Plan To Use Gulf Oil Spill Funds For Beach Hotel Sparks Lawsuit Environmentalists are suing to stop Alabama from using nearly $60 million in BP oil spill recovery funds to build a new hotel on the beach. The project is one of dozens underway across the region.

Plan To Use Gulf Oil Spill Funds For Beach Hotel Sparks Lawsuit

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Recovery funds are now finally beginning to reach the Gulf Coast. These are payments by BP for the damage caused by its massive 2010 oil spill. In all, payouts could reach into the billions of dollars. Already, all kinds of projects are underway, from building boat ramps to shoring up marshland. But as NPR's Debbie Elliott reports, what exactly qualifies for these funds is a tricky question.

DEBBIE ELLIOTT, BYLINE: On a breezy afternoon, restoration biologist Ben Frater meets me on Pensacola Beach, Florida.

BEN FRATER: The first thing you'll see when you walk up to Pensacola Beach is the very tall lights mounted on top of these polls. And at night, they are beacons.

ELLIOTT: These streetlights are no good for sea turtle hatchlings. They instinctively use light reflected off the water to direct them to their home in the Gulf of Mexico.

FRATER: So they're instead misoriented. They get confused.

ELLIOTT: Frater is with the U.S. Fish and Wildlife Service, one of several agencies charged with what's called the Natural Resource Damage Assessment - measuring and repairing the injury from the worst offshore oil disaster in U.S. history. He's overseeing a project here to lower the lights, shield them from the beach and use amber bulbs that turtles can't see. Frater says improving sea turtle habitat qualifies as a restoration project because the oil spill and cleanup disrupted sea turtle nesting patterns.

FRATER: Being here when the spill was happening and seeing the dead birds covered in oil and seeing the turtles, it feels good to start restoration.

ELLIOTT: This is one of dozens of projects paid for with the $1 billion payment BP made toward its ultimate responsibility to make the Gulf Coast whole. Trustees from five Gulf states and four federal agencies oversee the spending. But not all restoration is about helping sea creatures or the ecosystem. Nearly $60 million is set aside the build a beach hotel and conference center at a state park on the Alabama Gulf Coast. Frater says trustees found it to qualify under federal rules.

FRATER: The regulations do call for lost human recreation and use of the resources. So that was a way to get people to the beach to enjoy the resources that they were unable to take advantage of during the spill.

ELLIOTT: Alabama's strategy is to use the bulk of this immediate money for recreational restoration, says Gunter Guy, commissioner of the Alabama Department of Conservation and Natural Resources. He says that was easier to quantify than ecosystem damage.

GUNTER GUY: We believe there's still injury out in the Gulf, you know. It could be to the fish, to the fauna, to the corals, to those kind of things. But those injuries are going to take longer to identify, and they're going to take longer to figure out what type of remedies need to be put in place to address those injuries.

ELLIOTT: Alabama has long been looking for a way to rebuild a beach lodge destroyed by Hurricane Ivan 10 years ago, but hasn't had the resources. The BP money changes things.

GUY: Sure, we could try to spend that on some more, you know, quote-unquote, "environmental projects," but we chose to do it on what we did because we think it's the right thing to do. Sure, is it an opportunity? Absolutely.

JORDAN MACHA: This is a violation of the public trust, and this is an entirely inappropriate use of this money.

ELLIOTT: Jordan Macha is with the Gulf Restoration Network. The environmental group is suing the Obama administration to block funding for the hotel as an oil spill remedy.

MACHA: There were no oiled convention centers.

ELLIOTT: Macha says the Alabama project sets terrible precedence, given billions more will eventually be coming to Gulf states.

MACHA: They see this as their cash cow of being able to move this project forward with monies that really should be going towards real restoration of the environment.

ELLIOTT: Standing on the white sand beach at Alabama's Gulf State Park, environmental consultant Tom Hutchings remembers the day oil first washed ashore in the spring of 2010.

TOM HUTCHINGS: And it was just - it just looked like huge fingers just reaching out to touch the shore. And it did, and it covered these beaches up.

ELLIOTT: Save for tar balls that still surface, the beach hear appears to be recovering. Dolphins play in the blue-green surf, pelicans fly overhead and sea oats blow in the strong north wind. Hutchings notes the irony of dune restoration signs that warn visitors to keep off.

HUTCHINGS: That's the exact ecosystem they are talking about destroying. It's crazy.

ELLIOTT: Hutchings has started a petition drive against the hotel. He says the state conservation department should be about preserving this lone stretch of natural beachfront, not getting into the hotel business. Debbie Elliott, NPR News, Orange Beach, Alabama.

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