Official alleges HCC overpaid for building

Dissident board member files criminal complaint over purchase

Houston Community College, which has spent millions on far-flung properties it may never develop, now faces a criminal complaint filed by one of its own trustees alleging it unlawfully overpaid for a vacant building.

The complaint filed Wednesday by trustee Dave Wilson focuses on HCC’s February purchase of a former Conn’s store for $8.5 million, a price $3.2 million higher than the original value assigned by the same appraiser in November. The higher value reflected a planned fiveyear lease of the building to Tesla Motors that never materialized; HCC has yet to find a tenant.

According to Wilson’s complaint, Chuck Smith, HCC’s chief facilities officer, told trustees that the college was getting a second appraisal because the first was not high enough to satisfy the seller.

“In essence, they were seeking a second appraisal that would meet the owners’ asking price,” the complaint says.

Wilson filed the complaint with the Harris County District Attorney’s Office, which declined to comment on it. HCC administrators did not respond to requests for comment Tuesday, but they have said previously that they wanted the building because it was the one remaining piece of property in a former shopping center that is now HCC’s West Loop campus.

Wilson’s complaint raises additional questions about HCC’s real estate practices. The school has purchased more than 240 acres of land since 2010, and dozens of those properties remain undeveloped.

The land-buying spree has drained a $425 million bond package voters approved in 2012, pulling funds from projects the college promised voters it would complete with the bonds. Wilson contends the Conn’s purchase depleted funding for a new building in his district. Lone wolf on board

Wilson’s complaint is likely to increase his reputation as a gadfly and to aggravate friction between him and other trustees and the administration. He is frequently the lone no-vote on the administration’s pitches to the board.

Wilson, best known in Houston as an anti-gay activist, narrowly defeated an incumbent to win election to the board in 2013 based on a campaign that some said was intended to deceive voters in the largely black district into believing he was black. Wilson is white.

Wilson was for years a perennial candidate in local elections before the controversial 2013 HCC election, which prompted an ongoing legal battle over whether he was eligible to run. The Harris County Attorney’s Office sued Wilson, claiming he lied about his residency when running for office. Wilson has won at several levels, but the county has appealed for a second time and HCC is on the hook for his attorney fees.

“We’re supposed to trust the person who lies and manipulates his way into office? I don’t think so,” HCC board Chairman Zeph Capo said. ‘Ridiculous’ complaint

Capo, who voted to buy the Conn’s building, said Wilson’s complaint is “ridiculous.” Capo said the college hired “an appraiser with a good reputation and a stellar record” and the board acted on the recommendations of the experts.

Capo said Wilson is only interested in “getting his face on TV” and is not acting in the best interest of the college.

“I think it’s in the best interest of Dave Wilson,” Capo said.

Wilson said he was acting on behalf of the residents of his district.

“What can I do? Am I going to roll in with the get-along to go-along crowd? Hell no,” Wilson said. “The chancellor needs to be fired, (chief facilities officer) Chuck Smith needs to be fired and I don’t care what the board thinks.”

Wilson’s complaint comes a week after HCC settled a costly legal battle with former acting Chancellor Renee Byas, who also had served as the college’s top lawyer. Byas alleged in court that she had been talking to the FBI about potential misuse of bond money and allegations that some trustees had steered business to their friends and political allies.

When the Conn’s building became available late last year, college officials approached the owner with the $5.3 million price from the original appraisal. The owner turned down the offer and explained the first appraisal failed to reflect that the building could be leased, HCC officials have said.

“So we sent the appraiser back to talk to the owner and said, value it based on what the owner thinks the value is based on the potential tenants,” Smith said in an interview in June.

HCC officials brought the second appraisal, with the final $8.5 million price tag, to the board in January. The board voted 5-1 to approve the purchase. Wilson voted against the deal; three other trustees were not at the meeting.

It won’t be easy to prove that college officials broke any law, said Kellen Zale, an assistant professor at the University of Houston Law Center who teaches property, real estate, land use and municipal law.

“Sometimes things have the look of impropriety but it is exceedingly difficult to show it was actual illegal activity,” Zale said. “Just because people make bad decisions in real estate all the time, whether they’re a government actor or a nongovernment actor. It’s very difficult to prove that something just wasn’t a bad deal.” Good investment

Capo told the Chronicle at the time that the former Conn’s building was a good investment, even if it wasn’t to be used right away.

“We’re not buying for immediacy, we’re buying for the future. We’re buying to figure out what’s going on over the next 20 years at this campus,” Capo said. “Maybe it is worth it for us to say we have thought this piece through … that we’ll be able to hold it for future expansion.”

But Wilson says in his complaint that the board was misled about how the building would be used. Chancellor Cesar Maldonado told the board before the vote that HCC would lease 20,000 square feet to Tesla and keep 5,000 for the college, the complaint says. But the $8.5 million appraisal assumed the college would lease all 25,000 square feet of the building.

Wilson contends that the assumption that the college would lease all of the building added $1.7 million to its value.

His complaint also alleges that with bond money going toward at least the Conn’s purchase and the planned purchase of a shopping center in southwest Houston, HCC is poised to exceed an Internal Revenue Service rule that government entities can’t spend more than 5 percent of a bond package on buildings it isn’t using for schools.

HCC, meanwhile, has put a large “for lease” sign on the Conn’s building.