Freeport council holds first reading of EDC settlement to resolve disputed Velasco parcels

The Freeport City Council on a special meeting held a first reading of Resolution No. 2026-3042, a proposed settlement intended to resolve long‑running title and foreclosure disputes involving multiple lots in the Velasco town site and to clear the way for infrastructure completion and residential construction. Robert Johnson, executive director of the Freeport Economic Development Corporation (EDC), presented the agreement and detailed its key requirements.

Johnson said the settlement would consolidate obligations among the Freeport EDC, GL and L, and AMG, require completion of roadway and related infrastructure including North Avenue N and West Royer extensions, and make parties responsible for specified lots. He said the agreement requires certificates of occupancy for all units by Dec. 31, 2027, allows limited extensions for documented delays, and imposes liquidated damages of $500 per day after a 10‑day cure period if the completion deadline is missed. Under the draft cost allocation he described, the Freeport EDC would pay 50% of the road cost, AMG 25% and GLML 25%.

The council’s legal advisor explained the parties’ differing positions on how title and reversion language were recorded, saying the deed contains reversion language that would put later lenders on notice and that, under lien‑priority rules, an earlier‑filed reversion interest can have priority over subsequent liens. Johnson said the settlement text — which will be filed with the court — contemplates reverting title to the EDC as it stood in 2018 and that opposing counsel will appear at the second reading to present counterarguments.

Councilman Pena pressed for more transparency and questioned why the city or EDC would now assume a 50% share of road costs that earlier agreements had assigned to the developer. Pena said he was concerned the EDC and earlier counsel had not done adequate due diligence and that the public had not been told key details while litigation was ongoing. Pena cited a city finance estimate of about $88,000 for the work and said projected annual revenue from the finished houses would be small — roughly $7,000 — making the fiscal tradeoff questionable.

Johnson countered that the settlement reduces the risk of losing in court and would produce a finished street and homes that the city would otherwise not have while litigation remains pending. He provided historical cost estimates to the council: a 2020 estimate of $139,965 and a 2026 estimate of $176,068, which he said is roughly consistent with cumulative inflation for the period; his inflation‑adjusted calculation put a 2020 cost near $174,100 and made the 2026 estimate only about $1,968 (≈1.1%) higher.

Council members also asked for documentation on whether the earlier estimate compared like materials (concrete vs. asphalt) and requested copies of building‑department inspection records for units on Skinner Street that councilors described as damaged or potentially uninhabitable. Johnson said he had one written estimate in the file and would provide additional documentation and inspection reports at the second reading, when opposing counsel would also appear.

No final action was taken at the first reading. The mayor said the council plans a second reading on Monday, when legal counsel for the opposing parties will be present and further questions can be asked before any vote. The meeting adjourned after a motion to close the session was made and seconded.