Orange Beach resident Bill Jeffries is tired of looking at the shuttered Bama Bayou project north of The Wharf and next to the Foley Beach Express tollbooth.
“How many times have I come before you and told you how disappointed I was to see the ‘welcome to Orange Beach’ sign and I have to look at that,” Jeffries told the council in a special-called meeting on May 29. “Then I have to pay a toll. You’re correcting half of that.”
The long-stalled Bama Bayou project in Orange Beach received new life this past week when the City Council voted to begin negotiations with a Texas company on a memorandum of understanding to create a tax district. The company Presidium is hoping to buy the 144-acre failed project. It includes land on both sides of the toll bridge.
“They’ll keep half of whatever sales tax they create and half will go to the city of Orange Beach,” Councilman Jeff Silvers said.
Mayor Tony Kennon said the agreement will cost the city nothing but will help Presidium attract investors.
“This utilizes economic development tools at our disposal to facilitate development of this project without assuming any debt or taking any financial risk,” Kennon said. “If the new project is successful, we all succeed. If it does not happen, then the city of Orange Beach has not incurred any costs whatsoever.”
But Jeffries isn’t likely to get relief from the eyesore at the city’s northern gateway. According to lawyers representing Bama Bayou’s original investors and owners, the lawsuit over the failed mixed-use property is ongoing.
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A hearing is scheduled for July in the nearly 10-year-old suit to settle a foreclosure between Bama Bayou owners and guarantors and Southeast Property Holdings, according to Samuel McKerall, a lawyer who has represented Bama Bayou defendants from the beginning. His group claims it owes Southeast $20.4 million while Southeast contends the group owes more than $50 million to settle the long-standing dispute.
The primary lender for the project, Visions Bank, said the original investors defaulted on a $21 million loan and foreclosed in 2009. Visions then bought the property for $10.3 million in the ensuing auction. McKerall and his group say Visions didn’t follow through with all the financial support it promised and that’s why the project faltered. He said the ownership of the property is up in the air until the suit is settled.
Whenever the case is settled, Presidium could begin the process of actually purchasing the property. David Wallace of Presidium said the company is studying what type of development it would pursue if able to acquire the Bama Bayou property.
“It’s going to be some kind of mixed-use development,” Wallace said. “What the different components are we’re still conducting feasibility studies, and we’ll continue to do that and let those numbers continue to drive what those uses will be.”