RNS) The Episcopal Church will pay a $1.2 million penalty and break a contract with Denver's Adam's Mark Hotel because the hotel chain has been sued for racial discrimination.

The denomination had planned to use more than 1,000 rooms and all of the hotel's meeting rooms during its General Convention this July. About 10,000 people are expected to attend the meeting.

"We were disturbed to learn just prior to Christmas that the United States Department of Justice had filed suit against the hotel chain in federal court in Florida alleging a broad pattern of racial discrimination in providing a variety of guest services," wrote President Bishop Frank T. Griswold and House of Deputies President Pamela P. Chinnis in a joint statement.

They said their subsequent discussions with hotel officials in Denver and at the chain's St. Louis headquarters did not halt their concerns.

"The church is obviously not in a position to assess the merit of the discrimination suit against the hotel chain," they wrote. "Nevertheless, the allegations of the Justice Department and other (RNS) eports from local leaders citing similar problems with the Adam's Mark in Denver led us to recommend ... that the church not go forward with the planned arrangements to use any of the facilities of that hotel at the Denver convention."

The church's Executive Council voted unanimously Monday to no longer use the hotel.

Hotel officials could not be reached Monday,but Andre van Hall, general manager of the Denver hotel, said earlier that he knew the Episcopal Church had some concerns "but we haven't been found guilty of anything."

The church already had booked delegates and meetings in four other downtown hotels, but the Adam's Mark--the largest hotel in Denver--was to be the convention headquarters.

"This is a large, complicated meeting so we will have to find another space," said Jim Solheim, national spokesman for the New York-based denomination.

The Justice Department suit, filed in December, alleged that African-Americans were charged more than other guests, given less desirable rooms and required to wear identifying bracelets while at the chain's Daytona Beach, Fla., hotel.

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