CORPUS CHRISTI, Tx — Twenty-seven private companies that own apartment complexes in Corpus Christi have asked a judge to let them join Nueces County's lawsuit against the Corpus Christi Housing Authority, according to a petition filed November 19.
The companies are seeking to protect workforce housing agreements worth approximately $350 million that the county claims violate the Texas Open Meetings Act, court records show.
The intervention comes even though the Nueces County Appraisal District has already denied tax exemptions for these properties, finding they do not qualify under state law.
The intervenors include companies that entered into sale/lease-back agreements with CCHA intended to remove their properties from local tax rolls, according to the petition.
Nueces County sued CCHA on October 20, alleging the housing authority violated the Texas Open Meetings Act by approving memoranda of understanding and other transactions for thirteen apartment complexes without providing adequate public notice, according to the county's petition.
County officials claim CCHA's meeting agendas contained only vague descriptions such as "Consider Memorandum of Understanding" that failed to inform the public that the housing authority was "entering into a transaction to nominally acquire the Apartment Complexes for the purposes of obtaining a property tax exemption," the petition states.
In its petition, the intervening companies deny this and every other allegation.
The complexes involved include Armon Bay, Azure, Churchill Square, Ocean Palms Apartments, Sandcastle, Sawgrass, South Lake Ranch, Stoneleigh Apartment, The Icon, The Summit, The Veranda, Tuscany Bay South, Villas of Ocean Drive, Arts at Ocean Drive, Caspian Apartments, Gulf Breeze, Shadow Bend, Bay Vista, Bay Vista Pointe, Baypoint, and Solana Vista, according to court documents.
Together, these properties represent approximately $350 million in taxable value, the county's petition states.
In its petition, the county characterizes the deals as a "scheme to convey tax-exempt status on private investors" that benefits "bad actors waiting to exploit these well-intentioned benefits for improper private gain."
"Upon information and belief, these private interests continue to lease these properties not as affordable housing, but at or above market rates with some operating as luxury apartments," the county's petition states. "In this way, the CCHA and its private interest partners line their pockets at the expense of the local taxing authorities, without adding a single new unit of affordable housing to benefit the local community."
The county also seeks to void the employment contracts of former CCHA CEO Gary Allsup, which paid him approximately $640,000 in 2024 and increased to nearly $800,000 in 2025, according to the petition. The county argues these contracts were approved with inadequate public notice.
In their 21-page petition to intervene, the private companies dispute the county's characterization, calling the deals legitimate public-private partnerships to address Corpus Christi's affordable housing shortage.
"Corpus Christi needs affordable housing," the intervenors' petition states. "As the Corpus Christi Housing Authority has recognized, workforce housing—affordable housing for working people who make 80% or less than the area's median income—is a critically underserved need in the Corpus Christi community."
The companies say that under these agreements, they are required to reserve at least half of their units for working families at affordable rates, with some properties committing to reserve 10% of units for tenants making 60% or less of area median income, according to their petition.
"To be clear, the CCHA (not Intervenors) initiated the idea for and promoted these workforce housing agreements," the intervenors' petition states. It adds that the companies are "complying with their obligations under their agreements with the CCHA" and that they "have not 'lined their pockets' (in fact, the opposite is true)."
"The County's attacks are unfounded, unwarranted, and irrelevant to the relief sought by the County," the petition states.
The companies argue in their petition that they have "substantial legal and/or financial interests" that would be directly harmed if the agreements are voided.
These include contract rights under the memoranda of understanding, leasehold and operating rights related to possession and management of the properties, potential tax liabilities, governance rights, and financial rights including distribution rights for investor members, according to the petition.
"Former owners conveyed property interests based on the validity of the workforce housing transactions and the expectation that the CCHA-ownership structure would remain in force," the petition states. These property owners "abjured other investment and development opportunities and relinquished title to their properties" to effectuate the agreements.
The petition argues that "resolution of this controversy without Intervenors will substantially impair Intervenors' rights because CCHA cannot fully vindicate Intervenors' distinct contractual and equitable interests."
Under the sale/lease-back structure, private developers conveyed apartment complex land to CCHA, which then leased the land back to companies controlled by the former owners, according to court documents. CCHA receives fees and a portion of cash flow from the projects.
The properties were intended to claim tax exemption under Texas Local Government Code § 392.005, court records show.
However, the Nueces County Appraisal District reviewed these arrangements and denied the tax exemptions, finding the properties do not qualify under state law. This means the intended benefit of the deals — tax-free operation for the private companies — has not materialized.
The ground leases run for 99 years and give CCHA the right to purchase improvements at any time, according to the intervenors' petition. Regulatory agreements require affordability restrictions and controlled rent schedules.
According to court documents, Nueces County seeks an injunction voiding the workforce housing agreements, reversal of CCHA's authorization of the MOUs, invalidation of Gary Allsup's employment contracts, and attorney's fees under the Texas Open Meetings Act.
The intervenors seek denial of all relief sought by the county, attorney's fees, and preservation of their contractual and property rights, according to their petition.
The controversy over these deals, in part, resulted in the termination of CCHA CEO Gary Allsup and the replacement of the majority of CCHA's board by Corpus Christi Mayor Paulette Guajardo.
The Corpus Christi City Council also passed a resolution declaring the deals "apparently illegal" under state law.
CCHA has since paused an additional $435 million in similar deals that were in the pipeline, according to previous reports.
