CORPUS CHRISTI, Tx — City Manager Peter Zanoni's testimony about whether he adequately warned the Corpus Christi City Council about an altered federal screenshot raises questions about transparency in the approval of a $2 million hotel incentive.
In June 2024, KRIS 6 News first reported allegations that an altered FEMA screenshot had been used in a presentation to the Type B board and Corpus Christi City Council for a hotel project seeking $2 million in public funds.
The Corpus Christi City Council approved a $2 million Type B sales tax incentive for the Homewood Suites by Hilton downtown development, marking the first time such public funds had been used to subsidize a hotel in the city.
The decision came under scrutiny after investigations revealed that developers presented an altered FEMA screenshot and claimed flood plain changes caught them off-guard.
In response to allegations of fraud and misconduct, attorneys for Elevate QOF, LLC—the developer behind the Homewood Suites project—have categorically denied any wrongdoing, calling the accusations "baseless, meritless, and slanderous."
The statement maintains that the Type B Board approved the project as a downtown "Capstone project," not due to FEMA requirements, and argues that developers were unaware of flood plain issues until February 2023.
In addition to Type B funds, the Homewood Suites project also received $1.55 million in Tax Increment Reinvestment Zone (TIRZ) financing.
The Type B Corporation Board recommended the funding based on the project's catalytic nature and street-level retail and public space.
However, the TIRZ agreement already required 8,500 square feet of ground-floor retail space facing Chaparral Street as a condition for receiving any tax increment reimbursements. The developer was contractually obligated to include the retail component regardless of Type B funding.
The Type B agreement had a retail requirement but added job creation mandates, requiring the developer to create 65 full-time positions and meet local contractor utilization goals.
In depositions obtained by 6 Investigates from an ongoing lawsuit between local hotelier Ajit David and the City of Corpus Christi and Mayor Paulette Guajardo, Zanoni's accounts of who he allegedly told about what he characterized as a falsified FEMA screenshot—and when he told them—appear to be unclear.
In a recorded phone call made just days before the April council vote, Zanoni told David that the document had been deliberately altered to support a false narrative about recent FEMA changes.
"Right, it was altered," Zanoni said in the recording. "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."
He went further, describing what he characterized as a deliberate scheme: "They hatch the scheme that, okay, FEMA floodplain, that's infrastructure, fixing the bottom floors."
Yet when the council voted on April 23, 2024, Zanoni's public comments were vague. Rather than clearly warning about potential document falsification, he told council members: "The issue with staff is there's still some uncertainty in some of the information, we're working to get that."
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THE DEPOSITIONS
WATCH: Corpus Christi City Manager Peter Zanoni video deposition
WATCH: CCREDC CEO Mike Culbertson video deposition
WATCH: Assistant City Manager Heather Hurlburt video deposition
WATCH: Type B Corporation President Alan Wilson video deposition
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Staff Emails Reveal Internal Concerns
Internal emails obtained by 6 Investigates appear to show that city staff recognized problems with the project early on. In a February 26, 2024, email to the Corpus Christi Regional Economic Development Corporation, Assistant City Manager Heather Hurlbert wrote:
"I went through the presentation as well and got an impression that the Mayor is pushing this. The developer's excuse on the Flood Maps that have been in place for a couple of years, cost escalations due to the 2020 pandemic, etc. should not be qualified. I understand why a lot of people are upset. Council needs to do the right thing."
READ MORE: Original PowerPoint presentation obtained by 6 Investigates
Despite these apparent concerns, Hurlbert seems to have actively worked to get the item back on the agenda with different justification. In a March 8, 2024, email to the CCREDC, she wrote, "I would like to get his back on the agenda for consideration on the 19th (of March) if possible. Can you flesh out the agenda memo to reflect the sentiment expressed but (sic.) the Type B board of why they recommended the $2.0m and the catalytic nature of this project and the value of the street level activation."
Guajardo told 6 Investigates she did not push the project and did not put the project on the agenda, or ask any member of staff to place it on the agenda.
READ MORE: Peter Zanoni deposition
READ MORE: Mike Culbertson deposition
READ MORE: Heather Hurlburt deposition
READ MORE: Sony Peronel deposition
READ MORE: Alan Wilson deposition
Shifting Testimony About Alleged Disclosures
Under oath, Zanoni's certainty about who he allegedly warned appears to change under questioning. Initially, he said, "I know I told the mayor. I know I told Councilman (Everett) Roy, Councilman Pusley."
However, when pressed for details about other conversations, his testimony appears to become less definitive.
