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Years before Texas conservatives painted them as criminals, Colony Ridge residents sought help from state agencies

By Alejandro Serrano, The Texas Tribune, and Paul Cobler, Houston Landing

Years before Texas conservatives painted them as criminals, Colony Ridge residents sought help from state agencies” was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

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LIBERTY COUNTY — When the fast-growing Colony Ridge development outside Houston became a fixation of right-wing media last year, Texas’ Republican leaders called for swift action.

The 33,000-acre development had been painted by conservative influencers, outlets and think tanks as a destination for thousands of immigrants in the country illegally and a hub for drug cartel activity. Gov. Greg Abbott publicly worried it was a “no-go zone” and directed legislators to craft new laws about “public safety, security, environmental quality, and property ownership in areas like the Colony Ridge development.”

Records obtained by Houston Landing and The Texas Tribune, however, show at least three state agencies were warned about other potential problems with the development years earlier. Residents sent state agencies more than five dozen complaints about Colony Ridge and its marketing arm, Terrenos Houston, from 2016 to 2023.

Yet, the state has few, if any, results to show.

Instead, the federal government stepped in with enforcement action, painting a different picture of the development’s problems. In a December lawsuit, the U.S. Justice Department alleged the Colony Ridge’s developer duped thousands of Latino buyers with a scheme that violates federal consumer protections and fair housing practices, while ruining their dreams of homeownership.

Thousands of Colony Ridge buyers defaulted on their loans, losing their land and nascent investments, according to the federal government. The company is accused of repeating that process — often exploiting language barriers — by reselling the land to new, unsuspecting customers.

A sign outside of the Colony Ridge development on Oct. 10, 2023, in New Caney, Texas.
A sign outside of the Colony Ridge development on Oct. 10. Credit: Mark Felix for The Texas Tribune

Those findings mirror a Houston Landing investigation that found Colony Ridge had reacquired 45% of the 35,000-plus properties it had sold since 2012. The company’s practices raised concerns of a predatory lending scheme, experts told the Landing, which published the report in December, days before the Justice Department announced its lawsuit.

At least 27 complaints sent to three Texas state agencies since 2019 previously were unreported. They raise new questions about how Texas state leaders last fall failed to publicly identify the residents of the development as potential victims of predatory lending practices instead of villains trying to take over the country.

“Gov. Abbott and the Texas GOP spent months fearmongering about the immigrants living in Colony Ridge,” said U.S. Rep. Joaquin Castro, D-San Antonio. “Their concern should have been with the developers exploiting Latino families trying to achieve the American dream of owning a home.”

Even today, Texas has done little about the development, other than paying to increase the law enforcement presence there. Lawmakers held multiple hearings on the neighborhood last fall. But they struggled to craft any new laws that complied with the directive from Abbott, whose campaigns have received $1.4 million from the community’s developer.

“The concerns raised about Colony Ridge are unacceptable,” gubernatorial spokesperson Andrew Mahaleris said in a statement for this story that noted the investigations Abbott ordered last fall. “The state will provide all resources and support needed to uphold the rule of law in Colony Ridge.”

Colony Ridge’s Chief Executive Officer John Harris said he could not discuss the federal government’s lawsuit on the advice of his lawyer. He defended his company’s practices generally as offering an opportunity for people to own land who otherwise would not.

Harris owns the business with his brother, Trey Harris and their cousin, Kevin Harris.

“Just from knowing my customers and leading this business, the people that are in this neighborhood, creating their homes — I look up to them,” John Harris said in an hour-long interview in February, his first since the DOJ filed its lawsuit. “They’re building more with less than 99% of Americans.”

He blamed the federal lawsuit and state leaders’ uproar on the ever-divisive national debate over immigration — a major issue in this year’s presidential race — and the source of a heated battle between Abbott and the federal government.

Nobody actually knows how many Colony Ridge residents are in the country illegally. Some neighboring residents contend a vast majority of those living there immigrated illegally, while local officials estimate the number is closer to 10 to 20%.

