New Castle County is suing for property damages it says occurred during the company’s control of the facility. Photo by Kyle Grantham.
New Castle County is suing Hersha Hospitality Management for damages in the high hundreds of thousands of dollars, claiming they occurred during its control of the Hope Center.
A lawsuit filed Monday in Delaware Superior Court seeks compensation for the damages caused by Hersha’s breach of its property management agreement.
“New Castle County is fully committed to ensuring the health, safety and well-being of the Hope Center’s residents and staff,” said County Executive Matt Meyer, who this week won the Democratic nomination for governor.
“This lawsuit is not only fighting for the residents of the Hope Center, who deserve better, but also for the money of our taxpayers,” he said.
In December 2020, the county hired Hersha, who usually manages hotels, to operate the Hope Center, a former Sheraton Hotel with a long and colorful history that sits along Interstate 95.
Hersha Hospitality Trust is the company that sold the hotel to the county for $20 million in late 2020. The county used some of its share of federal CARES Act funding.
Two weeks later, it reopened the 192-room hotel as a temporary emergency shelter to protect homeless state residents from winter weather and the coronavirus.
The Hope Center now houses almost 400 people every night, while also providing comprehensive onsite services, the county lawsuit said.
“As the hotel industry recovered from the COVID-19 pandemic, the Hope Center became an afterthought for Hersha,” the lawsuit says. “By 2023, Hersha was no longer focused on taking care of the Hope Center and making certain that ordinary maintenance and repairs were being done in a timely fashion.”
Efforts were unsuccessful to reach Hersha for comment Friday.
Agreement with Hersha
Under the management agreement, Hersha was responsible for hiring staff, conducting routine maintenance and repairs, and overseeing refurbishments, the lawsuit says.
However, the county contends in the lawsuit that Hersha failed to fulfill these obligations, resulting in significant damage to the building.
Despite the agreement stipulating that Hersha would cover the costs of damages caused by its negligence, the company has refused to do so.
One example cited by the county is two flooding events in late 2023 caused by a Hersha maintenance worker’s incompetence that caused hundreds of thousands of dollars of damage. Despite complaints, Hersha didn’t fire the worker.
The company also didn’t hire a chief engineer to oversee the complicated repairs and routine maintenance.
In 2023 and 2024, there were four flooding events, the lawsuit said.
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The County said Friday it had hired industrial hygienist Dr. Joseph Cocciardi from Pennoni Associates Inc., to conduct extensive testing of the building.
Cocciardi has confirmed that the building poses no threat to its occupants, the county said in a press release.
While the legal proceedings are ongoing, the Hope Center will continue its operations without interruption.
The county has also initiated an extensive cleaning of the facility to address any potential concerns.
RELATED STORY: New Castle County to manage Hope Center
New Castle County took over management of the facility from Hersha earlier this year.
The lawsuit said that the county then discovered Hersha had failed to identify ongoing water intrusion and moisture issues that had led to significant property damage that may
cost the County in excess of a million dollars to repair and fix.
At the time, a county spokesman said that Hersha was the right company to start managing the facility, but not the right one to lead it into the future.
The Hope Center showed up in several campaigns during primary season, including Meyer’s.
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