Master Plannning - Regular Meeting

you.

All right, it is 1.35. I'm going to call the Corpus Christi B Corporation meeting to order. Ms. Huerta, will you please call the roll?

President Diana Summers. Present. Vice President Jesus Jimenez is absent. Secretary Mark LaRue. Present. Victoria Holland. Present. Johnny Filippello. Here. Duke Conchola. Present. Claudia Mostagasi is absent. We do have a quorum of the board present to conduct the meeting.

Thank you very much. Next on the agenda, we have public comment. Do we have anyone that would like to make public comment?

And we have a timer? Okay. I'm the captain that needs to see it so I can be reminded. Good afternoon, everybody. My name is Jeff Lehrman, and I am counsel for Elevate, and I'm here to give a public comment on one of the agenda items that is on the Type B's agenda today, which is an issue involving the incentive agreement between my client and the city of Corpus Christi Type B Corporation. Elevate is asking that Type B declare publicly what is already consistently declared. That is that it remains in support of this catalytic capstone economic project. We are further asking that the type B board declare publicly that contrary to the city you do not find this to be in default of any of our agreements. And that elevate as elevate has fully complied or is fully compliant with all terms under the agreement. And the hotel is in fact open opened and is waiting for a final CEO from the city. So since we last met that is a significant change in this The city is holding us in default, in my opinion, at the behest of Ajit David and his lawyer who have manufactured a fiction that you guys all know about related to a PowerPoint slide as a justification for a misrepresentation. The only problem with that narrative is that it's simply untrue. And it is largely defamatory as the premise made the basis of the allegation has been fully investigated by law enforcement, fully investigated by outside counsel hired by the city of Corpus Christi because they wanted an independent opinion, fully vetted by the city attorney's own office who have all found it to be meritless. Contrary to the narrative that you heard. So there's finding whatsoever at any level that this incentive is illegal or that it's contrary to city law indeed despite the best efforts of mr david and his council there's been no finding of wrongdoing by anyone associated with this project more of all Moreover, all counsel involved in the case, other than the Jeets counsel, are confident that the case will eventually be dismissed by the courts. This is not surprising, as we all know that the politics generated by a well-known competitor are meritless, and he must feel that downtown Corpus Christi is only big enough for one hotel. Type B is well aware of this. And Type E is uniquely positioned based on its knowledge of the facts, the history, and the incentive. And there's been no new facts that have emerged since the original approval of this project that should change Type E's position. Please also remember that the support you heard from the default hearing a couple months ago, you heard from several public leaders in downtown Corpus who were all in support of this project. In fact, I haven't heard anybody other than Mr. David, a competitor, who was against this project. The business community has fully rallied behind this project and everybody around it. All we're asking is that you send a message that the city rewards risk and economic growth and doesn't politicize it. My client truly appreciates your time in this decision today, and I thank you for your time and assistance.

Thank you. Are there any other anyone else who would like to make a public comment?

Good afternoon.

I didn't sign up for public comment. I can still make a comment, though? Yes. Okay, wonderful, thanks. Madam President, Type B Board, city manager and city staff, my name is Ajit David. I live in Corpus Christi. You all probably know by now, I sued the city over a Type B incentive. That was two years ago. I sued the city after city staff investigated and told me and council and testified that this was a scheme to procure tax dollars. The word scheme was not my words. You'll also know I have not sued Type B. I did not intend to sue Type B. The city's outside council has been encouraging my attorney to include Type B in the lawsuit. I didn't see the need to. Type B, according to Texas law, has authority subject to the authorization and control of the governing body, which in this case is the city. Several weeks ago, city staff, the assistant city manager, Michael Dice, issued a memo through his office to Type B recommending that Type B issue a notice of default. Type B was created by the city. There is no reason why Type B should do things contrary to what the city has instructed them to do. But here we are. In my lawsuit, which is now about two years come September, the city has pled in front of the trial judge, had their motions denied. They decided to go to an appeals court, pled several motions, had all of those motions denied. Now, they're taking the city and its residents, the taxpayers, all the way to the Supreme Court. There's only two questions that Type B needs to ask, which have been answered. One, who was behind the scheme? Were there multiple people? That answer was given by Deputy Chief Breedlove, CCPD. His answer was Philip Ramirez, the applicant, takes full responsibility for being the only person who altered the document and misled the city council. The other question, was it intentional? Multiple people have testified it was, including him. Thank you.

