EcoHub Sues Houston to Find Out How Its Recycling Deal Fell Apart

Mayor Turner unveils the unfinalized deal with recycling company FCC.
Mayor Turner unveils the unfinalized deal with recycling company FCC.
Photo by Meagan Flynn

Who knew there could be so much drama over trash- and recycling-collection contracts?

Continuing the saga that has unfolded at City Hall — in which City Council members have said a deal with one company "smelled," and in which another company, EcoHub, claims Mayor Sylvester Turner snubbed him out of the whole process — EcoHub is now suing the city to find out what happened.

EcoHub had worked for years with former mayor Annise Parker's administration to set up the One Bin for All Recycling paradigm, and CEO George Gitschel had said he secured millions of dollars in bond funding to build an $800 million facility that would recycle up to 95 percent of all our waste and repurpose it as fuel or other traditional recycling products. But when Turner took over, the deal with Gitschel fell apart — for largely unknown reasons. Turner has refused to provide an explanation beyond the fact that he is "not obligated" to continue with Parker's vision. The city instead opened up a bidding process for more traditional single-stream recyclers in 2016.

The lawsuit, filed this week, is seeking clarity about how Turner made this decision. Gitschel had hired former KTRK reporter Wayne Dolcefino's consulting firm to investigate, but in the lawsuit, Gitschel's attorney says the city has not turned over documents, emails and phone calls that Dolcefino requested under the Texas Public Information Act. The lawsuit asks the court to compel the city to release the documents, and make sure officials are not hiding anything. Gitschel speculates that "improper influence by those who stand to financially benefit the most from the status quo" may have played in a role in why Turner canceled the One Bin proposal and opened it up instead to traditional single-stream recyclers.

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"What we're hoping to uncover is at least emails between either Turner or folks in his administration and those with whom the city has been corresponding about bids on this contract, just to find out who the mayor's been supporting and what's going on at the Solid Waste Department," said Gitschel's attorney, Stewart Hoffer. "It just doesn't make any sense why he would turn down a costless solution in favor of one that will cost a lot of money and has a greater environmental impact than what EcoHub had."

The city had argued that much of the information Dolcefino requested could be excepted from disclosure because the city anticipated litigation from Gitschel, or because releasing some of the information would disrupt the competitive bidding process among all the other recycling companies gunning for a contract, among other reasons. The Texas Attorney General's Office agreed with some, but not all, of the city's arguments.

"Our position is that the documents he's entitled to he has received, or will," said Alan Bernstein, the mayor's spokesman. "The documents he's not entitled to, obviously, he's not going to receive them. He, being a pronoun that covers everybody who's paid to represent the company that didn't bid on the contract it says it should have gotten. Last time I checked, you don't get to complain about the umpire's ruling unless you played the game, and that's not what happened here."

Gitschel told the Houston Press he did not bid on the city's October 2016 Request for Proposals for single-stream recyclers because he felt the criteria disqualified EcoHub, since its business model is entirely different from that of single-stream recyclers such as Waste Management. In June, Turner announced that a European recycler, FCC, had won the contract, pending City Council approval.

And City Council loudly disapproved. Several members said the 15-year, $46 million contract with FCC "smelled," was "rotten" and needed to be withdrawn so that the best and final offers from the other recycling companies could be re-evaluated. Ultimately, Turner agreed to restart that process, after City Council members pointed out that FCC's pricing, an $87-per-ton processing fee, was far from the best deal for Houston, and that the criteria used to evaluate the best proposal seemed flawed.

"We're not the only ones asking these questions," Hoffer said. "The folks at City Council are asking the same questions. So it's not like we're some pissed-off vendors who got our feelings hurt because we lost the deal. It just doesn't make sense."

Bernstein maintained that, regardless of the lawsuit's outcome, EcoHub can't participate in the bidding process since it didn't originally submit a bid.


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