Gulf State Park - Gulf Shores, AL

Real Estate Agent with RE/MAX of Orange Beach

Riley signs bill for beach hotel at Gulf State Park

Wednesday, May 13, 2009 By GEORGE R. ALTMAN Capital Bureau

Gov. Bob Riley on Tuesday approved a compromise bill to bring a new, beachfront hotel and convention center to Gulf State Park, after years of court battles over the project.

But legal problems for the planned hotel may not be over.

Senate Bill 254 requires that room rates at the hotel, planned for public land, be reasonable in comparison with similar hotels.

"Because a four-star hotel's rates would not be reasonable to the public, if Governor Riley violates this section of SB 254, I will carry him back to court so fast it will make his head swim," former Conservation Commissioner Charley Grimsley said in an e-mail.

Lee Sentell, director of the Alabama Tourism Department, said the hotel's rates will only need to be comparable to the nearby Perdido Beach Resort, which has rates that meet luxury standards set by a national hotel statistics organization. Sentell said it costs more to build a hotel on the beach, so the rates must be higher.

"You cannot put millions of dollars in the ground and then expect to build a Motel 6 on top of the sand," he said.

The planned hotel has been a subject of controversy for years.

After 2004's Hurricane Ivan destroyed the state's previous hotel in the park, the Gulf State Park Lodge, Riley backed a plan to replace it by subleasing land to the Atlanta-based West Paces Hotel Group.

Grimsley and other opponents sued, four years of litigation followed and the state's highest court ruled against Riley in late March.

Soon after that ruling, both sides worked out a compromise in the Legislature, through a bill sponsored by Sen. Larry Dixon, R-Montgomery.

The bill required legislative approval for the long-term lease or sale of other state beaches but allowed a lease for the former site of Gulf State Park Lodge. The bill also mandated that the lease be between 30 and 70 years, construction be competitively bid, state employees run the convention center, local governments enter into negotiations for paying maintenance costs, and the hotel's rates be reasonable.

Riley signed the bill into law Tuesday in Gulf Shores, but disagreements persist.

A clause in the bill refers to a state law, which mandates that contracts "shall provide for the reasonableness of the concessionaire's rates and charges to the public, and such rates shall be judged primarily by comparison with those rates or charges for facilities and services of comparable character."

Dixon and Sentell pointed to the nearby Perdido Beach Resort as a comparable facility.

For a single guest staying one night, the lowest available rate at Perdido is $191.86, as a seven-day average. Booking information from the hotel's Web site shows that the lowest available nightly rate this week ranges from $269, for a Friday check-in, to $159, for Sunday and Monday check-ins.

The average cost for Perdido is almost 2.5 times the average daily rate for the region and falls within the "luxury" price classification, according to information from Smith Travel Research, a Tennessee-based group that compiles statistics on hotels nationwide.

"Governor Riley wanted a four-star luxury hotel whose rates would be unreasonable to the public. SB 254 stops that by requiring reasonable rates," Grimsley's e-mail said.

Riley's office did not return messages seeking comment. Sentell said room rates would have to be low enough to draw visitors but high enough to pay for construction costs.

Dixon said he believes Grimsley will lose if he takes the matter to court again. He added that the most important part of his bill is that it protects more than 4 miles of beaches beyond the old Gulf State Park Lodge site.

"Basically, nobody has to worry about some developer getting hold of that beachfront from now on," Dixon said.



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