Biloxi's Crude Deal: Oil Spill Reparations Are Funding a Baseball Stadium in Mississippi

Biloxi, Mississippi's complicated relationship with nature is built into the town's very infrastructure. The exit off I-110 that delivers drivers to the city's waterfront loops out over the Gulf of Mexico and back onto dry land. On a hot recent morning, gulf water the color of dirty dishwater lapped at the exit's concrete support beams and onto an awkward patch of beach beneath the off-ramp.

Nature has given a lot to Biloxi. The city was once known as "The Seafood Capital of the World." More recently, however, that relationship has deteriorated. In the last decade, the Mississippi Gulf Coast has been struck by the one-two punch of Hurricane Katrina—which in 2005 killed 238 people and wiped out 90 percent of properties—and the 2010 Deepwater Horizon oil spill, for which BP expects to pay out at least $42.5 billion in fines, cleanup, and other reparations to the federal government, five states, and private claimants.

Today, Biloxi's waterfront is defined by casinos. And soon, it will be home to a minor league baseball stadium. Adjacent to the highway sits the future home of the Biloxi Shuckers, a product of $21 million in city bonds and, notably, a $15 million grant Mississippi Governor Phil Bryant drew from early BP oil spill reparations—$15 million that could have gone to environmental cleanup, or to aiding some of the region's many out-of-work fisherman.

A crane towers above the stadium's grounds as workers in hardhats hurry to get it ready for June 6 which, if you ask team officials, will be its opening date. Construction delays have city officials saying August 4. All the while, the team continues on an prolonged road trip that began when the Southern League season commenced in April, and the delay could cost taxpayers up to $250,000 in fees.

Publicly funded stadiums and the controversies surrounding them are nothing new, but a ballpark subsidized by disaster-related money? Dennis Coates, a professor at the University of Maryland, Baltimore County, and one of the nation's foremost experts on stadium economics, says this is a surprising development.

"I have never heard of that before," he says.

Indeed, while the stadium will be known as MGM Park thanks to a sponsorship from the proprietor of the Beau Rivage casino across the street, a more apt nickname might be The House That Crude Built.

In a May 2013 press release announcing the stadium subsidy, Bryant touted the project as one that would help counteract the oil spill's impact on Mississippi's coastal tourism. But he was vague about where the money would come from, stating that the project "would not reduce or otherwise affect Mississippi's right to recover damages…including under the Natural Resource Damage Assessment Process or RESTORE Act."

The classifications of payouts made and yet to be made by BP, Transocean and Halliburton—the parties responsible for the spill—are matched in complexity by the alphabet soup of regulations that govern the use of them. In response to multiple calls and emails requesting specifics on which "pot" of BP money the $15 million came from, a spokesperson for Bryant emailed a link to the original press release and added, "Gulf Coast tourism was significantly affected by the oil spill, and the stadium will be a significant tourism amenity."

Avenues by which affected states can and have used oil spill funds on tourism ventures have been challenged. In October, an environmental group sued the Department of the Interior and other federal agencies for allowing Alabama to use nearly $60 million in oil spill relief—which the group argues is specifically intended for natural resource restoration—for a planned hotel and convention center.

"For something that is a 'combination event' where there are environmental and economic impacts, you should be looking at projects that have environmental and economic benefits," says Cameron Smith, a senior fellow at the R Street Institute, a libertarian think tank that is researching the use of oil spill funds. "I'm not sure about the environmental nexus of a stadium, and there's a large body of research that suggests they aren't even the [drivers of] economic development that they purport to be."

Coates has authored some of that research, and says "amongst economists there is as close to unanimity as you're going to get" that high-level pro sports stadiums are not economic catalysts and that, though studies on less-expensive minor league parks are more scant, he believes "there really isn't going to be much impact there, either."

He also says academics are generally skeptical of positive impact analyses commissioned by local governments, like the one a Chicago consulting firm did for Biloxi that touted a possible $34 million annual windfall from the stadium.

"I don't mean to be offensive," he says, "but the press treats these things as though they were carved in stone by God himself."

The questionable allocation of BP funds in Biloxi is compounded by the stadium debt being incurred by the city and its taxpayers. Biloxi is not a large town, with a population under 45,000. Nor is it a wealthy one: its 22-percent poverty rate and median household income of about $40,000 are both far worse than the national averages. Understandably, the City Council's approval of using public funds for the stadium was met with protests by local citizen groups.

The newest controversy is that for each home date the team misses at MGM Park, the city will owe $10,000 to the team; that will amount to $250,000 if the June 6 date is met, and even more if it isn't. The city projects Aug. 4 for the opener, and newly elected mayor FoFo Gilich is weighing the costs of expediting construction versus continuing to accumulate fines from the team. In the meantime, the Shuckers, previously known as the Huntsville Stars, are playing "home" games in their old northern Alabama confines.

"We haven't really had any other discussions about it," says team owner Ken Young, a Florida-based concessions magnate who bought the Stars last year and owns four other minor league teams scattered from Albuquerque to Norfolk. "That was built in to give incentive to try to get open as early as possible."

"We were not opposed to a ballfield being built," says Roberta Avila, executive director of the Steps Coalition, a community group that protested the stadium's funding. "There just wasn't any real civic engagement.

"And we felt like the $15 million was misplaced," she added. "They can rationalize why they used BP oil spill money for that, but we have drainage problems, water-quality problems, that are more critical than building a baseball stadium."

Thao Vu, director of the Mississippi Coalition for Vietnamese-American Fisher Folk and Families, says that poor fishing families have been pressured into taking quick-pay settlements in the tens of thousands of dollars that represent a fraction of their losses. In the last five years these families—who generally have a lack of access to technology and struggle with the language barrier—have been devastated by dramatically reduced fishing seasons. This year, oystermen hauled in five percent of their yield in 2004, before Katrina and the spill.

"We should not use funds from a disaster that disproportionately affected fishing communities for a stadium," Vu says. "Neither the governor nor the state agencies made meaningful attempts to reach out to us to ask for our input."

Perhaps the tide will soon turn for Biloxi and its fishing community. Though BP's total fines are still being litigated, a lot of money is on its way to the Mississippi Gulf Coast. About $50 million has already been earmarked for the restoration of an oyster reef in Heron Bay on the Louisiana state line, the type of project Smith says can be "an environmental win but also, where fishing is a major industry, a really good economic plan." The project's coordinator expects work to begin in late 2015.

In the meantime, however, a baseball team subsidized by oil spill money will trade on Biloxi's reputation for seafood—while the shrimpers and oystermen who helped build it still languish. That those Shuckers came first, says Vu, "is like throwing salt on the wound."

Update: Biloxi's Mayor announced Thursday that MGM Park would indeed be open on June 6.