More than a year after a federal judge blocked state and federal trustees from spending $58.5 million of early restoration funds from the BP oil spill to construct a hotel and lodge at Gulf State Park, work continues on the project almost daily. Now a concrete superstructure on the footprint of the former hotel, absent since Hurricane Ivan, looms above the nearly half-mile-long fishing and education pier and is scheduled to open early next year.

Coincidentally, construction on the project continued uninterrupted because the state secured a separate financial settlement from BP in October 2015, but now plaintiffs in the original case have filed a new lawsuit seeking to halt the project after the defendants submitted a motion to dismiss the previous ruling last month.

In the latest suit, the Gulf Restoration Network (GRN), a New Orleans-based environmental conservation organization, reiterated several of its original complaints and further claimed the trustees’ subsequent attempts to rectify deficiencies in the project’s approval are also unlawful. The organization has long argued the hotel and convention center do not comply with “public use” requirements governing the expenditure of early restoration funds under the Oil Pollution Act, believing those funds are primarily intended for environmental sustainability projects.

State and federal trustees originally approved the expenditure, claiming it was within the scope of the law’s provision to “provide and enhance recreational activities.”

But Mobile attorney Hank Caddell, who serves as vice chairman of the board for GRN, said the project will likely have the opposite effect.

Photo | Daniel Anderson


“This is being built on the only stretch of undeveloped public beach remaining in Baldwin County,” he said. “Currently, the public gets to come and enjoy that and this will substantially encroach on that. Keep in mind it will be managed not by the state, but by Hilton [Hotels & Resorts]. This is not the kind of hotel the average Joe Six-pack can go to — it will be $200 to $300 per night. Think of Sandestin,” he said, referring to the private golf and beach resort in the Florida Panhandle.

Caddell said he was surprised by the state’s motion to dissolve the court’s order when it was filed May 23.

“What happened is this,” he explained. “The injunction was ordered Feb. 16, 2016. Meanwhile, Gov. [Robert] Bentley and others found a way to get other BP money — $50 million from the settlement to build the hotel and convention center — admitting they don’t need to use the early restoration money at all. But in the motion to dissolve the injunction from May [2017], now they are seeking to release the funds so they can use all or part for the project. So what’s going on? Has the total price of the project doubled? Do they want to use it to gold-plate the toilets?”

GRN’s original lawsuit was straightforward enough, and evidently the courts agreed. U.S. District Court Judge Charles Butler found the state’s use of Natural Resource Damage Assessment (NRDA) funding for the project violated both the Oil Pollution Act and the National Environmental Policy Act (NEPA).

As Lagniappe previously reported, the claim GRN won in court was centered on the Programmatic Environmental Impact Statement (PEIS) 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.

Prior to his resignation after Gov. Kay Ivey took the oath of office in April, former Alabama Department of Conservation and Natural Resources Commissioner Gunter Guy sought to dissolve Butler’s injunction, arguing “the factual conditions surrounding this project and the development of the NRDA process for the Deepwater Horizon oil spill in general have changed dramatically through the occurrence of multiple major events.”

Specifically, Guy cited:

• Completion of a market feasibility study in December 2014 “that determined a market existed for a 350-room lodge to be built at Gulf State Park.”

• The settlement agreement between Gulf Coast states and BP for economic damages as a result of the oil spill.

• A new federal Record of Decision that adopted a final environmental impact statement and programmatic damage assessment for the project.

• A notice of intent to prepare a restoration plan and environmental impact statement subject to public scoping, and the subsequent adoption of that statement.

• The completion of a master plan for Gulf State Park.

• A state Record of Decision approving the new restoration plan and environmental impact statement.

Caddell said he believes the state — which under “the last six governors have all sought to build a hotel and convention center in Gulf State Park” — put the cart before the horse when BP money began flowing in the wake of the 2010 Deepwater Horizon spill. But Chris Blankenship, who has been acting commissioner of the ADCNR since his appointment by Gov. Ivey last month, said the project is being built within the legal framework of the Oil Pollution Act, and there is no plan to build beyond its original scope.

“So the judge enjoined only the funds from NRDA for the lodge [and convention center],” Blankenship explained. “The other part of the project — dune restoration, trail work, the interpretive center — were not in question. At the same time, there were other funds made available from the settlement with the previous governor to go for construction.

“I would say, as long as the [NRDA] funds are released, the project will be built to the standard we planned — with the tram for public access, an interpretive center and a pedestrian bridge [over Highway 182]. If there is some problem, we’ll have to make some adjustments.”

The total cost to implement the master plan has been estimated at $85.5 million, according to the ADCNR. The project’s market feasibility study, completed in December 2014, estimated the hotel will “generate approximately $5.7 million in net revenues in its first year of operations.” The state’s agreement with Hilton gives the company 7 percent of gross room revenue annually in exchange for Hilton’s management and booking services.

The official name of the hotel will be “The Lodge at Gulf State Park, a Hilton Hotel.”

In approving the project under Oil Pollution Act guidelines, state and federal officials determined the hotel and convention center will “restore injuries suffered as a result of the spill” by “increasing recreational opportunities such as fishing, beach-going, camping and boating with a combination of ecological restoration and creation of infrastructure, access and use opportunities,” and “use education and outreach to promote engagement in restoration and stewardship of natural resources, which could include education programs, social media and print materials.”

But, according to Caddell, “a resort hotel goes against restoration because it will bring in large numbers of people and traffic.”

He said of all projects submitted for approval by Gulf Coast states under the Oil Pollution Act and NEPA process, the Gulf State Park hotel and convention center was the only one of its kind.

“This is the poster child of bad projects,” he said. “I think in Mississippi they tried to build a baseball stadium but that was unsuccessful. The oil spill was horrific and imposed terrible harm on the environment and this was the one time to take advantage of funds dedicated for restoration. Compared to every other coastal state, Alabama has so little coastline and we have urbanized it and consumed it — there is just a remnant of nature left.”

The draft environmental impact study suggested “the public lost 16,857,116 user days of boating, fishing and beach-going experiences” as a result of the spill. Project proponents, according to the newest lawsuit, claimed the hotel and convention center “would add 120,000 new user-days” in visits to the beach annually, but did not provide data to support the claim.

But Blankenship believes the facility will be a jewel of the state park system and have broad financial impacts.

“I’m glad the project is progressing along,” he said. “We’ve provided briefs and we’re just waiting on the judge to rule to free up the funds that were held and that could happen any day, any time. Hopefully the court will rule pretty quickly on the original complaint and we can move forward.”

Meanwhile, as priority environmental projects remain unfunded, Caddell said, “it was the prime, onetime opportunity to take this large funding and genuinely preserve some habitat and restore damage from the oil spill — so the state’s decision to spend it in this manner is a shame. Now that they’ve said they don’t need it, we’d like to see that $58 million spent some other way.”