Velasquez hit with ethics complaint

This article was updated again July 21, 2023, at 9:57am to add that the chair of the City’s Ethics Review Commission has determined the commission has jurisdiction to hear Daniel Llanes’s complaint against Jose Velasquez.

This article was updated again July 17, 2023, to add a detail about the Planning Commission’s vote to change zoning on the Borden Tract.

This article was updated at 10:21am July 15, 2023, to insert Council Member Velasquez’s response an hour after the story was published.

District 3 Council Member Jose Velasquez’s Statements of Financial Interests filed with the City Clerk reporting his activities in calendar years 2021 and 2022 did not list his connection to, and income from, the East Austin Conservancy.

That unreported connection surfaced when on June 1^st Velasquez filed an Affidavit to abstain from voting and further participation in the City Council’s consideration of changing the zoning and future use for land known as the Borden Tract. Facts revealed in the Affidavit indicated that recusal was appropriate but revealed to those who examined the situation that he had omitted essential details from other sworn reports filed with the city clerk.

Daniel Llanes on Friday filed a sworn complaint against Council Member Velasquez. Llanes is a longtime East Austin activist who currently chairs the Govalle/Johnston Terrace Neighborhood Plan Contact Team.

The complaint alleges violations of Austin City Code Section 2-7-72(E)(1), (2), and (13) for:

Count 1—Velasquez failed to list the East Austin Conservancy on his sworn Statement of Financial Interest as a source of more than 10 percent of his gross income in 2022.

His sworn Affidavit filed June 1, 2023, with the City Clerk to recuse himself from consideration of the Borden Tract request states, “Funds received from the business entity East Austin Conservancy exceed 10 percent of my gross income for the previous year.”

Count 2— Velasquez failed to list his sources of income on his sworn Statement of Financial Interest for 2021.

Counts 3 and 4—Velasquez was a director on the board of East Austin Conservancy from March 3, 2017, until at least March 28, 2022, according to records on file with the Texas Secretary of State. But he failed to list that board position on his sworn Statements of Financial Interest for 2021 and 2022.

Velasquez’s conflict stems from the fact that the East Austin Conservancy has partnered with the developer Endeavor Real Estate Group, which requested council approval for modification of the neighborhood plan and rezoning for the Borden Tract. The Austin Monitor reported June 13^th, “Ten percent of the project’s units will be affordable and Endeavor will donate money to the conservancy for each market-rate unit.”

The East Austin Conservancy, which promotes housing affordability and economic diversity, was cofounded by former City Council Member Raul Alvarez, executive director of the Community Advancement Network, and Theresa Alvarez, CEO of the East Austin Economic Development Corporation.

All supporting documents were included in the 32-page complaint.

The legal secretary for the Ethics Review Commission July 21^st notified Llanes’s attorney, Bill Aleshire, that the commission’s chair has determined that the commission has jurisdiction over the complaint against Velasquez. Meaning that the complaint will be scheduled for a preliminary hearing on a future date. Commission rules state, “The hearing shall be held within 20 working days of receipt of the complaint.” The complaint was filed July 14^th, and the 20^th working day would be August 11^th.

Council Member Velasquez did not respond to provide comments about the complaint based on Bulldog emails sent to his office and personal account, and voice messages left with his office and on his personal cell phone. He also did not respond to a text message Friday evening. Then an hour after this story was published he texted to say, “I was tied up with family yesterday. I will not be commenting at this time. But I thank you for the opportunity and for reaching out. Have a blessed Saturday.”

Austin City Code Section 2-7-99 states that an offense under this section “is punishable as a Class C misdemeanor” while Section 1-1-99 states such offense is “punishable by a fine not to exceed $500.”

Borden Tract details

The Borden Tract consists of 21.38 acres immediately east of the intersection of U.S. Highway 183 and East Cesar Chavez Street.

The property is owned by New Dairy Texas LLC and is used as a Borden Dairy facility, according to a 38-page staff report, which states, “Mixed Use land is appropriate for this location.”

