Tiny, landlocked Florida City gets $1 million BP oil spill settlement

Florida City Mayor Otis T. Wallace in a 2008 file photo. [ALBERT SIEGEL   |   Miami Herald (2008)]
Florida City Mayor Otis T. Wallace in a 2008 file photo. [ALBERT SIEGEL | Miami Herald (2008)]
Published Jul. 14, 2015

Five years after the worst offshore oil spill in history, a small city in South Miami-Dade miles from any beach or coastline has received a hefty settlement for losses linked to the environmental disaster.

Landlocked Florida City — which bills itself as a gateway to the Florida Keys and Everglades National Park — last week accepted a $1.01 million settlement from British Petroleum, just a small piece of an $18.7 billion settlement the oil giant agreed to pay to four Southern states for economic damages from the 2010 blowout of a drilling rig in the Gulf of Mexico.

In a city that receives a good chunk of its revenue from a half-mile strip of gas stations, hotels and restaurants along U.S. 1's entrance to the Keys, the infusion of cash into its general fund had the mayor promising relief for homeowners this year.

"We haven't made plans for it just yet," said Florida City Mayor Otis Wallace. "But there won't be any tax increases, that's for sure."

The million dollar settlement amounts to almost 10 percent of the entire operating budget for the city of 13,000 residents. The payout represents compensation for the thousands of tourists who avoided the Keys and Everglades in the months after the spill — and by extension didn't drop dollars in Florida City's hotels, restaurants or gas stations.

Overall, Florida is set to receive $3.25 billion of the settlement reached two weeks ago. The other states that will be compensated are Alabama, Louisiana and Mississippi.

It was on April 20, 2010, when the Deepwater Horizon drilling rig exploded and sank, killing 11 workers. Over 87 days, 210 million gallons of crude oil gushed from the ocean floor in what is now considered the largest accidental marine oil spill ever.

In 2012, BP and the U.S. Justice Department agreed to $4.5 billion in fines. Then two weeks ago, BP reached a settlement in a lawsuit by dozens of injured cities in four states — the largest corporate settlement in U.S. history.

Florida City got a piece of it, Wallace said, because he read a story about an ongoing lawsuit over damages to cities as he was passing through Key Largo in 2010. Wallace said when he returned, he told the city's attorneys to join the suit. He said it was clear at the time that tourist traffic and hotel occupancy had slowed. Then, all the city had to do was show those numbers in court to make the case for economic damages.

"The majority of our hotel rooms are rented by people going to the Florida Keys,'' he said. "Basically, we had a drop in hotel occupancy, no doubt about it."

Wallace said the number of visitors to the city and hotel occupancy are now back where they should be.