The fight over who gets to pipe water to a sprawling Daphne development has jumped to federal court, where Belforest Water System accuses city officials and a regional developer of conspiring to carve a piece of its service territory away.
On Tuesday, July 15, Belforest Water System filed suit in the U.S. District Court for the Southern District of Alabama against the city of Daphne, the city’s Industrial Development Board and developer 68 Ventures. The utility alleges the three worked together to lure BWS into declining to provide water to Prospect Park, a large mixed-use development planned between Champion’s Way and Highway 181 in Daphne.
“The city, IDB and 68 Ventures desired to obtain exclusive water service from (Daphne Utilities) rather than from BWS, but this desire was frustrated by the existence of the 2002 Settlement Agreement and the provisions of both 7 U.S.C. §1926(b) and Ala. Code §11-501.1 (1975),” attorney George Irvine, writing for BWS, argued in the civil complaint. “Defendants, City, IDB and 68 Ventures, entered into a common scheme, combination and conspiracy to unlawfully curtail the services of BWS in its service territory and facilitate the duplication of BWS’s water service by [Daphne Utilities].”
Judge Kristi DuBose has been selected to preside over the case. As of the filing week, no response to the complaint had been entered and no hearing had been set.
The federal law at the heart of the fight
BWS’s complaint leans on a pair of legal protections that rural water systems across Alabama rely on. The first, 7 U.S.C. §1926(b), is a federal provision that protects utilities carrying federal loan funds: while a system’s outstanding loans remain unpaid, no other provider may serve new customers within its territory in a way that would impair the system’s ability to repay the debt. The second, a state statute, requires one water provider to get written consent from another before serving properties inside that provider’s certified territory.
Per a 2002 settlement agreement between Daphne Utilities and BWS that drew service boundaries for the two providers, properties along the boundary can be served by the other utility only if the first either refuses to or cannot reasonably provide water service.
BWS claims the city is running afoul of those protections by proposing franchise ordinances and permit fees on BWS inside city limits — actions the utility argues the city cannot take while BWS possesses federal loan funds.
The development that started it all
Prospect Park is envisioned as roughly 700 residential units along with office space on land between Champion’s Way and Highway 181, behind Daphne High School. The property was long slated for a science park under plans championed by the city’s Industrial Development Board, which dates back more than a decade.
According to the complaint, 68 Ventures first asked Daphne Utilities to serve the project area in 2024, then discovered the property sat within BWS territory. When BWS later provided a “will service” letter, it was — the utility says — for a completely different project, one previously proposed by the IDB in 2016 that featured only six buildings. The complaint claims the IDB also had a service agreement connected to those earlier plans, under which the IDB would have remained responsible for water infrastructure upgrades through 2026.
The dispute, at its core, is about money: BWS says the cost of water infrastructure improvements needed to serve the project would have to be paid by the developer. 68 Ventures CEO Drew Dolan has said the upgrades would cost his company roughly $10 million, while Daphne Utilities offered service to the site for $2 million.
The complaint also alleges 68 Ventures hired a consulting firm to assist with “due diligence” activities at the site — work that included ensuring proper water service and, in BWS’s telling, making it more difficult for BWS to claim it could reasonably provide water to the development.
The parallel state court fight
Even as the federal case gets underway, the war over Prospect Park is playing out in the state courts. Last year, 68 Ventures and the city of Daphne sued BWS in Baldwin County Circuit Court, accusing the utility of “blocking” the development by refusing to let Daphne Utilities serve it — a standoff that, the plaintiffs said, was keeping land deals between the developer, the city and the IDB from closing.
In late June, BWS appealed a partial summary judgment ruling that went in the plaintiffs’ favor. Baldwin County Circuit Judge Ashley Siebert ruled in favor of counts one and two of the developers’ complaint — a ruling that, if it holds, may have established that BWS effectively declined to provide sufficient water service to the project. Siebert did not explain her decision, though she told attorneys they could submit a proposed order providing greater detail; as of the filing of the federal suit, she had not ruled on that proposed explanation.
If Siebert’s ruling stands, it could result in Daphne Utilities being able to serve the property and effectively carve it out of BWS’s territory. A hearing on BWS’s appeal has not yet been scheduled by the Alabama Supreme Court.
What happens next
The federal complaint asks the court to declare that the city’s franchise ordinances and permit fees are unlawful, to stop the defendants from facilitating service by Daphne Utilities within BWS’s protected territory, and to award damages for the conspiracy BWS alleges. Mayor Robin LeJeune declined to comment on the lawsuit, and Dolan and 68 Ventures founder Nathan Cox did not respond to requests for comment.
The federal case, Belforest Water System v. The City of Daphne et al., was filed as case number 1:26-cv-00254 in the U.S. District Court for the Southern District of Alabama. BWS is represented by George R. Irvine III of Stone Crosby, P.C., in Daphne. The dispute has barely surfaced in public records: its main official trace so far is in Daphne Utilities board minutes from July 29, in which the board’s attorney acknowledged the new lawsuit and said a dismissal was being pursued.
Prospect Park was proposed in 2024 as a mixed-use village on roughly 60 acres at the corner of Champions Way and State Route 181 behind Daphne High School, planned to combine single-family housing, multifamily units, retail and corporate office space — including a training center component tied to the Novelis aluminum plant under construction in the county. The land is owned by the Daphne Industrial Development Board and the city and was in the process of being purchased by 68 Ventures, one of Baldwin County’s largest developers. Roads have already been paved through the site and much of the underground infrastructure is in place.
For Daphne residents, the case is about more than one development. The outcome will determine whether a member-owned rural water system can hold its territory against a city utility backed by one of Baldwin County’s largest developers — and whether the federal law that underpins small water systems across Alabama still has teeth when a project of this size is on the line.