Developers Want BP Funds for Turquoise Project
By Kathy Jumper, Mobile Press Register, April 29, 2012
Developer Larry Wireman says BP gave a $37.2 million steroid shot to competitor Phoenix West II, and now he’s wondering why the oil company hasn’t done the same for his $375 million Turquoise Place condominium project.
“They set a precedent when they gave money to Phoenix West” after the BP oil spill of 2010, he said. “I think the world of that group (Brett/Robinson) and have nothing bad to say about them. But BP gave them a subsidy and they started competing with us. BP skewed the market to help one entity.”
BP PLC agreed in December 2010, to pay developer Brett/Robinson $37.2 million to finish building the 32-story, Gulf-front tower in Orange Beach. The $245 million project was scheduled to open in July 2009, but that was later pushed into 2011. Units that were priced from $650,000 to $850,000 in March 2009, today are averaging around $550,000. Of the 358 units, about 120 remain for sale.
Prior to the April 2010 oil spill, unit sales had been picking up in the second, 30-story, 227-unit tower at Turquoise, according to Stephen King, vice president of development for Turquoise. Wireman and the Yates family in Mississippi are partners in the condo development company.
“The oil spill killed us,” King said. Two units sold at Turquoise the entire summer of 2010, he said. “In October 2010, to spark sales velocity, we lopped off $200,000 a unit.”
Units that had originally sold for $925,000 were now priced at $725,000.
“Ken Feinberg said if we sell a unit and take a loss, he would consider that loss,” Wireman said. “We decided to discount and take the losses and try to recoup them.”
So far, BP has not paid the losses, he said.
Feinberg, an attorney based in Washington, D.C., was the administrator of the Gulf Coast Claims Facility, and for 18 months was responsible for reviewing damage claims and distributing checks to victims of the oil spill. He stepped down in March.
Turquoise developers filed a claim in February 2011 and it was approved in July 2011, according to King. GCCF has confirmed to the Press-Register that the claim was approved.
The final agreed upon amount was comparable to what was paid to Phoenix, according to Wireman.
In August 2011, BP disagreed with the GCCF approval and appealed the decision. The claim has been in the appeals review process, and a final decision should be made in mid-May, according to King.
BP’s spokesman Justin Saia said, “Our policy is not to comment on individual claims.”
The Phoenix West II project “was dead in the water prior to the oil spill,” King said. The BP money got construction going at Phoenix, as well as sales, at reduced prices in the $500s.
The units at both upscale projects are comparable in size and some of the amenities, but with Turquoise units in the $700s, they have lost sales to Phoenix, according to King.
The Turquoise developers said Brett/Robinson was helped by then- Gov. Bob Riley, who pushed BP to fund the construction to finish Phoenix West II. In August 2011, Riley filed papers showing he was a registered lobbyist for Brett/Robinson.
Riley has not lobbied for them, but he does consult for the developers, according to Tillis Brett, one of the partners at Brett/Robinson.
“He was very supportive of us, just like Orange Beach Mayor (Tony) Kennon was supportive,” Brett said. “We are proud to be associated in any manner” with the former governor.
Brett said it was the company’s good record-keeping system that showed BP their sales history, and the need for assistance.
“We started meeting with BP the month after the spill,” Brett said. “They sent in accountants and audited our operation. The records we had and our impact on the state, the region and the community, as far as tax revenues, and the impact it would have if the building failed” were the reasons BP gave them the funds.
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