Waterloo to take over the downtown convention complex.
“It was represented to LK Waterloo that the Waterloo City Council was behind the project,” LK Waterloo claimed in court filings. “Unfortunately, nothing could be further from the truth.
“Members of the Waterloo City Council voted repeatedly against key aspects of the city contracts,” the suit continued. “Furthermore, certain Waterloo City Council members disparaged LK Waterloo and its principals by circulating false information.”
LK Waterloo does not specify an exact dollar amount it seeks but indicated the firm had spent more than $850,000 before the project disintegrated last October.
The Waterloo City Council voted 4-0 on July 17, 2017, to approve an agreement for LK Waterloo’s planned $20 million renovation of the convention center and hotel. The city would donate the convention center, grants and tax incentives to LK Waterloo subject to the developer getting financing and completing the work.
LK Waterloo also had an agreement to operate and acquire the Ramada Hotel from Watermark Hotel Equities. LK Waterloo managed both the hotel and convention center until October 2018, when Watermark and the city both terminated the agreements.
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An architect and food distributor also have pending lawsuits against LK Waterloo for unpaid bills.
Leslie butted heads with former Councilman Tom Lind and current Councilman Bruce Jacobs, who both had questioned the developer’s ability to finance the project and cited a failed hotel venture in Omaha that ended in litigation.
LK Waterloo singled out Jacobs in the suit.
“Bruce Jacobs pressured plaintiff to use the bank he worked for as a local partner despite the obvious conflict of interest,” the suit states. “When plaintiff declined to do business with Mr. Jacobs’ bank, Jacobs acted in his capacity as Waterloo city councilman to frustrate plaintiff’s ability to purchase and operate the hotel and convention center.”
Jacobs, who abstained from voting on any aspects of the LK Waterloo contract, had denied he acted inappropriately when Leslie raised the issue in 2017. Leslie filed a complaint with the Black Hawk County Attorney’s Office against Jacobs, although no action has been taken to date.
The lawsuit also claims the city failed to provide promised parking spaces and building repairs; refused to recognize LK Waterloo’s liquor license; and, along with Watermark, benefited from events booked by LK Waterloo and improvements made to both buildings.
The Courier reached out to the city of Waterloo for comment but received no answer by press time.