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Federal Suit Seeks to Block Gulf State Luxury Hotel

Bill Britt

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By Bill Britt
Alabama Political Reporter

MONTGOMERY—A Federal lawsuit seeks to stop the State of Alabama from using settlement money from the Deep Water Horizon oil spill to build a luxury hotel, and conference center at Gulf State Park.

The lawsuit, filed by the Gulf Restoration Network in May of this year, contends the State of Alabama improperly received $58 million in BP settlement money to subsidize building the hotel and conference center from the Trustees for the DWH Natural Resource Damage Assessment.

The complaint states: “Alabama had tried without success for over a decade to promote this project as a means of economic development. The actual cost of the project and source of the other funds which would be necessary to construct it are unknown. The Federal Trustees nonetheless acquiesced to the demand that the Project receive natural resource damage funding.”

Currently, Gov. Robert Bentley is asking the State Legislature to pass a $50 million bond to allow construction on the State park to begin.

The Gulf Restoration Network is an environmental group “committed to uniting and empowering people to protect and restore the natural resources of the Gulf Region.”

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In the lawsuit they state that the money allocated to Alabama for constructing a hotel and conference center, violates the Federal Oil Pollution Act, 33 U.S.C. § 270, which they say, “provides a very specific mechanism for forcing a responsible party like BP to pay for the damages to publicly owned natural resources caused by an oil spill.”

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The group argues, “The Oil Pollution Act and the regulations implementing it specifically define ‘restoration’ as actions to ‘restore, rehabilitate, replace, or acquire the equivalent of injured natural resources or services.’” They claim that the Gulf State project is not an act of restoration, as defined by the law.

“Building a hotel and convention center is plainly not an action that will ‘restore, rehabilitate, replace, or acquire the equivalent of injured natural resources or services,’ and the Federal Trustees do not even try to explain how building a convention center qualifies as a ‘restoration project,'” state the court filings. 

They also contend, “Much of the plan for the Alabama Convention Center Project remains conjectural, and the configuration, cost, financing and other aspects of the Project are entirely unknown.”

To date, the State has commissioned a feasibility study for the park, and passed a tortured law to circumvent numerous State statutes that, for decades, prohibit such construction on the State’s property. 

Around 16 years ago, a $110 million bond was issued for a similar project. However, Gov. Fob James, at the urging of Conservation chief, Jim Martin, decided to abandon the project. Much of the millions raised for the project went missing in the subsequent years, according to former Attorney General Bill Baxley, who represents the Perdido Resort. 

According to the suit, Alabama Department of Conservation and Natural Resources, Commissioner, N. Gunter Guy serves as “implementing trustee” for the Alabama Convention Center Project, and that he and State officials plan to further expand the use of BP settlement money for the hotel, and conference center to be built at Gulf State Park.

The latest figure being considered is $85 million from settlement funds, with an additional $50 million in bonds, for a total of $135 million.

Several lawmakers have questioned the wisdom of using BP settlement money, and issuing more bonds at a time when the State is struggling to pass a sustainable State General Fund Budget.  

Bentley is calling for tax increases to insure basic services continue for Medicaid and other programs.

He has said, that he will once again ask the Legislature for the $50 million bond, in the second Special Session of 2015.

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