Thank you. Is there anyone else that would like to make public comment? Seeing none, Ms. Huerta, have you received any public comments?

No, ma'am.

Thank you. Next on the agenda items, we have the minutes and excused absences. Are there any corrections to the minutes? Seeing none, I'll entertain a motion to approve the meeting minutes.

So moved.

Is there a second?

Second.

All those in favor say aye. Aye. Any opposed say no. The motion carries. Next, we have the financial report, the presentation of the Type B financial reports as of May 31st, 2026.

Good afternoon. Julie Sandoval, assistant director of finance. I'll be presenting the unaudited financial statements for May 31, 2026. So the existing funding for the type B corporation consists of 50% of all revenue dedicated for economic development. 500,000 is dedicated for housing projects and all remaining funds are utilized for the streets capital projects. The Economic Development Fund has total revenue of 4.7 million, with 3.3 million in actuals, which is 70% of the budget, and that leaves about 1.4 million to collect through the end of the year. For expenditures, we have 12 million total, and then we have with 4.2 million in actuals, which consists of 35% of the budget, leaving 7.8 million to expend through the rest of the fiscal year. So at the end of May 31, 2026, we have an ending fund balance of 8.6 million. So this slide shows the forecast of funds available for commitments for the Economic Development Fund for fiscal year 2026. The beginning fund balance is 8.6 million with an estimated 1.4 million to be collected through the end of the year. We have about six million that will be expended in commitments, so leaving an estimated balance of four million. For fiscal years 27 through 2039, we are projecting a 1% annual increase in sales tax revenue. We have 4.1 million in existing contract commitments, and level funding for administration and other expenditures. This will leave an estimated fund balance of 57.9 million in 2039. So the economic development has several major business incentives and small business contracts totaling 8.7 million total through the end of the life of type B. And also the Economic Development Fund has administration and other expenditures totaling $7.2 million, which includes a contract with the Regional Economic Development Corporation, administration and operating expenditures, and a transfer to the CIP Fund. The Economic Development CIP Fund has a total budget of $5 million, with 347,000 in expenditures, 196,000 in encumbrances, leaving 4.4 million balance. The Affordable Housing Fund has total revenue of 575,000. We've collected 583,000, so we're at 101% of budget. We don't foresee any additional revenue So total expenditures is $1 million with $46,000 in actuals, which is 4% of budget. So that leaves about $1 million to expend through the end of the year. So this leaves an ending fund balance of $3 million. So the streets are... So for the affordable housing fund, we have an existing project. with the Palo Verde Senior Apartments for $1 million. The Streets Arterial and Collector Fund, we have total revenue of $4 million, with $2.6 million in actuals, which is 65% of the budget, so leaving $1.4 million to be collected through the end of the year. For total expenditures, we have $4.1 million, with $2.7 million in Actuals, which is 66% of the budget, so that leaves about $1.4 million to expend through the end of the year. So as of May 31, that leaves a deficit in the ending fund balance of $3,856. The streets fund, CIP, we have $19.3 million budgeted with $5 million in expenditures. and 3.8 million in encumbrances, leaving a balance of 10.4 million. So the new Type B funding, which was effective April 2026 through Proposition E, allocates funding for recreational and community facilities and arterial and collector streets. Under Proposition F, funding is allocated for the downtown seawall and citywide flood control. So the facilities fund has a total revenue of $1.8 million with $375,000 in actuals, which is 20% of budget. So leaving $1.5 million to collect through the end of the year. So total expenditures are $1.8 million with $52,000 of actuals, which is approximately 3%. So that's leaving $1.8 million to expend through the end of the year. So this leaves an ending fund balance of 323,000. So the streets fund has 1.8 million in revenue, with 375,000 in actuals, which is 20% of the budget, leaving 1.5 million to collect through the end of the year. For total expenditures, it's 4,644, with actuals of 3,096, about 67% of the budget, leaving $1,548 to expand. So that leaves an ending fund balance of $372,000. For the seawall and citywide flood control fund, we have $3.7 million in total revenue with $751,000 in actuals. So that's 20% of the budget. so that leaves $3 million to collect through the end of the year. For total expenditures, we have about $53,000, and in total expenditures as a budget, $35,000 in actuals, which is 66%, so leaving $17,900 to expend through the end of the year. So that leaves an ending fund balance of $716,000. So for the sales tax revenue update, so total budget we have is right under 7.6 million. We've collected almost 7.8 million, which is about 200,000 over what was budgeted. This concludes my presentation. If you have any questions, I'm available.

