AMARILLO, Texas (KAMR/KCIT) — After the Civic Center funding-related bench trial in October, retired Judge William Sowder, made a decision on Oct. 25, stating that the city of Amarillo’s use of anticipation notes for the Amarillo Civic Center Complex was “invalid” and “void.”
The decision comes after years of news related to the Amarillo Civic Center. Take a look at the following timeline to see how it got to the bench trial’s judgment
Before the Lawsuit
A group of five citizens came together to give a final presentation on what they think the future of the Amarillo Civic Center Complex should be. During this presentation, the group said that they believe a bond issue was the necessary step to move forward, based on the deficiencies of the complex.
At the time, the bond also included the relocation of the Amarillo City Hall facility, along with the renovation of the Santa Fe Depot. The initial bond amount the committee recommended was recorded at $279 million.
Feb. 11, 2020: Bond election approved for Amarillo Civic Center renovation
The Amarillo City Councill approved a measure, establishing that a bond election would be hosted for the Amarillo Civic Center Project would occur in May 2020. This $275 million bond would cover constructing, improving and purchasing land to expand the complex.
In March 2020, the Amarillo City Council made the decision to move the bond election to November 2020, as the COVID-19 pandemic continued to make impact the Amarillo community.
Nov. 3, 2020: Voters nix $275M bond for Amarillo Civic Center and longer terms for city council; approve Prop C
During November 2020’s bond election, around 61% of Amarillo residents voted against the Civic Center proposition in the $275 million bond election.
At the time, Build Amarillo organization member Jason Herrick said that while the proposition didn’t pass, thousands of people believe in the project.
At the time, Fairly said that while they did not agree with the proposition on the ballot, he stressed that something still needed to be done in downtown Amarillo.
During a meeting of the Amarillo City Council, the council approved entering into a pre-development services agreement with Garfield Public/Private LLC surrounding the Amarillo Civic Center Complex.
The partnership gave the city of Amarillo, along with citizens, the ability to find additional ways to help fund the overall project, without solely relying on property tax dollars. Officials at the time expected the pre-development phase to last through the end of 2021.
When the city of Amarillo released its agenda for the May 24 Amarillo City Council meeting, two items were included in the agenda to bring back the conversation surrounding the potential expansion and renovation of the Amarillo Civic Center Complex.
The agenda listed that officials with the city of Amarillo were planning to hear an update on the Garfield Report, a report that the city commissioned to explore potential public/private partnerships for the project. The council then was expected to vote on a measure surrounding funding for the project.
The Amarillo City Council approved Ordinance 7985 in a 4-1 vote, which authorized the use of $260 million in tax and revenue notes to fund the Amarillo Civic Center project. During the meeting, a number of individuals spoke out against the ordinance, saying that the action by the council goes against the November 2020 bond election vote.
At the time, Amarillo Mayor Ginger Nelson pointed to increasing interest rates as the reason why the decision was made during the meeting. Officials said the project will be paid for with taxes, along with other potential revenue sources like naming rights, increased hotel occupancy tax revenues and increased sales tax revenues.
Amarillo Businessman Alex Fairly filed a lawsuit on May 27 in the 108th Judicial District of Potter County aimed at preventing the city of Amarillo from moving forward to issue the anticipation notes for the expansion and renovation of the Amarillo Civic Center Complex.
The lawsuit’s goal was for a judge to determine that the ordinance the Amarillo City Council voted on was unlawful because it differs from the 2020 election results. The lawsuit also claims the city’s plan to use tax and revenue notes was never brought forward to Amarillo residents prior to the vote on the ordinance.
A few days after the City Council meeting, Amarillo Mayor Ginger Nelson defended the passage of the Civic Center funding-related ordinance, saying that moving forward with the project will save taxpayers money in the long run. She continued to cite the ongoing needs at the complex, along with potential increases in interest rates.
Nelson continued to stress that revenue sources will help pay for the improvements to the complex, not solely relying on property taxes for the project. While she did not comment on the lawsuit at the time, she did say that using tax notes, in this case, is a lawful option.
