City of Canton v. Zanbaka, USA, LLC
In City of Canton v. Zanbaka, USA, LLC, No. 12-12-00006-CV, 2013 WL 3377436 (Tex. App.--Tyler July 3, 2013, pet. denied), Canton Economic Development Corporation entered into an agreement with Zanbaka to fund a sewer line and lift station to its travel plaza.
The city delayed construction of the line and station after Zanbaka fulfilled certain requirements under the agreement. Id.
Zanbaka filed suit for a declaratory judgment asserting it had entered into a contract subject to section 271.152. Id.
Zanbaka argued that it provided goods and services to the city under the agreement when it allowed the city to annex its real property, when it created new jobs, and when it installed a fire hydrant on the property.
The city filed a plea to the jurisdiction arguing it was immune from suit.
The appellate court explained that despite the stated purpose of the agreement--to provide economic opportunities to the Canton area--the tangible objective of the parties' agreement was to provide funding for the line and station.
The appellate court held that any benefits that flowed to the city from the construction of the line and station were thus indirect and attenuated, and that section 271.152 did not apply to such benefits. Id.