Amarillo Civic Center trial starts Tuesday

After months of legal wrangling between the city of Amarillo and local businessman Alex Fairly, both parties are set to argue their cases this week before Judge William Sowder on whether the city can issue debt to fund its civic center project using Texas Code 1431.

The Amarillo City Council approved the issuance of $260 million in debt using anticipation notes with Ordinance 7985 by a 4-1 margin May 24, with Cole Stanley being the only dissenting vote of the elected body. Immediately challenging the council’s authority to fund the civic center project by this means, Fairly filed for injunctive relief against the city to prevent the issuance of the debt just three days later.

Fairly challenged that the state statute that the city used for this funding method was a manipulation of the code that was not designed to pay for projects such as the civic center but for items that are critical needs for cities. Also citing that this was the largest bond issuance under this statute by a city by about $200 million, Fairly stated that this was overreach and not done in the spirit of the statute.

Emphasizing that the city had tried to pass a measure previously to address the Amarillo Civic Center in a 2020 bond election that saw 61% of voters reject a $275 million bond proposal, Fairly said that this was the city’s way to try to go around the will of the voters.

The city contends that situations have changed since that election and that there is a need for the civic center project to move ahead. Mayor Ginger Nelson stressed that the more this project is kicked down the road, the more that it will cost taxpayers and cause revenue loss due to the current state of the civic center.

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Nelson stated that the civic center is in bad need of renovation, which has been in discussion for now over a decade. Without these renovations, the city contends that the civic center will not remain competitive in the convention market, which will result in a loss of revenue, losing out to cities with better facilities.

“This is just the environment that we are in, and I do not see another way to do it that does not end up costing us a lot more money," Nelson said a week after passing the ordinance. “The bottom line is that I hear from taxpayers that we need the project, and we want to pay as little as possible for it. And seeing the urgency of the situation with the Garfield Report, we took action as needed.”

Councilmember Stanley, the one opposing vote on the ordinance, said at the time of the vote passing that he felt that the proposal should go to the public for a bond election and did not feel that it was appropriate to issue this amount of debt without taking it to the voters.

With legal challenges mounted against the ordinance to issue debt, the city of Amarillo sought an expedited judgment to wrap all legal challenges into one case and have the issue settled in a timely manner due to rising interest rates. The city stated that with interest rates expected to increase, delays would substantially increase the project's total cost for the taxpayer. Since that point, the Federal Reserve has had multiple rate hikes.

In July, both parties met with Potter County appointed Judge Sowder, who set the trial for Oct. 4 and not to last more than two days to make a judgment on the case. Since that time, both parties have been open to extending that time if needed.

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At that meeting, Sowder set parameters for the trial, with Fairly asking for a jury trial and the judge siding with the city for a bench trial. Fairly’s team was given more discretion in deposing city officials and what could be admitted as evidence.

In August, the city filed for Fairly to have to post a surety bond to cover potential delay costs for the city project if his case was found to have no grounds, to which Sowder ruled that no bond was necessary in the case. Fairly’s team argued that since the Texas AG or their financier had not approved the measure at this point, the city had no claim to cite potential added cost.

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Also in August, a statement of petition was submitted to the city designed to have the city take its measure to an election by getting enough registered voters to force a referendum vote, as referenced in the city charter. On Aug. 29, that petition with more than 12,000 signatures was submitted to the city.

Last week, the city’s secretary’s office rejected the petition for not complying with the city charter, citing that it was missing key elements that are required by city and state law. Councilmember Stanley, who was one of 12 people on the steering committee, felt that the petition should have moved forward to the council since in his opinion, these were format errors, and all necessary elements were provided.

Amarillo City Secretary Stephanie Coggins said that her office was impartial in the matter and had a sworn duty to follow the exact parameters of the law in deciding not to present the petition to the council.

More:Petition to block Amarillo Civic Center project rejected by city

With the petition currently not hanging over the case, this week’s trial should be the definitive answer on whether the city of Amarillo can move forward on its civic center funding plan.

Last week, Sowder made some procedural rulings for the upcoming case. These included again rejecting Fairly’s request for a jury trial, stating that the expedited nature of the case called for a bench trial. He also ruled against an in-camera review of city emails, calling it a fishing expedition.

Day one of the trial is scheduled for Tuesday morning at the Potter County Courthouse and will be streamed live on YouTube.

This article originally appeared on Amarillo Globe-News: Amarillo Civic Center trial starts Tuesday