After Texas Attorney General Ken Paxton’s office announced an investigation into the development last fall, the state’s top lawyer told a conservative talk radio host it was “completely insane that they can set up these villages with illegal immigrants,” but claimed the Legislature had not given his office the “authority to do anything about it.”

Paxton did not mention the complaints received by his office, which did not respond to a list of questions for this report.

“So, we’re looking at whether we have some authority to do something with deceptive trade practices,” he said.

Harris contends the complaints to state agencies are far overshadowed by the thousands of transactions Colony Ridge conducts any given year. He said Colony Ridge had turned over all information that state officials have sought since last September, including employee lists, deeds and names of customers — a trove that took weeks to share digitally.

“We’ve responded to everything. They’ve got tons, they’ve got more than anybody,” Harris said of state officials. “This place isn’t what they think it is.”

• • •

Plum Grove City Council member Lee Ann Penton-Walker said she has been raising hell about Colony Ridge for more than a decade.

About 600 people lived in Plum Grove, a city surrounded by woods and wetlands next to Colony Ridge, 30 miles north of Houston, when John Harris and his brother began clearing nearby land in the early 2010s.

At the time, Plum Grove was populated by “originals” who had lived in the area for generations, said Penton-Walker, a resident of the city for most of her 55 years.

The city had grown to 1,245 residents by the 2020 Census.

The Plum Grove City Council holds a meeting, Monday, Feb. 12, 2024, in Plum Grove. (Antranik Tavitian/Houston Landing)
The Plum Grove City Council holds a meeting on Feb. 12 in Plum Grove. Credit: Antranik Tavitian/Houston Landing

Penton-Walker accuses the Harrises of disturbing the city with a massive development that has adversely affected Plum Grove’s drainage, infrastructure and quality of life by rapidly moving in thousands of people next door.

Most significantly, she claims a vast majority of the land buyers are in the United States illegally. “I don’t like illegals,” she said.

In 2016, Liberty County officials facing pressure from Penton-Walker and others testified before a Texas Senate committee about problems the rapid, uncontrolled development of Colony Ridge already had presented.

Liberty County Judge Jay Knight told lawmakers he and the county needed more authority to regulate development. In Texas, counties do not have the same kind of zoning and land-use oversight powers that cities do. That means neighborhoods built in unincorporated areas outside city limits — including Colony Ridge — face less oversight that comes from permitting processes and building standards.

“What I’m concerned about is the rapid growth that’s going to come between now and 2021,” Knight testified. “What can we do to protect property owners and their rights, but also developers and their rights?”

At the time, local media reports compared Colony Ridge to a colonia — an unincorporated community typically found near the border with Mexico that lacks essential services, such as paved roads or drinking water.

Former state Sen. Eddie Lucio Sr., chair of the chamber’s Intergovernmental Relations Committee at the time, told Knight he unsuccessfully had been advocating for updates to the state’s Local Government Code for decades. His former legislative district along the border contains colonias that have been a headache for local officials for years. Lucio said he needed to consider the needs of people living without infrastructure in the developments and the county government unable to regulate the growth.

When he pushed for updates to state laws governing counties’ zoning and land-use powers, Lucio “had developers in my own county yelling at me and cursing me out,” he said.

The next year, a Texas House bill that would give some counties zoning powers was assigned to a committee, but never got a hearing.

The Texas Public Policy Foundation, an influential conservative Austin think tank, echoed the concerns about explosive growth in a 2020 report. The population influx was fueled by a broken U.S.-Mexico border and putting pressure on county resources and local schools, the paper stated.

Knight said the Legislature missed an opportunity years ago to give counties more power to regulate development.

“We had the same conversation eight years ago, and here we are, once again,” Knight told a House committee last fall, months after another bill that would have given counties some zoning abilities again died quietly without being heard in a committee.

• • •

Sisters SuEllen and Keilah Sanchez say they bought eight pieces of land from Colony Ridge with hopes they could help their family.

Their excitement soon crumbled.

They say Colony Ridge lied to them about flooding and utility hook-ups, gave them incorrect tax documents and took money before accusing them of missing payments and filing for foreclosure.

