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2012-CI-19589 HAYS STREET BRIDGE RESTORATION GROUP AND BEATRICE VALADEZ

v. CITY OF SAN ANTONIO AND SHERYL SCULLEY

§ § § § § § §

IN THE DISTRICT COURT

288TH WDICIAL DISTRICT

BEXAR COUNTY, TEXAS

DEFENDANT CITY OF SAN ANTONIOS NO EVIDENCE AND TRADITIONAL MOTIONS FOR SUMMARY JUDGMENT

TO THE HONORABLE WOGE OF SAID COURT: NOW COMES CITY OF SAN ANTONIO, DEFENDANT in the above styled and numbered cause and files this its No Evidence Motion for Summary Judgment, or in the alternative, Traditional Motion for Summary Judgment and in support thereof would show unto the Court as follows: I.

This suit arises out of action by the City of San Antonio to sell property to a third party. Plaintiffs allege that this transfer of property constitutes a breach of a contract existing between Plaintiff and The City. Plaintiffs further allege that that the transfer of the property violates the provisions of Texas Local Government Code Sec. 253.001. Defendant City, hereinafter "the City," files this motion pursuant to Tex. R. Civ. Pro. 166a(i) on the basis that there is no evidence to supp011 at least one element of each claim asserted by Plaintiffs against the City. This suit was originally filed on December 6, 2012. Pursuant to an agreed Docket Control Order, discovery in this matter was concluded on January 17, 2014. As such, Plaintiffs have had sufficient time to conduct discovery necessary in this case. CoSA'sMSJ HSBRG, et. al. v CoSA, et. al., Cause No. 2012-CI-19589 Page 1of13

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Alternatively, the City seeks summary judgment pursuant to Tex. R. Civ. Pro. 166a on the basis that the summary judgment evidence negates at least one element of each of Plaintiffs claims such that the City is entitled to summary judgment as a matter oflaw. II.

A.

Background In 2001, the City applied for TEA-21 funds from the Texas Depai1ment of Transportation

to restore the Hays Street Bridge into a pedestrian and bicycle transportation thoroughfare. Ex. A. The terms of the funding required the City of San Antonio to provide 20% of the project cost

(matching fund), if awarded.

The Texas Department of Transportation approved TEA-21

funding for the project on October 3, 2002. Ex. B. The project was accepted by TxDOT on Janua1y 31, 2002, and a LOCAL TRANSPORTATION PROJECT ADVANCE FUNDING AGREEMENT For a Transportation Enhancement Protect between the City and State of Texas,

by and through the Texas Department of Transportation, was executed by the City on JulylO, 2002, and signed by the State on January 21, 2002. Ex. B, Ex. C, C-2. On June 4, 2002, Plaintiff, the Hays Street Bridge Restoration Group, executed a Memorandum of Understanding (MOU). The MOU was signed by Emil Moncivais, Director of the City of San Antonio's Planning Depaiiment. Ex. B, B-1. The MOU obligates the HSBRG to do two things through the San Antonio Area Foundation: 1) Continue to raise "matching" funds. 2) Transfer the funds to the approved City of San Antonio budget. 3) Apply all funds raised through the San Antonio Area Foundation towards the City's 20% match of the TEA-21 funding approved by TxDOT.

Def. CoSA's MSJ HSBRG, et. al. v CoSA, et. al., Cause No. 2012-CI-19589 Page 2 ofl3

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The MOU contemplates that the City's Department of Planning would: 1) Monitor the cash flow for the 20% match in coordination with Finance Department. 2) Coordinate status review concerning funding. 3) Ensure that the funds raised by the HSBRG via the San Antonio Area Foundation's Hays Street Bridge Restoration Fund go to the approved City of San Antonio budget, as authorized by TxDOT, for the Hays Street Bridge project costs. 4) Manage the design and constrnction phases of the project. The City made a second application for government funding in 2006. Although the City did not own it yet, the 2006 application specifically sought state funding for development of the property at 803 North Cheny Street into a park.

Ex.

C, C-3.

The application clearly

distinguished between park development and the bridge rehabilitation, which had been previously approved for TEA-21 funding in 2002. Id., p. 200. The application for state funds to develop the property at 803 North Cheny Street was denied. Ex. D, p. 61. The City never received or appropriated funds to develop the Cheny Street property into a park. Id. After the state declined to fund the Hays Street Bridge park project, the City acquired the property at 803 N01th Cheny Street in October 2007, without designation, dedication, or restriction to, or for use as a park. Ex. E, Ex. F.

