EP Hotel Partners, LP and Spokane Equities Limited Partnership, LTD v. City of El Paso, Mayor Oscar Leeser, City Representatives Emma Acosta, Carl L. Robinson, Michiel R. Noe, Courtney C. Niland, Ann Morgan Lilly, Larry Romero, Claudia Ordaz, Lily Limon, and EP VIDA, LLC, 527 S.W.3d 646

Background

The City of El Paso owned a blighted parcel near the airport and entered a 40‑year lease (Amended Lease, 2015) with EP Vida to build a four‑star hotel, retail center, and related improvements.
The Amended Lease set a low initial MAG (minimum annual guarantee) rent (.49 cents per sq. ft.) with a 100% abatement of MAG until May 28, 2016 (or CO), and delayed application of percentage‑of‑revenue rent until year 15 (2028); thereafter rent would be the greater of MAG or percentage revenue or 8% of fair market value.
City staff (Director of Aviation Lombrana) testified the abatements were incentives to induce development on a blighted site and that over the 40‑year term the City would recoup and exceed fair‑market rent.
Appellants (nearby hotel owners/operators) sued under the UDJA seeking a declaration that the lease violated El Paso City Charter §3.18 (requiring a "reasonable fee" for conveyance/lease) and asserted ultra vires claims against City representatives.
The trial court granted no‑evidence and traditional summary judgment for the City and EP Vida; the court of appeals affirmed, holding appellants failed to raise a genuine fact issue that the lease lacked a "reasonable fee" or that officials acted ultra vires.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the EP Vida Lease violated the City Charter’s requirement that a lease include a “reasonable fee”	The rental abatements and deviation from the City’s prior practice produced grossly inadequate consideration (not a reasonable fee) and therefore violated the Charter	The Charter requires a fair/moderate fee but not a fixed formula; abatements were legitimate economic incentives for redevelopment and overall consideration over the 40‑year term was reasonable	No genuine fact issue: plaintiffs failed to produce more than a scintilla of evidence that the lease’s consideration was grossly inadequate; summary judgment affirmed
Whether differences between EP Vida Lease and older airport hotel leases created a fact issue on "reasonable fee"	City deviated from its asserted practice (e.g., MAG at 8% and immediate percentage rent) so the EP Vida Lease was unreasonable	City evidence shows varied past lease structures (including abatements/offsets); differences alone do not render fee unreasonable; plaintiffs’ affidavits were conclusory and lacked factual support	Held for defendants: comparisons and conclusory affidavits do not raise a fact issue
Whether City’s failure to use "specific criteria" for setting rent created a fact issue	City admission that it used no specific criteria implies arbitrary, unreasonable rent setting	Charter does not prescribe specific criteria; discretionary use of different incentives is permissible when justified by public purpose and evidence shows rationale	Held for defendants: absence of written criteria is not per se unconstitutional or dispositive
Whether City Council members acted ultra vires in approving the lease	Council may have been uninformed or misled about the abatements; approval therefore ultra vires	Ultra vires requires action without legal authority; validity of council action depends on whether lease complied with Charter, not on what council knew; record shows council was informed and summary form disclosed abatements	Held for defendants: ultra vires claim fails because plaintiffs did not show the lease violated the Charter; knowledge of council does not create ultra vires action

Key Cases Cited

Garcia v. Gomez, 319 S.W.3d 638 (Tex. 2010) (definition of "reasonable fee" as fair, proper, or moderate)
Barrington v. Cokinos, 338 S.W.2d 133 (Tex. 1960) (municipalities may contract with private entities for legitimate public purposes; not unlawful because private entity benefits)
City of Lubbock v. Phillips Petroleum Co., 41 S.W.3d 149 (Tex. App.--Amarillo 2000) (inadequate municipal fee must be grossly inadequate to shock the conscience)
Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572 (Tex. 2006) (nonmovant’s burden in no‑evidence summary judgment)
King Ranch, Inc. v. Chapman, 118 S.W.3d 742 (Tex. 2003) (standard for more‑than‑a‑scintilla evidence to create fact issue)
Dupree v. Boniuk Interests, Ltd., 472 S.W.3d 355 (Tex. App.--Houston [1st Dist.] 2015) (temporary abatements do not necessarily render consideration inadequate when contract viewed as a whole)