CORPUS CHRISTI, Tx — The Texas Municipal League Intergovernmental Risk Pool (TML) will not renew insurance coverage for the Corpus Christi Housing Authority (CCHA), citing concerns about the agency's controversial public-private partnerships that could remove $350 million worth of luxury apartments from local tax rolls.
In a June 3 letter, TML notified the CCHA it would no longer provide insurance after October 1, 2025, pointing to "blended ownership structures" with private developers that create "significant complexities into the risk landscape—particularly where private dollars are involved."
The insurance provider specifically cited concerns that the arrangements require "extensive indemnification agreements and elevated liability limits that go beyond the protections typically afforded to governmental entities under Texas tort laws." TML stated that insuring such arrangements "places a disproportionate burden on the collective Membership."
6 Investigates has learned that TML also did not renew policies for housing authorities in Dallas, Houston, and Fort Worth.
On Friday, just weeks after the insurance cancellation notice, the housing authority board voted to reject pending tax-exempt development deals and approved a new direction focusing on traditional public-private partnerships and direct housing support.
"These transactions were done in the dark," City Attorney Miles Risley told the board. "You sold your tax exemptions, harmed local tax entities, and delivered little public benefit. We're asking you to rescind them."
The controversial deal structure at the heart of TML's concerns allows the housing authority to acquire apartment complex land at no cost, then immediately lease it back to the original owners while those developers can claim complete property tax exemption. In exchange, complexes must designate 50% of units for residents earning 80% or less of area median income, with 10% reserved for those at 60% AMI.
Documents obtained by 6 Investigates reveal the program's significant financial advantages for property owners. An analysis of the Azure Apartments deal projects annual tax savings of $564,636 and a net cash flow increase of $408,459 in year one, with a ten-year benefit to investors totaling $11.4 million.
The TML decision comes as the housing authority faces mounting legal challenges. Three days before Friday's board meeting, the Corpus Christi City Council unanimously declared the workforce housing deals "apparently illegal," alleging multiple violations of state law in the property acquisitions.
A KRIS 6 News investigation found the housing authority may have failed to provide adequate public notice before approving deals. Meeting agendas provided minimal information—the February 21 agenda listed only "Consider Resolution for MOU - Shadow Bend" without details, and proposed agreements weren't made publicly available before meetings.
Allsup has maintained the authority's actions were legal, citing similar programs in other Texas cities. He stated that a judge recently determined "that neither the state nor the school district has standing to challenge the constitutionality of the statutes under which the housing authority acquired those properties."
The controversy has united local government entities in opposition. Del Mar College, the City of Corpus Christi, and Nueces County have all opposed the deals, citing lost tax revenue that must be made up by other taxpayers or through service cuts.
Opposition led to a pause in new acquisitions in May after Mayor Paulette Guajardo appointed three new board members to the CCHA—former Mayor Joe McComb, former City Council Member Greg Smith, and West Oso ISD counselor Judith Gonzalez-Rodriguez.
In a final move Friday, the board voted to bring in outside legal counsel to examine whether already-approved tax exemptions can be rescinded—signaling a broader reckoning with how the agency operates and whom it serves.
The housing authority must secure alternative insurance arrangements by September 30, 2025, when TML's coverage ends. If the deals are ultimately found to violate the Open Meetings Act or other state laws, they could be declared void, potentially unwinding the entire $350 million program.
The Corpus Christi Housing Authority is a governmental body created by state law to develop and operate housing for low-income families. It operates as a separate entity from the City of Corpus Christi, though its board of commissioners is appointed by the mayor.
