University Beach Improvement District Seeks Court Approval For $59.7M Bond Issuance

NORTHPORT, AL — The University Beach Improvement District has filed a lawsuit in Tuscaloosa County Circuit Court seeking judicial validation of nearly $60 million in bonds to finance infrastructure for the controversial University Beach lagoon resort project.

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As Patch previously reported, the University Beach Improvement District is a three-person board that consists of Texas developers Kent Donahue and John Hughes, along with investor and Board Member Katie Le of San Marcos, California. The board is tasked with financing and maintaining the public infrastructure related to the proposed resort and lagoon.

The lawsuit also comes after all but one pro-University Beach City Council member — Woodrow Washington III — was voted out of office during the 2025 municipal election, setting the stage for potential pushback against the developers from the new council.

ALSO READ: University Beach Improvement District Board Manager Has Long History Of Regulatory Violations

The complaint was filed by the developers on Aug. 29 and asks the court to confirm the legality of $59.7 million in Special Assessment Revenue Bonds, which the district’s board approved earlier this summer.

The bonds would fund road, water, wastewater, stormwater and other public infrastructure at the University Beach project site.

As Patch previously reported, developers insist that the project will bring in $350 million in private investment to the city and will represent a major boon for the local economy.

The city has already committed $22.65 million for the development — money that city leaders have said will primarily be used for the initial infrastructure improvements in the area of Harper Road.

According to the filing, the bonds would be repaid through special assessments levied on property within the district, not through taxes. The district also said the assessments will cover bond payments, operational expenses and project costs.

University Beach LLC has also agreed to cover any costs that exceed bond proceeds.

The lawsuit names “the taxpayers and citizens of the City of Northport” as defendants, a common legal step in bond validation cases, and asks the court to set a hearing requiring citizens to show cause why the bonds should not be validated.

The district said it wants the court to confirm its authority to issue the bonds and the legality of the related financing documents, including agreements with the developer and a management firm.

The Series 2025 bonds would carry interest rates up to 7.5% and mature no later than November 2055, the complaint states.

The court is expected to set a hearing date within the next several weeks.

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