In December 2003 the Corsicana Chamber of Commerce pitched the retailer Gander Mountain on a $16 million incentive package to build a flagship store that, with a planned Home Depot, would anchor a 132-acre business park called Corsicana Crossing, and the City of Corsicana and Navarro County authorized agreements with the Corsicana Industrial Foundation, a nonprofit that owned the project site.¹ Under the agreements the City and County pledged portions of the sales-tax revenue from the center into a "Grant Fund" that could be used only to repay the Foundation's construction loan, the Foundation took out a $10 million loan and leased the site to Gander Mountain with base rent equal to the quarterly loan payment minus the sales-tax grants, and Gander Mountain could buy the premises for $1 once the loan was paid.² The store opened in August 2004 and operated for eleven years, the City and County paid about $150,000 per quarter, and the Foundation serviced the loan; Gander Mountain closed the store in 2015, apparently after finding structural defects, but the shopping center kept operating and generating tax revenue.³

In February 2016 the City and County decided that the closure ended the public purposes justifying the grants and sued the Foundation and Gander Mountain for declarations that the agreements were unconstitutional, and JPMorgan Chase, the project's lender, intervened.¹ The trial court granted the City and County summary judgment, declaring that the closing extinguished the public purposes and that the agreements lacked sufficient controls, and the Tenth Court of Appeals affirmed, applying the Texas Municipal League framework over a dissent that found the evidence insufficient on summary judgment.² The vehicle in this Court is a petition for review filed by Chase, argued September 11, 2025, and decided May 8, 2026.³ Justices Lehrmann and Devine did not participate.⁴

Petition for review from the Tenth Court of Appeals (Waco) after summary judgment for the City and County; argued September 11, 2025, and decided May 8, 2026.⁵

Chase argues that the courts below erred in declaring the agreements unconstitutional because local governments are authorized to grant public money to businesses for economic development under Article III, Section 52-a and Chapters 380 and 381 of the Local Government Code.¹ The Court framed the threshold question as whether its Gift Clause precedents continue to govern economic-development grants and loans authorized by Section 52-a, and then whether the agreements violated them.²

The Court decided the threshold question of constitutional interpretation as a question of law, looking to the constitution's text and history to determine what the voters understood when they ratified it.¹

Whether Section 52-a exempts economic-development grants from the Gift Clauses.

Chase (Petitioner): Section 52-a authorizes economic-development grants "[n]otwithstanding any other provision of this constitution," so the Gift Clauses do not apply, and more than 4,000 economic-development agreements in Texas depend on that reading.¹ The question is not whether the City and County made a good deal but whether the deal is unconstitutional, and no constitutional provision was identified as violated.²

City and County (Respondents): Section 52-a establishes that economic development is a public purpose, but the second and third parts of the TML test, which examine whether taxpayers receive a return and whether the public purpose is accomplished, still apply, as every authority has held for thirty years.³

Whether the agreements satisfied the Gift Clauses.

City and County (Respondents): The agreements lacked the controls required by TML, and when a public purpose fails the government must stop contributing funds.⁴

Chase (Petitioner): In the alternative, the lower courts misapplied the framework.⁵

Chase argued that the courts below reinjected doubt about the constitutionality of conventional economic-development grants, which the Court recently said Section 52-a had removed, and that over 4,000 such agreements are in effect.¹

• State of Texas supports the City and County: Section 52-a does not categorically exempt grants of public money from Gift Clause scrutiny.
• Texas Public Policy Foundation and the Goldwater Institute support the City and County: the Gift Clauses forbid giving away public money to private ends.
• Texas Municipal League, et al. argue that the Constitution prohibits gratuitous payments unless the TML test is met.
• Texas Association of Business and the Texas Bankers Association filed amicus letters.

Holding

Economic-development grants authorized by Article III, Section 52-a remain subject to the Gift Clauses' requirements that a grant not be gratuitous, have a predominantly public purpose, and be subject to retained public control; the closure of one store does not as a matter of constitutional law extinguish the public purpose or show inadequate controls, so summary judgment for the City and County was improper.¹

Reasoning

Section 52-a and the Gift Clauses. The "notwithstanding" clause does not settle whether Section 52-a displaced the Gift Clauses, so the Court examined the original meaning in light of the background law, which included stringent early readings of the clauses, an expanding view of public purpose by the mid-twentieth century, the long-recognized requirements of control and consideration, and attorney general opinions disapproving "pure" economic-development grants.² The 1987 legislative record, bill analyses, and voter materials consistently describe the amendment as clarifying what counts as a public purpose, not as exempting economic development from control and consideration.³ The Court therefore held that Section 52-a establishes "development and diversification of the economy" as a legitimate public purpose but leaves the Gift Clauses' requirements of control and consideration in place.⁴

This arrangement. The agreement to dedicate tax revenue from a construction project to attract new businesses and create jobs falls comfortably within economic development as understood in 1987.⁵ The lower courts erred by defining the public purpose as the Gander Mountain store's continued operation: the question is whether the expenditures genuinely serve economic development in a concrete way, even if not precisely the way the parties envisioned, and the store's operation was one way, not the only way, to show that.⁶

Controls and benefit. The agreements likely contained sufficient safeguards, because payments began only after the store opened, the contributions were held in a separate account to be used solely to pay off the construction debt, and the City and County received a return benefit, a large anchor store that was built and operated for over a decade, with the center apparently generating additional tenants and tax revenue.⁷ The City and County could have negotiated payments contingent on continued operation but did not.⁸

Disposition

Court of appeals' and trial court's judgments reversed and the case remanded to the district court for further proceedings consistent with the opinion.⁹

Vote Breakdown

Chief Justice Blacklock delivered the opinion of the Court, with no separate writings; Justices Lehrmann and Devine did not participate.¹⁰