Amarillo Businessman first spoke publicly about his Civic Center funding-related litigation during the June meeting of the High Plains Republican Women. During the meeting, Fairly laid out why he believes, and disagrees, with what the Amarillo City Council did in approving this ordinance.
Fairly argued that per Texas Government Code Chapter 1431, anticipation notes were not intended for projects like the Civic Center Complex project, saying that Amarillo residents should not have their property taxes impacted by a project they voted down in the first place.
Amarillo Businessman Alex Fairly hosted a roundtable with media members, further pushing his lawsuit, why he filed it and why he thinks what the city did surrounding this Civic Center funding-related ordinance was, in his mind, illegal.
During the roundtable, Fairly said this lawsuit has nothing to do with the “Amarillo Plan” Fairly and former Amarillo Mayor Jerry Hodge put together in December 2020 after the November 2020 bond election. When asked what he would do to fund a Civic Center expansion project, he said he would go back to Amarillo residents and ask them again in an election.
After Amarillo Businessman Alex Fairly filed his lawsuit in Potter County, the city of Amarillo filed its own lawsuit, requesting for a Potter County Judge to declare the city’s use of anticipation notes for the Amarillo Civic Center Complex project to be legal and valid.
The city requested that a bench trial occur so “Interested Parties,” along with representatives from the Texas Attorney General’s Office, can have the opportunity to present their thoughts on the city’s choice to use anticipation notes. At the time, officials said in the lawsuit the goal was for the city to “proceed with confidence and certainty in the issuance of the Notes in accordance with Chapter 1431.”
Officials with the city of Amarillo asked Potter County District Court officials to combine the two lawsuits, their own and the lawsuit from Amarillo Businessman Alex Fairly, surrounding the use of anticipation notes for the Amarillo Civic Center Complex project.
In the city’s motion, they stressed that the two pieces of litigation cover the same ground – determining whether or not the use of the notes is legal in this case. They said if the two lawsuits are not combined, officials requested that the court pause Fairly’s lawsuit until the Potter County Judge makes a decision in the city’s case.
In a response from Amarillo Businessman Alex Fairly’s legal team to the city of Amarillo’s request to combine the two Civic Center-related lawsuits, Fairly’s team said he supports the motion to bring them together.
However, Fairly said he wanted more time for his team for the discovery process, surrounding alleged violations of numerous statutes, including the Texas Government Code, the Tax Code, the city of Amarillo’s Charter as well as the Texas Open Meetings Act.
During an in-person hearing, Sowder made the decision to combine the two Civic Center funding-related lawsuits into one piece of litigation.
No other decisions, including the discovery process for the combined litigation, the kind of trial along with when the trial would occur, were made in the open court proceedings.
After lawsuits are combined
After the trial was combined in Potter County District Court, officials with the office of Ken Paxton, the attorney general for the state of Texas, asked the city of Amarillo for clarification on portions of its city charter surrounding the cap of ad valorem taxes the city can tax residents.
Through the documents, officials from the Texas AG’s office asked the city to prove why they should not be bound by the cap of $1.30 per $100 of property valuation listed in the city charter.
In an order made by Sowder, he made the decision to host a final hearing for the Civic Center funding-related lawsuit in October, allowing two days for the trial of the case. Sowder also ordered the trial will be in front of a judge and not a jury, and also ordered that discovery – gathering evidence and information – be expanded for the case.
On July 15, Potter County District Court officials set the date for the Civic Center trial to begin on the morning of Oct. 4 in Potter County District Court.
The legal team for the city of Amarillo is requesting that Amarillo Businessman Alex Fairly cover the increased costs of the expansion and renovation of the Amarillo Civic Center Complex project because of the delay caused by the ongoing litigation.
The documents filed asked Sowder to host a hearing to give Fairly the chance to “show cause” why he should not be required to pay a surety bond to cover the increased costs, stressing that a delay in issuing public securities can often have “dire financial consequences for the issuer.”
During an in-person hearing surrounding the “Security Against Suit” motion, the city of Amarillo’s legal team initially laid out why it brought forward the motion, saying that the delay on the overall project was caused by Amarillo Businessman Alex Fairly’s litigation.
