CHRONICLE OF A BUYOUT FORETOLD: GBIC CEO/CITY, DEALING; POTENTIAL $605,000 BUYOUT FOR CEO'S CONTRACT

By Juan Montoya

Things started going bad with the selection of the new Greater Brownsville Incentives Corporation Chief Executive Officer – as bad-faith mistakes usually do – right off the get-go.

Now the city commission – which by a vote have appointed themselves to be GBIC board members – will consider a negotiated "separation agreement" which could potentially cost the GBIC $605,000 to buy out current CEO Mario Lozoya's remaining compensation for his guaranteed five-year contract.

No one will comment at the stage the negotiations and where the negotiated amount of the buyout stands. Speculation indicates that Deputy City Manager Helen Ramirez with 10 years of private sector experience managing economic development projects both in the United States and internationally, might be named the the interim CEO of the GBIC.

The action item will be considered this Friday during the GBIC board Zoom meeting this Friday and reads: 

1. Consideration and appropriate action, if any, to approve a separation agreement between Executive Director Mario Lozoya and the Greater Brownsville Incentives Corporation (GBIC). 

2. Consideration and appropriate action to appoint an Interim Executive Director.  

This sordid tale started back in 2018.

Under the terms of the contract negotiated with then-GBIC chair Cesar de Leon and interim board attorney Luis Hernandez, Lozoya received $225,000 a year in salary with a $30,000 bonus after a year if he met the benchmarks set by the board. He did.

They inked the contract June 24 and the negotiated contract was brought back for approval to the GBIC board on June 26. At that meeting, Galonsky and GBIC member John Cowen voted against the contract and the majority – De Leon, City Commissioner Jessica Tetreau and Cameron County Treasurer David Betancourt – voted to approve it.

No sooner had a majority (3-2) of the five-member board voted on June 26, 2018 to hire a replacement for interim GBIC CEO Gilbert Salinas that the losing minority filed – and was granted – a temporary restraining order (TRO) preventing Lozoya, the former director of government relations and external affairs for Toyota Motor Manufacturing in San Antonio, from going to work.

A month later, on July 18, the court dissolved the TRO and the GBIC was allowed to do business. 

The lawsuit in 2018 was filed by Galonsky argued that the bylaws didn't allow for the hiring of an executive director. 

She was joined in her efforts to nullify his hiring by Cowen, the other losing board member, and supported by city commissioner Ben Neece, who just happens to be a tenant in one of the Galonsky downtown properties.

(Since her appointment to the PUB, the GBIC, and as a member of the city commission, there has been an undercurrent of criticism that her family's ownership of numerous properties throughout the city and its ETJ constitute a potential for conflict-of-interest as does her father Abraham Galonsky's serving on the Planing and Zoning Commission. Brownsville politics being what they are, we're sure more of these  allegations will surface as we approach the end of her term in 2023.)    

After the court dissolved the TRO against the GBIC, Galonsky filed a non-suit and the litigation stopped. 

But that inauspicious beginning and bad faith over the Lozoya hiring continued with constant backbiting and – after Galonsky and Cowen joined Neece after they were also elected to the city commission – packed the GBIC board with members who had it out for the embattled CEO.  

Now, halfway through his five-year contract, the GBIC board which is now composed of the seven-member city commission after the former board was removed by a commission vote, he has been negotiating with the city administration for a buyout which potentially could leave more than $605,500 of city sales-tax money in his pocket when he leaves. That is the "separation agreement" to be considered by the board.

Galonsky was appointed to the GBIC on October 2017 and just a month before her appointment the members of the GBIC board had voted to cut ties with the discredited Brownsville Economic Development Corporation (BEDC) and to hire nationally-recognized headhunter Jorgensen Consulting to find a permanent executive director.

Since November 2016 until the hiring of Lozoya, the GBIC – a sales-tax funded economic development entity – the board had hired former BEDC VP Salinas as interim CEO while Jorgensen continued the nationwide talent search.

When Salinas wasn't chosen, Galonsky filed for the TRO, then filed a lawsuit to stop Lozoya's hiring.

The proposed buyout on Friday culminates the fruit of the nearly three-year effort to remove Lozoya and send him on his way.

At the time she filed her lawsuit, Galonsky complained that the contract contained no probationary period and the GBIC could end up paying up to $1.22 million during that contract period. 

“We are dealing with taxpayers’ money,” Galonsky said. “This is a very risky way to commit Brownsville’s sales tax revenue.”

What Galonsky didn't say was that in separating itself from the BEDC where Salinas was the VP, chair De Leon and then-City Finance Director Pete Gonzalez pressured the BEDC to return some $1.4 million in unspent money for FY 2017.

"The returned money more than paid for Lozoya's salary if he had been allowed to finish his contract," De Leon said. "The board of the BEDC wanted to keep the money but were forced to return it by the city after the contract was terminated."

Cowen said in a statement during the litigation that he voted against the contract because Lozoya “has no previous experience running an economic development department for a city.”

“As a GBIC director, I have fiduciary responsibility to ensure that taxpayer funds are used efficiently and appropriately and as such, I feel this decision by the board is reckless on many levels and may have serious repercussions for our city.”

On this Friday, we'll see how serious he is about using taxpayer money "efficiently." Will Cowen join Neece and Galonsky with the rest of the city commission to buyout the GBIC CEO?