A company leasing city land for $1 per year didn't have the financial backing needed back when the company was vetted by city leaders, according to a city councilwoman who has seen the city's file on the company.
"The financial backing is not there that I can see," said Debbie Lindsey-Opel, At-Large City Councilwoman. "There is a commitment to evaluate the project as it moves further along that is not a commitment to actually provide the funds to make this project happen."
For weeks, company officials have not answered questions from KRIS 6 News. Earlier today, the company held a news conference at City Hall after giving community notice over the weekend. When asked how the company can assure the public that the project will happen as promised and concerns about the vetting process, a company official said this:
The first (thing) is we've passed all the vetting processes that the city gave to us in the RFP," said Brent Statzer, CEO of SQH Sports. "…The city isn't taking any of the risk here. We're taking the risk. Our investors are taking the risk.
A new lease agreement is expected to go back to the City Council for a final vote on May22. Company officials requested a new lease because they said more land is needed to build a regional sports complex. There are problems with the existing site, such as flood plains because it's adjacent to the banks of the Oso Creek. The property is part of a 300 acre tract of land owned by the city of Corpus Christi. It's valued at $4.1 million dollars, according to the Nueces County Appraisal District.
As long as it's vacant, the city cannot collect any property or sales taxes from the company.
SQH Sports has asked the council to approve an agreement that would allow it to lease 203 acres of city property to build an even larger sports complex than first proposed. The deal no longer requires the company to purchase adjacent private property, unlike the first contract signed in 2016.
The final vote on that contract is expected May 22. It comes more than a year and a half after a previous City Council approved a deal to lease 68 acres of public land to SQH Sports. At the time, the company went through a lengthy negotiation process with the city. It took time because city staff recommended the council not move forward with the project. Council members at a meeting on Feb. 10, 2015 directed city staff to continue negotiating with the company and address the concerns.
The concerns included lack of experience building and managing sports complexes, and a concern that based upon the financial information provided that the banks were not willing to commit to the project without a lease agreement and the city's plan for improvements. The city never has had a plan for improvements to the property, staff said in 2015, during a public presentation to the City Council.
It's unclear how those concerns were addressed. 6 Investigate requested a copy of the city's file on SQH Sports.
Lindsey-Opel received a copy of the file, but couldn't show the file to 6 Investigates because a public request is pending with the city legal department. Instead, Lindsey-Opel explained her concerns based on the information she saw in the file.
The file showed that back in 2015 the city followed a Request for Proposal (RFP) process. That did not happen for the new contract presented three weeks ago, she said. That's part of Lindsey-Opel's concerns about the new lease agreement. The new lease is different from the old one, and should require a new process, she said.
The story revealed that the three businessmen involved with the company have no experience building or managing sports complexes, despite claims on the company's website. And an extensive search of public records showed the businessmen have had past financial problems. SQH Sports' Vice President of Governmental Relations Bert Quintanilla has several pending federal tax liens with the IRS for other businesses he's opened through the years, according to Nueces County Clerk records. SQH Sports owners Brent Statzer and Derrick Hegmon had trouble paying a bank loan for their company PMG Retail in San Antonio, but paid off that debt in 2016 after a court ordered them to re-pay the outstanding balance, according to records on file with Bexar County District Court.