Texas Senate Bill SCR59

Texas 2009 - 81st Regular

• Refer: 4/15/09
• Report Pass: 5/13/09
• Refer: 5/25/09
• Report Pass: 5/30/09
• Introduced: 5/30/09
• Enrolled: 6/1/09
• Vetoed: 6/19/09

Caption

Granting MBP Corporation permission to sue the Board of Trustees of the Galveston Wharves.

Impact

The resolution underscores the legal complexities surrounding property development and lease interpretations. It highlights how, despite MBP Corp.'s substantial investments, tensions arose due to unauthorized alterations made by the Board to the Mallory Building. Disagreement over the enhancements, including infrastructure for enhanced passenger loading operations, led MBP Corp. to declare a breach of lease provisions, claiming that the Board has progressively failed to negotiate in good faith concerning amendments to the original lease. If the resolution is passed, MBP Corp. will regain its rights to address these grievances in court, potentially setting a considerable legal precedent for similar cases involving public entities and private developers.

Summary

SCR59 is a concurrent resolution pertaining to the permissions granted to MBP Corporation to sue the Board of Trustees of the Galveston Wharves. The resolution arises from longstanding disputes between MBP Corp. and the Board regarding the interpretation and execution of a lease agreement originally established in May 1990. Under this agreement, MBP Corp. was to develop tourist-related facilities at its expense while paying rent, with the understanding that all improvements would revert to the Board at the lease's termination. Over the years, MBP Corp. has invested significantly in the property, contributing over $10 million in improvements to the Historic Strand Seaport area, which boosts tourism in Galveston.

Contention

Notably, the resolution raises contention as to the Board of Trustees waiving its immunity from lawsuits under the lease terms. This aspect implies a significant shift in how public entities can operate concerning agreements made with private corporations. Furthermore, MBP Corp. argues that it would face irreparable harm unless the courts mandate that the Board cease current alterations and restore the rooftop conditions prior to the Board's actions. The resolution has the potential to ignite discussions about the balance of power between local boards and private entities, especially within the context of economic development and tourism.