Doug Allison, attorney for David: "Well, do you think you made it clear to the mayor that it was an altered federal document?"
Zanoni: "I'm not.. I'm not a hundred percent certain but I would… but I would suspect I did…"
Zanoni also said he did not brief the whole council, "I didn't sit down with all council members, all of them, either individually or collectively to let them know, but the council members who had interest in this item would often call or come and visit – come visit me. So when I was engaging with council members individually, along this continuum of time, I let them know that brought to my attention has been what appears to be a forgery of a federal document tied to this award money."
City Councilman Gil Hernandez told 6 Investigates the entire council had been told the screenshot was altered.
During the deposition, Allison asked Zanoni if he told the council, "hey, don't touch this."
Zanoni responded, "I can't recall if I said that exactly, but I would – I would, let me think of how I can say this here, given the – given the – given what we knew at the time, given the fact that it appeared of a law – federal law had been broken, I wouldn't – I wouldn't consider it yet – I wouldn't – I wouldn't have put it on the agenda, I wouldn't have voted on it if I was a council member."
Guajardo denies she, and the council, were notified adequately. And denies Zanoni ever said a federal law may have been broken.
"The city manager... had a duty to inform the entire city council... not just select a few public officials," Guajardo said at a September council meeting.
She repeatedly denied being told about alleged fraud: "No one has said that any document was fraud. No one, no one, no one."
Through her attorneys, Mayor Guajardo provided a statement to KRIS 6 News maintaining her position: "At no point did City Manager Peter Zanoni inform Mayor Guajardo that the FEMA screenshot in question was a forged federal document. In fact, in public meetings he supported the passage of the ordinance."
The mayor's statement argues that "the document in question is not an official federal document, but rather a screenshot of a federal website regarding flood map information" and that the project "underwent a rigorous vetting process by professional staff prior to placement on the Council agenda."
Mayor Guajardo also defended the city's vetting process in a September council meeting, stating that "the ordinance was vetted by staff, was vetted by legal, was vetted by city managers, was vetted by the legal department."
She maintained that city legal staff had approved the ordinance and emphasized it was their "duty to ensure that all documents that go before any city council are vetted and in fact legal."
In a statement to 6 Investigates, David wrote in part, "The Mayor says she did not know if the document was forged, but I explained in-person to Mayor the federal document had been altered on April 16th, and again on April 23rd. I emailed it to the Mayor on April 19th."
Unprecedented Process Raises Questions
Despite his private statements about what he called a "scheme," Zanoni testified that he was directed to place the item on the agenda anyway: "Three council members want it...okay, I'll put it on the agenda."
That item was placed on the agenda without the usual recommendation by staff to approve.
In his deposition, Zanoni said, "To my knowledge, in the six years, if you count how many ordinances, and resolutions, and motions, there's been a lot – I don't even want to guess at a number – but I would think it's fair to say that this one is probably about the only one that did not have a recommendation."
The apparent contradiction deepened at the April 2024 meeting, where, despite withholding his written recommendation, Zanoni verbally endorsed the project: "On the merits of the two million dollars, the city staff supports what the Type B recommended... Without any doubt, we support that."
Following that vote, in a text message between Zanoni, David, and then assistant to the city manager Sony Peronel, Zanoni responds to David, writing, "OK Ajit (David). I got screwed on this item and had nothing to do with it from the get go. I know what happened, and it's too bad people weren't truthful or even willing to communicate and made me take the fall for their shortcomings. Pretty disappointing."
Charter Violation May Compound Problems
Beyond the disclosure issues, the approval process itself may have violated the city charter's requirement for two "same" readings of an ordinance. The February reading justified the $2 million as necessary for "FEMA flood zone costs," while the April reading described the same money as funding for "street-level retail and public space."
Assistant City Manager Heather Hurlbert acknowledged under oath that the first reading was "brought forward incorrectly."
Pattern of Apparent Contradictions
Zanoni privately described what he characterized as an altered document as part of a deliberate "scheme," yet his public warnings appear to have been vague. Meanwhile, the mayor flatly denies being informed about any alleged fraud.
Internal emails appear to show city staff recognized the project's problems early on. Yet the same staff member seems to have later worked to get the item back on the agenda with repackaged reasoning.
The case is pending in district court and depositions are not yet complete. The City Council voted last week to hire outside counsel to review the allegations. A petition has also been filed seeking Mayor Guajardo's removal from office.
Peter Zanoni did not respond to requests for comment. 6 Investigates has published all depositions available to date.
