Watts Law Firm LLP Files Complaint Against Hutto, Texas Officials Over Pay-to-Play Scheme

Ben Cannon

Author

“Nothing kills job creation faster than petty corruption. This lawsuit is critically important to ensure that the economic engine which is the State of Texas cannot be stopped by politicians seeking bribes for their friends.” — Attorney Mikal Watts

Watts Law Firm LLP has filed a new lawsuit in February, 2026 on behalf of its client, plaintiff Midway Development Group, LLC against the Hutto Economic Development Corporation (HEDC), Mayor Mike Snyder, Joel Scott, and Terra Halona, LLC.

The case centers on a major Central Texas development project that was derailed by officials demanding improper payments. The petition, filed in Texas state court, alleges that city leadership used its influence to pressure Midway into compensating the mayor’s associates. When Midway refused, the HEDC terminated its agreement.

The lawsuit seeks to recover more than $50 million in lost profits and $250 million in exemplary damages. This lawsuit is an important effort to hold public officials accountable and restore trust in Texas’s economic development process.

This case is now poised to test not just the facts surrounding one development deal, but the broader principle that public office in Texas must always serve the public interest. We must not turn a blind eye to corruption and must instead hold our elected politicians accountable.

Midway Chosen as Hutto Developer After Formal Selection Process

Midway Development Group has a long record of creating large-scale, mixed-use destinations across Texas that attract jobs, retail, and investment. Midway offers a range of valuable resources and tools to facilitate the creation of remarkable projects, including destinations in Buffalo Heights, City Centre, Central Park Post Oak, East River, Green Street, Kings Harbor, Kirby Grove, Memorial Green and Water Mark District, each in Houston, Texas, as well as Century Square in College Station, Texas.

In 2024, Midway was one of four companies that participated in a formal Request for Qualifications (“RFQ”) to develop a plot of land located in Hutto, Texas. The project, encompassing roughly 250 acres, was later named “Cottonwood.” The four firms were then reduced to two, and Midway submitted a Request for Proposal (“RFP”).

Following this formal selection process, Midway was chosen to lead the development. The concept promised new housing, commercial spaces, and public infrastructure. To formalize the project’s terms, Midway and the Hutto Economic Development Corporation (HEDC) signed a Memorandum of Understanding (MOU) on March 18, 2024, an agreement later ratified by HEDC’s board on April 4, 2024.

Throughout the RFQ/RFP process, a company called Terra Halona, LLC had represented to Midway on multiple occasions that they were “friends” with the mayor and offered to arrange a meeting. That offer was accepted only after Midway had been formally selected through the RFQ/RFP process by the HEDC.

Pressure to Compensate Mayor’s Associates

As the planning work advanced, the mayor and others repeatedly asked how Terra Halona would be “compensated” for their involvement, despite the fact that Terra Halona was not part of Midway’s development team and had no formal role in the project.

Over time, the pressure to compensate the associates of the Mayor escalated. Midway says it was warned that “things would not end well” for the project unless payments were made to the Mayor’s friends. The company refused to agree to any such arrangement, maintaining that all financial dealings must be legitimate, transparent, and tied to actual work performed.

The complaint describes how the project’s momentum began to falter during 2025, partly due to infrastructure challenges outside Midway’s control. Specifically, a proposed highway interchange design that required coordination with state and regional transportation agencies. Despite these setbacks, Midway continued investing resources to keep progress on track, completing planning work and maintaining regular communications with HEDC officials.

During these efforts, Mayor Snyder allegedly expressed growing dissatisfaction with the project’s pace and continued to pressure Midway to compensate Terra Halona. At this time, the Mayor had appointed himself to the HEDC and replaced several members with his own appointees.

On October 8, 2025, HEDC abruptly terminated the MOU. Midway believes this termination was not based on performance issues but rather a retaliatory move following its refusal to pay the Mayor’s favored associates.

Damages and Relief Sought Following Corruption

When the MOU was terminated by the HEDC, Midway had already spent more than $1 million on planning, design, and due diligence work for the Cottonwood project; money the company says it would not have invested if city officials were acting in good faith. Beyond those direct costs, Midway claims that the project’s termination destroyed its opportunity to earn more than $50 million in profits that would have flowed from successful development and long-term operations.

In addition to recovering its financial losses, Midway is asking the court to award $250 million in exemplary damages. These are penalties designed to deter similar misconduct in the future and to protect the integrity of public-private partnerships that drive economic growth across Texas.

Political corruption harms not only the business at the center of a deal but also the broader community, which loses out on jobs, tax revenue, and commercial vitality when projects are derailed for personal gain. The damages sought are intended to hold the defendants accountable and affirm that no local official or private actor is above the law.

Midway’s lawsuit has been filed in Texas state court, where the company has requested a jury trial. Discovery, or the process where both sides produce documents and take testimony under oath, is expected to move forward in the coming months before the case is presented to the people of Texas sitting as jurors, and the plaintiff looks forward to having its claims heard in open court.

In an era when public trust feels increasingly fragile, cases like this stand as reminders that accountability cannot be optional. Corruption, no matter how small or local, erodes the very foundation of democracy and economic growth. Now more than ever, Texans, and all citizens throughout the US, must demand integrity from their leaders and refuse to let power become a shield for misconduct.

Disclaimer: The information contained in this article is provided for general informational purposes only and is based on allegations set forth in publicly filed court documents. This article does not, and is not intended to, constitute legal advice or a solicitation for legal services, and readers should not act or refrain from acting on the basis of any content herein without seeking advice from qualified legal counsel licensed in the relevant jurisdiction.