In 2012, The City enacted an ordinance

authorizing the sale of the propeity to Alamo Brewery. Plaintiffs subsequently filed this suit.

B.

Plaintiffs' Allegations Plaintiffs allege that the City, in conjunction with the 2001 application for bridge

restoration funding from the Texas Department of Transportation, "insisted upon a written contract for fundraising services between the Hays Street Bridge Restoration Group and the City" obligating the HSBRG to raise money and other assets "to satisfy the City's obligation to contribute 20% of the cost of the Hays Street Bridge Restoration project." Pl's First Amended Def. CoSA's MSJ HSBRG, et. al. v CoSA, et. al., Cause No. 2012-CI-19589 Page 3 of13

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Petition,~ 21.

Plaintiffs allege that the City's reciprocal promise was to use "whatever assets the

Group acquired and donated to the City ... only for the Hays Street Bridge Restoration Project."

Id. A Memorandum of Understanding (MOU) between the City and the HSBRG was executed in June 2002, as set out in greater detail below. Plaintiffs claim that the HSBRG fulfilled its obligation under the MOU. They claim the HSBRG raised or helped raise more than $825,000.00 for the restoration project. Part of the $825,000.00 the Plaintiffs claim the HSBRG raised was the "in kind" contribution of the property located at 803 North Cheny Street. Pt's First Amended Petition,~ 22. Plaintiffs allege the City breached the MOU by not using the Cherry Street prope11y "for the Hays Street Bridge Restoration Project." Pt's First Amended Petition,

~

28. They seek

unspecified monetary damages and specific perfo1mance. Pt's First Amended Petition,~~ 39. Plaintiffs further seek judgment declaring the transfer of the prope11y to Alamo Brewe1y is invalid because the City lacked the authority to so transfer pursuant to Tex. Loe. Gov. Code Section 253.001. As will be shown below, the transfer of the property located at 803 N. Cherry St. did not violate any contractual agreement existing between Plaintiffs and the City, nor was it subject to the provisions of Tex. Loe. Gov. Code Sec. 253.001

III. A.

Breach of Contract Plaintiffs' claim that the transfer of the property at 803 N. Chen-y St. to Alamo Brewe1y

was a breach of the MOU. To properly analyze this claim, it is necessary to look not only at the MOU but at the original agreement with TxDOT as well. The application submitted by the City to the TxDOT had nothing to do with the property at 803 North Cherry Street, did not seek any Def. CoSA's MSJ HSBRG, et. al. v CoSA, et. al., Cause No. 2012-CI-19589 Page4of13

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funds to develop park space, and did not even mention the property at 803 North Cherry Street. The funds were to be used strictly for transp011ation infrastructure. Ex. A., Ex. B. The funding approval described the scope of the project as "Rehabilitate the Existing Historic Bridge for Pedestrian and Bicycle Use as pait of a Bike and Pedestrian Route." Ex. C-1, p. 168. Funding would be provided from TEA-21 funds, with a 20% match by the City. The

agreement and award made no provision to use funding for purposes of park development, and did not mention development of the property at 803 North Cheny Street. Ex. A, Ex. C, C-1, p. 168.

The project's scope of work is defined in the agreement: the scope is restricted to bridge

restoration and does not include development of park property. Ex. C, C-2, p. 275. The MOU pertains only to fundraising to satisfy the City's obligation to pay 20% of the initial bridge restoration project costs for which TxDOT had approved funding. The MOU identifies the City as "the sponsoring entity for the Hays Street Bridge Rehabilitation and Bicycle and Pedestrian Route project." It identifies the HSBRG as the representative of a diverse group of supporters for the project" that has "obtained financial pledges to help fund the project." Ex. B, B-1. All of the funds raised by HSBRG must be applied "towards the twenty (20) percent

match" of the total project cost. Id. The MOU is clearly limited to funding of the specific project for which TxDOT approved TEA-21 funds -- the project the City applied for in 2001. Id. The MOU's recitals demonstrate that the City was the sponsoring entity for the 2001 application for TEA-21 funds for bridge restoration, and that TxDOT's award of funding required the City, as the sponsoring entity, to fund the project, subject to TEA-21-funded reimbursement of 80% of the project cost; the City was ultimately responsible for 20% of the project cost. Id. The clearly stated purpose of the

Def. CoSA's MSJ HSBRG, et. al. v CoSA, et. al., Cause No. 2012-CI-19589 Page 5of13

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MOU is to provide matching funds for the bridge restoration project that was the subject of the 2001 funding application. The MOU specifically addresses the value of in-kind contributions the HSBRG intended to contribute to the bridge restoration.

