A pair of country club homes purchased by the North Baldwin Utilities board have been quietly rented out to private individuals for the past three years, rather than used to temporarily house visiting business executives as intended.

As Lagniappe reported earlier this month, the homes — located in Loxley’s gated Steelwood subdivision — were purchased for a combined $830,000 in 2013 from a trust in the name of Bay Minette Mayor Bob Wills’ late father-in-law, Thomas William “Bill” Mitchell.

Heading into the municipal elections Aug. 23, the purchase became politicized as Wills faced a challenger in former Bay Minette Mayor Sonny Dobbins. Ultimately, Wills easily secured re-election by a margin of more than 200 votes.

The current board of directors for North Baldwin Utilities. (northbaldwinutilities.com)

The current board of directors for North Baldwin Utilities. (northbaldwinutilities.com)

As mayor, Wills automatically serves on the NBU board, and many were critical of Wills or his family for benefiting from a real estate deal that was never appraised, exceeded the fair market value and was inked at a time when other properties in the same subdivision were on the market.

In response, Wills said neither he nor James H. Robertson — another NBU board member who manages the Mitchell Trust — voted to purchase the properties in May 2013. Minutes provided by NBU confirm both Wills and Robertson left the meeting during the vote to purchase the Steelwood properties.

Lagniappe reached out to the Alabama Ethics Commission for clarification on the laws governing personal benefit, and after more than two weeks, General Counsel Hugh Evans III responded to say that “the facts in each situation matter greatly” in any ethics review.

“As a general rule, a public official cannot use his official position in a manner that personally benefits himself, a member of his family or a business with which they are associated,” Evans wrote. “If a matter comes before a public body requiring the public official’s vote, if the commissioner, family member or business are affected uniquely or differently than all other individuals that are affected, or if they are part of a small class affected by the measure, he may not vote, attempt to influence the outcome or otherwise participate.”

Originally, the properties in Steelwood were purchased to provide temporary lodging for business executives visiting the South Alabama Mega Site — a 3,000-acre, shovel-ready development area in Bay Minette to which the Baldwin County Commission has contributed $32 million.

Even though the commission and the Baldwin County Economic Development Alliance remain optimistic about the mega site’s long-term payoff, their efforts to attract manufacturers to the site have so far been unsuccessful.

“It is very well positioned to bring advanced manufacturing to the north end of the county and help us with our stated goal of increased diversification within the economy of Baldwin County,” Commissioner Chris Elliott said. “I think it will be a very significant part of the future of Baldwin County.”

While Elliott suggested officials have been selective while “looking for the right fit” in any anchor tenant, the lack of rapid growth at the mega site has forced NBU to find a use for its properties in Steelwood.

General Manager Jason Padgett says because of that, the public utility began renting the houses through “word of mouth” with no long-term lease agreements just a few months after they’d been purchased.

“The units are intended for industrial prospects and as a tool to recruit industrial development to the North Baldwin community, therefore NBU has never used an agent or agency to locate rental prospects,” Padgett explained in an email.

Though the houses are part of a development including Steelwood Country Club and golf course, Padgett said living there does not include membership. He also said no NBU board members or employees use or have used the homes for any reason since they were purchased.

Earlier this week, Padgett provided the names of tenants who’ve lived in the publicly owned properties — a list that includes a former hospital administrator as well as an engineer with ties to BCEDA.

Joseph P. Bullock and his wife, Leslie, were tenants in one of the two properties from November 2013 through December 2015, paying $1,850 per month in rent to the NBU. Joseph Bullock was an engineer and entrepreneur who also served as a member and past chairman of BCEDA. After his death in 2015, Padgett said Leslie Bullock moved to another state.

More recently, one of the homes was occupied from April 2014 until June 2016 by former Thomas Hospital administrator Bill McLaughlin and his wife, Teresa, who, according to Padgett, paid the same $1,850 monthly rent.

Padgett said the only current occupant is Danny Spivey, who has lived in one of the two homes since April — paying $1,500 per month in rent to NBU.

“In all instances, all utility expenses — including satellite — have been reimbursed to NBU on a monthly basis,” Padgett said.

Lagniappe reached out to the Attorney General’s office and received a copy of the 2013 correspondence NBU sent seeking an AG opinion on the purchase of real property. In the letter, the Mega Site is never referenced and the only reason listed for purchasing real property is to house “visiting consultants.” Though NBU inquired, it was clearly expressed there was “no statutory authority” for the public utility to purchase real estate for investment purposes alone.

Despite that, NBU has collected upward of $105,000 in rent since 2013, based on the numbers Padgett provided. Still, he said, the properties aren’t intended to be profitable, adding that “monthly rentals are merely a means to reduce expense to NBU.”