Alex Fairly says lawsuit against city is 'way bigger than Amarillo'
Amarillo business owner Alex Fairly spoke in-depth to the Amarillo-Globe News Friday about the lawsuit he filed May 27 against the city of Amarillo for a temporary injunction preventing the issuance of debt for its $260 million rehabilitation plan for the civic center.
Fairly, president of the Fairly Group, is seeking injunctive relief from the court preventing the city from using tax and revenue notes that it approved 4-1 at its May 24 regular city council meeting. He said he feels these notes are not aligned with the will of the voter, who soundly rejected a proposition to finance civic center renovations in 2020.
The city issued anticipation notes under Chapter 1431 of the Texas Government Code. Under this code, municipalities can issue anticipation debt notes to pay for the construction of a public work, along with materials, supplies and equipment that are required to complete this action. The notes can be paid from revenue, taxes, a combination of revenue and taxes or bond proceeds. Once approved under this chapter, the action is then reviewed and considered for approval by the Texas Attorney General.
On Wednesday, the city petitioned the 320th Judicial District Court of Texas for an expedited judgment that would address and encompass any potential litigation including the Fairly Suit which will also give a distinct timeline for approval. If the court gives favorable judgment on the issuance of debt, the legality of the city’s procedure to issue debt will be upheld to move forward and will be held as proper usage of Chapter 1431.
When asked about the city’s expedited judgment request, Fairly said this was something that he and his attorneys were expecting to counter his already filed lawsuit. Under the petition, a district judge will address any objections to the city’s plan on whether debt notes can be issued in the city’s process. Fairly stated that he felt there were strategic reasons for the city going through this process, most being about getting the process going faster.
“We were expecting this of the city; they did this in a previous lawsuit over the certificates of obligation issued related to moving city hall," Fairly said. “This is a request by them to go around waiting on the attorney general by going to a district court for approval to move forward. If they get a judge to issue a favorable judgment, their project is off and running.”
He said the city wants to get it done as fast as it can without going through a time-consuming lawsuit or waiting on the attorney general to get around to it.
Fairly said that due to the usage of government code section 1431 with the amount of money and what they are doing, he believes it is completely out of the norm. He said the city may have thought that the Attorney General may not have rubber-stamped this debt issuance. This expedited judgment would ensure that these issues were addressed in a prompt manner.
“The largest 1431 bond issuance in the history of the state is only $60 million and that was in San Antonio - a city that is 10 times bigger than Amarillo,” Fairly stated. “The $260 million we are asking for is like San Antonio asking for $2.6 billion.”
Fairly stated that the $60 million issuances in San Antonio was used to build fire stations. He contends that is in line with what 1431 has been used for traditionally - for critical needs in a community.
More information about the statute is available on the state's website, https://statutes.capitol.Texas.gov/Docs/GV/htm/GV.1431.htm.
Stating that there were only three options for the city to fund the project, Fairly said the city could have gone back to the ballot, certificates of obligation or the city's choice of using a 1431 bond issuance.
“I think that, integrity wise, if you want to spend this type of money you should go to the voters and ask them," Fairly said. “Even though I would like to get something done downtown, if we cannot talk voters into approving it, then we just do not get to do it. If the majority of people do not want to do it, we just have to kind of live with it.
He said the issue with the city issuing certificates of obligation the city could have been petitioned by voters to force a special vote on the issue.
Fairly said he was confident that there could be a plan to renovate the civic center that voters would get behind.
“I said if we build a good enough plan and it’s the right size and doesn’t cost too much, I think we could go ask taxpayers and obviously they disagreed,” Fairly said. “I totally think we can get something done but the city does not agree.”
When asked if the city could have tried to muster private investment through revenue bonds, Fairly said that was part of the evaluation process the city considered through their consultation firm Garfield Public/ Private LLC, which according to him did not come away with any major investors for the project.
Fairly said he did not feel the city’s contention that predicted increases in interest rates was a major factor in moving the process along.
“If you follow taxpayers' wishes and do not build the building, it does not matter what the interest rate is," Fairly added. “We also believe that we could build a smaller project for a lot less money, which would be a way to save tax dollars. The council is in a rush because the mayor wants to get this before she leaves office; she is not leaving this for the next city council to maybe not get done.”
He said this is what he believes is the impetus to get this project done in such an expedited manner.
One major issue Fairly had with the Garfield report that was used to justify the size of the project was that it claimed it could raise $105 million for naming rights fees over the 30-year term of the debt. He said at an average of $3 million a year, the naming rights predicted fees were overinflated compared to comparable facilities. Fairly said that his group does a lot of work in this field and estimates $500,000 annually in naming rights fees would be about the best-case scenario.
He said that even if the naming rights numbers were accurate, he still would have filed the lawsuit.
“It’s not about should we have the building or not or what size the building it is,” Fairly said. “It is completely about that you should not be able to ignore taxpayers and just do what a small group of people want to do. I think more voters would be against this measure than voted against the last measure the city tried.”
Fairly posed a question to city council about their steps in the measure to fund the civic center project.
“My challenge to the city council is; if you are so sure that taxpayers want the project then take it back to the voters and have a bond election,” Fairly said. “Why did we ever have a bond election if you were just going to the project anyway?”
Reflecting on the mayor’s comments about talking to the taxpayers that say they clearly want the project done for city hall, Fairly pushed back on her assertion.
“That is a ridiculous statement to justify what the council did; she thought the same thing in 2020 and clearly were wrong,” Fairly argued. “If she is so sure, let us have an election. I just think people have been voting these proposals down because they do not trust our leadership.”
Fairly said he felt the lawsuit was worth it due to the bigger implications of the city council decision’s possible impact on the entire state.
“The fight is worth it because even if Amarillo is legally able to pull this off, then attention needs to be brought to this across the state for the Legislature to make the statute more narrowly defined," Fairly said. “That is why it is worth the money involved in bringing this lawsuit; this is way bigger than Amarillo in my mind.”
This article originally appeared on Amarillo Globe-News: Alex Fairly says lawsuit against city is 'way bigger than Amarillo'
