Hitting the jackpot

East end of city could become a gambling mecca

By TOM WILEMON, tewilemon@sunherald.com

BILOXI - A casino loop that someday might rival the Atlantic City Boardwalk is already taking shape on the east end of the Biloxi Peninsula.

Biloxi is ahead of the game because it has the roads, the utilities, the market history and a city leadership that was quick to embrace the casino industry as a partner in rebuilding. But delays in the construction of a new U.S. 90 bridge across the Biloxi Bay and the price of real estate could slow the pace of development.

Other areas along the Coast - Gulfport, D'Iberville and Hancock County - also have potential casino sites.

Gulfport has been slow to engage the casino industry, but the city is taking steps by considering entertainment zones for casinos around its harbor, including one location north of U.S. 90.

D'Iberville, which has been seeking a casino for the past decade, is actively marketing its waterfront.

Land in Hancock County, 404 acres close to Interstate 10, is available for new ventures.

But Biloxi continues to be the hot spot.

Ray Stronsky with Grubb & Ellis Sawyer Commercial has several real estate listings that could be potential casino sites.

One listing attracting a lot of interest is an approximately 7-acre site between Boomtown and the IP owned by the Suarez, Fayard and Andrews families. The company has scheduled a showing of the site to casino operators this month.

"We have some developers looking at this site and wanting to do the boardwalk concept with the other casinos," Stronsky said. "People could walk between them and also be within walking distance of Bacaran Bay."

For the past 13 years, Grubb & Ellis Sawyer Real Estate has either represented the landowner or the casino operator in about 75 percent of the real estate deals that have closed on the Coast, said owner broker Lenny Sawyer. The company currently has casino listings valued at about half a billion dollars.

Who owns what?

Other prime locations available along Biloxi's casino loop are three sites owned by Christopher Ferrara of Baton Rouge - a 40-acre site on Back Bay, 10 adjacent acres and a 27-acre site on Clay Point around the old Heinz plant. Other locations include 40-acre sites owned either by W.C. "Cotton" Fore and Ray Sims or a partnership between the two men as well as land at the northern corner of Clay Point owned by the Victor Mavar family.

In addition, several Back Bay property owners on the east side of Oak Street this year successfully petitioned the city to rezone their land for casinos. The total rezoned area is 22 acres.

Stronsky has already closed two real estate deals along this loop: the purchase of property on Point Cadet for a proposed Golden Nugget casino and the leasing of seven acres immediately east of Boomtown.

Others are taking a serious look at the Broadwater Beach property in west Biloxi, which is jointly owned by Fore and Roy Anderson III. It's a massive piece of real estate in the heart of Biloxi, 269 acres in all.

Broadwater Development LLP, the partnership formed by Fore and Anderson, will present a master plan to the city of Biloxi on Thursday that includes two proposed casinos, keeping a golf course and adding high quality retail, entertainment venues, restaurants, housing and a marina.

In downtown Biloxi, Grubb & Ellis is advising some Windjammer condominium owners about their property's potential. It's small in size, but its location is prime. The condominium site is between Beau Rivage and Hard Rock Biloxi.

But insurance issues have yet to be resolved for waterfront areas.

"All the people on the waterfront are very cautious about doing anything right now without seeing what the insurance companies will do," Sawyer said. "The lending is one thing, but the lenders are going to make sure they have insurance."

Prices too high?

Another concern is that inflated asking prices will hamper development.

"The problem we're having now is everybody is hearing what everybody else got and regardless of why they got it or even if they got it at all, they are setting unrealistic goals for true value," Stronsky said. "I actually had one developer tell me he'll come back in six months when these expectations are a little bit more real than they are now."

John Ed Ainsworth, the managing partner for the Gollott brothers' casino sites, inquired about purchasing adjacent properties but said some of the asking prices are "totally unrealistic." There's a misconception among property owners that any land within 800 feet of the main high tide is a casino site, he said, but the property must be contiguous to the water and zoned properly.

"They want to sell for three and four times what it is worth," Ainsworth said. "Somebody might pay two times what it is worth, but not three or four."

Margie DeSilvey, who owns a 25,600-square-foot lot near the end of Howard Avenue, is asking $1.8 million for her property. She said she does not know if it is within 800 feet of the mean high tide, but nevertheless believes it's worth the price.

She's asking about $70.31 a square foot, which is more than her former neighbors sold their land for to Landry's Restaurants for a proposed Golden Nugget casino. They got about $48 a square foot.

"The price was set before the hurricane and before casinos could be land-based," DeSilvey said. "Some of my neighbors said they won't sell for less than $100 a square foot. Most of them are asking $70 or $75 a square foot."

Casinos for other cities?

Gulfport had two casinos before the hurricane, but the larger one is selling out to the smaller one. Harrah's Entertainment plans to sell the Grand Casino Gulfport property to the owners of the Copa Casino. The price has not been disclosed.

"Message number one was sent out when Harrah's, the world's largest casino company, put the Gulfport property on the market and offered it to the gaming industry," Sawyer said. "No one was interested in it except the Copa, to my knowledge."

Gulfport currently has no zoning classifications for casinos. Its casinos were located in industrial zones and had special use permits. The city is now considering a new entertainment zoning classification for casinos.

In D'Iberville, Mayor Rusty Quave saidhe has talked to developers interested in potential casino sites on both sides of the Interstate 110 bridge. He believes that this is the year it will happen.