The MOU identifies the in-ldnd contribution as the

"bridge and land conveyed by Union Pacific." 1 Id.

The MOU is silent about HSBRG's

contribution of the 803 North Cheny property for purposes of the bridge restoration, and the memorandum does not apply to park development. On the same day the MOU was signed, an addendum was also signed. The addendum seeks to absolve members of the HSBRG from individual liability and places restrictions on the use of funding provided by the San Antonio Historical Society. Ex. B, B-1, Addendum.

In

addition, it states that requests for payments by the HSBRG "to the San Antonio Area Foundation shall be subject to the rules and regulations of the San Antonio Area Foundation regarding Donor Advised Funds. Id. "Attachment A" to the MOU is a letter from the San Antonio Area Foundation to the HSBRG, enclosing a copy of an agreement for donor-advised funds. Ex. B, B-1, Attachment A. The letter advises that donations to the SAAF are "total and iffevocable gift[ s] to charity" but that HSBRG may submit recommendations for distributions for various charitable purposes. The letter cautions that the SAAF will not make distributions "to pay a charitable pledge that [HSBRG had] already committed." Id. p. 2. HSBRG was warned that if it exercises or attempts to exercise control over its gift, and if the gift were used to pay any of its debts or obligations-including charitable pledges--"the Internal Revenue Service will either disallow or reduce [the]

Neither the Union Pacific property nor any other in-kind prope1iy was donated by the HSBRG under the tenns of the contract, for the reasons set forth herein. Def. CoSA's MSJ HSBRG, et. al. v CoSA, et. al., Cause No. 2012-CI-19589 Page 6of13

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charitable contribution."2 Id. p. 1. The SAAF Donor-Advised Fund Agreement (signed by

Douglass Steadman on behalf of the HSBRG) stipulates that the funds will be used for the bridge restoration, for the encouragement of "appreciation for the bridge's role in the transp01iation history of our community and [to] enhance future uses in ways that are consistent with that legacy." Id. p. 2.

However, the agreement is clear that recommendations [by HSBRG's Fund

Committee] for fund distributions are advisory only, and that SAAF need not abide by the recommendations. Id. HSBRG's advisors cannot name the recipient to receive distribution of the funds. 3 Id.

1.

There is no evidence to support at least one element of Phtintiffs claims that the transfer of the property from the City to Alamo Brewery breached any contractual agreement between the City and Plaintiffs.

The elements of an action for breach of contract are: 1) the existence of a valid, enforceable contract; 2) Privity between plaintiff and defendant; 3) Perfo1mance by the plaintiff 4) Breach by the defendant, and; 5) Injmy to the plaintiff. The City is entitled to summaiy judgment as a matter of law as there is no evidence of the existence of a valid, enforceable contract between the City and Plaintiffs. Plaintiffs' contract claim is based on an alleged violation of the MOU. The City contends that the MOU is not a valid, enforceable contract - it is a memorandum of understanding. To be enforceable, a contract 2

In this respect, the nature of the HSBRG's breach of contract allegations, discussed in greater detail herein, virtually assure that the charitable contributions solicited by HSBRG are not, in fact, tax-exempt.

Funds that make distributions only to a single identified organization or government entity are not Donor Advised Funds. IRC 4966(d)(2)(B)(i). Def. CoSA's MSJ HSBRG, et, al. v CoSA, et. al., Cause No. 2012-CI-19589 Page 7of13

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must be based on consideration

a mutuality of obligation. In this case, there is no evidence of

mutuality of obligation. There is no evidence of mutual consideration. Thus there is no evidence of an enforceable contract and the City is entitled to summary judgment as a matter of law. Assuming merely for the sake of argument that the MOU is an enforceable contract, which this party denies, the City is fmiher entitled to summary judgment as there is no evidence of a breach of the MOU by the City nor is there any evidence of an injury suffered by Plaintiffs. With regard to the Cherry Street property, Plaintiff did not perform any obligation under the MOU that would trigger a reciprocal obligation by the City.

