HomeMy WebLinkAbout034001 ORD - 08/25/2026One -Reading Ordinance disapproving the Program, Expenditure, and Funding
under the Termination, Settlement, and Release Agreement between the Corpus
Christi B Corporation and Elevate QOF, LLC; adjusting Type B Budget to withdraw
funds from the terminated program for the Homewood Suite Incentive; directing
the City Manager and City Staff not to make or facilitate payment; and providing
for an effective date.
WHEREAS, the Corpus Christi B Corporation (the "Corporation") is a development
corporation created by and for the benefit of the City of Corpus Christi under Chapters 501 and
505 of the Texas Local Government Code;
WHEREAS, Texas Local Government Code § 501.054(b)(2) provides that, with respect
to a project, a development corporation may exercise powers necessary or appropriate to effect
its purposes "subject to the control of the governing body of the corporation's authorizing unit";
WHEREAS, Texas Local Government Code § 501.073(a) provides that the
Corporation's authorizing unit "will approve all programs and expenditures of a corporation";
WHEREAS, Texas Local Government Code § 505.302 restricts the use of Type B sales
and use tax proceeds to statutorily authorized project costs and related obligations;
WHEREAS, Texas Local Government Code § 501.401(b) limits the authority of an
authorizing unit "under this section" by the law of this state concerning impairment of contracts
entered into by the Corporation;
WHEREAS, on August 10, 2026, Elevate QOF, LLC and Corpus Christi B Corporation
terminated the Business Incentive Agreement for costs associated with Homewood Suites by
Hilton at the corner of Chaparral Street and Lomax Street;
WHEREAS, on August 10, 2026, the Corpus Christi B Corporation entered into a
Termination, Settlement, and Release Agreement with Elevate QOF, LLC that provides, among
other terms, for an immediate $1,500,000 payment to Elevate QOF, LLC;
WHEREAS, the City Council did not approve the Termination, Settlement, and Release
Agreement nor any creation of any program for that agreement, nor the $1,500,000 expenditure
of Corporation funds;
WHEREAS, the Corporation's Certificate of Formation, Article IV, provides that "[a]II
actions of the Corporation shall be taken ... with the advice and consent of the Corpus Christi
City Council";
WHEREAS, the Corporation's Bylaws § 2.1(a) provides: "Any projects undertaken using
the funds of the Corporation will require the approval of the Corpus Christi City Council, in
accordance with the Act";
WHEREAS, the Corporation's Bylaws § 5.5 provides that, to the extent the Bylaws or
Certificate of Formation require City Council approval, "such approval shall be evidenced by a
certified copy of a resolution, ordinance or motion duly adopted by the City Council";
03 4 0
ANNED
WHEREAS, the City Council has now reviewed the program, expenditure, and funding
contemplated by the Termination, Settlement, and Release Agreement and determines not to
approve them;
WHEREAS, the City Council finds that preserving the status quo by maintaining the
funds under existing control is necessary to protect public funds and ensure compliance with
applicable law;
WHEREAS, City's Notice of Default letter sent by City on May 14, 2026, to Elevate QOF
LLC is affirmed, and it is further resolved that Elevate QOF LLC's default described therein is
not curable and thus — pursuant to the express terms of the Business Incentive Agreement
("BIA") signed by Elevate QOF LLC on January 18, 2024 — the "[Type B] Corporation and
[Elevate QOF LLC] shall have no further obligation to one another under [the Business Incentive
Agreement];"
WHEREAS, City's Type B Corporation terminated the BIA on August 10, 2026, with
Type B Corporation approving a Termination, Settlement, and Release Agreement ("TSRA"),
which TSRA is subject to City's approval of funding, if any, pursuant to Texas Government Code
section 501.073; and
WHEREAS, there is "no further obligation" for the City to fund the BIA because of
Elevate QOF LLC's default; and no obligation for the City to fund the TSRA pursuant to Texas
Government Code section 501.073.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS
CHRISTI, TEXAS, THAT:
SECTION 1. The foregoing recitals are true and correct and are adopted as findings of the City
Council. In adopting this Ordinance, the City Council is exercising its authority as the
Corporation's authorizing unit under applicable law, including Texas Local Government Code §§
501.054 and 501.073.
SECTION 2. Pursuant to the City Council's authority under applicable law, including Texas
Local Government Code §§ 501.054 and 501.073, the City Council disapproves the program,
expenditure, and funding contemplated by the Termination, Settlement, and Release Agreement
between the Corpus Christi B Corporation and Elevate QOF, LLC, including the proposed
$1,500,000 payment to or for the benefit of Elevate QOF, LLC.
SECTION 3. The City Manager and City staff are directed not to make, authorize, process,
facilitate, or cause any payment or transfer of Corpus Christi B Corporation funds to or for the
benefit of Elevate QOF, LLC under the Termination, Settlement, and Release Agreement.
SECTION 4. The City Manager and City staff shall pursue all appropriate and available trial
court and appellate remedies, including appeals, mandamuses, stays, or supersedeas, as
appropriate, to preserve the status quo. They shall comply with any applicable court order
requiring payment when no further legal remedy permits the City to withhold payment pending
review.
SECTION 5. To the extent any funds have been and are appropriated pursuant to Ordinance
#033350 and any subsequent amendments for the same (up to $2,000,000.00), the Type B
Budget is amended to decrease all expenditures designated for the terminated project for the
Business Incentive Agreement between Corpus Christi B Corporation and Elevate QOF, LLC for
costs associated with Homewood Suites by Hilton at the corner of Chaparral Street and Lomax
Street.
SECTION 6. This section constitutes a written request by the Mayor Pro Tem or a majority of the
members of the Council for this ordinance to be passed finally on the date of introduction due to
an emergency. The City Council finds and declares an emergency due to the need for immediate
action to preserve public funds that are presently the subject of a demand for payment and
pending litigation; and suspends the City Charter rule requiring consideration of and voting upon
ordinances at two regular meetings so that this ordinance is passed and takes effect upon first
reading as an emergency measure.
PASSED and APPROVED on the day oflWSM'
ylynayor Pro Tem
ATTEST:
, 2026.
Rebec a Huerta, it Secretary
034001 p