"I had a feeling at the time, when they were throwing around eminent domain, that something shady was happening," Bull said.
The utility authority has spent about $2.8 million to buy small portions of the Broadwater property and install water lines there. Pahlavan said that total could eventually top $5 million. The water lines are on land zoned for residential housing, meaning any homes built later could easily be hooked up to water service once the water tank is built. Developers typically pay for their own water infrastructure.
The property owners had planned a massive casino development on the property, which is more than 200 acres. It would have included stores, entertainment and housing, but those plans didn't materialize after Katrina struck. An August 2009 appraisal of the utility site said the entire Broadwater property was under "unofficial contract" for an undisclosed price at that time. It's not clear what happed to that deal.
A legislative committee also has looked into the Broadwater project and said in a 2010 report that the water tank site and other infrastructure may lead people to believe it was picked to encourage future development at Broadwater.
The utility authority had considered even more expensive land on the Broadwater property in an area zoned for casinos, but MDEQ rejected it because the price exceeded the project's $5 million budget, according to the committee.
The Broadwater project ended up in the Gulf Region Water and Wastewater Plan because Biloxi officials asked to incorporate an engineering study the city had commissioned before Katrina. Biloxi officials told the legislative committee that less-expensive sites were considered off the Broadwater property, but couldn't provide documentation to back up the claim.
Biloxi Mayor A.J. Holloway, a member of the utility board, has declined repeated interview requests. The city's engineer also declined an interview.
In a statement through Vincent Creel, a city spokesman, the mayor blamed the Broadwater problems on engineers but wouldn't say who.
Creel said the city commissioned the study before Hurricane Katrina to be sure it had the capacity to handle growth at a time when developers were proposing big developments on and near the Broadwater property.
Creel said he couldn't recall if the study considered less-expensive sites.
Marlon Ladner, a Harrison County supervisor and member of the utility authority, said it appears engineers didn't look at the half-acre Broadwater site before recommending it because there was a fence with a sign warning that it could be contaminated. There were also power lines over the site.
"That should have sent up red flags immediately," Ladner said.
Long Beach Mayor Billy Skellie, new president of the utility authority, said board members base decisions on the recommendations of lawyers, engineers and appraisers. There was also pressure from the state to get the projects done quickly, he said.
"We depend solely on professionals bringing us information back," Skellie said.
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