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The Biloxi Casino Market May Belong to Just Two Properties for the
 First Half of 2006, the Imperial Palace and the Isle of Capri
By Howard Stutz, Las Vegas Review-Journal
Knight Ridder/Tribune Business News

BILOXI, Miss. - Nov. 14, 2005 - As a magnificent sunset slowly faded into the Gulf of Mexico, newlyweds Lela and Thomas Catron walked along the beach bordering Highway 90 with their dog Scooby.

The couple, married less than a month, lovingly held hands and watched the sun drop beneath the blue waters. The partly cloudy sky offered an array of colors.

Behind the couple and the calming mood, however, was a drastically surreal environment.

The President Casino, a 38,000-square-foot floating gaming barge, sat along the north side of Highway 90 resting at an angle against the wreckage that was once a small beachfront motel.

Slot machine chairs and debris that had once been part of the now-broken casino boat spilled out along its resting place more than a mile from where it had been moored to pilings.

"You look at it every day, but it still doesn't seem real," said Thomas Catron, a Biloxi resident for almost 35 years. "We used to go into this casino and others all the time. To see it beached like this is hard to believe."

When Hurricane Katrina, a Category 4 storm packing winds of 135 mph and an accompanying storm surge of 30 feet, washed ashore Aug. 29, Mississippi's coastal casino community, a vibrant and lucrative mix of gambling barges, hotels and entertainment sites, was annihilated within hours.

Wiped off the books were 12 operating casinos in Biloxi, Gulfport and Bay St. Louis. A 13th casino was ready to open the first week of September in Biloxi, but it was also demolished by Katrina.

Some 17,000 jobs were lost, annual gaming revenue of $1.2 billion went away, and an estimated $500,000 a day in state and local tax revenue was eliminated from government budgets.

The casinos weren't alone in the destruction -- Katrina wiped out tens of thousands of residences, businesses and roads and heavily damaged the southern Mississippi infrastructure.

"We're going to rebuild, there's no question about that," said Connie Mackay, a Biloxi native who oversees human resources at the Beau Rivage casino. The Beau Rivage, the state's largest casino, will be closed well into 2006 for repairs.

Mackay lost her home in Pass Christian. She's now living in a trailer supplied by the Federal Emergency Management Agency while helping relief efforts for the casino's displaced employees.

"This area is a special place and it will return better than ever," Mackay said.

More than two months after Hurricane Katrina, life is slowly coming back in southern Mississippi.

Although damage from the hurricane is still strewn for endless miles and the bulk of the area's business activity either involves FEMA, construction and demolition, relief efforts or homeland security, a return to a more normal routine is starting to take place.

Two casinos, the Imperial Palace on Biloxi's Back Bay and the Isle of Capri on Highway 90, are expected to reopen around Christmastime.

While the Imperial Palace will return its existing 70,000-square-foot gaming barge to operation after repairing some water damage, Isle of Capri will move gaming into a 33,000-square-foot temporary casino inside the hotel's convention area.

The Imperial Palace's 1,088 rooms have been housing relief workers and homeland security officials, despite minimal elevator service to the hotel tower because of flood damage to the building's lower levels. During the last week of October, the hotel cinema complex reopened, as did two restaurants offering limited menus.

"Our boat did exactly what we hoped it would do," Imperial Palace general manager Jon Lucas said. "It rose with the flooding. There was a little water damage, but not much. We just decided to remodel the boat and give it a new look."

Lucas said refurbishing the hotel tower had been planned before the storm. So that task is being accomplished while relief workers are housed in the older rooms.

As rooms are remodeled, Lucas said, the furniture and bedding is being donated to Imperial Palace employees who lost possessions in the hurricane.

As for other casinos, the market may belong to just two properties for the first half of 2006.

Construction and relief workers looking for any sort of entertainment and area residents not affected by hurricane damage are expected to be the bulk of the customers.

"We know there is a bunch of demand out there from the main feeder markets that is just not being served right now," Isle of Capri President Tim Hinkley said, citing increased gaming revenue in other parts of Mississippi and on Indian casinos in neighboring states. "Is it going to be robust or back to the way it was immediately? No, but you also won't have the supply either."

Before Katrina hit, gaming was only allowed over water on floating casino barges. The destruction brought about a new state law allowing casinos in the Gulf Coast to rebuild over land 800 feet from the water's edge.

Most of the major casino operators are still assessing their options, dealing with insurance claims and trying to salvage anything from their sites.

