(CNN) An Alabama restaurant refused in February to rent an event space to members of a predominantly black fraternity, telling them "we've had problems with your kind before," according to a lawsuit and the fraternity chapter president.

The Cypress Inn calls the discrimination allegations "completely untrue."

In the suit the fraternity says it paid $1,500 last December to reserve a waterfront pavilion at the Cypress Inn for a February 23 gathering. But on February 6, just weeks before the event was scheduled to take place, Cypress Inn canceled the reservation and refunded the deposit.

The chapter's president, Clifton Warren, said he had gone to the restaurant to make final arrangements when a staff member informed him that the event could no longer be held there due to security concerns. The lawsuit alleges the staff member, a white woman, said she hadn't realized Warren's organization was an "all black" group.

According to the lawsuit, Warren said he explained that the group's membership consisted of "African-American professionals and business leaders." He offered to pay for additional security and to assume liability, but the restaurant still refused.

Warren told CNN that the restaurant's owner, Renea Henson, told him, "We've had problems with your kind before."

Restaurant had public safety concerns

In a statement sent to CNN, the Cypress Inn said it does not discriminate but made its decision after consulting with the company that provides its security.

"Our outside security firm recommended against hosting the party because the fraternity was proposing to sell tickets to the public and our security firm strongly recommended against hosting that type party out of concern for public safety," the restaurant said.

The restaurant is located on the Black Warrior River near downtown Tuscaloosa and the University of Alabama.

Attorney: 'This is 2018, and this is just not acceptable'

Warren told CNN that more than 300 people turned out for last year's Kappa Alpha Psi event, and a similar number was expected for this year's bash, billed as " Blackout On The River ."

Kappa Alpha Psi is one of the country's oldest black fraternities and "was born in an environment saturated in racism," according to the national organization's website

The fraternity's Tuscaloosa alumni chapter hosts the annual event to raise funds for its philanthropic efforts, which include donating supplies to elementary schools and funding scholarships to a local college, said Warren, adding that members of his chapter felt "very disheartened" by the Cypress Inn's decision.

"We don't feel that anyone should be discriminated against or taken advantage of because of perceived notions of conduct in the past from any organization," he said. "We want to let the community know that this type of behavior shall not and will not be tolerated by any organization."

His group is now seeking monetary damages, as well as an injunction barring the Cypress Inn from discriminating in the future.

"This is 2018, and this is just not acceptable," said Roderick T. Cooks, an attorney representing the chapter. "There's no place for it, especially here in this state, where sensitivity should be heightened to this kind of thing."

But the Cypress Inn says it's ready to tell its side of the story.

"We look forward to presenting the complete facts to the court," the restaurant said. "We are confident we will prevail."