The federal government also has accused Colony Ridge of misrepresenting facts — such as guarantees of water, electricity and sewer hook-ups, “causing borrowers to incur substantial unanticipated expenses after closing.”

SuEllen Sanchez filed a complaint with the state’s Department of Savings and Mortgage Lending, which investigates some mortgage-related complaints. Her complaint was forwarded to the attorney general’s office, according to a letter a DSML investigator sent Sanchez in August 2021.

The sisters say they didn’t hear from the attorney general’s office until September 2023, two years later.

By then Colony Ridge had become a talking point for state lawmakers and national right-wing media. The attorney general’s office received an average of 33,000 consumer complaints each of the last five years, according to caseload statistics from the office.

The sister’s complaints were among 69 sent to the state about Colony Ridge or its marketing arm, Terrenos Houston.

Forty-two of those complaints went to the Texas Commission on Environmental Quality, several of them alleging raw sewage discharges and violations of proper construction procedures. The federal government also accused Colony Ridge of causing raw sewage to run through and around some customers’ land.

The environmental agency did take some action against Colony Ridge in response to several early 2020 complaints of stormwater runoff from five sections of the development filling nearby creeks and ditches with pollutants. Colony Ridge’s leadership agreed to pay a $23,280 penalty that could rise to $29,100 if the company failed to improve its stormwater runoff monitoring, according to a TCEQ commissioners order dated Aug. 1, 2022.

At least 14 other complaints were sent to the attorney general’s office. They alleged unsolicited telemarketing, misleading statements and billing practices, according to records obtained under the Texas Public Information Act.

The attorney general’s office declined a public records request for copies of the complaints, however, citing the ongoing investigation.

“If violations are uncovered, the OAG will initiate enforcement proceedings. Accordingly, the OAG anticipates litigation in these matters,” a January letter from the attorney general’s office states. “The complaints are related to the anticipated litigation, and have not been seen or provided to the opposing party.”

Omar Camargo said he filed two of those 14 complaints because of continuous marketing calls even though he never had conducted business with either company and never wants to.

The federal government’s lawsuit accuses Colony Ridge of using targeted and aggressive marketing — sometimes offering entry into contests for free gifts — to invite people on tours, where the developer deployed high-pressure sales tactics.

Camargo said an investigator for the Texas attorney general’s office called after his first complaint last January, but the calls from Terrenos Houston continued and he never heard from the investigator again. That is when he filed the second complaint in November, he said.

Eight of the complaints sent to the state’s Department of Savings and Mortgage Lending were closed due to lack of jurisdiction, insufficient evidence or apparent resolutions between the complainant and Colony Ridge, records show. It is not clear what the agency did with the other four complaints.

Once, DSML recommended to a complainant they contact the attorney general’s office and another time, with SuEllen Sanchez’s complaint, the agency said it had forwarded the complaint to the attorney general’s office.

Harris said Colony Ridge takes legitimate complaints seriously and tries to work with customers who may have had a misunderstanding or difficult situation. He also said the company has received complaints from people who purchased lots as investments and became disgruntled when they were not able to flip the land as they had hoped.

• • •

Last year, Penton-Walker’s anti-Colony Ridge advocacy in Plum Grove caught the attention of supporters outside Liberty County.

A writer for the Center for Immigration Studies, a far-right think tank, interviewed Penton-Walker for a post about Colony Ridge. The report, published in May, incorrectly linked a mass shooting in nearby San Jacinto County to Colony Ridge.

Soon after, claims of cartels, drugs and lawlessness in Colony Ridge spread quickly among conservative media. Texans for Strong Borders and Texas Scorecard, a conservative media website, elevated the claims through the summer of 2023.

Abbott, Lt. Gov. Dan Patrick and other Texas Republican elected officials joined the chorus by the fall. Residents, Colony Ridge developer Trey Harris and the Liberty County sheriff all said state leaders’ comments about a community overrun by crime did not reflect reality.

Leaders’ portrayals also drew rebukes from Latino rights activists, particularly when officials use the word “invasion” to describe migrants.

