The city of Lawrence has taken an important step in holding the developers of The Oread hotel to the terms of a redevelopment agreement that calls for a large percentage of local sales tax collected in the Oread taxing district to be rebated to the developers.

Last week, the city declared the Oread Inn development group to be in default on that agreement because it hadn’t abided by the section requiring mutual assistance in carrying out the agreement and its intent. Hours later, attorneys for Oread Inn declared the city to be in default because it had been withholding tax rebates due to the developer since June. The Oread Inn response also referred to the city’s decision to declare default as “aggressive.”

Many local residents would applaud “aggressive” action on this matter.

It’s a positive sign that the city believes the redevelopment agreement gives it the legal basis to terminate the agreement if it doesn’t receive additional cooperation from the developers. The city specifically has been concerned that Oread Wholesale, which is listed as a tenant of The Oread, has improperly manipulated sales tax data to inflate city rebates on the project. Officials also have been dissatisfied with the response they have received to questions raised in a city audit of the Oread operation.

An attorney for Oread Wholesale responded by calling the city’s process “flawed and improper” and maintained that Oread Inn and Oread Wholesale have “acted with integrity.” An attorney for Oread Inn chastised the city for being unwilling to pursue “discussions” to resolve the situation “and instead wishes to pursue an aggressive agenda that will most likely result in litigation between the parties.”

It’s unclear what kind of “discussions” the attorney was referring to, but the city had spent several weeks trying to obtain information and resolve this matter. Given the city’s history with Thomas Fritzel, who heads Oread Inn, Oread Wholesale and other entities in the Oread district, it’s understandable that officials would be hesitant to try to pursue this situation in an informal manner. The kind of trust it would take to resolve this issue with a handshake simply doesn’t exist between Fritzel and the city.

The legal battlelines on this issue have been drawn. That doesn’t mean this case necessarily will end up in court, but it may set the parameters for productive discussions to resolve this matter without pursuing litigation. If it is confirmed that the developers have sought and received unwarranted or illegal payments, they should be required to repay that overage plus an added sum in recognition of their wrongdoing.

It’s unfortunate this situation has arisen, but, as Interim City Manager Diane Stoddard said in a letter outlining the default declaration, the city has the right “to take those actions necessary to ensure that the terms, provisions and intent of the redevelopment agreement are carried out.”

If that means the city needs to get a little “aggressive” in its pursuit of this case, so be it.