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Pittman Sponsors Bentley’s Beachfront Boondoggle


By Brandon Moseley
Alabama Political Reporter

tripp_pittmanThe Alabama State Legislature is back in session (albeit currently taking a long recess) to deal with the supposed State General Fund (SGF) “crisis” and…….burden taxpayers with another $50 million in long term debt to build an enormously expensive taxpayer subsidized hotel on a beach that already has more hotel rooms than it needs.  Why Governor Robert Bentley (R) is so determined to borrow money to get the state of Alabama in to the highly competitive hotel business has never been explained very clearly.

Gov. Bentley has repeatedly said that he is tired of going to conferences in Florida to meet with Alabama groups as a justification for spending $135 million on a conference center and hotel in a business environment where more and more organizations forgo expensive conferences in favor of teleconferences or elect to go to gambling cities like Los Vegas where the casinos can absorb a lot of the costs since they profit from the increased betting handle.

Even though the state has no SGF budget, for fiscal year 2016, after Gov. Bentley vetoed the budget passed by both houses of the Alabama Legislature, the Governor is demanding that legislators spend precious time in the special session trying to pass this twice rejected legislation back up for a third time this year.

This time the legislation is being sponsored by Senator Trip Pittman (R-Montrose) whose district this massive hotel in a hurricane zone is being built in.  Pittman also owns the Hyundai tractor dealership in the area.

This remains an extremely controversial project.  Sen. Paul Sanford wrote on Facebook recently, “So glad I know we will be back in Montgomery on August 3rd so I can KILL THE $50 MILLION BOND ISSUE. The State should not be borrowing more money when we have a cash flow crunch. We should cut back not expand operations.”

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The Governor’s Finance Director Bill Newton called the Hotel by the beach, “An economic development project,” when briefing legislators.

For years, the Gulf State Park Lodge was the “crown jewel” of the State Park system. It made far more money than any other State park, while allowing Alabama families to enjoy the Gulf at an extremely affordable rate. It was destroyed a decade ago by a hurricane.

Rather than simply taking the insurance money and rebuilding what we had, Governor Bob Riley (R) Administration wanted to build a grandiose resort for people with bigger budgets. That project got delayed by a lengthy court battle and then the Great Recession. The State has since allocated $85 million of our BP oil spill recovery money to build the monstrous resort which will cater to the higher income tourists.

Sen. Jimmy Holley (R) said during the last session that the insurance and the $80 million check from BP are not enough to build what the Bentley Administration wants to build, thus they need to be able to write up to $50 million in new bonds. The bonds would be paid back by revenues from the resort. If that is not enough the bill authorizes that the bonds be paid back by two small taxes that are currently earmarked for the upkeep of the State parks. No mention was made of how the bonds get paid back if the palace by the beach gets washed away in a future hurricane.

If issued, the bonds would be for 20 years at a 4 percent interest rate, the debt service payments on the bonds would be an estimated $3.65 million annually. Backers claim that the massive project will pay for the bonds; but two existing taxes that are currently earmarked for maintaining Alabama state parks would be diverted to pay for the bonds….in case those rosy forecasts are wrong.

The Governor claims that the State is in a fiscal crisis, but is adding additional debt to the General Fund, rather than indefinitely delaying this project until after this crisis is over and the state has paid off almost $600 million in existing debts.

Sen. Sanford said during the regular session, “Is Alabama really broke or is our handling of our finances BROKEN?”

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Proponents of the project hope that their legislators can rush this project through while the public’s attention is diverted on the General Fund budget, tax increases, raiding education to support the General Fund, etc.

According to the synopsis:

“This bill would authorize the incorporation of the Gulf State Park Improvements Financing Authority. This bill would authorize the authority to sell and issue, from time to time, its bonds, not exceeding fifty million dollars ($50,000,000) in aggregate principal amount for the purpose of providing the funds necessary to construct and equip capital improvements at Gulf State Park in Baldwin County, Alabama, including capital improvements authorized by the provisions of Chapter 14E of Title 9 of the Code of Alabama, 1975.

This bill would provide that the bonds issued by the authority pursuant to this act would be payable solely out of and secured by a pledge and assignment of certain designated revenues, including (i) certain tax revenues allocable to the Department of Conservation and Natural Resources from the State sales and use tax and the State tax on tobacco products and (ii) such revenues derived from the operation of the park improvements financed with proceeds of the bonds as the authority may determine. This bill would provide for the details of the bonds and for the terms of the sale thereof. This bill would provide that the bonds and the income therefrom shall be exempt from taxation in this state.  This bill would authorize the issuance by the authority of refunding bonds for the purpose of refunding the principal of and interest on any then outstanding bonds theretofore issued by the authority and the expenses of the refunding and any premiums necessary to retire those so refunded.

This bill would amend Section 9-14E-9 of the Code of Alabama 1975 to provide that casualty insurance proceeds respecting damage to the project authorized therein and proceeds of bonds issued by the authority would constitute a source of funds to pay a portion of the costs of constructing and equipping the project authorized therein.”

The previous Gulf State Park Lodge was reclaimed by the ocean.


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Brandon Moseley is a former reporter at the Alabama Political Reporter.

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