Development of the tract was proposed by Endeavor Real Estate Group, represented by lawyer-lobbyist Richard Suttle of Armbrust Brown. He submitted an application for a neighborhood amendment a year ago.

A Visitor Sign-in Sheet maintained by the council member’s office, which the Bulldog obtained with a public information request, shows that Suttle and two others representing Endeavor visited with Velasquez April 27^th. That was five weeks before Velasquez filed for recusal. Records show that Suttle communicated with Velasquez via text April 27^thand April 28^th, asking to “talk about Borden;” May 1^st asking “If…you have a moment can we talk about Borden;” May 30^th “1^st reading on Borden? Visit?” to which Velasquez responded, “Yessir. I’ll give you a holler later this morning;” and June 8^th, the last stating, “Conservancy signed.”

The Borden Tract proposal calls 1,400 condominium and apartment units, a 220-room hotel, 411,500 square feet of offices, 66,000 square feet of restaurant space, and 40,000 square feet of retail. The plan shows 95 percent impervious cover and a 120-foot-tall building along the adjacent roadway. Development would be scaled back toward the 43-acre Colorado River Park Wildlife Sanctuary that abuts the southern border of the tract. The sanctuary is situated between the Borden Tract and the Colorado River. Roy Guerrero Metropolitan Park sits immediately across the river from the sanctuary.

“The applicant proposes a mixed-use development to include commercial, retail, hotel and multifamily uses. The proposed residential use will provide additional housing choices for the City and the planning area,” the staff report states.

A traffic study is to be performed when the developer files a site plan, the report states, and water quality will be protected by compliance with the watershed ordinance. An environmental study would come later.

The neighborhood represented by complainant Llanes initially had asked the development be limited to 50 percent impervious cover, a building height of 60 feet, with a 50-to-100 foot buffer from the sanctuary. Llanes amended that in March 2023, saying in an email the contact team wanted building height limited to 75 feet and no more than 65 percent impervious cover.

Online records maintained by Travis Central Appraisal District shows the tract is owned by New Dairy Texas LLC consists of four parcels totaling 21.383 acres with an aggregate market value of $28,605,482.

The proposal would change the tract’s future land use designation from industry to mixed use. The Planning Commission approved staff’s recommendation for the change by vote of 13-0 March 28^th. Although an additional vote to change zoning on the tract passed 10-3, Commissioners Awais Azar, Grayson Cox, and Jennifer Mushtaler voted against it.

Council acts without Velasquez

The development was strongly opposed, including in public comments made at the council meetings of June 1^st and June 8^th. Susana Almanza, director of PODER (People Organized in Defense of Earth and her Resources) and a two-time council candidate, spoke there and also wrote an earlier letter opposing the action, calling it “racial capitalism” that would exploit and oppress the poor and people of color.

Christopher Brown, cofounder of the Colorado River Conservancy and a nearby homeowner, opposed the development too. The staff report included his statement that approval would “…permit a Domain-like project along one of the city’s best preserved natural areas—the Colorado River below the Longhorn Dam.”

But not everyone was opposed to the development. The staff report includes letters from several nearby property owners in support of the project, including John Scott, owner of Central Machine Works; Richard B. Hull; and Vijay Mehra of Viamar Properties LLC.

Participants in a press conference held May 31^st to protest plans for the Borden Tract included the Govalle/Johnston Terrace Neighborhood Contact Team, PODER, Sierra Club, Save Our Springs Alliance, and Austin Neighborhoods Alliance. At that rally, Llanes said the development “will instantly overwhelm the bottleneck transportation access infrastructure, from 500 trips to more than 21,000 trips per day…, the Austin Monitor reported.

Despite opposition—and without the participation of the council member in whose district the project is located—the City Council voted 7-0 June 1^st to approve on first reading a motion to approve the change in zoning and future land use. Velasquez was recused. Mayor Kirk Watson and Council Members Alison Alter and Natasha Harper-Madison were off the dais,.

