Mayor rejects settlement offer from immigrant child facility

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Officials considering downtown Houston for immigrant children's shelter (KTRK)

The city of Houston rejected a settlement offer from Southwest Key, the company looking to open a child immigrant facility at 419 Emancipation, despite concessions to the city, the company said Wednesday.

The company sued in September alleging the city of Houston has illegally stood in its way of opening the facility because it could win political points for standing in its way.

The company claims the actions are discriminatory and unconstitutional. It's seeking at least $8 million in damages and a stop to the city's actions are keeping it from doing business.

Southwest Key officials say they were invited in by the city to negotiate. The company agreed and spent most of a day last week going over its plans and agreeing to changes, but then the city rejected them all, sending the issue back to court, according to the company. Even changes that would resolve the city's permitting concerns were offered and rejected, including raising the minimum age to 16 or 17. The city didn't include a counteroffer.

"We came to the table in good faith because the city asked us to do so. Now, a week later, the city rejected our proposal and has no counteroffer. And that's disappointing," spokesman Jeff Eller said in a written statement. "The real losers are the children. More and more unaccompanied minors are coming across the border. They need compassionate child care. Unfortunately, the city continues to play politics and keep these children from getting the care they need and deserve."

"Since it appears Southwest Key has chosen to make confidential negotiations public: The City requires that Southwest Key simply comply with the rules governing permitting for its intended use of the building at 419 Emancipation," Mayor Sylvester Turner's communication director Alan Berstein said.

Bernstein wouldn't respond to other questions about the claims from Southwest Key.

The facility was planned to open as demand for facilities increased under policies put in place by President Donald Trump.

City of Houston officials undertook a "meticulous effort" to block Southwest Key's efforts, the lawsuit alleges.

"The lawsuit filed... lays out clearly and convincingly how the City of Houston has ignored its own regulations, and past practices, and has knowingly misrepresented the facts to the State of Texas to deny Southwest Key a license to open the facility. This suit shows how city officials bent the rules and broke the law for the sole purpose of advancing the mayor's political agenda," a Southwest Key spokesperson said after the lawsuit was filed. "We attempted on several occasions to resolve this matter with the Mayor's Office. The mayor refused to listen and ordered a stop (from) work on any Southwest Key permit applications."

It was forced to withdraw its state application because of the problems, costing it even more, the suit claims.

Southwest Key said it put more than $3 million into the Emancipation facility, also called Casa Sunzal. Officials with the city inspected the facility and granted it a Certificate of Occupancy on June 8, according to the suit. A fire inspection followed on June 14 and received a "safety survey approval."

The company filed its application with the state and was one step away from opening when the city stepped in, the suit alleges.

Problems began to arise when the city found out who was going to be using the facility, the suit claims.

Bernstein sent an email memo to department heads outlining talking points for the facility and the city's opposition to it, according to documents obtained by Southwest Key through an open records request and shared it with ABC13.

"If organizations such as [Southwest Key] refuse to be enablers of an immoral, un-American immigration policy, the federal government might be left with no alternative than to re-united (sic) them with their parents," Bernstein wrote.

Bernstein claims his memo "did not outline the city's opposition."

"Are (Southwest Key) shelters 'detention centers?' No, their parents were detained by the federal government. They are in quasi foster care."

That distinction is key to the city's case against the facility, Southwest Key claims.

June 20, Houston Fire Chief Samuel Pena wrote to other city officials that the facility's approved R1 permits were no good, based on the idea it might be a detention facility, despite Bernstein's claim they weren't.

"Based on the reported type of occupant for the facility, it seems they are describing a detention facility to house children, which is different from their previously declared use and (Certificate of Occupancy,)" Pena said. "If accurate, this type of use would most appropriately require an Institution, I, designation."

Bernstein said the memo wasn't written as an official building inspector document and said he has no experience as a building inspector.

After Pena's email, on June 21, Mayor Turner issued a press release saying the plan was "not going to go down well" and threatened "meticulous permitting inspections" of the unused building.

The issued Certificate of Occupancy was for category "R1," or residential as a shelter, but city officials later said because of the ages of the children and their insistence, it was a "detention facility," and a different permit would be required.

In city emails from Harry Hayes, Houston's chief operating officer and solid waste director, no one was to complete any permitting on the building until approved by senior management, a step not taken with other permitting processes.

The message then filtered to other departments of the city: to Public Works Director Carol Haddock, to Chief of Staff Marvalette Hunter, to Fire Chief Samuel Pena and to heads of the permitting department to individual inspectors.

"(P)lease put a hold on the address for permit issuance," Haddock wrote.

Another email from an executive assistant fire chief appears to show a city staffer claiming the change of permits from R1 to I, or institutional, would cause Southwest Key more time and expenses to comply with city rules and perhaps rethink their plan.

"(T)hey will have to evaluate the economic feasibility of moving forward," it read.

Other emails show significant attention to the building by senior officials of the Turner administration, sending inspectors out to document and investigate what they thought was "unpermitted" work. It turned out to be landscaping work that was allowed. A presentation with photos of the work was put together.

Pena suggested an inspector sit near the facility to monitor work.

There were no problems found during further inspections.

On July 23, the city placed a "hard hold" on the facility until a determination was made on what classification the building fell under, according to an email from Fire Chief Pena.

Since the city wouldn't issue permits, Southwest Key was forced to withdraw its state application. It can't move forward because the city won't make that determination, leading to the suit, a spokesperson said Friday.

City officials wouldn't comment on any of the specific issues raised in the suit, except to release a statement saying the company has to "follow the rules."

"The city is only interested in the safety, security and well-being of children and will continue to enforce all building codes and regulations designed to accomplish that purpose," a city spokesperson wrote. "Southwest Key has repeatedly been asked to provide plans that meet existing building codes for the intended use of the facility at 419 Emancipation Street in Houston. They have failed to do so. Hopefully they will realize that they are not exempt and must follow the rules like everyone else. We continue to wait for them to respond. In the meantime, we will review the pleading and respond accordingly."

City officials have held that the facility could open if Southwest Key applies for the proper permitting and complies with current code.

Inspectors have also been called to other facilities managed by Southwest Key, including one that has been closed. Southwest Key officials claim its been targeted by city officials due to politics.

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