Post-Katrina Biloxi will look very different from the city before August 29, 2005. There’s a good piece in the Sun-Herald about an amibitious proposal from Harrah’s and some unintended consequences of the burgeoning condo boom:
Harrah’s Entertainment, the world’s largest gambling company, will invest more than $1 billion to build two casinos in Biloxi, said Mayor A.J. Holloway, who expects the city’s economy to be moving at “full speed in three years.”
Other casino companies and condominium developers are also approaching the city with waterfront projects, but so far no one has proposed any apartment complexes to house tourism workers. Inflated land prices, proposed elevation requirements for buildings and fragmented ownership of property are obstacles to the creation of new affordable housing, the mayor told the Sun Herald.
Harrah’s, which owns the Grand Casinos in Biloxi and Gulfport, plans to build two casinos in Biloxi: one on the north side of Beach Boulevard and one on the south side, Holloway said. The company, which last month announced it is pulling out of Gulfport, will rebrand the casinos with new names.
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Biloxi, which was home to 13 casinos before Hurricane Katrina, could in five to 10 years have between 15 and 18 casinos, the mayor said.“That’s going to be the tide that lifts all the boats in the city of Biloxi – the gambling industry,” Holloway said.
But the mayor worries that inflated property prices could hold back redevelopment in interior areas of the peninsula, including apartments and other affordable housing.
“Now, everybody thinks they have casino land,” Holloway said.
Condominium projects are being proposed in East Biloxi, on Back Bay along the Strip where mom-and-pop motels and souvenir shops operated before the hurricane, and downtown at the old Dees Chevrolet site.
The city is working to keep the shrimping industry from being displaced as seafood processors on Back Bay sell out to condominium developers.
Shrimpers, many of whom are Vietnamese, need a place to dock their boats and sell their catches.
“If they don’t have a place to dock, they’re not going to come back,” Holloway said. “I don’t want that to happen. The Vietnamese community is an important part of Biloxi.”
Billions in new developments is great, but keeping the shirmpers is about more than cultural diversity: it’s about economic diversification. Destination gaming tourism is a tremendous growth engine, but with another 9/11 or similar interruption in air travel, you’ve got major problems.
One reason the Strip was able to weather 9/11 was because it has a pretty large foundation of drive-up tourists who fill the 2nd-tier hotels. So while Venetian was struggling to give suites away, Circus Circus wasn’t hurting that bad. Keeping the shrimpers in Biloxi makes it less of a one-horse town, which is a good thing in the long run.
Speaking of future development, Liz Benston has an article in today’s Sun about plans at the Tropicana:
Working with Tony Marnell’s Marnell Corrao Associates is the latest sign that Tropicana owner Aztar Corp. is closer to tearing down the aging property, which sits on a prized corner of the Las Vegas Strip across from Mandalay Bay, observers say. Marnell Corrao is still working on a final cost estimate for the project, according to informed sources. In addition to building two of the Strip’s highest-end properties, Marnell also developed and owned the Rio before selling it to Harrah’s Entertainment for $888 million in 1989.
Representatives for Aztar and Marnell Corrao declined comment.
The Tropicana’s room reservation department also has stopped accepting reservations beyond April 14 — another indicator that a major redevelopment is under consideration. Hotel properties don’t pass up future revenue without a good reason.
In a Securities and Exchange Commission filing last week, Aztar amended severance agreements with its top executives that will provide cash payments for all outstanding stock options — whether or not the options have vested — should the executives be terminated.
So is there another implosion in the Strip’s future? Right now, the Trop is behind the Stardust and Frontier in line for destruction.
In other news, I’m pretty sure that I’m going to be on the 2nd hour of State of Nevada tomorrow on KNPR. I’m definitely going to be in the studio, but if you tune in and hear someone else being interviewed, it means that it’s happening on tape. There’s someone else listed as the live guest, but I might be the replacement. If it isn’t live, I’ll be sure to post an update.