A lawsuit filed against the city of Corpus Christi and Mayor Paulette Guajardo has been formally dismissed with the stroke of a judge’s pen Sept. 1.
The lawsuit, filed by hotelier Ajit David, has been officially settled for $450,000 in taxpayer funding. The dollar amount was assigned for attorney’s fees and dismissal of the case, originally filed almost exactly two years ago.
In it, David had asked a judge to declare a tax incentive agreement that had been approved by the Type B board — a city entity responsible for brokering economic development agreements using a portion of sales tax — and, later, the City Council, as invalid.
The $2 million tax incentive agreement had been with developers Elevate QOF LLC, a company constructing a now-open new
downtown Homewood Suites.
David had accused Elevate developers of intentionally misleading city officials about the purpose of the funding, in part with a presentation that had included a screenshot of a news release that did not show the date of its issuance.
Elevate developers have stated it was an inadvertent formatting error and denied wrongdoing.
Judge Sandra Watts’ sign-off on Sept. 1 represents the end of David’s lawsuit against the city of Corpus Christi and Guajardo.
However, claims between David and Elevate have not been resolved, attorneys said.
Also pending is a lawsuit filed by Elevate against City Manager Peter Zanoni.
That case involves a settlement signed by the Type B board and Elevate that would pay the company $1.5 million in exchange for terminating the agreement that was the subject of dispute in David’s case.
The agreement had been between the Type B board and Elevate, as opposed to the council, and funding was to be drawn from a Type B account.
In the lawsuit, Elevate claims Zanoni improperly “froze” the $1.5 million payment approved by the Type B board, both in his official capacity and as an individual. Developers contend that Zanoni had acted with “personal animus and independent motivation,” according to the petition, filed earlier in August.
Zanoni has denied wrongdoing.
He, as well as other city officials, has taken the position that the funds could not be paid without the council’s blessing.
Type B board members have asserted they have the ability to make the settlement and are enabled to under state law.
The City Council on Aug. 25 voted to reject the settlement agreement between the Type B board and Elevate and ordered city staff not to make the payment.
An item echoing the action last week appears on the Sept. 1 City Council agenda.
A temporary injunction hearing in the lawsuit against Zanoni, originally scheduled also for Sept. 1, has been postponed.
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: Lawsuit against Corpus Christi, mayor over hotel funding is dismissed
