HCC's real estate portfolio: Floodplains, empty warehouses, questionable deals paid for with your tax dollars

Thursday, April 30, 2015
HCC's real estate portfolio of questionable deals
An investigation of the Houston Community College System found many land deals that appear to have not been good bargains for taxpayers

HOUSTON (KTRK) -- The Houston Community College System has entered into questionable land deals for years and continues to do so despite new board of trustees members and a new chancellor, Ted Oberg Investigates has found.

The investigation into HCC purchases found:

  • A former Conn's appliance store that the college purchased in January for $8.5 million, based on a lease between HCC and the car company Tesla that ultimately fell apart. The college has no immediate plans for the South Loop property except to find a new tenant. Documents obtained by ABC-13 show the building was appraised for $5.3 million by the college's appraisers just three months before the sale.
  • Nine acres of vacant property just off State Highway 288 along North MacGregor Way. The college purchased the land in 1990 for $800,000. They sold it 10 years later for $2 million and then repurchased it in 2013 for $13.6 million -- $12.8 million more than taxpayers paid for it the first time.
  • Twenty-three acres just north of Westheimer on the west side, purchased in 2011 with the then-HCC board chair saying there were no plans to ever use the land. FEMA describes the parcel as having a high flood risk.
  • A half-acre of land acquired in 1997 near the East Loop and I-10, located under power lines and partially in a flood way. Tax records describe it as worthless.
  • A vacant warehouse on the city's East Side, owned for seven years and described in HCC records as a parking option. It is a 46-minute walk to HCC's main campus on Main Street.

"The College does not have detailed plans for those properties," HCC Chief Facilities Officer Charles Smith said in a statement to ABC-13. "We are in the process of engaging a consultant to advise us on strategic land issues, including recommendations for potential acquisitions and divestitures."

And at an HCC trustee meeting this month, Smith assured the public that the college, an institution with more than 55,000 students, is not simply buying up property for no reason.

"We're not in the real estate business, we're in the college business," he said.

But as of April, HCC owns more than 150 separate pieces of property. And dozens of those parcels are unused or vacant.

"We have a real estate investment package that would make Donald Trump envious," said Trustee Dave Wilson, who has long criticized HCC land purchases that he says make little sense. "We've bought property that's in the swampland."

These revelations come amid recent court records filed in ongoing lawsuit between HCC and former acting chancellor Renee Byas.

In those records, filed this month, Byas described how she told law enforcement authorities that three trustees attempted to orchestrate a deal in which the HCC would buy property, and they would receive 10 percent of the money the college paid to the seller.

The records did not mention specific trustees. An attorney for HCC said in press reports the claims are unfounded. And these events took place before Wilson was elected trustee.

Wilson is not the only trustee unhappy with the bevy of HCC land purchases.

Chris Oliver, the longest-serving trustee member, told ABC-13 that trustees "have some of the same questions that you do" about the land deals.

Trustees want to ask questions about some of the deals, but get push-back from HCC administrators, Oliver said.

"If you ask the kinds of questions that you're asking me now, we're accused of micromanagement," he said. "We get questions like, 'Why are you asking so many questions?'"

Carroll Robinson, who stepped down from the HCC Board of Trustees this month saying he wanted to concentrate on a run for Houston Controller, said it's an uphill battle to get "full and complete information" about land deals from the administration.

For example, Robinson said he asked several times for a map of HCC properties and how many of those held vacant buildings.

"I could never get it," he said.

Robinson was investigated for trying to direct a $1.4 million contract to a friend. He was cleared by an HCC investigation. And Robinson, Oliver and Wilson have had a contentious relationship with the current HCC administration.

The most recent contention between the trio and the HCC administration stems from the January purchase of the West Loop former Conn's building. All three told ABC-13 the college overpaid for the building after they were shown documents obtained by Ted Oberg Investigates.

On Thursday at 6 p.m., tune into ABC-13 to find out more about the questions surrounding the deal that led to the purchase of the former Conn's on the West Loop and to find out exactly how much taxpayers may have overpaid.

Correction: An earlier version of this story described HCC's future plans for the vacant property off of State Highway 288 along North MacGregor Way as land to build HCC's Coleman Medical Education Campus. HCC said they have no immediate plans for that property. ABC-13 regrets the error.