Responsible Urban Development for Houston (RUDH) has filed a petition in Harris County District Court challenging the 380 Agreement between the Heights-area Walmart and the City of Houston, which was awarded in 2010 and provides $6 million in reimbursements to the developer, Ainbinder Heights LLC., for the controversial project at I-10 and Yale.

The City has said that its pursuit of the 380 Agreement gave it some measure of control over the development, and provided an avenue through which it could demand concessions above and beyond what's required, including more greenery, wider bike paths and better parking lot lighting.

The opposition to the 380 agreement hinges on the fact that the developer has stated (and the City confirmed) that it had the funds and was willing to build the project with or without incentives from the City. (You can read some of CultureMap's past coverage of the controversy here, here and here.)

CultureMap spoke to Jeff Jackson, RUDH director and filing attorney, about why the nonprofit residents group is challenging now and what it hopes to gain from the filing.

Jackson says the group chose to file now — 13 months after the 380 was awarded — in part because of similar economic circumstances surrounding the development of a Heights-area Kroger at Studemont and I-10. (The City is looking to reimburse the developer of that site up to $2.5 million for road and infrastructure improvements.)

"One reason we waited to file was we had a bunch of public information documents to put together and we didn't want to rush it," Jackson says. "Second, we got wind of the Kroger 380 and that the mayor and her economic team were planning on giving away more tax dollars in a corporate welfare-style giveaway clouded in this 380 agreement. With all the legal research done, we felt this was the right time to file and bring the public's attention to these 380 agreements."

These "380 Agreements" are established under Texas Government Code to "promote state or local economic development and to stimulate business and commercial activity." The Texas Constitution states that all expenditures of municipal funds must serve a “public purpose,” including expenditures related to 380 programs.

Houston's use of 380 agreements is unusual, Jackson says, for two reasons. First, Houston is the last of Texas' major cities to utilize the agreements. He says Houston's use is also unique in the City's interpretation of public purpose.

"Through my investigation, I have not uncovered a similar use of a 380 where a city basically uses private money as substitute financing for road improvements, where the road improvements solely benefit the profit margins of the project," Jackson says.

Jackson is referring to the road and infrastructure improvements immediately surrounding the Walmart construction site, which the City claims as a public good justifying the 380 agreement. Jackson and others argue that those improvements would have had to be made, anyway, for the project to have been approved by Public Works and Engineering had Ainbinder proceeded with the project without tax incentives.

In addition, Jackson says a loophole exists in the City ordinance that established the 380 program which allows the Director of Planning and Development — at this time Marlene Gafrick — to waive the criteria demanded by the ordinance if an application is "otherwise meritorious."

"Our argument is the fact that the criteria can be waived at the whim of one unelected bureaucrat does not meet constitutional muster," Jackson tells CultureMap.

In an assembly after Wednesday's City Council meeting (in which Kroger's 380 was tagged), Mayor Parker touched on the issue:

"We don't write a check to Kroger, we don't write a check to Walmart, we're not giving money to anybody. They pay for public infrastructure and we reimburse them if they generate incremental tax revenue."

When asked directly about RUDH's suit, which was filed Tuesday, Parker said, "Your sources are better than mine, I have no clue what you're talking about. The RUDH folks have not wanted to see that Walmart there and they've used every tactic they could to prevent its construction."

Officials from the mayor's office referred CultureMap to those Parker comments when contacted Friday. A representative for Ainbinder says the company does not comment on pending litigation.

Although RUDH was founded in direct response to the Walmart development, Jackson says the suit is about more than that; it's about the City's alleged broad misuse of 380 program funds.

"The lawsuit specifically does not ask the judge to prevent the development, or to temporarily restrain them from building the development. The argument is on Texas Constitutional grounds and has specifically to do with 380 agreements," Jackson says. "While the lawsuit might have an effect of delaying the project, our legal basis rests in the illegal expenditure of public money to a private party."

The suit, filed Oct. 18, asks that the court invalidate the 380 agreement between Heights Ainbinder, LLC., and the City of Houston and that the judge declare the City's 380 program unconstitutional for lacking the processes to ensure that expenditures serve a public good.

"We're not asking the judge to do anything right away," Jackson says. "We have hope that the suit will have an effect on the construction of the Walmart — obviously, that's the main intention of the group — but realistically, what we can get out of it is to get a judge to tell City Hall that this isn't the way to use public funds."