The Oread Hotel, 1200 Oread Ave.

The City of Lawrence will be taking legal action against the developers of The Oread hotel.

In December, the city demanded more than $500,000 from the developers after a city-ordered audit found the development group filed incorrect sales tax returns in order to receive sales tax rebates from the city and the county. The development group has denied those allegations.

After meeting in executive session as part of their meeting Tuesday night, city commissioners unanimously voted to file a lawsuit on behalf of the city regarding The Oread hotel tax district. Commissioners said the lawsuit will be filed on Wednesday. Lawrence businessman Thomas Fritzel leads the development group behind The Oread.

The motion, read by Mayor Mike Amyx, directed “the city’s attorneys to file the appropriate court documents to take action against Oread Inn LLC and related parties.”

Commissioners also voted to direct city staff to release a report Wednesday that the city recently received from the accounting firm of Allen, Gibbs & Houlik concerning The Oread tax district and the redevelopment agreement between the city and Oread Inn LLC.

Commissioners did not comment further beyond making the motions — though Amyx did thank staff for their work — and questions were directed to an attorney the city has hired to handle the matter. The attorney, Bradley Russell, said the lawsuit and report would be filed Wednesday morning but declined to provide further information until that time.