Island businessman Allen Flores this week filed a lawsuit against Mardi Gras promoter Yaga’s Entertainment Inc. and the city of Galveston over a slew of complaints about the event, including the blocking of public streets and the use of hotel occupancy tax money to police and clean up after the festival.

Keri Heath: 409-683-5241; or on Twitter @HeathKeri.

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(12) comments

Wayne D Holt

It's unfortunate that a taxpayer and successful Galveston business owner has to sue the City to get transparency on where the authority arises for these activities, where the numbers are coming from and if the associated costs actually take into account the lost business due to store closures. Of course, there really is no way to value the cost of the damage to the image of the city as a family tourist destination with events like the Lone Star Rally and Mardi Gras.

"The city referred all questions to the Mardi Gras contract." That really isn't useful if the questions Mr. Flores is raising have to do with the legitimacy of the contract itself. I hope the City doesn't expect Galvestonians to accept the idea the contract is legitimate because it's a contract that is legitimate. I think it's an appropriate time to have these issues adjudicated by a party not trying to perpetuate these events.

Regarding the purported $15 million economic benefit to Galveston from Mardi Gras: that's odd. The economic benefit to Galveston for the Lone Star Rally that was being bandied about was also $15 million. Are the proponents of these events sharing the same data for both? Is it a cosmic coincidence? Or is Galveston like a 15 Million Dollar Store where every big event results in the same economic boost?

Allen Flores

It’s unfortunate that our customers, tourists and taxpayers are forced to payoff a promoter if they want access to our businesses. It’s unlawful to charge all customers of downtown businesses and place out-of-town vendors in front of us to restrain our trade and intercept our sales. The outdated and unnecessary drinking-parties drive up city costs for two weekends on the backs of taxpayers. They overrun downtown with frequent fighting and large crowds of intoxicated people who pay to watch public lewdness in the historic district. While it’s okay without fees, fences and vendors on Seawall, according to the city manager, it’s the council members who insist on continuing the contract even though it violates public policy. The city uses fuzzy math to allege a $15 million in benefits but refrain from saying how much of the $15 million is pocketed by the well-connected promoters. They don’t factor in losses from local businesses, the negative publicity from two riots, or losses of family-tourism who despise this image of Galveston. Council has normalized the dangers that police are put in by performing the contract. They claim packing large crowds inside fences is for safety reasons and fills hotel rooms. But hotels are already full from the family activities, parades and balls. It’s a money grab. It’s not truthful to claim that the promoter’s young and low quality crowds are staying in hotels. The contract exempts the promoters from every law and illegally assigns the promoters monopolistic power that governments don’t even have to assign. Take away the contractual demands for drinking-parties, raves, beer booths, vendors and most of the problems and high costs will no longer exist. Council spent $405,000 on Mardi Gras in 2019 and lost $259,000 in public funds this year according to city records. The promoters profits have remained a secret for nine years. The contract is illegal and void in my opinion of the law.

Gary Scoggin

"Or is Galveston like a 15 Million Dollar Store where every big event results in the same economic boost?" - Wayne, I think you found the right answer! 😁

Allen Flores

The promoter paid the city $15,000 in 2011 and the city spent $413,000 of public funds in 2011. Let that sink in.

Allen Flores

Of course Hotel Taxes are for promoting tourism and the convention and hotel industry, but the fine print of the law elaborates on the specific legal uses in the Texas Tax Code Sec 351.101. The legal uses are specific and restricted to historic preservation, the arts, museums, advertising, promotional marketing programs for conventions and so on. The city council can’t conveniently use general tourism on any given weekend as an excuse to justify using hotel taxes for city services and general city purposes. The city attorney has mistakenly stretched the interpretation to include a promoter’s drinking-party expenses, including general city purposes like police, sanitation, drainage and public works. That’s entirely inconsistent with the law and prohibited by now Governor Abbott's legal opinion.

According to a legal opinion by then Attorney General Abbott on March 30, 2011, “Chapter 351 prohibits hotel occupancy tax revenues from being expended for general city purposes.” It doesn’t get much clearer than that regarding lawful uses of Hotel Taxes. Even if it were legal to spend Hotel Taxes on police, sanitation and other general city purposes, why would you keep blowing $405,000 in two weekends for a drinking-party that loses the public's money, has no transparency, trashes The Strand and hurts local businesses?

Terry Moore

Just wondering the real motive in all this since it's been going on for years. Googling Mr. Flores and found a few articles. One related to Mardi Gras and the issue at hand. Sounds like he has more than one thing going on.

Stephen Murphy

Terry Moore, I have no idea what you're trying to insinuate with those articles, but Mr. Flores has been against paid entry to Mardi Gras on The Strand for as long as I can remember. Also, he is against paid entry to The Lone Star Rally.

I don't know about you, but as a Galveston homeowner and a taxpayer, I resent the fact that I am charged an entry fee to walk down public streets, which my tax dollars help to maintain.

I, too, would like to see a detailed accounting of the monies generated and used from these events. Also, I would like to know the details of the monies the promoters are making with the city council's blessings. The Daily News, are you listening?

Don Schlessinger


Allen Flores

Here is the motive in a nutshell: The city spent $405K for an drinking-party that lost $259K of public funds in 2019. The hotel funds were supposed to be used for marketing programs to fill hotels, not for "general city purposes" or a private promoter's drinking-party on public streets. The drinking-party consists of lewd behavior, frequent fights, riots, and the charging of taxpayers before they can enter local businesses. Many people see the contract as wasteful, unnecessary and against public policy. The motive is to discontinue the unsafe activities, unfair restraints to trade and substantial impairments to doing business in Galveston's family historic district.

Don Schlessinger

Maybe Galveston homeowners and taxpayers should have a chance to vote on events like Mardi Gras and the Rally. I doubt the city council will be inclined to bring the question to a vote voluntarily though.

CJ Kirwer

While we’re talking about transparency - as a resident of downtown I’d like the city to explain how they can allow a private for profit company to put a fence around my home and restrict access?

Wayne D Holt

Mr. Flores can speak for himself but I believe that is why it has come to requiring a lawsuit to adjudicate. As an observer, what I see is Mr. Flores quoting chapter and verse of state law that seems to clearly prohibit what has been done for years here. When we (meaning Mr. Flores, myself and others) have asked for a formal exposition of the legal justification used by the City, the most I have seen is a blanket assertion that the city manager may do these things as long as council doesn't object. To me, this seems like a tactic to avoid stating a formal position that can be legally attacked.

It really is quite simple. If the City is confident that they have state law on their side and Mr. Flores, myself and others misunderstand the legal justification, so state it clearly. I am sure the GDN would be more than happy to do a feature story on a topic that is trending so highly right now.

The fact that we have not seen anything like an unambiguous legal justification that answers Mr. Flores' specific objections is a clear tell to me that the City knows it is on shaky ground and doesn't want to be pinned down.

I would not be surprised one bit to see Mr. Flores' lawsuit answered, not be a legal justification but rather by a request for a preliminary injunction on the basis of irreparable economic harm. That may buy some time but, as is becoming obvious, these issues are not going to go away and are not going to be resolved by stonewalling. We the People have a right to know the law being applied in any situation. We do not have to justify our right to know; the City must justify its reason to withhold such information and absent that, MUST comply with the overriding legal authority in each instance.

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