Corpus Christi Hotel Project Lawsuit: FEMA Screenshot and Default

The Corpus Christi Homewood Suites lawsuit is a civil case filed by rival hotel developer Ajit David against the City of Corpus Christi, asking a Nueces County court to void a $2 million taxpayer-funded incentive awarded to the developers of a downtown Homewood Suites by Hilton. David alleges the developers won the grant partly by presenting an altered federal flood document, and that the City Council violated its own charter and the Texas Open Meetings Act in approving the money. The suit was filed on September 30, 2024, and remains pending.¹

Who Sued, and What They Want

Ajit David is a Nueces County hotel developer who operates under RGB Hospitality. He filed suit as Cause No. 2024CCV-61174-3 in County Court at Law in Nueces County, naming the City of Corpus Christi as defendant and serving the city through Mayor Paulette Guajardo.¹ He is asking the court for a declaratory judgment voiding City Ordinance 24-0256, which authorized the $2 million grant, along with attorney’s fees. He is not seeking money damages for himself.

The Incentive and the Project

Elevate QOF LLC, a company led by developers Deven Bhakta and Phillip Ramirez, bought property at the corner of North Chaparral Street and Lomax Street in downtown Corpus Christi in January 2022.² The planned project is a five-story, 126-room Homewood Suites by Hilton with a reported $30 million capital investment, and it would be the first hotel in Corpus Christi to receive Type B sales tax economic development funds.³

Elevate QOF applied for Type B funding in September 2023. The city’s Type B Corporation board authorized the $2 million grant on December 11, 2023, and gave final approval on January 22, 2024.⁴ The project also received $1.55 million in separate Tax Increment Reinvestment Zone financing tied to ground-floor retail requirements.⁵

The Altered FEMA Screenshot

The central factual allegation in the suit concerns a screenshot from a FEMA website that appeared in a PowerPoint presentation the developers gave to the Type B board and the City Council. The original FEMA page included a release date of April 13, 2022, and a release number, R6-009, marking when updated flood maps for the area had been finalized. According to city officials and the city auditor, the version shown to the board had those details covered up with text boxes matched to the page’s background color, requiring what the auditor described as “at least 8-10 intentional computer key or keypad strokes.”⁶

The dates mattered because the developers told the Type B board that new FEMA flood zone requirements were an unexpected cost that hit the project mid-construction. Developer Phillip Ramirez called the requirements a “surprise” at a December 2023 board meeting.⁷ If the flood maps had been released in April 2022, months before Elevate QOF even applied for funding, that framing fell apart. The site had been identified as within a flood boundary since at least 1985.⁶

In a recorded phone call later obtained by KRIS-TV, City Manager Peter Zanoni told David the slide was altered and that the presentation was built so a reader “wanted to be led to believe that the FEMA [change] was just recent.”⁶⁷⁵

The Legal Theories in the Petition

David’s petition raises four grounds for voiding the ordinance.

Two-reading rule violation. The city charter requires an ordinance to be considered and voted on at two regular meetings. David contends the first and second versions of the ordinance were substantively different, so each version was voted on only once. The first reading, on February 20, 2024, focused on FEMA flood compliance costs. The second reading, on April 23, 2024, emphasized “street level retail, public space, and outdoor dining area activation” along with floodwall and dry flood-proofing expenses.⁸
Fraud and public policy. The application relied on what David calls an altered federal document, and the grant went to a project he alleges was already fully funded and under construction, making the public money unnecessary.
Unconscionability. David alleges the combination of falsified documentation, false public statements by Mayor Guajardo, and the use of public funds for an already-funded project renders the ordinance unconscionable.
Texas Open Meetings Act violations. The suit alleges the city manager knew the vote count in advance and that the mayor privately solicited votes during a public meeting, in violation of provisions of the Texas Government Code.¹

Where the Civil Case Stands

As of mid-2026, the lawsuit remains pending in County Court at Law in Nueces County. No ruling on the merits has been issued, and the ordinance remains in effect.⁹ Mayor Guajardo was deposed in the case on August 6, 2025, and her testimony has since become the basis of separate perjury allegations in a removal proceeding against her.

What Investigators Found

Three separate reviews have reached different conclusions about the same underlying facts, and each matters to how a court may view the fraud claim.

Criminal Investigation: No Charges

A criminal investigation by the Corpus Christi Police Department, the FBI, and the Texas Rangers began in September 2024. By early 2026 the case was formally closed with no charges filed. The investigative team concluded: “Based upon the totality of the evidence reviewed, the investigative team was unable to establish probable cause or otherwise substantiate any violation of applicable State or Federal criminal law.”¹⁰ The Nueces County District Attorney’s office determined the omission of dates from the FEMA screenshot was “not material to any action,” and the FBI and U.S. Attorney’s office found that supporting an incentive application with alleged misrepresentations did not violate Texas law. Investigators found no evidence of a quid pro quo. Police noted their scope was limited to criminal offenses and did not address potential civil or charter violations, which are the issues raised in David’s suit.

