Roughly $13,000 owed in a leasing dispute by the Democratic candidate for Hays County Judge was partially waived by San Marcos city leaders May 1, but not without controversy.
The issue centered on a dispute between Ruben Becerra and the city of San Marcos over his acquisition of the Dixie Cream Donuts shop in San Marcos. The San Marcos City Council approved waiving a part of what was owed in a 5-2 vote.
The city of San Marcos claimed Becerra had failed to pay the city the $13,117.99 that he owed for lease on Dixie Cream Donuts from 2015 to 2017. San Marcos city leaders approved waiving roughly $11,000.
Becerra bought the business in 2015 from Daniel Anderson, the original owner of Dixie Cream who passed away later that year.
The property is on an approximately 1,400-square-foot plot of land which is owned by the city of San Marcos and Union Pacific Railroad Company.
Tenants of the property have one lease and two landlords – the city of San Marcos and Union Pacific.
Becerra, who was making payments to Union Pacific, said in an interview with KXAN that in a handshake deal with Anderson he would keep the property clean in lieu of paying rent.
However, according to a Texas state law known as the statute of frauds, a real estate deal generally has to be written to be enforceable.
“It’s unethical that some city officials created this fiasco for the sake of political motives, falsely accusing me of delinquent payments when, in fact, the city was delinquent on setting up a lease or billing us for use of the land,” Becerra said. “The city first approached me about this at the end of 2016 and the amount sought for 2017 has been paid.”
Becerra said he has since paid the approximately $2,000 which was the final payment council required after the $11,000 was waived on May 1.
However, according to a May 1, 2015 Bill of Sale, signed by Anderson and Becerra, the assignee (Becerra) accepts and agrees to be bound by and to perform and observe fully and faithfully all of the covenants, including liabilities and obligates mentioned in the Lease Agreement with the Union Pacific Railroad Company.
“The city’s legal team and staff have held the position that there is a lease,” San Marcos Mayor John Thomaides said. “We have notified Becerra since 2016 about the payments. The lease is legitimate and legal. This is all outlined in the Bill of Sale Becerra signed.”
Thomaides said claims that there was no lease is incorrect. Three city managers have contacted Becerra in writing about the money owed.
According to an email from City Manager Bert Lumbreras, which was obtained through public information act request by the Hays Free Press, Becerra was made aware on Sept. 29, 2017 – nine months before council waived his debt – that he was not making payments on the property.
In the same email, Lumbreras said that the letter served as notice of unpaid rent to the Dixie Cream Donut lease entered into between Union Pacific and the City of San Marcos.
However, Becerra said in a reply the handshake agreement was in effect for many years and Dixie Cream never received any type of communication related to alleged monies for the parcel of land.
Lumberas later said that in 2017 Anderson “should have disclosed” information regarding the agreement when Becerra purchased the donut shop. Even if Anderson didn’t make known the details, Lumbreras said Becerra “would still be responsible to honor the terms of the lease.”
However, in an April 28, 2018 email, Lumbreras said the city did not properly bill Becerra for the previous three years. Lumbreras had offered Becerra a one-time payment of roughly $4,500, which was nullified by the city council’s waiver.
“As a result, it is our responsibility to ensure we are properly billing and I can assure you we will do that from now on,” Lumbreras said in the April 28 email.
Thomaides said the decision by council to waive the debt will haunt the city in the future when other leasing disputes arise.
“If you lease property from the City of San Marcos, you are not going to get free rent,” Thomaides said. “The taxpayers paid around $400,000 for that property. It doesn’t matter who is in the lease agreement. If you sign a lease with the city, you are obligated to pay it and that’s what this issue really comes down to.”
Lumbreras declined to comment on this story.