The city of Corpus Christi will pay $450,000 to settle a lawsuit filed by a hotel developer nearly two years ago, which had sought to invalidate a competitor’s tax incentive agreement.
The $450,000 that
will be paid to Ajit David is for attorney’s fees.
The move was supported in a five-vote majority, with City Councilman Everett Roy not in attendance of the meeting, Mayor Paulette Guajardo on suspension and Mark Scott and Roland Barrera voting in dissent.
Voting in favor were City Council members Carolyn Vaughn, Gil Hernandez, Eric Cantu, Sylvia Campos and Kaylynn Paxson.
David’s lawsuit against the city and later the mayor had been filed based on assertions that Elevate QOF LLC, a company constructing a now-open Homewood Suites hotel, had misrepresented the project and its stated purpose of the $2 million in tax incentives approved.
Elevate QOF and the Homewood Suites project have drawn increased scrutiny over the years, including playing a central role in a six-member council tribunal’s suspension of Guajardo.
The company was accused of intentionally altering a presentation slide, which had shown a screenshot of a U.S. Federal Emergency Management Agency news release.
The dates of the news release did not appear in the screenshot used in the presentation, compared to what was shown on the agency’s website.
Critics have asserted it was a deliberate attempt to mislead city officials into believing the funding was intended to address unanticipated FEMA regulations.
Developers have said it was an inadvertent formatting error and that there had not been an intention to deceive.
Those who have supported the agreement have pointed to its purpose as supporting economic development aspects of the project, such as publicly accessible retail and restaurants.
Guajardo in a removal hearing earlier this month was suspended by a six-member council tribunal, with 5-1 votes reaching findings that she had committed “misconduct, malfeasance, incompetence, or inability or willful neglect of performance” related to the controversial tax incentive agreement and project.
Both Guajardo and Elevate QOF developers have denied wrongdoing in the matter.
The incentive agreement
The council also took a formal position on a settlement negotiated between Elevate and the Type B board, which oversees sales tax incentives for economic development.
The board, which is the only other party of the agreement with Elevate, recently announced a settlement with the company, which would terminate the agreement.
The agreement with Elevate initially called for $400,000 annual installments over a five-year term, assuming criteria such as job numbers were met.
Earlier this month, the board approved a settlement that would pay Elevate a bulk sum of $1.5 million from the Type B’s funding account, citing in part what it had described in a resolution as “substantial compliance with the agreement.”
It set off contention over who had the authority to make a payment and whether the Type B board had the ability to pay the funding or if it was required to go through the City Council.
Type B board agreements are brought to the council for two affirmative votes before they become effective.
However, board members have said they retain authority under state law and that the decision was reached after conferring with their legal counsel.
The council in its resolution disagreed.
Also with a five-member majority, the council directed city staff “not to make or facilitate payment.”
As in the previous vote on settling David’s lawsuit, Vaughn, Hernandez, Cantu, Campos and Paxson approved the measure.
Scott and Barrera voted in dissent.
Kirsten Crow covers city government and water news. Have a story idea? Contact her at kirsten.crow@caller.com.
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This article originally appeared on Corpus Christi Caller Times: Hotel developer's lawsuit in Homewood Suites case settled for $450,000
