BP PLC will pay an Alabama coastal developer $37.2 million under a deal made public Tuesday to settle claims that the Gulf of Mexico oil spill damaged a major beachfront condominium project, but condo buyers and lenders still must agree not to sue the petroleum company.
The agreement, negotiated between the oil giant and the Brett/Robinson firm, will allow the Gulf Shores-based realty company to complete work on a massive luxury project on the Alabama coast, the 31-floor Phoenix West II condominium at Orange Beach.
The 358-unit, 1.9 million-square-foot complex is one of the largest condo developments ever in Alabama.
The Birmingham law firm of Hare, Wynn, Newell and Newton, which represented the developer, issued a statement saying Brett/Robinson was trying to obtain releases from everyone involved with the project, including condo purchasers and their lenders.
A lawyer with the firm, Jim Thompson, said each of the 188 owners who purchased pre-sold condominiums must agree not to sue BP and associated companies, including Transocean and Haliburton.
"There will be no payment from BP until these releases are obtained," Brett/Robinson said in the statement. The company said it hoped to finish the agreement by Dec. 31.
BP spokesman Justin Saia said the company had been in direct talks with Brett/Robinson for several months.
"This was one of the first economic development projects our team in Alabama looked at several months ago," he said in an e-mail. "BP is entering into this agreement because of the unique size and economic impact this project will have on the area."
Gov. Bob Riley said completing the unfinished condo was important to the coastal economy, which was damaged by the loss of tourist dollars from the oil spill.
Officials have said business was off by as much as 50 percent this summer because of the fallout from the accident, depressing a coastal real estate market that already was hurting from the sluggish economy and hurricane damage.
"Right after the oil spill, BP began exploring ways to assist the project because of its importance to the entire state and I am pleased with the outcome," Riley said in a statement.
Thompson said the settlement was both for damage to the real estate market in Orange Beach and for oil that hit the beach at the development. "Under Alabama law that's a trespass," he said.
Brett/Robinson executives said they hope to complete the Phoenix West II development by the end of 2012. The luxury complex includes a multilevel fitness center and a beachfront lazy river, and Brett/Robinson's website lists condo prices from $545,000 to $849,000.