Local Mayor’s Back Alley Deals Raise Concern

City of Roanoke Mayor Carl E. "Scooter" Gierisch Jr.
City of Roanoke Mayor Carl E. "Scooter" Gierisch Jr. | Image by City of Roanoke

Documents obtained by The Dallas Express suggest there may have been a series of transactions for alleyways in a local town that raise ethical and legal questions about the mayor and his family’s business dealings.

Carl E. “Scooter” Gierisch Jr. is the mayor of Roanoke, a town touted for being the “unique dining capital of Texas,” according to the city’s website. Located in Denton County, it has a population of roughly 9,943, according to the last census.

A transaction involving the mayor may potentially be in conflict with the Roanoke City Charter. The charter requires sales of city land to benefit the city and prohibits an “officer [elected or appointed]” from having a “substantial financial interest, direct or indirect, in the sale to the City of any land… except as allowed by state law.”

Additionally, the land deal under question may be contravening a Non-Arm’s Length (NAL) practice held by finance companies and investors. Though such practices lack the force of law, observers of NAL often choose not to purchase or insure mortgage notes if the buyer and seller have some extant familial or business relationship, for example.

The particular deal revolved around the sale of a 15-ft-wide strip of an unused alley near the intersection of U.S. Highway 377 and West Byron Nelson Boulevard. The sale was recorded in September 2018 with a purchase price of just $1. The signatures indicate the purchaser of the land was either Carl E. Gierisch Sr., Mayor Gierisch’s father, or his company, Gierisch Commercial LTD, whom the senior Gierisch would have been signing on behalf of.

Around 10 months later, in June 2019, property with the same legal description as the alleyway was sold by Gierisch Sr. and several other entities bearing his last name to a company called MPC Oak for $1.3 million. One of the entities, Gierisch Management LLC, has the mayor listed as an agent on Zillow. The land was eventually developed into the Magnolia at Oak Street Apartments, which stands there today.

It is unclear how the city came to abandon the alley and sell it. DX could not locate any public records that indicate whether the City of Roanoke went through a bidding process to sell the land after abandonment. A legal Q&A provided by the Texas Municipal League reads, “Real property (i.e., any property that is attached directly to land, as well as any right or ownership interest in the land itself) owned by a city must generally be sold by: (1) public auction under Local Government Code chapter 253; (2) notice and bidding procedures under Local Government Code chapter 272; or (3) in the case of a home rule city, the use of a broker under new legislation passed in 2013.”

DX reached out to the mayor for comment, and he denied any wrongdoing.

“I was a minority partner with 3% ownership,” the mayor explained, describing his interest in his father’s company. He stressed that he did not profit from the sale directly or indirectly, claiming, “There was no conflict [of interest]. City Council members abstain from voting. Although, at this time, I wasn’t a voting member of the council. When this item was discussed and voted on, the mayor pro-tem took charge of the meeting, and the council voted.”

The mayor also rejected the notion that the bidding process was irregular or unlawful.

“With regard to the notice and bidding issue, I understand there is a state statute which allows the city to convey unused alleys or rights-of-way to the abutting property owner without going through notice and bidding. This is what the city did for unused alleyways in the older part of Roanoke,” he said.

The mayor appeared to be referring to TEX. LOC. GOV’T CODE § 272.001(b), (c). which generally allows cities to make sales using the process he described, according to the Texas Municipal League. However, DX could not immediately confirm if Gierisch Sr. was a property owner of the abutting land at the time of the sale.

The mayor’s website says his “top priority is to stay on top of the continued positive growth and development.” Other priorities include “maintain[ing] a  great quality of life for our residents” and promoting growth, as well as “offer[ing] our citizens great amenities and low taxes.”

Sean Turner is opposing the incumbent mayor in the 2024 race. Turner’s campaign website enumerates three planks in this platform: cutting property taxes, opposing apartments and high-density housing, and promoting “high-quality investment” in small businesses.

Early voting for the mayoral race began on April 22 and continues until April 30. Election day is May 4.

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