“It’s totally fearmongering and scapegoating Latino immigrants in Colony Ridge for partisan political purposes,” said Domingo Garcia, president of the League of United Latin American Citizens. “Hate speech creates hate that can lead to violence, and Gov. Abbott and Lt. Gov. Patrick need to stop the hate speech.”

Republican leaders’ finger-pointing also ignited ongoing feuds within their own party.

In October, Paxton castigated state Sen. Robert Nichols, R-Jacksonville, and state Rep. Ernest Bailes, R-Shepherd — who supported his impeachment last year — for creating a special utility district that “was specifically granted to create an advantageous carve-out for the Colony Ridge development to act virtually as its own city.”

Such districts can incur debt for public infrastructure and pass on the costs to residents via taxes. Lawmakers ratify dozens of them each legislative session, according to state records. During last year’s regular session alone, the Legislature approved 48 bills relating to the creation of such special districts.

Bailes said he pushed for the special district at the request of local officials and schools, including Liberty County and Plum Grove leaders. He said he worked directly with Abbott’s office and noted the governor “personally signed off his approval.”

“I worked hard to pass the management district which they had asked me to pass, in order to help provide the additional tools they needed to better regulate the exponential growth,” he wrote on social media. “Because of a wide open southern border, these restrictions were not near enough.”

Abbott also went further in supporting Colony Ridge’s growth outside city limits — and the kind of regulations municipalities can wield, Bailes said. He said that after Colony Ridge developers donated $50,000 to Abbott’s campaign, the governor endorsed Harris’ application to designate Colony Ridge as an opportunity growth zone, making it eligible for federal funding.

“I could say that I was shocked to hear this when I first heard the news, though I really wasn’t too surprised,” Bailes said on Facebook.

In a statement for this story, Bailes welcomed the federal government’s scrutiny into Colony Ridge.

“If this business has violated the law, I believe they should face full prosecution — just as any other business would,” Bailes said.

Nichols, the other lawmaker Paxton blamed, was unavailable for an interview for this story.

As lawmakers last fall grappled with Abbott’s vague directive to address various aspects of developments like Colony Ridge, the man who leads the consumer protection division in Paxton’s office revealed the agency’s ongoing probe into the Liberty County development.

Democrats on the Senate Local Government Committee grilled Ryan Baasch about the apparent sudden interest in consumer protections — and the office’s authority to conduct such investigations.

Baasch said the attorney general could try to limit abuse of conventional business practices, but current law does not limit Colony Ridge’s ability to operate as it does. And he told lawmakers he could not provide many details about the agency’s investigation.

“Our preliminary findings reveal significant concerns with Colony Ridge’s compliance with multiple laws designed to protect consumers and the public — and to prevent unscrupulous business practices,” Baasch said. “Our preliminary findings also indicate, however, that Colony Ridge will likely persist in materially the same form as it exists today and will likely only grow larger without new legislation.”

That special session ended without legislation regulating Colony Ridge. Abbott quickly called another special session and again put the development on the agenda. This time, however, he limited lawmakers’ work to funding an increased law enforcement presence in the area.

An overhead view of the Colony Ridge development on Monday, Oct. 9, 2023, in New Caney, Texas.
An overhead view of the Colony Ridge development on Oct. 9 near Houston. Credit: Mark Felix for The Texas Tribune

The Legislature ultimately approved up to $40 million for state troopers to patrol Colony Ridge, even after local officials refuted claims that the development had become too dangerous for law enforcement to effectively police.

The Sanchez sisters, who are among Colony Ridge’s customers who filed complaints with the state, continue to run a website documenting complaints from the development’s clients.

“Our goal is for people to see through our testimony what other people have been going through. How they have been scammed and taken advantage of,” the sisters wrote in an email to the news organizations. “We hope that justice is served for everyone that has suffered at the hands of Colony Ridge.”

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This article originally appeared in The Texas Tribune at https://www.texastribune.org/2024/02/27/texas-conservatives-immigrants-federal-lawsuit-colony-ridge/.

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