After months of negotiations behind the scenes, a developer’s plan to build a Southside sports complex appeared in front of city leaders Tuesday evening, but raised even more questions and left the project’s future uncertain.
“The proposal that is being considered today is worlds apart from the original proposal,” said Joe McComb, mayor of Corpus Christi.
He questioned whether it was even legal for the city to consider a lease change with the developer since the project now included 200 acres of city land when it began as a 68-acre proposal.
Since 2016, SQH Sports has leased 68 acres of city property off State Highway 286, adjacent to the Oso Creek. The developers originally proposed an $18 million dollar regional sports complex that would attract youth tournaments across the state to Corpus Christi. The sports complex would be built on city land, and a hotel and retail space would be built on private, adjacent land. But the private land purchase fell apart, and the developer came back to the City Council in April asking for 200 acres and offering to build an even larger sports complex complete with retail.
As a part of the revised lease proposal, the developers asked for the same lease price of $1 per year.
A KRIS 6 Investigation uncovered the city land was actually worth millions. After the report, the council directed city staff to order a separate appraisal to determine the value, and it confirmed the extra land requested by the developers is worth $2 million. The council also asked city staff to renegotiate the terms of the lease.
In a presentation Tuesday, the developers proposed several changes. They agreed to increase the rent price from $1 to $50,000 per year for the extra land, and to cover the cost of building a road and hike and bike trail – valued at about $3.5 million in public improvements.
Within 5 years, the developers said the project would bring in $14 million in additional tax revenue to the city.
Councilman Everett Roy, who works in the banking industry, said he liked the terms of the new proposal, and that it puts minimal risk on the city. The new terms of the agreement also would add back project deadlines, including one that would require SQH Sports to prove its financial support for the project within 12 months of a signed agreement.
“It definitely gives them the opportunity to show what they can do, but if they can’t do it, it also protects us,” Roy said.
Many council members asked what would happen in the project failed. The answer is the land would go back to the city, and the city would keep any improvements to the property, the developers said.
In a heated exchange with a company representative, the mayor raised concerns that the company didn’t have any track record, and was created in 2014 – just six months before it bid on the city project.
“Has SQH every built a project?, the mayor asked. “And the answer is no,” he answered.
Last year after KRIS 6 Investigates found the company’s referenced didn’t check out. At the time, the partners admitted they don’t have any direct experience managing or building sports complexes, but said they would assemble the right team to make the project a reality.
On Tuesday, Hegmon defended his experience after criticisms from the mayor. He has spent the last 25 years owning and operating a marketing promotions company in San Antonio called PMG Retail. Before that, he worked in a management role at Sea World in San Antonio, which he described as a similar line of work to operating a sports complex.
Hegmon said if the city doesn’t approve a new lease with the additional city acreage that the developers were still committed to building a scaled-back project on the 68 acres of city land. The original lease agreement for 68 acres remains in effect.