A Des Moines developer claims it was forced to stop work on a residential construction project in southeast Des Moines after Legacy Bank terminated a loan.

DRC Land and Development LLC said in a lawsuit filed in Polk County District Court that Legacy agreed to loan $974,000 in March 2007 to purchase land and develop the site of the Palms. Legacy also provided $240,000 for excavation and other site preparation work, the lawsuit said.

Grading and other site preparation began in July 2007, but after three months, the bank terminated the loan, according to the lawsuit, and all work came to a halt.

In addition, Legacy asked for a $2.5 million mortgage on the property, according to the suit.

After financing came to a halt, Legacy told the developer that it was relying on another lender to help fund the project, that the other lender withdrew its commitment and that Legacy had reached its lending capacity for the project.