The multinational company that was awarded a confidential, 22-year contract for the management of Gulf State Park in 2017 was paid at least $8.4 million to open the doors last November, according to invoices submitted to the University of Alabama.
As Lagniappe reported in July, the Alabama Department of Conservation and Natural Resources (ADCNR) has denied a public records request to review redacted portions of its contract with Valor Hospitality Partners regarding management fees, financial reporting requirements, market competitiveness, furnishings, extension of the term of the agreement, competitive bidding, the allocation of billable group expenses and the maintenance of an operating account at Gulf State Park, which has historically been the most lucrative of the 22 state parks administered by ADCNR.
The management contract — a first of its kind in the state and enabled by a constitutional amendment in 2016 — was sought after former Gov. Robert Bentley approved the expenditure of nearly $140 million worth of improvements at Gulf State Park. The project was primarily paid for with Natural Resource Damage Assessment (NRDA) funds and a legal settlement resulting from the 2010 BP Deepwater Horizon oil spill.
Improvements included the construction of a 350-room lodge featuring a pool, restaurants and bars, the addition of 40,000 square feet of event space, an environmental interpretive center, a learning campus and more than $13.5 million worth of trail enhancements and dune restoration.
According to a Sept. 3 email from Lindsey Hughey, open records and policy specialist at the University of Alabama, “the University of Alabama is the payment processing agent for the [ADCNR’s] payments related to the Gulf State Park Project (GSPP). Any contracts for the GSPP are directly between ADCNR and Valor Hospitality Partners LLC. ADCNR approves the payments before the university makes payment to the vendor on DCNR’s behalf.”
The arrangement was approved by the university’s Board of Trustees in April 2015. Lagniappe sought financial records from the university after being denied as much from the ADCNR.
Covering a period from Sept. 19, 2017 to Dec. 3, 2018, invoices provided by the University of Alabama indicate that prior to the park’s ribbon-cutting ceremony last November, the state guaranteed Valor $3 million to complete a “pre-opening” component, $2.3 million to complete an “information technology” component and $3.098 million to complete a “technical services” component.
A total of 29 invoices were paid, twice each month, with each accompanied by a request for payment authorized by ADCNR Commissioner Chris Blankenship and Nisa Miranda, the director of the University of Alabama’s Center for Economic Development. While the invoices are not itemized, the requests stipulate “the items for which payment is hereby requested are not items for which any previous request for payment has been made.”
Further, each request contains a note indicating “funds have or will be paid from the NRDA funds allocated for the development or construction of the lodge component of the Project … In no event will NRDA funds expended exceed the amount of NRDA funds allocated for the development or construction of the lodge component of the Project.”
After the $8.395 million of contracted funds were exhausted in late 2018, Blankenship requested the transfer of an additional $1.5 million “of interest earned on the non-NRDA Gulf State Park Project funds held by the University of Alabama to Valor Hospitality Partners LLC, for budgeting working capital and capital expenditures related to The Lodge …”
The transfer was completed on Feb. 15 of this year, according to a receipt provided by the university. Details including startup costs and working capital were among those redacted from the contract provided by ADCNR.
Former State Sen. Trip Pittman, who was one of the sponsors of a 2013 Senate bill that defined legal and physical boundaries for the Gulf State Park Enhancement Project, said he believed the state’s contract with Valor was in violation of that legislation. Among other things, SB 231 limited the project site to 29 acres south of State Highway 182. Valor has since taken over the management of existing lakeside cabins and cottages north of the highway.
“I know we got into that debate and limited it to the three miles of coastline seaward of the highway,” Pittman said. “It did not include Lake Shelby, it did not include across the road. The legislative intent was only for [the south side of the highway].”
Another stipulation of the legislation limited any lease of the project site to 12 years, unless “approved by a majority vote of the Gulf State Park Project Committee.” It’s unclear at this time whether Valor’s management agreement constitutes a “lease” as defined by the legislation and if so, its 22-year term was approved by the committee according to the legislation.
Pittman further said he was perplexed by ADCNR’s decision to redact portions of the contract. According to a statement by ADCNR attorney Charlanna Skaggs, the omitted information contains proprietary data, “the disclosure of which would be detrimental to the ability of The Lodge at Gulf State Park to compete in the marketplace (thereby possibly resulting in increased costs, loss of revenue and the disclosure of proprietary data) which would, in turn, be detrimental to the public interest.”
“I would encourage Commissioner Blankenship to be forthcoming,” Pittman said. “From [Valor’s] side of it, maybe there was a legitimate issue in terms of bidding and establishing an operation, but I didn’t contemplate there would be anything less than transparency once the details were worked out.”
Pittman left the Legislature in 2017 to pursue a campaign for Jeff Sessions’ former Senate seat. His successor, State Sen. Chris Elliott, said last week he was also in favor of transparency. As of Sept. 3, State Rep. Matt Simpson agreed, telling Lagniappe he would advocate for the contract’s transparency.
In addition to the contract, ADCNR has refused to provide monthly financial reports required by Valor as a part of the agreement, but as of July, Skaggs said those reports have not yet been submitted.
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