LA FERIA — The city may shut down its Industrial Development Corporation for the fiscal year, and possibly reappoint a new board of directors.
City Attorney Ricardo Navarro suggested the shutdown and said the La Feria Industrial Development Corporation has been acting as a real estate agent, and that is not really what it’s for.
Navarro has his sights set on reversing a transaction made by the IDC to lease office space to the South Texas Collaborative for Housing Development.
This is in an effort to find the $3 million in city funds officials say is missing.
At the heart of it all appears to be former city manager Sunny Philip who was fired in July.
“They are on a witch hunt at this time and they are trying to throw mud at anything that will stick,” Philip said about Navarro and the city. “Any of the real estate transactions the nonprofit had with the IDC is actually for the benefit for the IDC and it fit the mission of the nonprofit also.”
Navarro’s suspicions stem from the lease agreement between the IDC and the Collaborative. It was signed on both sides by Philip. At the time he was the executive director of the IDC and the Collaborative.
Because of these findings, city leaders have agreed to give Navarro the power to file lawsuits against nonprofits Philip was involved with.
So far during Navarro’s investigation, he found the nonprofit to be independent of the city while using the City Hall address and being led also by Philip.
Philip said he has been a volunteer for the Collaborative for the last seven years.
It is unclear if that remains his role with that organization.
He said the only property the Collaborative bought from the IDC was a foreclosed property the corporation did not want.
“The nonprofit bought it, and got a lien on the note for a higher value so it would not have deteriorated,” Philip said.
There are hundreds of nonprofits in the Valley and South Texas Collaborative happens to be one of them that has done some wonderful things, he added.
“They (commissioners) are changing the story from one thing to the other,” Philip said. “It is terrible to see the attorney is taking this route to bill the city at the same time without proof for it.”
Philip said he has nothing to hide, and truth will prevail as always.
But Navarro reported to the commissioners the sale involving an IDC property sold to the South Texas Collaborative and then was resold.
Navarro said the IDC is a nonprofit that was organized in 2009. Under the bylaws the city manager is the executive director.
“There is nothing wrong with that,” Navarro said. “However in the most recent years the IDC’s activities have been real estate transactions.”
Navarro said the IDC is a Type A economic development corporation and it has to engage in certain types of economic activity.
“It’s not to say the IDC can’t be in any real estate transaction, but it has to be in furtherance of a larger economic development plan for the creation of jobs,” Navarro said. “If all they are doing is buying and selling properties that is probably not legitimate.”
Navarro said all cities have an EDC, but it’s not necessary, if the commission decided to shut it down.
“Our recommendation is to stop all IDC activities for this fiscal year, take stock of where everything is and get everything organized and in put into order,” Navarro said to the commission.