Las Vegas Business Press : Harrah's to spend $1 billion-plus in Biloxi

Harrah's to spend $1 billion-plus in Biloxi

By DAVID MCKEE
BUSINESS PRESS

Harrah's Entertainment will replace its hurricane-shattered Grand Casino Biloxi with a pair of new casinos, in a $1 billion-plus project, according to Biloxi Mayor A.J. Holloway.

For its part, Harrah's did not contradict any of Holloway's disclosures, telling the Biloxi Sun-Herald, which broke the story, that it was unready to disclose the scope, cost or timetable but that it would be "making a significant investment in Biloxi," according to Anthony Sanfilippo, the company's Midwest-operations vice president.

Holloway's revelation arose during a meeting with the Sun-Herald editorial board, surprising mayoral spokesman Vincent Creel, who said his reaction was, "Gee, I sure hope Harrah's knew he was going to say this."

Holloway believes, Creel continued, that BIloxi's post-1990 economic renewal was merely a glimpse of the prosperity that was possible and that the size of Harrah's investment validates that belief. Casino investment in Biloxi since 1990 has been $5 billion, Creel said, making the Harrah's project a 20 percent increase in one fell swoop.

He added that Harrah's had promised "something spectacular" if it could build onshore, as the Mississippi Legislature permitted last autumn.

"Our challenge now is to get our infrastructure where it needs to be," particularly in terms of affordable housing, Creel said, noting that the scale of Harrah's investment would cause land values to escalate.

That escalation may already be happening. Wednesday's issue of the Sun-Herald reported that a group of residents in the city's Point Cadet area had sold their property to Landry's Restaurants for $48 per square foot. Landry's paid $11.25 million to assemble 23 parcels into a 5.4-acre site for its projected, $500 million Golden Nugget Casino & Biloxi Boardwalk.

The company had previously sought to lease shorefront acreage but at a price that the Biloxi City Council deemed insufficient. Isle of Capri Casinos still holds an option to buy that land outright.

Creel said the Landry's project was attractive to Holloway because, with its wide variety of amusement park-like amenities, it would have wider appeal than a casino standing alone. "It fits within the footprint of the 800 feet," was Creel's description of Landry's new real estate, referring to the gambling-enabled beachfront zone established last year by the Legislature.

The post-Katrina defection of smaller casino operators that some expected and others fear has not materialized, according to Creel, who said that the city has commitments to rebuild from all operators except Casino Magic, which remains noncommittal. Twelve of the city's 13 casino barges and platforms were sunk or smashed by Katrina.

The gradual re-opening of the city's casinos, led by the Imperial Palace and followed by Isle of Capri and Palace Casino Resort, has apparently unleashed pent-up demand. Creel reported bumper-to-bumper traffic on the interstate for the Imperial Palace's relaunch, adding that there was some question if Mississippians would still have an appetite for gaming in the aftermath of Katrina. "The answer has been 'Yes,' in all-caps bold," he said. "It looks like gangbusters at IP.

"I hope people don't look at these announcements and say, 'Oh, Biloxi's past the tough part," added Creel, who noted that residents are still living in FEMA trailers. "We still have cities that are like Ground Zero -- just barren."

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