Filed Monday in federal court in the District, the suit also names a competing developer and Metro as defendants and seeks $100 million in compensatory damages.
The development, dubbed “The Jazz,” was to be built on Florida Avenue NW and was to include 103 residential units and about 12,000 square feet of retail.
According to investigations, Graham told Banneker representatives in 2008 that he would support their bid to run the D.C. Lottery if the firm dropped out of the competition. Graham favored another developer — LaKritz Adler of the District, which is also named as a defendant in the lawsuit.
Joshua A. Adler and Robb M. LaKritz, the founders and managing partners of the firm, did not return phone calls and e-mails seeking comment. Metro spokesman Dan Stessel said in an e-mail Tuesday that the transit agency does not comment on pending lawsuits.
Graham, who left the Metro board in 2010, said in a statement released by his office that Banneker’s lawsuit is “the latest chapter in their saga of failure to produce results.” Banneker’s accusations, the statement said, are “spurious and wholly unfounded.”
In the lawsuit, Banneker alleges that Graham “unlawfully, maliciously and purposefully interfered” with the company’s attempts to negotiate a deal with Metro to develop the land. Banneker accuses Metro of breach of contract, calling the transit agency’s actions “calculated and not inadvertent, flagrant.”
Banneker said it paid Metro a deposit and fees totaling $200,000 and spent money on architectural and engineering work and legal services to try to develop the project. It alleges in several counts breach of contract and fraud.
The lawsuit also lays out details of e-mails among Graham, the two developers, and Metro real estate and development officials.
The suit also describes a lunch meeting Graham held at his “favorite restaurant,” TenPenh, with Omar Karim, the principal owner of Banneker, at which the council member allegedly told Karim that he needed “to add LaKritz Adler” to the development team for the deal to be approved.
“There was a great deal of expense and effort put into place over two years to do this deal,” said Brian K. McDaniel, an attorney for Banneker. “They feel they’ve not been treated fairly. They feel Graham, [Metro] and the board didn’t negotiate in good faith.”
He said Banneker’s deal with Metro ended after the board voted to table its negotiations with the company in March 2010. In 2011, Metro sold the Florida Avenue property to JBG for $10.2 million.