Beau Rivage, which had 1,740 rooms and an 80,000-square-foot casino, has cleared its public areas of debris and is repairing damage to the building's main level. The casino was built 25 feet above the Gulf of Mexico, and the 30-foot storm surge destroyed its back walls and sent water cascading through the public areas.

The rebuilt casino will bear a strong resemblance to the one that existed before Katrina hit.

"We have a blank piece of paper to work with, but remember, this casino was very successful and drop-dead gorgeous," Beau Rivage President George Corchis said. "We're redesigning some of the property, but we're also putting back some old favorites just as they were before."

Harrah's Entertainment, which operated Grand Casinos in Biloxi and Gulfport, has said it wants to rebuild its Biloxi property as a land-based casino but is still evaluating what to do in Gulfport.

Many local residents credit the casinos, which have been part of the Mississippi landscape since 1992, with revitalizing the Gulf Coast. The casinos built their own accompanying hotels, restaurants and showrooms, but also spurred development along Highway 90, a long four-lane stretch of roadway -- Mississippi's version of the legendary Pacific Coast Highway -- that runs from Biloxi heading west through the communities of Gulfport, Long Beach, Pass Christian, Bay St. Louis and Waveland.

Two Highway 90 bridges on each end of the Biloxi peninsula -- connecting with Ocean Springs to the east and Bay St. Louis to west -- were destroyed by the storm and may take up to a year to rebuild. Entry to the beach area is through the communities of Biloxi and Gulfport and Interstate 110, which ends at the Beau Rivage.

Getting the casinos back and running will boost the local economy, several residents said. While the casinos directly employed 17,000, area leaders have estimated they had an influence on some 50,000 jobs.

"It's definitely made an impact on my business," said Don Marie Jr., the sales manager serving the casinos for the local Budweiser distributorship. His sales have all but disappeared.

"There are a lot of local people who did business with the casinos and, with those businesses closed, that has hurt everyone in the community because it trickles down," Marie said.

Hurricane Katrina didn't discriminate in its destruction. Multimillion-dollar beachfront homes were reduced to rubble, as were several middle-class neighborhoods, including the once quaint Point Cadet area near the casino district.

Shopping malls, children's play lands, motels, restaurants, surf shops and souvenir stands all have dates with the bulldozer. Residents and supporters hope to save Beauvoir House, the retirement home of Confederate President Jefferson Davis that also served as a Confederate history museum.

The parking lot for the Mississippi Coast Coliseum is being used for relief efforts. The Mississippi Sea Wolves, the East Coast Hockey League team that called the arena home, has disbanded for the season.

Much of the wreckage remains and only the two eastbound lanes of Highway 90 are open to traffic, one way in each direction. Armed military troops guard entrances to the highway, especially in hard-hit residential areas. Access is only granted to residents, relief workers, construction crews, law enforcement and the media.

Floating casino barges that had been moored to the Gulf of Mexico were tossed about like toy ships in a child's bathtub by Katrina's winds and storm surge. The barges came to rest when the water receded, demolishing any building in their paths.

Scenes similar to where the wrecked President sits are repeated along other spots on Highway 90.

In Gulfport, a small casino entertainment barge was imploded in early September by the Mississippi Department of Transportation because the boat came to rest across all four lanes of Highway 90.

In Biloxi, the smaller of two barges from the Grand Casino floated across Highway 90 and destroyed the city's yacht club before crashing into a previously boarded-up hotel where the homeless had gone to ride out the storm. Eighteen people died in the building.

Casino Magic's Biloxi barge came ashore next to the historic St. Michael's Catholic Church, taking out a pawn shop. The boat's sides were ripped open by a large oak tree that tore directly into the casino's count room. Casino executives, investigating the boat soon after the storm, found thousands of dollars in rolled coins spilled about the room.

Some in the community think it will take five years to build the Mississippi Gulf Coast back to its pre-Katrina state. Many longtime residents believe the casinos need to lead the charge.

Carl Webber, who spent 10 years as a dealer at Casino Magic in Biloxi and is now working with a construction company demolishing parts of the damaged casino, said the community is resilient.

"The way I see it, when the casinos come back, so will much of the community," Webber said. "I hope to be a part of it."

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To see more of the Las Vegas Review-Journal, or to subscribe to the newspaper, go to http://www.lvrj.com.

Copyright (c) 2005, Las Vegas Review-Journal

Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com. MGG, ISLE, HET,


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