A Corpus Christi City Auditor's investigation has concluded that "there is a reasonable basis to conclude that fraud, abuse, and/or illegal conduct have occurred" in connection with a $2 million taxpayer incentive awarded to developers of the downtown Homewood Suites by Hilton.
In an August 21, 2025, memo obtained by 6 Investigates, City Auditor George Holland told the Mayor and City Council that developers allegedly altered a federal government document to conceal information that contradicted their request for public funding.
"City Leadership investigated and concluded that the facts of the case constitute a felony forgery under the Texas Penal Code 32, a violation of law," Holland wrote in the memo.
The memo calls for an external investigation into the matter.
6 Investigates is reviewing hours of depositions from an ongoing lawsuit that seeks to invalidate the City Council's approval of the incentive. The suit was filed in October 2024 by competing hotel developer Ajit David.
The allegations
According to Holland's memo, developers altered a Federal Emergency Management Agency website screenshot presented to the Type B Corporation and City Council. The alteration concealed the fact that FEMA flood maps had been released in April 2022 — months before developers claimed the maps created unexpected costs for their project.
Holland wrote that developers dropped two text boxes onto the FEMA screenshot and filled them with matching background color to hide the release date of "April 13, 2022" and release number "R6-009."
"If not hidden, the information would have shown that FEMA's final flood maps had been released to the public months before the Applicant's project was even considered," Holland stated in the memo. "If not hidden, the information would have contradicted the Applicant's reasons for requesting the $2 million."
The memo notes that concealing this information "would have required at least 8-10 intentional computer key or keypad strokes."
6 Investigates obtained that presentation document, which was turned over as discovery in the ongoing lawsuit. A review of the document clearly shows text boxes covering information contained on the FEMA release. Project developers are Deven Bhakta and Phillip Ramirez.
Previous investigation
6 Investigates first reported on the altered document in June 2024.
At that time, 6 Investigates obtained a recorded phone conversation between City Manager Peter Zanoni and David in which Zanoni acknowledged the document was altered.
"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 the recording.
Zanoni also told David that developers "hatch(ed) the scheme that, okay, FEMA floodplain, that's infrastructure, fixing the bottom floors, it meets the floodplain. And they stuck with it."
The vote
Despite the allegations, five council members voted to approve the incentive in April 2024: Mayor Paulette Guajardo, and council members Roland Barrera, Mike Pusley, Dan Suckley, and Everett Roy.
The vote came 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 the recorded conversation obtained by 6 Investigates.
Council members Michael Hunter, Jim Klein, and Sylvia Campos voted against the measure. Gil Hernandez abstained.
"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," Hernandez told 6 Investigates in June 2024.
The timeline
According to documents reviewed by 6 Investigates and David's lawsuit:
- January 2022: Developers purchased the property, which had been identified as within the flood boundary since at least 1985, according to the lawsuit
- April 2022: FEMA released final flood maps for the area
- November 13, 2023: The funding request was first presented to the Type B Corporation in executive session
- December 11, 2023: The altered presentation was shown to the Type B board during a public hearing
- January 22, 2024: Type B Corporation approved the funding
- February 20, 2024: First reading of the ordinance passed 7-1-1 at City Council
- April 23, 2024: Second reading passed 5-3-1, with developers removing all FEMA references from their presentation
The incentive was justified partly on job creation, though the positions would pay an average of $30,000 annually — half the $60,000 average salary in Corpus Christi, according to Mike Culbertson, CEO of the Corpus Christi Regional Economic Development Corporation, during an April council meeting.
Carlton Schwab, president and CEO of the Texas Economic Development Council, told 6 Investigates in June 2024 that while he couldn't comment on this specific incentive, primary jobs typically produce goods or services for export.
"Resulting churn that occurs from the outside money coming in to produce that good or service is really what economic development is all about," Schwab said.
David's lawsuit alleges the city violated its two-reading rule, used an altered federal document, and violated the Texas Open Meetings Act.
The petition notes that a portion of the developer's December presentation to the Type B Corporation is missing from the city's website recording. The city uploaded a new version after 6 Investigates inquired about the missing meeting in 2024, but the new recording still lacks part of the presentation.
The City Auditor's memo formally refers the matter to City Council "for review and recommendation to perform an external investigation."
The Homewood Suites, a five-story, 126-room hotel at the corner of North Chaparral Street and Lomax Street, continues construction across from the Executive Surf Club.
