Orange Beach reaches settlement agreement with BP

The city of Orange Beach, Alabama, and BP reached an agreement Wednesday over tourism revenues the city lost during and after the Deepwater Horizon oil spill. The settlement came after a year of negotiating, with BP agreeing to pay $1.27 million to cover lodging and retail taxes and other “small claims” the city has tried to recover since the BP oil spill fouled Alabama’s coastline.

Although a step in the right direction, the agreement does not settle a number of claims for other lost revenues the city wants to recover. According to the Associated Press, Mayor Tony Kennon said that BP still owes the city at least $6 million for other damages and the city was prepared to use “whatever legal avenues we have to go through to go after that revenue.”

Other fiscal losses for Orange Beach stemming from the BP oil spill include franchise taxes, sewer fees, business licenses, and building permits for “multimillion-dollar projects that could have come to fruition but did not because of the oil spill,” the AP reported.

Mr. Kennon said that agreement, which was reached after BP consented to pay an additional $300,000, computes to a 10-percent increase over 2009 revenues. “We used this summer as validation for our claim that we could have been up 15 (percent) to 20 percent in 2010, had it not been for the oil spill,” Mr. Kennon told the Associated Press. “But the bottom line is we knew what was fair and we just stood by that number.”

Coastal Alabama reported a record tourist season in July of this year, with nearly $70 million in lodging revenue collected just in the month of July. Gross retail sales in July were just shy of $95 million.


The Associated Press