Monday, August 2, 2010

Will BP Compensate Gulf Coast Outlet Stores for Lost Sales?

Oil spill claims czar Ken Feinberg said Friday at a town hall meeting that real estate agents and brokers would receive some sort of compensation for lost sales, but he didn't offer specifics.

He also said he still wasn't sure what he would do for businesses that suffered indirect damage from the spill, like stores at the Tanger Outlet Mall (in Foley AL).

And he said he didn't know exactly when BP PLC will begin depositing money in the escrow account that his Gulf Coast Claims Facility is supposed to draw from, although he said he expects to be writing checks within the next month.

BP officials and President Barack Obama agreed June 16 that the oil company would put $5 billion a year over the next four years into an account to pay for spill-related costs, such as damage claims, cleanup expenses and environmental restoration.

Obama and BP agreed that Feinberg, who ran victims compensation funds for the Sept. 11 terrorist attacks, among others, would administer individual and business claims stemming form the spill.

On Friday, Feinberg said that real estate agents and brokers would be awarded some kind of compensation from the Gulf Coast Claims Facility, despite the fact that he didn't think their claims would hold up in court if they sued BP.

Feinberg told a woman that she had a valid claim when buyers backed out of a condominium sale.

But he did not lay out specifics on how agents and brokers would be compensated, saying only that he would "find a way" to pay them.

Feinberg, however, seemed dismissive about writing a check to a developer who maintained that the funding for a beach hotel has been delayed because of the spill.

Feinberg told the owner of a store in Foley, the pastor of a church, a wedding planner and the manager of a golf course that he would consider paying them for the revenue drop that they've suffered this year. But again, he did not get into specifics.

He said that eligibility would be decided based on three factors -- proximity to the shore, the type of industry a business is in, and how much that business depends on natural resources, like fish or the beach.

Businesses that lost money because fewer customers were drawn to the beach this year are tricky cases, Feinberg said. He may award them only a percentage of their lost revenue.

He said Friday, "You may decide that 10 percent, 30 percent, 50 percent is better than no percent."

Danny Fox, owner of Tanner's Pecans & Candies Inc., which has a store at the Tanger Outlet Center in Foley, said most of the damage wrought by the spill in Baldwin County is due to a drop in tourism.

"I guarantee you, the indirect losses are going to outweigh the direct," Fox said.

Kennon said he believes it is fair to offer varying degrees of relief to companies based on Feinberg's criteria. He said that business owners who are upset were "misled" by BP into thinking that everyone affected by the spill would be made whole.

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