|By Tom Daykin, Milwaukee Journal
SentinelMcClatchy-Tribune Regional News
Jan. 23, 2013--An architect who did work for The Delafield Hotel is suing the hotel's developer, one of its investors and their attorney, claiming his ownership stake was unfairly eliminated.
James Gray and his Barrington, Ill., firm, Cornice & Rose International LLC, filed the suit in U.S. District Court against Delafield attorney Thomas Aul and his practice, Aul Law Offices; Scott Rookus, whose investment group once owned the boutique hotel; and Robert Lang, the hotel's developer and original owner.
Neither Aul nor Rookus, who operates Rookus Capital Partners LLC, of Grand Rapids, Mich., responded Tuesday to requests for comment. Lang, a Delafield developer whose projects included Erin Hills Golf Course, declined to comment.
Delafield Hotel was created within a former warehouse that Lang had built when he owned Lang Cos., a supplier of calendars, stationery and specialty gifts which he sold in 2003. The 38-room luxury hotel opened in 2006 at 415 Genesee St.
In 2010, the hotel was sold by Lang's investment group, Lang Campus LLC, to 616 Hotel LLC, a Rookus Capital affiliate, for $4.53 million, according to state real estate records.
That sale occurred through a land contract in which the buyer provides a down payment and then makes installment payments to the seller. A land contract is used when a buyer cannot obtain a bank loan to help finance a commercial real estate purchase.
In September, Lang Campus transferred ownership of the hotel to Rock River Property Holdings LLC, an affiliate of Ixonia-based ISB Community Bank, according to state real estate records.
Lang Campus had previously taken back control of the property after the Rookus affiliate defaulted on its installment payments. According to real estate records, the ISB Community Bank affiliate took ownership of the property -- now valued at $3.5 million -- in return for not filing a foreclosure suit against Lang Campus.
Bank President Dan Westrope didn't return a call seeking comment. Meanwhile, Delafield Hotel is still being operated by a separate group, 616 Hospitality Group LLC, according to city tavern license records.
In his lawsuit, Gray claims he found the Delafield Hotel in 2008 as an investment opportunity, and then spoke to Rookus, who joined him in the venture. In 2009, Rookus and Gray's investors group, Delafield LLC, hired Aul to represent them in plans to buy and expand the hotel, the suit says.
Allegedly, Aul later helped transfer all control of the hotel to Rookus without Gray's knowledge or consent, the suit claims.
"The precise actions taken by Aul, Aul Law Offices, Rookus and Lang are unknown," the suit says. But, it says, Gray was stripped of his ownership rights and interests.
Gray also claims that, while Cornice & Rose received $70,000 for some of its work, most of that money was put back into the hotel project "to keep it operating and meet other cash needs." The firm and Gray provided services and funds totaling $284,688, the suit claims.
Aside from the hotel, Lang developed several red brick buildings in a colonial Williamsburg style throughout the 1990s to house Lang Cos., and as investment properties. Some of the space developed by Lang was leased to office and retail tenants, and the buildings helped transform downtown Delafield into a boutique shopping destination.
Lang later sold most of those buildings and opened Erin Hills Golf Course in 2006. Erin Hills, which will host the 2017 U.S. Open, was sold in 2009 to investor Andy Ziegler.
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