This 'Alli-Gator' ready to go, but it's missing any water

A new restaurant stands ready to open but can't because of a dispute over water service.

Published April 27, 2007

TRINITY - Alli-Gators Grill & Bar has drink coasters on the counter, dishes on the shelves and more than 120 workers on the payroll.

But the restaurant on Little Road, just north of State Road 54, can't open for business until it gets the most essential element: water.

Opening day has been delayed nearly a month amid a dispute between restaurant developer Warren Dunphy and Aloha Utilities over construction of a reclaimed water line.

Aloha's history in southwest Pasco has been marked more typically by criticism from residential customers, whose complaints about water quality led to more than a decade of legal wrangling.

But this conflict with Alli-Gators illustrates the tensions Aloha may face with new commercial enterprises, which the utility is counting on to help pay for the reclaimed water systems required by state regulators.

Part of public conservation efforts, reclaimed water refers to recycled and treated wastewater for irrigation use. Reclaimed water gives utility departments an environmentally sound way to dispose of wastewater.

In this case, Aloha won't provide Alli-Gators with drinking water until Dunphy commits to build a $300,000 reclaimed water line.

Dunphy signed an agreement in May 2006 saying he would build the line extending from his property to an existing Aloha line near State Road 54.

But the agreement provided no price tag for the project, which also would serve future developments on four nearby properties. Aloha agreed to collect fees from future projects using the line over the next five years and refund the money to Dunphy. Those fees would be based on how much reclaimed water each development used.

"Bottom line is they signed an agreement," said Aloha president Steve Watford. "Obviously, they've ignored their responsibility under this agreement for the last year."

But Dunphy said he did not anticipate the project's scope and $300,000 price tag when he signed the agreement. He said he is being forced to pay well more than his fair share for the line.

Dunphy filed a complaint against Aloha with the Public Service Commission, which oversees the state's private utilities. According to documents he submitted, his $6-million project, which also includes two doctor's offices behind the restaurant, will use less than 5 percent of the reclaimed water line.

"Why should I be responsible for 100 percent of the costs?" he said. "I don't have bottomless pockets here."

Watford said timing governs what developers owe in many cases. "That's part of the risk of development," he said.

So why did Dunphy sign the agreement? He said he faced pressure to get the project started. "I had a mortgage on the property," said Dunphy. "We were unaware that this was going to be some kind of major problem."

Now with the pressure of a payroll but no business, Dunphy said he has no choice but to put up a $300,000 letter of credit. His lawyer and Aloha's lawyers are working toward an agreement, said Dunphy and Watford.

Just north of Alli-Gators on Little Road is evidence of what happens if you refused to sign on the dotted line.

Phil Chesnut of Republic Bank said a bank branch and some medical offices should have been open more than a year ago.

But when Aloha came to them with an agreement that they also must pay to connect to the reclaimed water line, Chesnut hesitated. There was no indication of how much the bank would be liable.

"To me," he said, "it was a blank check."

Without the agreement in hand, Aloha refused to sign off on state water and wastewater permits, which meant construction could not start, he said.

Chesnut said he doesn't believe water service should be contingent on the reclaimed water systems. "The two pieces should've been independent," he said.

The project is now on indefinite hold, he said.

Watford said Aloha faces penalties from the Public Service Commission if it doesn't ensure reclaimed water is available at new developments. Indeed, the Public Service Commission has directed Aloha to be more aggressive about getting reclaimed water to developments, said PSC spokeswoman Kirsten Olsen.

Many commercial projects in Pasco County clamor for the reclaimed water, which cuts irrigation costs, said county utilities director Bruce Kennedy. But with a limited amount available, the county has focused reclaimed water requirements in residential developments, he said.

Kennedy pointed out that Aloha's service area, unlike the county's service area, is mostly built out on the residential side. With the need to safely get rid of wastewater, it's no surprise Aloha is looking to whatever new development it can for reclaimed water systems.

"They're probably having to be a little more aggressive to manage disposal of effluent," he said.

Times researcher Caryn Baird contributed to this story.

Jodie Tillman covers business in Pasco County. She can be reached at 727 869-6247 or jtillman@sptimes.com.