A federal judge ruled Tuesday that Alabama cannot move forward with plans to construct a $58 million lodge and conference center at Gulf State Park using funds received in the wake of the BP oil spill.

The ruling doesn’t mean the project can’t ever move forward, but it does prevent those early restoration dollars from being spent until it complies with federal law.

That’s according to a Feb. 16 ruling from United States District Judge Charles Butler.

Gulf State Park

Gulf State Park

The Alabama Department of Conservation and Natural Resources (ADCNR) has taken point on the project. Lagniappe reached out to ADCNR and Gov. Robert Bentley’s office, but neither was able to be reached for comment.

On Wednesday, Cooper Shattuck, official spokesperson on the Gulf State Park Enhancement Project, released a statement saying the project — including the lodge — is still on tap to move forward.

“While we are disappointed with Judge Butler’s decision, it will not impede our progress at the park,” Shattuck said. “There are other funds available for the continued work on the lodge that do not include taxpayer dollars. The court’s ruling does not affect the other aspects of the project, which will continue unaffected.”

After being criticized by Gulf Coast lawmakers for plans to keep the state’s $1 billion settlement with BP in Montgomery, Bentley’s office announced that $50 million of those funds would be dedicated to the Gulf State Park Enhancement. At this point, it’s unclear exactly what that contribution will fund.

It’s also unclear what funds that “do not include taxpayer dollars” Shattuck was referring to. Lagniappe reached out for clarification, but so far has not received a response.

Though the $58 million can’t be used for the lodge, the remaining aspects of the $85 million project were not challenged by the lawsuit and thus are not impacted by the decision. Those other aspects include dune restoration, trail enhancements and the construction of an environmental information center and a learning campus within the park.

Brought by the Gulf Restoration Network (GRN) in 2014, the lawsuit that preceded the ruling claimed that the state’s use of Natural Resource Damage Assessment (NRDA) funding for the conference center violated both the Oil Pollution Act and the National Environmental Policy Act (NEPA).

NRDA funding comes down in the immediate wake of the disaster from the responsible entity — a process overseen by a group of Trustees that comprise department heads from several federal agencies. In this case, the Trustees also included representatives from the five Gulf states affected by the oil spill.

Those trustees set up a “framework agreement” that secured $1 billion for early restoration projects, and in exchange, gave BP credit against its total liability from the oil spill. In layman’s terms, any money BP spent would be subtracted from the amount it was ultimately held accountable for in court.

However, that offset was applied at a ratio the Trustees and BP both had to approve. In these particular projects, the offset ratio was 2-to-1 — meaning every dollar BP spent would take $2 from its final payout.

As GRN pointed out, that means the $58.5 million going toward the conference center could have been $117 million if it were applied to other projects.

After two phases of NRDA projects, the Gulf State Park Project was included in a third phase finalized in June of 2014, which included 44 projects across the Gulf of Mexico with an estimated value of $627 million.

At an estimated $85.5 million, the Gulf State Park project was and is the most expensive recreational use project, but GRN’s main issue was with $58 million the project earmarked for the conference center.

The claim GRN won in court was centered on the Programmatic Environmental Impact Statement (PEIS) that is required in all NRDA projects. Among other things, a PEIS is supposed to identify and discuss alternatives to a project and “present those in a comparative form to show a clear basis for choice among options.”

However, in the study associated with the lodge and conference center, the only alternative the Trustees explored was to take “no action” at all. The Trustees maintained that no other project could be considered because all projects had to be approved and funded by BP and no possible alternatives had been previously agreed to.

In his order, Butler didn’t seem to support that interpretation, suggesting the Trustees used “circular logic.” to set up what was essentially a “self-fulfilling prophecy.”

“Whether an alternative is reasonable depends upon the goals of the agency’s action, but ‘an agency may not define its goals in terms so unreasonably narrow that only one alternative from among the environmentally benign ones in the agency’s power would accomplish the goal, and the EIS would become a foreordained formality,’” Butler wrote.

In closing, Butler said the Trustees had clearly violated OPA and NEPA by failing to evaluate whether there were reasonable restoration alternatives to the project. He also called their failure to do so “arbitrary and capricious.”

“This case demonstrates the importance of providing a clear and meaningful analysis of alternatives,” Butler wrote. “The Trustees and BP agreed to take $58.5 million dollars ($117 million total, with NRD offsets) out of the ‘pot’ of funds available for early restoration with the intention of setting those funds aside for possible use in a project that, at the time, was little more than an idea and could not come to fruition for many years, if at all.”

Updated at 10:10 a.m., Feb. 17, to include comments from project spokesperson Cooper Shattuck.

Butler’s Ruling