Independent Attorney Review: Ordinance Still Valid

The City Council hired outside attorney Daniel Ray to conduct an independent administrative review. Ray presented his findings on February 17, 2026. He concluded there was “no prosecutable criminal fraud or forgery” and that the slide “appears to have been intentionally altered to cover the dates” but did not meet the threshold for criminal fraud because it was a presentation slide that was not ultimately relied upon for the council’s vote. Ray also found the tax incentive ordinance remained valid, stating the funding “rested primarily on economic development metrics,” and that allegations of Open Meetings Act violations “lack legal support.”¹¹ Ray’s conclusions cut directly against David’s four legal theories.

City Auditor: Reasonable Basis for Fraud

On August 21, 2025, City Auditor George Holland issued a memo to the mayor and council stating his office had found “a reasonable basis to conclude that fraud, abuse, and/or illegal conduct have occurred” regarding the incentive.⁴ Holland wrote that city leadership had concluded the facts “constitute a felony forgery under the Texas Penal Code 32” and that passage of Ordinance 24-0256 was “tied to a forgery of a federal document.” He recommended the council authorize an external investigation.¹²

The City’s Default Letter to the Developers

Separately from the lawsuit, the City Council voted on May 12, 2026, to send a formal default letter to Elevate QOF LLC, citing “misleading material representations made to the Type B Corporation.”¹³ The letter gave the developers a 60-day cure period. The Type B Board retains ultimate authority over whether the issue is resolved, potentially by the developers providing corrected, unmodified FEMA documentation.⁷ Developers’ attorney Jeff Lehrman called the council’s actions “politically motivated” and pointed to the law enforcement investigations that found no criminal wrongdoing. This default process is a contractual action by the city against the grant recipient, separate from David’s judicial challenge to the ordinance itself.

Spillover: Mayor’s Removal and Ethics Complaints

The lawsuit has fed into a broader fight at city hall. On August 29, 2025, six Corpus Christi residents filed a petition to remove Mayor Guajardo from office, alleging she was aware of concerns about the altered document yet still placed the incentive on the agenda and voted to approve it.⁹ Articles of impeachment filed on March 13, 2026, added allegations that Guajardo committed perjury during her August 6, 2025, deposition in the David lawsuit.

Guajardo denies wrongdoing. On April 13, 2026, she filed a federal complaint against the city and five council members, arguing the removal proceedings lack due process and that the city charter’s removal provisions apply to council members rather than the mayor. On May 26, 2026, U.S. District Judge George C. Hanks Jr. denied her request for a preliminary injunction, finding she had not shown a “substantial likelihood of success on the merits.” The formal removal hearing is scheduled for July 22–23, 2026.

Resident Sondra Meyer has also filed ethics complaints against council members Gil Hernandez, Kaylynn Paxson, and Eric Cantu, alleging they voted on matters involving David despite receiving campaign contributions from him. Cantu has argued recusal is only required when donations exceed a $2,700 threshold and has alleged the mayor received significant donations from the Homewood Suites developers. Those complaints remain unresolved.¹⁴

The Homewood Suites project itself continues to move forward at the corner of Chaparral and Lomax while the civil case, the default process, and the removal hearing all remain open.

1
EW Scripps Brightspot CDN. Homewood Suites Lawsuit Petition
2
KRIS-TV. Law Enforcement Agencies Not Pursuing Criminal Charges in Homewood Suites Case, Developer’s Attorney Says
3
Corpus Christi Caller-Times. Corpus Christi Type B Board Homewood Suites Lawsuit Hotel Fraud Allegation
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EW Scripps Brightspot CDN. City Auditor Memo – Homewood Suites Allegation
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KRIS-TV. Questions Arise Over City’s Disclosure of Document Concerns in $2M Hotel Deal
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KRIS-TV. City Auditor Finds Reasonable Basis Developers Committed Fraud for $2M Incentive
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AOL News. Corpus Christi Issues Default Letter
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KRIS-TV. Hotel Owner Seeks to Invalidate Corpus Christi City Council Vote Awarding $2 Million to Developer
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Corpus Christi Caller-Times. Texas Corpus Christi Mayor Paulette Guajardo Removal
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Corpus Christi Caller-Times. Homewood Suites Corpus Christi Hotel Tax Incentive Police Closed a Case Fraud Allegation
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Corpus Christi Caller-Times. Homewood Suites Corpus Christi Hotel Tax Incentive Police Investigation Fraud
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Corpus Christi Caller-Times. Corpus Christi Fraud Homewood Suites Hilton Downtown Hotel Incentive
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Corpus Christi Caller-Times. Corpus Christi City Council Sends Default Letter Controversial Homewood Suites Hotel Project
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Yahoo News. Corpus Christi Officials Accused Ethics