City Immunity, Gentrification at Texas Supreme Court

AUSTIN (CNS) — The Texas Supreme Court heard arguments Thursday about a controversial development project that has generated six years of litigation between neighborhood advocates and city management, in a case centered on urban displacement, backroom deals, an iconic view and governmental immunity.

Dozens of East Side San Antonians bused to Austin to follow the arguments, sporting T-shirts stating “Mi barrio no se vende” — my neighborhood is not for sale — a slogan also featured on posters dotting the fence around 803 North Cherry St., a vacant 1.7-acre lot that runs underneath the Hays Street Bridge.

This is the lot that the Hays Street Bridge Restoration Group claims was sold illegally in 2012 to Alamo Beer Company owner Eugene Simor, breaching an agreement they’d reached with the city a decade earlier.

In the early 1900s, a predecessor to the Union Pacific railroad planned a railway through San Antonio that would cut through the city’s almost exclusively black East Side. The city approved the plan on the condition that the company build a bridge connecting the East Side to downtown.

So in 1910 two wrought-iron spans were brought to San Antonio and fused to create the Hays Street Bridge. By 1982 the bridge had deteriorated so badly it was no longer fit to carry vehicles, so the city closed it to the public. The Hays Street Bridge sat in decay for decades.

When Nettie Hinton returned to her East Side home after spending 30 years in Washington, D.C., she had no patience for plans to get rid of the bridge.

“One of my fondest memories, having been born and raised in what is now known as Dignowity Hill,” said Hinton, 79, was her father “taking [my brother and me] across the Hays Street Bridge. We were delighted by the views that we were seeing of our community, and hearing the clank-clank of the bridge as we went across. It was adventurous, and it was wonderful.”

Hinton helped form the Hays Street Restoration Group in 2000, which worked to secure $2.89 million from the Texas Department of Transportation to repair the bridge.

The state grant required San Antonio to raise more than $718,000 for repairs, a responsibility passed to the Restoration Group in a Memorandum of Understanding in 2002.

Eight years later, the bridge reopened to pedestrians, and today is frequently the site of yoga sessions, graduation photographs and an occasional wedding.

Union Pacific gave the bridge to San Antonio in 2008, just one year after BudCo Ltd. gave the adjacent 803 North Cherry lot to the city. But in 2012, the city made a decision that Hinton and others call a betrayal, and sold the lot to Simor, owner of the nearby brewery.

The Restoration Group sued the city in Bexar County Court that year, of the 2002 memo. The lawsuit worked its way through appeals to the Texas Supreme Court, to whom the group’s attorney, Amy Kastely appealed in June 2017, saying the city “transferr[ed] land that the group had acquired for bridge visitors’ parking, restroom and educational facilities to a private company for its commercial use.”

The city denies that the land had ever been used as a park, planned to be a park, nor was designated as a park in its deed or by BudCo when the property was donated.

But the Restoration Group claims that park development had always been discussed throughout the decade-plus restoration process. Its supporters cite other evidence that the people had expected it would become public land.

In 2006, for example, the city and Restoration Group sought another grant from the Texas Transportation Commission to develop a nearby park. In support of this, BudCo’s vice president of marketing wrote a letter to the commission: “As the owners ... it is our desire to donate that land to the City for redevelopment into a park to serve visitors of the Hays Street Bridge.” This application was denied.

The assistant city manager at the time suggested that City Council accept the donation, writing: “Once developed, this land could become community public space. It has been envisioned by the community as a weekend farmer’s market, but could be used for other recreation uses as well.”

The Restoration Group says the controversial land sale might better be described as a land transfer: Simor had to pay $295,000 for the property, but the city gave him $295,000 back for improvement costs and $500,000 more in other incentives.

The group claims that then-Mayor Phil Hardberger, “old golfing buddies” with Simor, arranged the “sweetheart deal” in an act of cronyism.

Gentrification

Anti-gentrification activists joined the fray. Simor worked with developer Mitch Meyer of Loopy Limited to draft plans for a five-story, mixed-use apartment complex. But when they presented their plans to the city’s Historic and Design Review Commission, they were rejected last year and again this March.

That’s when defendant City Manager Sheryl Sculley stepped in to approve a version of the plan with 11 conditions, including three relating to views of the bridge: the only three that were stripped from the plan in July, when Sculley gave the project its final stamp of approval.

The dispute highlights difficulties facing gentrification opponents nationwide as they struggle to protect historic and near-downtown neighborhoods from rising property taxes borne by the low-income, mostly minority communities that live there.

“In May, my neighbors to the right of me, to the left of me and behind me all had to move out of the neighborhood at once,” said Natasha Hernandez, a nurse and lifelong East Side resident, at a news conference before Thursday’s hearing. “My community is disappearing.”

Hinton added: “Dignowity Hill is gentrifying so fast it’d make your head spin.” She said she never imagined that homes near the bridge could be worth more than half a million dollars. Hinton frequently parks her truck on a small strip of land, worth $600 fifteen years ago, near her home. “Last year, it had gone up to $12,000. This year it’s $26,000.”

Developers and realtors are pressuring East Side homeowners to sell. Gabriel Galloway, a political activist aligned with Dignowity Hill residents on local issues, says land speculators will offer to buy homes at low prices, but call 311 (the city’s customer service line) to complain of code violations when their offers are declined. The citations reduce the value of the home and saddle residents with fees — then the companies return with lower offers.

Christine Drennon, director of Trinity University’s Urban Studies Department, says these practices result from tight housing and infrastructure budgets.

“[Cities’] greatest source of revenue is property taxes, but you’ve seen cities get very creative. They rent out public space for a while, or they sell space on the Hays Street Bridge, or they’ll sell the land underneath the Hays Street Bridge,” Drennon said. “We want to understand these as unique, but it’s actually more powerful if we understand them as examples of a much more powerful phenomenon.”

The courts view much of this political background as window dressing, and focus on drier legal questions relating to contract law and government immunity.

In 2014, a Bexar County jury ruled that the city had violated the memo. The jury did not, however, “find that the city of San Antonio owned, held or claimed the property located at 803 North Cherry Street as a park.”

The Texas Fourth Court of Appeals reversed that ruling. Without deciding whether the memo was a contract or whether the group suffered an injury, the three-judge panel found the city immune from breach of contract claims in which money damages are not sought or in which “the contractual ‘payment due’ is not monetary.”

That’s the issue before the Texas Supreme Court: Cities are safeguarded against certain breach of contract suits that seek monetary damages, but are they immune to requests for “specific performance,” as when a group wants to nullify the city’s sale of land?

If the court rules in the group’s favor, they may be able to win a 2014 motion frozen in Bexar County Court would hold the city in contempt for going through with the property sale.

But first they need to defeat the city’s motion to dismiss, which claims that the lower court’s order was satisfied in 2014 when the $295,000 from the 803 North Cherry sale helped pay for bridge restoration.

“Monetary damages is not adequate to remedy the group’s injury,” Kastely said during the well-attended Supreme Court hearing. “The group sought to benefit the community. They did not seek a payment for their fundraising services.”

In the group’s eyes, striking a blow against government immunity would be a victory for democracy.

“A fascist government, the opposite of a democracy, would not allow their citizens to sue them,” Kastely said to the crowd of San Antonians after the hearing. “That idea, that the government can do no harm, is so against the fundamental principles of this country.”

If the developers get their bridge apartments, there’s at least this: Simor and Meyer’s plans include a 0.2-acre “pocket park” between the building and the bridge, open to the public.

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