There is no evidence of

Plaintiffs material performance. There is no evidence that HSBRG applied the Cherry Street property- through the SAAF

towards the City's 20% match of the TEA-21 funding approved

by TxDOT. There is no evidence the property was irrevocably donated by HSBRG (or on HSBRG's behalf) to the SAAF. There is no evidence that the prope1ty was deeded or donated to the City by or through the SAAF. There is no evidence the Cherry Street property was placed in the SAAF's trusteeship, or that it was ever included in the SAAF's Hays Street Bridge Restoration Fund. There is no evidence the prope1ty was "timely transfer[red]" from the Hays Street Bridge Restoration Fund, administered by the SAAF, to an approved City of San Antonio

Budget. There is no evidence the City of San Antonio's "approved budget" accepts real property donations. Accordingly, the City's acceptance of the prope11y falls outside the scope of any performance by Plaintiff under the MOU. There is no evidence the City's Department of Planning failed to "monitor the cash flow for the 20% match in coordination with Finance Department." There is no evidence that any such failure caused injury to the Plaintiffs. There is no evidence the City's Department of Planning failed to coordinate status review conceming funding. There is no evidence that any such failure Def. CoSA's MSJ HSBRG, et. al. v CoSA, et. al., Cause No. 2012-CI-19589 Page 8of13

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caused injury to the Plaintiffs. There is no evidence the City's Department of Planning failed to ensure that funds raised by the HSBRG via the SAAF' s Hays Street Bridge Restoration Fund did not go to the approved City of San Antonio budget, as authorized by TxDOT, for the Hays Street Bridge project cost. There is no evidence that any such failure caused injury to the Plaintiffs. There is no evidence that the design and constmction phases of the project were not managed by a City department. There is no evidence that every department of the City failed to manage the design and construction phases of the project. There is no evidence that any such failure caused injury to the Plaintiffs. As there is no evidence that the City breached the MOU, the City is entitled to summary judgment as a matter oflaw.

2.

Alternatively, the City is entitled to summary judgment as a matter of law as the competent summary judgment evidence establishes that the property was not subject to the terms of the MOU. Even if the MOU imposes any obligations on the City, the scope of the MOU does not

extend to the Cherry Street property. As previously noted, Plaintiffs neither allege nor offer evidence that the prope11y was given to the City through the SAAF. Plaintiffs neither allege nor offer proof that HSBRG ever owned or donated the Cherry Street property at all. The evidence is to the contrary: the property was deeded by BudCo directly to the City of San Antonio. Ex. E, Ex. F. Because the property did not flow through the SAAF, the MOU does not impose

obligations on the City. Even if the property had come to the City through the SAAF under the terms of the MOU, which it did not, the City would have had to liquidate the property and apply the proceeds to "the project." That's because the MOU clearly restricts application of HSBRG contr路ibutions to the project for which the City had been approved for TEA-21 funding-- the Hays Street Bridge Rehabilitation and Bicycle and Pedestrian Route project. Ex. B, B-1. That project's scope did not Def. CoSA'sMSJ HSBRG, et. al. v CoSA, et. al., Cause No. 2012-CI-19589 Page 9of13

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include developing adjacent park properties. 4 Ex. A, Ex. B, B-1.

Accordingly, if the property

transfer were within the scope of the MOU, the MOU would compel the City to do with it exactly what the Plaintiffs sued the City to prevent: sell it. Plaintiffs cannot sue the City for specific perfo1mance as such claims are batTed by the doctrine of sovereign immunity.

Accordingly, and as a matter of law, Plaintiffs' claim for

specific performance must be dismissed.

B.

VIOLATION OF TEXAS LOCAL GOVERNMENT CODE Plaintiffs also contend that the City violated Texas Local Government Code Sec. 253.001

by transfe1ring

the property located at 803 N. Cherry to Alamo Brewery without seeking

approval from a majority ofregistered voters. Section 253.001 requires: Land owned, held or claimed as a public square or park may not be sold unless the issue of the sale is submitted to the qualified voters of the municipality at an election and is approved by a majority of the votes received at the election; provided, however, this provision shall not apply to the sale of land or right-of-way for drainage purposes to a district, county, or corporation acting on behalf of a county or district.

1.

There is no evidence to support at least one element of Plaintiffs' claims that the transfer of the property from the City to Alamo Brewe1路y was subject to the requirements of Tex. Loe. Gov. Code 搂253.001. To establish a claim that the City violated this statutory requirement, an essential element

for Plaintiffs to prove is that the land in issue, 803 N. Cherry St., was owned, held, or claimed as a public square of park. The City contends that there is no evidence that 803 N. Cheny St. was ever owned by it as a park. The City contends that there is no evidence that 803 N. Che1ry St. was ever held as a park. The City contends that there is no evidence that 803 N. Cheny St. was 4

In contrast, the Union Pacific's donation of the bridge itself (the thing that the TEA-21 funding was supposed to fix) might be considered an in-kind donation to the project after all, the MOU specifically referenced it, and there would be no "project" at all without UP's donation . But the Cherry Street property was not integral to the TEA-21 project, not mentioned in the MOU, and therefore falls outside or the MOU's tenns. Def. CoSA 's MSJ HSBRG, et. al. v CoSA, et. al., Cause No. 2012-CI-19589 Page 10of13

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ever claimed as a park. As there is no evidence to that effect, the requirements of Tex. Loe. Gov't Code Sec. 253 are not applicable to the sale of the property located at 803 N. Che11y Street and therefore the City is entitled to summaiy judgment as a matter of law on that claim. 2.

