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Alabama Taps BP Spill Funds for Another Upscale Beach Project

The state's auditor says the administration of embattled Gov. Robert Bentley is being "funny" about funds awarded to Alabama after the 2010 Deepwater Horizon disaster.

by Matt Smith
Mar 25 2016, 2:24pm

Photo by Dave Martin/AP

Alabama has started building a controversial hotel and convention center on the Gulf of Mexico with money meant to compensate the state for the Deepwater Horizon disaster, sidestepping a court ruling that barred it from using other restoration funds.

It's the second time in recent months that cash-strapped Alabama has tapped into the same pool of funds for a controversial project, raising questions among watchdog groups about how that money is being spent. Environmental groups call it another example of state officials playing fast and loose with money that was supposed to be spent restoring the Gulf after the 2010 blowout, which still leaves tar balls washing up on the state's roughly 100-mile coastline.

"There was no lodge or conference center actually physically injured by the oil," said Cynthia Sarthou, the head of the Gulf Restoration Network, which sued Alabama over funding for the project. "Nobody was stopped from going to a conference center in Alabama because of the oil, because there wasn't a conference center."

And Casi Callaway, executive director of the conservation group Mobile Baykeeper, said she has no problem with the state building a conference center — but "under no circumstances" should it be done with money that was meant for coastal restoration.

"If you want to provide people more use of the beach, you give them more beach to use. You do land acquisition. That's easy as pie," she said.

Related: BP Just Agreed to Pay $19 Billion in Damages for the 2010 Deepwater Horizon Disaster

Alabama is grappling with another financial crunch, leaving Gov. Robert Bentley threatening to veto the budget state lawmakers just sent him this week. The two-term Republican is not only embroiled in a sex scandal, he's also under fire for giving some senior officials raises of more than $70,000 while public services face cuts.

So state officials are boasting that the $135 million, 350-room oceanfront hotel and conference center won't cost taxpayers a dime. It would replace a more modest state park lodge that was wiped out in 2004, when Hurricane Ivan slammed into the beach resort of Gulf Shores. It's the second most-expensive project to date in the Gulf restoration effort, behind a $318 million effort to restore Louisiana's coast and barrier islands.

In February, a federal judge ruled the state couldn't use nearly $60 million in early restoration funding it received from BP as part of the Natural Resource Damage Assessment process, since it didn't study any alternative plans. But US District Judge Charles Butler said he couldn't stop the state from using other money to pay for the project. And the state is doing just that, arguing that the new hotel will help pay for other state parks that are facing cutbacks.

"Once complete, park visitors will have even more reasons to visit: from overnight an classroom educational facilities to expanded bike paths — even one of the first Living Buildings in the South, bringing them closer to the unique ecology and environment that exists in Alabama's Gulf Shores," said Cooper Shattuck, a University of Alabama lawyer who is overseeing the project. "One aspect of this project that should be emphasized is that the lodge will be the economic engine that allows Gulf State Park — as well as other parks around the state — to function. Right now, many are operating at a deficit and face closure."

'They're funny about not wanting to let you, me, or anybody else know.'

BP has already put up $1 billion for early restoration projects, a kind of down payment on the $20 billion-plus settlement that now awaits approval in a New Orleans courtroom. Alabama will get about $2 billion from that settlement, Attorney General Luther Strange announced in October.

About $86 million of settlement money will pay for the conference center, Shattuck said. But State Auditor Jim Ziegler said the rest will come from another settlement between BP and Alabama, which the state has already touched for another widely criticized project — the restoration of a crumbling, George Wallace-era governor's beach house that's estimated to cost up to $1.8 million.

Callway said that the nearly six-year-old pot of money was originally meant to compensate Alabama for lost tourism during the spill, when many vacationers picked someplace other than the Gulf Coast to go for the summer. Now she and others want to know how much is left in that pot, and what else it financed.

"BP said 'You lost some money. Here's some pocket change.' But it's turning out that was a lot more than pocket change," Callaway said. "We didn't know how much it was exactly, we didn't know how to apply for it, how to get it, how it was spent, anything."

And though the conference center will be more upscale than the old lodge it replaces, at least it's open to the public: "The governor's mansion is limited use, limited access," she said. "Nobody can go unless you know the governor, I guess."

Ziegler, an outspoken critic of the beach house renovation, said Thursday he's also interested in finding out how much of the 2010 BP grant the state still has at its disposal.

"We're trying to get those figures now. They're funny about not wanting to let you, me, or anybody else know," Ziegler said.

Related: Alabama's Governor Uses Oil Spill Funds to Renovate Coastal Mansion

Bentley's office did not return phone calls seeking comment Thursday. His office has said the beach retreat will be used for economic development, hosting executives of companies weighing new ventures in Alabama. The property had been left vacant after Hurricane Danny battered the Gulf coast in 1997, and its renovation raised eyebrows in part because Bentley had just lost his own beach home in an abrupt divorce from his wife of 50 years.

Long-simmering rumors of an extramarital affair behind that split erupted into public view this week when Bentley's just-fired chief of the state law enforcement agency accused the governor of having an affair with his top political adviser. That left Bentley apologizing Wednesday for "inappropriate" recorded conversations with the adviser — but denying allegations of a sexual relationship.

BP declined comment on the grant funds. But Sarthou said she'd like to know how Alabama can keep coming back to the earlier settlement for Gulf projects.

"It's very unclear to me how they're spending the same pot of money several times, unless the pot is really large," she said.

Follow Matt Smith on Twitter: @mattsmithatl

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