Partners in Tru by Hilton hotel project file suit, allege unpaid development fees

Two local businessmen who say they helped secure plans for a new downtown Indianapolis hotel have sued their development partners, alleging their collaborators haven’t paid them for their services in the two-and-a-half years since work on the project began.

Bo Hagood and Harry Kennerk filed a joint lawsuit Aug. 1 in Marion County Superior Court, seeking money they say is owed related to their contributions to the development of the 148-room Tru by Hilton at 601 Russell Ave., a block east of Lucas Oil Stadium. Hagood is the president of Hagood Enterprises Inc. and Kennerk is the managing director of Sperry Van Ness and Sycamore Commercial.

The two men allege the defendants—contractor Neil Burnett and architect Steven Alexander, and their respective firms, Midwest GC LLC and Prince Alexander Architects LLC, along with MWA LLC, an entity created for the project—breached an oral contract, engaged in civil conversion and benefited from unjust enrichment tied to withholding their compensation.

In the suit, Hagood and Kennerk say they “[expended] numerous hours of effort and work” tied to the development of the hotel, beginning in January 2017. The lawsuit states the men reached an oral agreement with Burnett and Alexander in late May 2017 to split the anticipated $1 million development fee evenly, four ways.

Throughout the process, Hagood oversaw the procurement of a hotel brand for the development—which ultimately ended up being the Tru flag—and Kennerk oversaw financing and lined up investors for the project, the suit says. Burnett and his company were retained for construction services, while Alexander and his firm provided architectural services.

In December 2017, Burnett and Alexander formed MWA LLC as the entity under which the hotel development would move forward. It is not clear whether Hagood or Kennerk had financial stakes in the limited-liability company at the time it was created. Both men said they were involved with the project through May 2019, the month ground was broken for the development.

While the six-story building is now under construction—it’s slated to open by early summer 2020 and will be managed by Dora Hospitality—both Hagood and Kennerk claim they haven’t been paid their shares.

According to their complaint, their development partners “failed to compensate [them] in any way for their services,” and have “refused to pay” them for their work.

Alexander, who said he is acting as spokesman for himself and the other defendants, told IBJ that Hagood and Kennerk “had made verbal proposals but never presented written contracts, and therefore no contracts were ever signed” for the men to receive their purported share of the development fee.

In addition to asking the court to award damages for direct compensation—$500,000 total—Hagood and Kennerk asked the court to award punitive damages, attorneys’ fees and “all other appropriate relief.” The filing requests a trial by jury.

An attorney for Alexander and Prince Alexander Architects requested an enlargement of time to respond to the suit, which was granted by Superior Court Judge Kurt Eisgruber. The parties have until Sept. 25 to answer the suit.

An attorney for Hagood and Kennerk did not return a call requesting comment Monday.