Thank you. Are there any questions from the board?

I have just a few. If you could skip back to the facilities fund. I notice here that we have professional services as well as administrative services and those professional services have been billed three-fifths of the way so far. Could you clarify what those professional services

being used for and being paid out to for the facilities fund the administration the $2,000 is usually thanks for incidentals like copying or small

office administration items.

So those are still administrative services, then not professional services? My understanding was professional services was used typically more for outside contracting or for services associated with engineering.

I'm going to have to get an answer for you. Without looking at a ledger, I'm not going to be comfortable telling you where exactly those went.

Okay, I would like clarity on that just so that we, if we need to increase our budget for administrative services, that may be something. But if we just have a blank professional services that goes towards random copy paper or pens or things like that, I don't think that gives us a whole lot of clarity.

Administrative services is usually the transfer to the general fund for time professional services. I want to get you an answer.

Thank you, I appreciate that, yeah. All right, and I have one other question, if you could go back to our business incentives. Wonderful, thank you so much. This one, you may not have an easy answer to, so forgive me if that's the case. But I wanted to know if there was anyone who could give an update on the airline project, and if we are looking forward to an ask for more funds from them, or if we know that they are certainly going to terminate that project. You may not have an answer to that yet, but if you do, I would love to... to know for forecasting purposes?

Yes, Commissioner, we have an answer. So the year-long pilot air incentive expires in the August timeframe?

Yes.

In about 30 days. We're going to have a report on the conclusion of this year's worth of piloting. You may have seen some news reports that talked about a non-renewal.

Yes.

Right, and those reports came out from kind of an erroneous news story.

Okay.

However, there will need, if we want to continue the program, and this is new information, we'll be putting this out here this week with a memo, but if we want to continue the program, we'd need an additional $2 million, and that money is not readily available. The first year of subsidy, if you will, primarily was funded through a grant, That was a one-time grant. And so with that money being exhausted, it would be tough to try to fund the continuation of this program at $2 million.

Thank you, that's exactly the clarity I was looking for.

Yes, sir.

All right, and then I just had, if you could jump real quick back to our affordable housing. I believe we have a project that's supposed to be completed in 2026. Do we have an update on that project or the utilization of those funds?

They have experienced challenges with their financing and increasing construction costs. I'm currently evaluating a request for additional funding now. Even with that additional funding, they have to go out for new sources. So they're trying to adjust their funding to current market conditions, and we do have a new funding request for additional funds.

I see. So have they utilized the funds they were approved for?

No, they have not closed. They're not going to be able to close until they can prove that they have all of their financing. Okay. So they haven't spent any of the funds because they need to close on all their loans.

Okay, thank you, I appreciate that update. That concludes my questions, thank you.

Thank you. Do any of the other board members have any questions? I have just one. On the streets, the arterial and collector fund, you do show a very small deficit there. How will that be covered?

So we anticipate additional interest revenue

Okay, so it's the budgeting that we don't, we do a very conservative budgeting on our interest revenue, and that's where that deficit is coming from. Okay, thank you very much. All right, next up on the agenda is our executive session items. The board will go into executive session on items three and four per Texas Government Code section 551.071 and 551.087. We will return. And 551.072. I'm sorry, one more. And 551.072.

Thank you.

I'm sure we're all on silent. All right, it is 4-10. I am reconvening the Corpus Christi Type B Corporation onto item number four, executive session pursuant to Texas Government Cover Code 551071 and 551078 to discuss or deliberate regarding commercial or financial information or economic development incentives related to 1525 North Shoreline Boulevard. I can't read the rest of it. Okay, you don't have to read it, but is there a motion?

Yes, I would like to make a motion to approve the contract entered into by Shoreline Diversifications LLC and the Corpus Christi B Corporation related to the purchase of the property at 1525 North Shoreline Boulevard, Corpus Christi, Nueces County, Texas for $646,875. dollars cash to the seller.

Is there a second?

Second.

All those in favor say aye. Aye. Any opposed say no. The motion carries. Moving on to our agenda items, item number five, consider action regarding the status of the business incentive agreement between the Corpus Christi B Corporation and Elevate QOF LLC for the development of a hotel and retail project. Is there a staff presentation on the item? Seeing none, does the board have any questions for staff? Seeing none, I'm going to open the agenda item for public hearing. Are there any public comments?