Alternatively, the City is entitled to summary judgment as a matter of law as the competent summary judgment evidence establishes that the transfer of the property from the City to Alamo Brewery was subject to the requirements of Tex. Loe. Gov. Code ยง253.001. Alternatively, the City is entitled to summary judgment as a matter of law on the claim of

violation of Sec. 253 as the competent summaiy judgment evidence clearly establishes that from the time of acquisition of the property at 803 N. Cherry Street until the sale of the property to Alamo Brewe1y, the prope11y was not owned, held, or claimed by the City as a pai'k. Ex. D, p. 31, p. 68,ll. 12-19, p. 78, I. 4

p. 79, /. 13, p. 82, I. 4 0 p. 83, I. 3, D-1. Ownership of the

property was transferred to the City in 2007 from Berkely Dawson.

Ex. E, Ex. F.

In

transferring the prope11y, the grantor included language in the deed that if the property is ever used as a park, the grantor retains the right to name such park. Id. This language supports the fact that the prope11y was not accepted as a park. There is evidence that the City explored the possibility of using the prope11y as a park and to that extent prepared an application for grant funds from the State of Texas. Ex. C, C-3. However, this application was submitted in 2006, prior to the City's ownership of the property. Id. Further, the grant application was denied prior to the transfer of ownership. Ex. D, p. 61.

Thus, at the time the property was acquired by the City, there was no funding to develop the prope11y as a park and no intent to hold it as such. Ex. D, p. 31, p. 68,11. 12-19, p. 78, I. 4 - p. 79, I. 13, p. 82, I. 4 0 p. 83, I. 3, D-1. The evidence further establishes that the property was never

listed on the City's register of park lands. Id. The evidence establishes that this prope11y was

Def. MSJ HSBRG, et. al. v CoSA, et. al., Cause No. 2012-CI-19589 Page 11 of13

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not held, owned or claimed as a park by the City at any time during its ownership of the land; therefore, section 253 is inapplicable to the sale of the property to Alamo Brewery and the City is entitled to summary judgment as a matter of law on this claim. WHEREFORE PREMISES CONSIDERED, DEFENDANT CITY OF SAN ANTONIO prays this Court grant this Motion for Summary Judgment in all things, that the claims against it be dismissed in all things and for such other and further relief to which this party may be entitled.

Respectfully submitted, CITY OF SAN ANTONIO Robert F. Greenblum, City Attorney SBN: 08390430 Office of the City Attorney Litigation Division 111 Soledad St., 1oth Floor San Antonio, Texas 78205

Isl Deborah Lynne Klein DEBORAH LYNNE KLEIN Deborah.Klein@sanantonio.gov 路 Attorney IV SBN: 11556750 (210) 207-8919 (210) 207-4357 -Facsimile

Def. CoSA's MSJ HSBRG, et. al. v CoSA, et. al., Cause No. 2012-CI-19589 Page 12of13

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Hearing on the above motion is set before me, the undersigned Judge, sitting in the Presiding District Court, Room 109, of Bexar County, Texas on the 24th day ofFebrnary, 2014 at 8:30 o'clock a.m. SIGNED this _ _ day of _ _ _ _ _ _., 2014.

JUDGE PRESIDING CERTIFICATE OF SERVICE On this the 31 day of January, this instrument has been entrnsted to the filing party's electronic filing manager for service on the paiiies and/or counsel listed below. This instrnment may, and shall, if any of the below-listed persons does not have an email address on file with the electronic filing manager, be served in person, by mail, by commercial delivery service, by fax, or by email the following persons: Amy H. Kastely 233 Lotus Ave. San Antonio, Texas 78210

x

x Elva Trevino 917 S. Hamilton San Antonio, Texas 78207 William Shaw X The Law Office of William "Crnz" Shaw, PLLC 1630 E. Houston, Ste. 102 San Antonio, Texas 78202 Shawn Fitzpatrick FITZPATRICK & KOSANOVICH, P.C. P.O. Box 831121 San Antonio, Texas 78283-1121

X

DEBORAH LYNNE KLEIN Def. CoSA' s MSJ HSBRG, et. al. v CoSA, et. al., Cause No. 2012-CI-19589 Page 13of13

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Hays St - COSA Motion for Summary Judgment