CITY OF McALLEN, TEXAS v. Arnaldo Ramirez Jr., Raul Romero, Promotions of America, Inc., Nolana Entertainment, Inc.
The City of McAllen appealed a trial court judgment that found its denial of a conditional use permit for the Collage nightclub constituted an unconstitutional taking under the Texas Constitution. Appellees Arnaldo Ramirez Jr., Raul Romero, Promotions of America, Inc., and Nolana Entertainment, Inc., had sued after the permit denial led to the nightclub's closure and significant financial losses. The appellate court affirmed the lower court's decision, concluding that the City's actions demonstrated a severe economic impact and interfered with the appellees' reasonable investment-backed expectations, thus satisfying the criteria for a regulatory taking. The court also upheld the awards for lost investments, lost profits, and the loss of collateralized property (La Villa Real) and its associated rental income.