Matt? I have officially unplanned comments for you. And I mainly came up here because I know opposing counsel spoke and I heard the content of that. i just i do want to say i think it's just extremely important for how the city council and the type b board work together i think you probably received a letter referring to 501.054 and how you guys have authority to administer the projects basically but in a situation like this that rule also says quote subject to the control of the and it gives the long name, but basically the city council. So they're really, I think it is so important to have a little bit of deference and a little bit of respect at this point in time. I know there's a lot of good people trying to make sure things in this community are done the right way, and I think that's important. Without piling on at all, I do wanna say this, because I know that opposing council stood up here and said that there's nothing here, If you look at the certificate that was certified by the applicant to CCREDC and then to Type B Board, it says newly defined FEMA. And those rules were in existence for three and a half years. That's misleading. If you look at the presentation, you cannot escape the fact that it's misleading. If you look at the altered slide that everybody agrees was intentionally offered, you cannot escape the fact that it's misleading. And if you look at the contract, UL's contract, it says that it is an event of default if there was a misleading statement when made, meaning when it was made to the type B board. So it's a clear event of default. It gives the city the right to... Determine that and to issue the default letter letter in the contract in the agreement and that's what they've done. I Really do I don't pretend that I'm here for Advocating on y'all's behalf. I hope you're getting good guidance Because it is important and I think really what you ought to do. It's good for you to keep it on the agenda It's good for you to keep a prize and I really think what you should probably do is table it and give the City Council an opportunity to To work it out as they are the ones according to 501 that I think have that prerogative. That's all.

Thank you Thank you. Are there any other open public comments? Seeing none, I'm going to close the public hearing on the item, and I will entertain a motion.

Madam Chairman, I'd like to make a motion. A resolution of the Board of Directors of the Corpus Christi Group Corporation declaring contract validity, restating expenditure approval, declaring all conditions precedent have been met, restating intent to perform pursuant to the business incentive agreement between the Corporation, the Corpus Christi B Corporation, and Elevate QOF LLC. for the development of a hotel and retail project entered into owner about January 22nd, 24, providing for repeal, providing for severability, and providing an effective date.

Is there a second?

Second.

All those in favor say aye. Aye. Any opposed say no. The motion carries. Is there a second motion?

Madam Chairman, I would like to make another resolution. The resolution of the Board of Directors of the Corpus Christi B Corporation declaring an alleged breach of contract by Elevate QOF LLC and the business incentive agreement between the Corpus Christi B Corporation and Elevate QOF LLC for the development of a hotel and retail project entered into on or about january 22nd 2024 of non-machine of non-machine elevate qof llc for conduct supporting the allegations providing for repeal providing for severability and providing an effective date is there a second second

All those in favor say aye. Aye. Any opposed say no. The motion carries. Moving on to our public hearing items. Item number six, public hearing on the capital improvement project for Art Museum HVAC systems improvements, Museum of Science and History improvements, and the Harbor Playhouse Building HVAC system.

Madam President, the three public hearings require no action. We have prepared presentations on all three. You have seen them. There are projects that were approved in the mid-year FY26 budget and the FY27 budget. I am happy to show those three presentations or you can individually open up those public hearings because again, it requires no action. You have already approved them as part of the budget.

Does the board have any questions for staff on this item? Seeing none, I'm going to open for public hearing. Is there any public comment on the item? Seeing none, I'm going to close public hearing and I will entertain a motion. Oh, there's no motion. I'm sorry. There's no action on any of the items. No action but three separate public hearings. Okay.

Thank you.

Next, item number seven, public hearing on the capital improvement project for flood wall upgrades at the Science Museum. Does the board have any questions for staff on this item? Seeing none, I'm going to open for public hearing. Thank you. Seeing none, I'm going to close the item. Item number eight is public hearing on the capital improvement project for Harbor Playhouse building and HVA systems improvement. Are there any questions for the staff? Seeing none, I'm going to open the item for public hearing. Is there any public comment? Seeing none, I'm going to close the public hearing. And that is, those are the three items. All right, moving on to our presentation items. Are there any executive director comments, Mr. Zanoni?

No comments.

There being no further business, this meeting is now adjourned.