UC Davis' proposed hotel and conference center on campus has come under legal challenge for the second time in two years. And like the first unsuccessful suit that delayed groundbreaking by a year, the latest lawsuit also threatens to delay the project, university officials said Thursday.

John Gabrielli, a Davis attorney and activist, last week filed a legal challenge in Alameda Superior Court against the hotel and conference center slated to be built near the Mondavi Center for the Performing Arts off Interstate 80.

Gabrielli claims university officials are proposing an illegal public subsidy of the project by promising to lease back office space within the building from the private developer who will build and operate it.

His suit claims the university violated state law by not putting the project out to bid a second time after the developer who was initially awarded the contract backed out of the deal. The suit says the project changed significantly from the first awarding of the contract to the second awarding.

"If the university is going to do these kinds of projects, they should follow the rules ... and not subsidize private interests," Gabrielli said. "They shouldn't think of themselves and their mission as being so worthy that they are exempt from the law."

UC Davis officials said they could not comment on the lawsuit because they had not read it. They added that they believe they adhered to all state laws while negotiating the contract with the private development company, University Hospitality Group, which will build and operate the hotel conference center.

University officials are still negotiating with UHG on the ground lease for the project. In November, the UC Regents approved the business terms with the developers, B.B. and Ashok Patel, who are named as principals of UHG, Limited Liability Co. The Patels own and operate a number of hotels and motels in Northern California.

Gabrielli's suit also claims the UHG, LLC is an unincorporated entity that has not been registered with the California Secretary of State.

John Meyer, vice chancellor for resource management and planning, called it a "shame" that the lawsuit had been filed, saying the proposed hotel is estimated to bring in about $300,000 a year in taxes for Yolo County.

When completed, the project would include a 75-room hotel, 75,000-square-foot conference center and a three-story building to house the Graduate School of Management, the University Relations offices and other university offices. The center also would include a pub and a ballroom.

In response to local merchants' concerns, university officials scaled back the project from their original proposal to build a 150-room hotel.

The proposed hotel and conference center survived an earlier legal challenge filed in 2002 by Davis businessman Norm Rogers, who claimed it would drain business from Davis' downtown, creating blight. An Alameda County Superior Court judge rejected that argument, allowing the project to move forward.

University officials were forced to find another developer for the project, though, after developer John Thomas of All Star Investments LLC backed out of the deal, citing that pending lawsuit.

University officials said the first lawsuit delayed the project by about a year. University officials said the new suit could again delay groundbreaking, which had been expected this fall or in spring of 2005.

Gabrielli's attorney is Don Mooney, who also represented the group Stop UCD Biolab Now, which legally challenged the university's proposed biocontainment laboratory. The university lost its bid for the bio lab, so the lawsuit was rendered moot.

Gabrielli described himself as an "interested citizen" who is "trying to maintain the special nature of our town."

He said he hopes his lawsuit will force the university to redo its agreements for the project and engage in "more dialogue about alternatives that might be better."