A Conroe city councilman cast multiple votes related to a project that landed his employer a nearly $10 million subcontracting deal for a publicly owned hotel and convention center, despite signing an affidavit saying he would abstain from voting on any matters involving the company.
Since Todd Yancey was sworn into office in November 2020, he has voted in favor of more than 30 different items related to the hotel, including a bond sale that is helping finance the project and invoice payments to the project’s general contractor, according to minutes of council meetings. That general contractor, in turn, made payments to SRM Concrete, the company that employs Yancey.
Yancey said there is nothing improper about the votes because he was not involved in any way with SRM Concrete taking on the contract for construction of the city’s new hotel and convention center. “There is no way I had anything to do with it,” he said, claiming that he consulted with a city attorney on the matter.
Other Conroe council members disagree.
“I am very disappointed,” said Councilwoman Marsha Porter. “If you think you have a conflict of interest for gosh sakes, declare it. We cannot police one another on our business deals, we just can’t.”
Connection to SRM
Yancey’s family founded Conroe Concrete, which became known as Yancey Ready Mix, in 1969. SRM Concrete acquired the company in 2018, and Yancey now works in sales for SRM.
Yancey said his sales territory is between Willis and Madisonville, not Conroe.
In July, the company’s website listed Yancey as the Conroe-area salesman. However, as of August, his name no longer appears on the firm’s site.
In May 2020, the council awarded DPR Construction of California the design-build contract for the project. DPR later hired subcontractors, including SRM Concrete. Those subcontractors did not require council approval, as they were chosen by DPR.
The Hyatt Regency Hotel and Convention Center is the largest taxpayer-funded economic development project in the city, a project that has been dogged by cost overruns and multimillion-dollar taxpayer bailouts due to missed economic projections.
Yancey said City Administrator Gary Scott, who was assistant city attorney when Yancey joined the council in November 2020, told him he did not need to recuse himself from any discussions or votes related to the hotel project, including approving funding the project or paying invoices for the $9.7 million concrete contract.
“I went to Gary Scott, I had nothing to do with (it),” Yancey said of the contract SRM secured via DPR Construction for the project. “I had nothing to do with bidding the job, not a thing.
“I was told I was doing everything right. I am just an employee there.”
Scott said he doesn’t recall speaking to Yancey about his role at SRM and did not advise him on disclosing his employment with the company.
“I never talked to him about filling the form out or anything related to concrete and the hotel,” Scott said. “I wasn’t involved in the hotel (project).”
Other council members, both current and former, said they were not aware SRM Concrete was given the contract.
History of the Hyatt project
The hotel and convention center opened May 25 in Grand Central Park. The facility includes 250 full-service rooms and several large conference and event rooms.
The city began exploring the idea of a city-owned hotel and convention center in 2015, when it did not have such a facility in city limits. The council at the time agreed the ability to attract large events to Conroe would boost the city’s economy.
“This is going to be a tremendous asset for the city,” former Mayor Toby Powell said in May 2020.
Financial woes have plagued the project, with its construction cost ballooning from $86 million in 2020 to more than $107 million in 2022. Days before the hotel opened, the council was forced to fund $5 million in operating costs that were not included in the budget.
Additionally, according to information from Hyatt, the city is expected to lose more than $1 million in revenue from low occupancy rates through March 2024.
In 2017, the Conroe Industrial Development Corp., a nonprofit operated under the supervision of the Conroe City Council to promote economic development in the city, entered into a pre-development agreement with Dallas-based Garfield Public/Private for the planning, design and construction of a hotel and convention center.
The city in February 2020 awarded a $4.3 million professional services contract to Garfield for the development of the hotel and convention center and awarded the $86 million construction contract to DPR in May of that year.
The development corporation agreed in April 2021 to loan the city $11 million to get the project started.
State regulations
State law regulates how local public officials handle conflicts of interest, prohibiting a local public official from voting on or participating in a matter involving a business entity or real property in which the official has a substantial interest if it will result in a special economic effect on the business.
Austin-based attorney Ross Fischer with Ross Fischer Law, PLLC, said while he could not speak to Yancey’s situation, he said in general council members have obligations regarding city business and their employers.
“When a city council member is employed by a company that intends to do business with the city, they have a two-part obligation,” Fischer said. “The first is to disclose, under oath, their interest in that business. The second part of the obligation is to abstain from any vote or decision that could have an impact on that business.”
The Texas Municipal League, which offers annual training for new and current elected officials, reports Yancey is a certified municipal official with at least 72 continuing education credits, including a yearly review of the Open Meetings Act and Public Information Act.
Yancey, who told The Courier SRM Concrete’s Conroe location poured all concrete for the hotel, signed a conflict-of-interest affidavit in November 2020, months after taking office.
According to that affidavit, Yancey indicated he had a “substantial interest” in the SRM Concrete and receives more than 10 percent of his income from the company.
The affidavit also states Yancey was to “abstain from any discussion, vote or decision involving” the company, including contracts.
SRM began pouring the concrete for the project at the end of 2021. The city at the start of 2022 began paying invoices submitted by DPR for concrete pouring, with Yancey voting on those payments.
Newly seated councilmen Harry Hardman and Howard Wood, who were not on the council when the hotel contracts were approved, said they were not aware SRM poured the concrete for the hotel.
“It is very disappointing if that is what happened,” Hardman said of Yancey not abstaining from discussions and votes on the hotel project.
Neither SRM nor DPR responded to multiple requests for interviews.
