The city of Corpus Christi is poised for mediation in a yearslong lawsuit over tax incentives and a downtown hotel that has spawned multiple court cases and acted as the catalyst for a removal hearing of the mayor.
The majority of the City Council on July 14 endorsed opening talks with hotelier Ajit David, the plaintiff in the lawsuit against the city of Corpus Christi and Mayor Paulette Guajardo. David is also a lead petitioner for Guajardo’s removal hearing through a quasi-judicial council process.
It was a 5-3 vote to begin mediation — City Council members Carolyn Vaughn, Gil Hernandez, Sylvia Campos, Eric Cantu and Kaylynn Paxson voting in favor, with Guajardo and City Councilmen Mark Scott and Roland Barrera voting against.
City Councilman Everett Roy abstained.
David initially filed the suit against the city of Corpus Christi in September 2024, the aim being to invalidate an economic development agreement that would award sales tax dollars to competing developer Elevate QOF LLC for the construction of a Homewood Suites downtown.
The mayor was named individually in the suit about a year later.
David has alleged that Elevate developers misled city officials about the project, using in a PowerPoint presentation a screenshot of a government website that had been allegedly altered to remove a date of a news release.
Developers have denied David’s allegations, including accusations of intentional deceit — in part, describing the image’s discrepancy as a formatting error.
Both a law enforcement investigation and an outside legal review looking into the matter did not find criminal wrongdoing.
The council also voted to substitute its current attorney in the case, although the exact circumstances of his impending exit are unclear.
George Hyde was hired in September as legal counsel for the city, initially with a contract of as much as $325,000.
In a July 14 email to the Caller-Times, he wrote that “under the circumstances all I can share is that it was my decision to seek the consent of the City Council for my withdrawal.”
Scott in the meeting had proposed the city waive attorney-client privilege to publicly release a letter Hyde had sent to the council that day.
That proposition failed, 5-3, with Vaughn, Paxson, Hernandez, Cantu and Campos voting against releasing the letter and Guajardo, Scott and Barrera voting in favor of making it public.
Roy abstained.
Hernandez said that he wanted to “make sure that we understand that we’re not happy with his performance.”
“I don’t want to get into details. … I just want to make the intention known from council that we want to go in a different direction,” he said.
David’s lawsuit has led to the city filing two appeals related to jurisdiction, one to the 13th Court of Appeals — which was denied — and one to the Texas Supreme Court, which last week ordered a hold on the case pending its review.
Deputy City Attorney Buck Brice told the council he believed that “there’s a strong chance” that once sent back to the trial court, there wouldn’t be jurisdiction.
In that scenario, it’s possible the case could be dismissed.
Barrera said that he had wanted to reiterate “what the plausible chances are.”
“This council wishes to basically terminate our arrangement with the existing attorney when — and this is my opinion — when we see an opportunity to win,” he said.
Vaughn pointed out the previous denials.
“What in the world makes you think he’s got 50-50 chance to win when he’s already lost two?” she said.
(This story was updated to add new information.)
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: City of Corpus Christi poised for mediation in hotel lawsuit
Reporting by Kirsten Crow, Corpus Christi Caller Times / Corpus Christi Caller Times
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By Kirsten Crow, Corpus Christi Caller Times | USA TODAY Network
