Corpus Christi Type B board finds no contract default in Homewood Suites project

Following public comment, the Type B board entered executive session before returning to vote that there was no default under the agreement.

CORPUS CHRISTI, Texas — The Corpus Christi Type B Corporation has determined that developer Elevate did not default on its agreement with the city, marking the latest development in the ongoing legal dispute surrounding the Homewood Suites hotel.

RELATED: Homewood Suites lawsuit reaches Texas Supreme Court

The hotel, which recently opened, has been at the center of a lengthy legal battle that has reached the Texas Supreme Court.

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During Monday’s Type B Corporation meeting, hotel competitor Ajit David addressed board members, arguing that the controversy stems from what he believes was an improper use of public funds.

“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,” David said.

David has challenged the project after an altered Federal Emergency Management Agency document was used to secure $2 million in grant funding for the hotel. He said his lawsuit will reach its two-year mark in September and argued the city has spent unnecessary time and resources defending the case.

“They decided to go to an appeals court, plead several motions, had all of those motions denied. Now, they’re taking the city and the residents, the taxpayers, all the way to the Supreme Court,” David said.

Following public comment, the Type B board entered executive session before returning to vote that there was no default under the agreement.

Attorney Jeffrey Lehrman, who represents Elevate, said the board’s action reaffirmed the developer’s contract.

“They went even further and said that there was no breach, that there was no violation. And that there is no default. So this reaffirms my client’s contract with Type B for this economic development project for the opening of the Homewood Suites hotel,” Lehrman said.

Lehrman also argued that prolonged legal disputes over economic development projects could discourage future investment in Corpus Christi.

“If a hotel developer is looking at this and they read about all of this total nonsense and breach of contract and all of this, etc., is that going to incentivize them to want to invest in this community? Of course not,” Lehrman said.