On second reading June 8^th the council voted 7-2 to approve the change in zoning and future land use on second reading with Velasquez recused. Council Members Alison Alter and Vanessa Fuentes voted no after voicing concerns about the neighborhood’s council member being out of the action. Council Member Leslie Pool was off the dais.

Fuentes said, “It is my hope that the applicant works with the neighbors on the concerns that they have raised…There is no vote in solidarity with the neighborhood.”

Alter said, “Typically I strive to be attentive to the voice of my colleagues on land use and decisions in their district. I may not always defer, but I largely trust each of us to be stewards for the constituents we were elected to represent. Ten-one (geographic representation) was established precisely to provide for community voice and representation, particularly for those who felt their voices hadn’t been heard under our old system.”

The council will consider the matter for third reading and final approval at its July 20^thmeeting.

Why file a complaint?

Llanes told the Bulldog, “The Borden case was the litmus test for Velasquez regarding supporting and protecting District 3 Neighborhoods against gentrification, displacement and exploitation—and he failed.

“We filed the complaint because we saw Velasquez’s recusal as a backdoor deal to give him political cover to keep him from supporting the neighborhoods, and his recusal further enabled the systemic racism through zoning that East Austin has endured. His recusal illustrated the undue political, unethical and financial control developers have over City Hall.”

The complaint was filed on Llanes’s behalf by attorney Bill Aleshire. (Disclosure: Aleshire represents The Austin Bulldog in matters concerning open records requests.)

“The bottom line is that Jose Velasquez has not disclosed source(s) of income and board membership in his financial disclosure forms for 2021 or 2022,” Aleshire said. “What is clear is that Velasquez failed his first test to represent the people of District 3 and the test for transparency in identifying where he got money while he was running for the office.”

Velasquez was elected to the District 3 seat in a December 13, 2022, runoff against Daniela Silva.

Action up to Ethics Review Commission

The Borden Tract decision will soon be decided—without the involvement of the council member who represents the district it’s in. But that same council member will come under close scrutiny from the commission that must deal with the complaint against him.

The City Clerk has five working days to provide copies of the complaint to the city attorney, commission chair and the respondent.

Within five working days of receiving the complaint the commission chair must make a determination if the matter is within the commission’s jurisdiction. If it is not, then the chair will notify the parties in writing.

If the complaint is within the commission’s jurisdiction the chair must set a preliminary hearing to occur within 60 days, although it may be postponed on request of the complainant or respondent.

The purpose of the preliminary hearing is for the commission to determine whether there are reasonable grounds to believe that a violation occurred within its jurisdiction. Both complainant and respondent have the right to attend and be represented by counsel. At the conclusion of the preliminary hearing the commission decides if a final hearing is warranted.

Commission bylaws require the affirmative vote of six members to hold a final hearing. As the Bulldog reported June 12^th the Ethics Review Commission held a preliminary hearing on two sworn complaints with just six members present out of the eight appointed, and the motions to hold final hearings failed on votes of 4-2 and 5-1 in favor.

Council Member Paige Ellis appointed William Pumfrey June 8^th so the commission now has nine appointed members and two vacancies. Mayor Watson and Council Member Velasquez have been in office since early January but have yet not made appointments to the commission. There is an item on the July 20^th council agenda to appoint members of city boards and commissions but nothing about specific appointments.

A final hearing must be held within 60 days of the preliminary hearing approval unless postponed for good cause. Both parties must attend the final hearing, although the commission may proceed if the respondent fails to attend. Parties must testify under oath.

If the commission determines that a violation of a provision subject to criminal penalty has occurred, a copy of its findings would be sent to the complainant, the respondent, and the city attorney. The commission may recommend prosecution or list actions needed for voluntary compliance.

Trust indicators: Ken Martin has been investigating local government agencies and officials in the Austin area since 1981. He founded The Austin Bulldog in 2009. You can reach him at [email protected].