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$15 million lawsuit filed over Scott’s Addition hotel

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The Quality Inn & Suites building at 3200 W. Broad St. sold for $5.9 million in September. (BizSense file photo)

RICHMOND, Va. — Claiming one of its big projects is stuck in limbo because of a dispute with a local developer, a Richmond housing nonprofit has sued to regain control of its plan to convert a shuttered Scott’s Addition hotel into income-based apartments.

Better Housing Coalition filed a $15 million lawsuit Friday against Henrico-based Dominion Diversified Real Estate Group, alleging the firm is holding hostage the nonprofit’s plan to redevelop the former Quality Inn & Suites building at 3200 W. Broad St.

BHC claims that Dominion Diversified’s threats to refile a separate and recently withdrawn lawsuit, which alleged the nonprofit stole the idea for the hotel conversion from Dominion Diversified, continues to loom over the project and prevent it from proceeding.

The 60-page suit, filed in Richmond Circuit Court, seeks to recoup damages that BHC chief executive Greta Harris said the organization sustained not only in financial costs but also to its reputation.

“As a nonprofit organization that has served this community for nearly 30 years, beyond our people and the housing that we provide, our most valuable asset is our reputation of doing public good, and that has been questioned because of all of the notoriety of what we think is a completely ridiculous lawsuit that occurred earlier this summer,” Harris said Friday.

“The reason we’re doing this is so that, once and for all, we can resolve the legal issues that are now hovering over this development so we can move forward with what we think is one of the most exciting developments in the region.”

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