In response, Fairly’s team argued that the city had not followed all the criteria under a purchase letter from Frost Bank surrounding the notes. They also argued that Fairly’s team had not seen all the documents they had requested from the city of Amarillo, which ultimately caused the delay. Fairly’s team stressed their belief that the city’s motion was “premature,” with the Attorney General’s office not yet approving the use of the notes.
Those following the court proceedings, also heard testimony from city officials, speaking on various topics including the wording of the May 24 agenda item the Amarillo City Council voted on surrounding the notes, the city’s intention surrounding its plan for refinancing the notes and the potential of increased costs. While no decision was made at the hearing, officials asked for the lawsuit to continue.
The two entities continued to argue through documents whether or not Fairly should pay a bond through documents filed in Potter County District Court. Fairly’s team continued to stress alleged violations of the Texas Open Meetings Act along with the fact that the Texas Attorney General’s Office had not approved the use of the notes. The city’s team argued that Fairly had failed to meet the elements required to avoid paying a bond, including failing to prove a probably right to the relief sought and a probable, imminent and irreparable injury in the interim.
According to court documents, Judge William Sowder ultimately denied the city of Amarillo’s motion for “Security Against Suit.” In the documents, Sowder stressed that he considered the motion, responsive pleadings, the evidence before the court and the legal teams’ arguments.
As the lawsuit continued its process through Potter County District Court, a group of citizens came together, starting a petition process aimed at overturning the $260 million in anticipation notes for the Amarillo Civic Center Complex project another way.
Some of the individuals who were involved in the process were Potter County GOP Chairman Dan Rogers, Randall County GOP Chairman Tim Revell and Amarillo City Councilmember Cole Stanley. Through 120 days, the process outlines that organizers are required to collect signatures from “not less than five percent of the registered voters within the City of Amarillo.”
Through additional documents filed in Potter County District Court, the city of Amarillo’s legal team is asking Potter County District Court officials for portions of the lawsuit to be ruled on, since they believe they “can be decided now as a matter of law.”
These matters include the portions of the lawsuit surrounding the notice requirement of the Texas Open Meetings Act, the imposition of ad valorem taxes through the ordinance and whether or not the tax notes qualify as debt. Amarillo Businessman Alex Fairly’s legal team said this motion is premature before no depositions or any “significant” discovery occurred.
On Aug. 15, Sowder ultimately denied the city’s motion for partial summary judgment, saying he considered the motion, responsive pleadings, the evidence before the court and the legal teams’ arguments.
Officials with the city of Amarillo confirmed that depositions related to the combined Civic Center funding-related litigation would begin Aug. 17. Individuals deposed included all five members of the Amarillo City Council, along with city of Amarillo staff members like City Manager Jared Miller, Amarillo City Secretary Stephanie Coggins and Amarillo Chief Financial Officer Laura Storrs.
In further documents filed in Amarillo Federal Court, the city’s legal team questioned various topics they believe fall outside the scope of the original discovery order from retired Judge William Sowder. This comes as Amarillo Businessman Alex Fairly’s legal team continued to claim that the city failed to provide the documents required in the ongoing litigation.
Two signers of the Civic Center funding-related petition officially submitted and delivered the petition to the city of Amarillo’s city secretary’s office on Aug. 29. Officials said at the time that the petition, aimed at repealing the anticipation notes ordinance passed by the Amarillo City Council on May 24, was signed by 12,575 members of the Amarillo community.
From Aug. 29, the city of Amarillo’s charter states that the city had 21 calendar days after that date to verify the petition and its signatures.
As the city of Amarillo worked to verify the signatures from the Civic Center funding-related petition, Amarillo Businessman Alex Fairly’s legal team asked Sowder to nullify the ongoing Potter County Civic Center lawsuit, claiming the result from the petition will cover the same ground the lawsuit was covering.
Officials from Fairly’s legal team said that their expectation of the outcome of the petition will “likely cause the subject matter of (the) lawsuit to become moot” after the process is completed.
