CORPUS CHRISTI, Tx — Public officials are calling the development of the Homewood Suites by Hilton a catalyst that will spur growth.
But, others are questioning how those same officials signed off on a $2 million incentive for the same hotel.
That future hotel is located just across the street from the Executive Surf Club. It is a five-story, 126-room hotel and is the first new hotel to be built downtown in more than a decade.
"This is a pro-business project, It's a catalyst," City councilman Roy Barrera said during an April 23 council meeting.
"This is a good project for downtown and I support it," City Councilman Mike Pusley agreed at the same meeting.
It is also a first for the City of Corpus Christi.
Type B Sales Tax funds have never been used to subsidize a hotel, until now.
In April, the City Council approved the use of those public funds to support this development.
Before that vote, KRIS 6 News reported that a presentation made to the Type B Board and the City Council included a PowerPoint with an altered document.
A full video of the Type B meeting in December cannot be viewed on the city's website. At first, the meeting was missing completely, but after 6 Investigates asked why it was not on the city website, a new version was uploaded. The new recording uploaded to the city website is missing a portion of the developer's presentation.
Developers said that newly released FEMA Flood Plain maps caught them off-guard and resulted in unexpected additional costs.
But, those maps were released in April of 2022, well before construction began on the Homewood Suites.
6 Investigates obtained a recording of a phone call between City Manager Peter Zanoni and competing hotel owner Ajit David.
EXCLUSIVE AUDIO:
That recording shines new light on that funding request and that FEMA claim by developers.
"Right, it was altered. And then when you read the entire PowerPoint it's so obvious that the reader, or the writer, wanted to be led to believe that the FEMA (change) was just recent," Zanoni said.
In it, Zanoni said that developers learned the Type B Funds that they wanted had to be tied to infrastructure.
"And so they hatch the scheme that, okay FEMA floodplain, that's infrastructure, fixing the bottom floors, it meets the floodplain. And they stuck with it," Zanoni told David.
One of the developers, Phillip Ramirez, is an architect whose company works for the city. He also once sat on the board of the Corpus Christi Regional Economic Development Corporation (CCREDC), which vets these proposals.
KRIS 6 reached out to Ramirez nearly a dozen times, both in-person and via phone, but he did not respond to our multiple requests for an interview.
City Councilman Michael Hunter challenged the assertion that developers were unaware of impending FEMA changes that would place the entirety of downtown in a flood zone during a February council meeting.
"We've been working on the rules for two years. You can expect those changes two years ago," he said.
The CCREDC recommended just over $1 million be allocated to this request based on an economic impact report.
But the Type B Corporation voted to give the project almost double — $2 million — based in part on the jobs the project would create and the catalytic impact to downtown.
Type B Funds are partially used to encourage the creation of primary jobs, but the average annual salary these hotel workers will earn is $30,000.
Mike Culbertson, CEO of the CCREDC, told the City Council the current annual salary for a Corpus Christi worker is double that.
"What is the average salary of a Corpus Christi citizen?" Hunter asked during an April council meeting.
"Corpus Christi, well we actually hit the state average of $60,000, and that's our hourly wage. When you're taking leisure and hospitality, it's somewhere around $30,000," Culbertson responded.
6 Investigates spoke with Carlton Schwab, president and CEO of the Texas Economic Development Council, and while he couldn't comment on this specific incentive, he said that primary jobs are typically jobs created to produce a good or service that is then exported.
"Resulting churn that occurs from the outside money coming it to produce that good or service is really what economic development is all about," he said.
Schwab said in addition to high-paying industrial jobs, Corpus Christi's economy is impacted by tourism. But, tourism jobs are not as important as primary jobs.
In February, city staff recommended council approve that project, and seven council members voted in support.
It was after that vote that the altered document in the PowerPoint presentation came to light and the city began an investigation.
That item went back to council for a second, and final, vote in April. This time without the recommendation of city staff.
"They could ram it through, but it's on them. I know, if they, I'm not recommending it because I don't have the information I need," Zanoni told David.
In that audio recording, and text messages, Zanoni said the council would be briefed in executive session on these allegations.
Ultimately, five council members voted to approve this incentive.
"The whole process was just poorly done by not only the city staff, but also by Type B. For my perspective, I wanted to make sure that we could defend the process. As it stands right now, it's very difficult to defend it," Councilman Gil Hernandez said.
6 Investigates reached out to every council member who voted yes, but District 3 Councilman Roland Barrera was the only one who agreed to an interview.
"I think the questions were unfounded. I think the information that the competing hotelier (shared) was not relevant. But, I'm kind of disappointed that the City Manager would engage in conversations that would appear to validate the individual's concerns," Barrera said.
Council members Mike Pusley, Dan Suckley, and Everett Roy refused to comment. Mayor Paulette Guajardo sent this written statement.
"Cities all over America provide incentives for major development in their downtown. The City of Corpus Christi has not had a new hotel built in our downtown for more than a decade. My vote represents my faith in the future of downtown," Guajardo wrote.
KRIS 6 News also spoke with Zanoni, who said the city has multiple buckets of money to help developers and the project was properly vetted.
"Incentivizing development in our city, across our city, is not unusual," he said.
"I did recommend it go on the agenda," Zanoni said. "I did place it on the City Council agenda. Ideally, we would have like to have had better information on the accusation that was made by others in the community on this website alteration on this PowerPoint. We didn't have that and the council thought this was immaterial."
KRIS 6 News also reached out to Culbertson, but he declined an interview.
Both Barrera and Hernandez said issues brought up by 6 Investigates will be included in an upcoming annual review of Zanoni.
