Restaurant developer sued city for breach of contract for nonpayment of reimbursements for certain expenditures made in connection with construction and operation of a restaurant within city limits.
The District Court denied city’s plea to the jurisdiction. City brought interlocutory appeal. The Houston Court of Appeals affirmed. City petitioned for review, which was granted.
The Supreme Court held that:
- Activity was not included in statutory list of governmental functions; disapproving CHW-Lattas Creek, L.P. v. City of Alice, 565 S.W.3d 779;
- Activity was discretionary, weighing in favor of concluding that city engaged in a proprietary function;
- Activity was primarily for benefit of those within corporate limits of municipality, weighing in favor of concluding that city engaged in a proprietary function;
- Terms and requirements of agreement did not indicate in any way that city entered into agreement on state’s behalf, weighing towards a proprietary function; and
- City’s discretionary decision to enter into agreement with restaurant developer was not essential to any governmental function, weighing in favor of holding that city engaged in a proprietary function.
City’s activity of entering into agreement with restaurant developer as an economic-development activity and not as a community-development or urban-renewal activity was not included in statutory list of governmental functions protected by sovereign immunity under Tort Claims Act, for purposes of deciding city’s plea to the jurisdiction in developer’s breach of contract action against city for nonpayment of reimbursement of expenditures in constructing and operating restaurant in city; purpose of agreement was to stimulate business and commercial activity, create local jobs, and increase state sales tax revenue, not to undertake urban renewal activities; disapproving CHW-Lattas Creek, L.P. v. City of Alice, 565 S.W.3d 779.