A few days later, Fairly’s legal team canceled the hearing surrounding the nullification request. Officials associated with the petition process told MyHighPlains.com at the time that the petition and the lawsuit are separate issues and the cancellation of the hearing did not serve as a waiver of the motion.
Amarillo Businessman Alex Fairly brought his argument forward to both the Texas House of Representatives Ways and Means Committee, along with the Texas Senate Committee on Local Government. Fairly laid out why he filed the lawsuit against the city of Amarillo in front of lawmakers, none of which represent the Texas Panhandle.
During the testimonies, Fairly spoke about the potential abuse of anticipation notes from cities and other taxing entities, not being able to require voter approval when issuing debt.
Officials with the city of Amarillo announced that the city’s secretary was not able to authorize the Civic Center funding-related petition, stating that the petition did not conform to the city’s charter. The City Secretary said that the petition did not include a valid “affidavit of circulator,” along with there not being a printed or written copy of the ordinance that came with the petition.
Stephanie Coggins, the city of Amarillo’s city secretary, told MyHighPlains.com that once a petition is received by the city of Amarillo, the parties cannot revise or mend it. The only thing the parties can do is begin a new petition process and submit it to the city again, following the process laid out in the Amarillo City Charter.
In documents filed in Potter County prior to the bench trial, Amarillo Businessman Alex Fairly’s legal team laid out its allegations against the city of Amarillo, highlighting what they called the city’s “secret plan” in using anticipation notes to fund the expansion and improvements to the Amarillo Civic Center Complex.
In further documents, arguments prior to the trial continued to occur including whether or not the litigation should be a jury trial and the city of Amarillo’s response to Fairly’s team’s “secret plan” allegations.
The legal teams for the city of Amarillo, Amarillo Businessman Alex Fairly and the Texas Attorney General’s office met virtually prior to the bench trial, ironing out the details of the litigation.
During the hearing, Sowder determined that the trial will indeed be a bench trial, and not in front of a jury. Sowder also ruled against Fairly’s team’s motion for an in-camera review.
Officials from both sides of the Civic Center funding-related litigation spoke with MyHighPlains.com, prior to the beginning of the bench trial.
Amarillo Mayor Ginger Nelson stressed that the city’s use of anticipation notes for the project is a “more creative” way for the city to help fund the project, a tool in the toolbox that every city has access to. Ultimately, Nelson said she hopes the judge rules in favor of the city, saying the city of Amarillo “…followed the statute properly and I think as we trust the process of this litigation, the results will show that we follow the statute properly.”
Amarillo Businessman Alex Fairly continued to stress his belief that what the city of Amarillo did was illegal, using anticipation notes to push a project forward that Amarillo residents did not agree with. Fairly hopes this litigation sends a message throughout the state, ultimately preventing entities from doing this in the future.
During the two-day trial, officials heard from a number of city of Amarillo staff members, City Council members and experts, arguing whether or not the approach the city of Amarillo took to fund the improvements to the Amarillo Civic Center Complex was illegal.
After the trial
Officials with the two legal teams took time to argue via documents which party should foot the bill for attorneys’ fees in the ongoing Amarillo Civic Center funding-related litigation.
The city of Amarillo’s legal team claimed that under chapter 1205 of the Texas Government Code, Amarillo Businessman Alex Fairly, the intervenor, should pay all, or a substantial portion of, the attorneys’ fees and costs that have come as a result of the case.
Fairly’s legal team argued that under Chapter 37 of the Texas Civil Practice and Remedies Code, Fairly is entitled to reasonable and necessary attorneys’ fees in this case. To back up this argument, Fairly’s team said that Fairly revealed pieces of evidence in this case that showed the city’s attempt to use anticipation notes in this case was illegal.
According to a final judgment, posted Tuesday afternoon in Potter County District Court, Retired Judge William Sowder ruled in favor of Amarillo Businessman Alex Fairly in the litigation surrounding the funding mechanism for the Amarillo Civic Center Complex, ruling that the city of Amarillo’s use of anticipation notes for the project is invalid and void.