The city recently received federal design approval for a flyover from Interstate 110 directly to its waterfront district, which would make it more accessible for development. Jeff Kolb, assistant division administrator for the Federal Highway Administration's Jackson office, said the Mississippi Department of Transportation will still have to submit environmental impact documentation.

One site with quick access off of Interstate 10 is the 404 acres in Hancock County owned by Diamondhead Casino Corp. The land borders the Bay of St. Louis.

"We've received various requests to do different things on the property," said Deborah Vitale, president and chairman of the board of Diamondhead Casino Corp. "They range from simple condominiums to a major build out. Because we have 404 acres it's a little more difficult to evaluate and negotiate these various proposals. We may be looking at a build out that extends over 10 years."

There's been renewed interest since Gov. Haley Barbour signed legislation allowing casinos to come ashore.

"We have approximately two miles of waterfront property," Vitale said. "You can build your casino up to 800 feet from the mean high tide. We have a tremendous choice as to where we could put a casino."

Casino reopenings

Biloxi's casino market is rebounding. The three casinos that have reopened there generated almost $64 million in gross gambling revenue during their first full month of operation. The same period a year ago, nine casinos in the city made $90 million. That translates into about 71 percent of the regular market.

Another incentive for casino resort development is the Gulf Opportunity Act of 2005. Hotels and other resort amenities, excluding casino gambling floors, qualify for accelerated depreciation coverage, which means developers can write off 50 percent of the cost of rebuilding in the first year.

The IP, the Isle of Capri and the Palace opened in December.

Here's the status of the other casinos:

Beau Rivage: Reopening planned for Aug. 29, the one-year anniversary of the hurricane.

Copa: Buying Grand Casino Gulfport from Harrah's Entertainment. Deal expected to close in March.

Harrah's Entertainment: May open a temporary casino inside its Bayview Hotel in Biloxi, but will announce midyear plans for a "best of class" casino resort at site of Grand Casino Biloxi.

Treasure Bay: Reopening planned for July or August.

Casino Magic Bay St. Louis: Reopening in the fourth quarter of the year.

Boomtown Casino: Reopening in the fourth quarter of the year.

Silver Slipper: New casino slated to open in Hancock County in December.

Hard Rock Biloxi: Reopening uncertain because bank trustee for bond holders has held insurance proceeds. Premier Entertainment, the casino's parent company, is suing the bank.

Casino Magic Biloxi: Reopening uncertain. The company has said it will be months, maybe longer, before it makes a decision on whether to rebuild. However, architects are designing a new resort in case owner Pinnacle Entertainment decides to move forward with rebuilding.

Thieves make off with $26,000 of beer

From MSNBC.com:
Semi trailer loaded with Miller goes missing in Wisconsin

WEST BEND, Wis. - Authorities are hoping to break up what must be quite the party after beer thieves made off with almost $26,000 worth of suds from a delivery truck.
A semi trailer loaded with cans and bottles of Miller beer was stolen from a trucking company in Richfield, according to a Washington County Sheriff's Department report. The trailer was found four days later — sans beer — at an Oak Creek trucking firm.
The trailer had been dropped off at the Millis Transfer Co. sometime on Feb. 17 for delivery to a beer distributor in Menomonie, authorities said. Later that night, the trailer was discovered missing.
Company officials didn't report the loss immediately because they thought a driver must have picked up the wrong load.
The sheriff's department is investigating with Oak Creek authorities and Miller officials, said Sheriff's Capt. Dale Schmidt.
The missing product, valued at $25,788, included:
384 24-packs of Miller Genuine Draft cans
560 18-packs of MGD 12-ounce bottles
980 18-packs of MGD 12-ounce cans
40 24-packs of Miller Light 16-ounce plastic bottles

Beau Rivage to reopen with 3 new restaurants

BILOXI — The Beau Rivage will reopen this summer with three new restaurants, including one of celebrity chef Todd English's Mediterranean cuisine Olives. Executives with MGM Mirage Inc., the casino's parent company, discussed the plans in a conference call Thursday after releasing an earnings report. MGM Mirage reported a 31 percent jump in earnings for the fourth quarter.

Beau Rivage is expected to reopen Aug. 29, the one-year anniversary of Hurricane Katrina making landfall in Mississippi, said Bob Baldwin, president of the casino giant's Mirage division.

World-renowned designers will give the resort a new and fresh environment, he said.

"The property will reopen with 1,200 rooms, eight of its restaurants and all its bars and lounges," Baldwin said. "The balance of the amenities will reopen in the fourth quarter. Beau Rivage will reopen with three newly designed gourmet restaurants: a new steak house, a hip Asian concept and a Beau Rivage version of Olives."

MGM Mirage's Bellagio in Las Vegas also has an Olives restaurant. Others are located in high-end hotels in Aspen, Washington, New York and Tokyo.

In 2001, English was awarded Bon Appetit's Restaurateur of the Year award and was also named one of People Magazine's "50 Most Beautiful People."

Beau Rivage's casino will feature the return of a poker room, a contemporary high-limits area and a completely reconfigured table games layout.

Fondren Place

Ckeck out the website for Fondren Place if you haven't seen it.

Old Capitol Green in the works

Project that targets eight blocks for development depends on Legislature bill

By Joshua Cogswell, jcogswell@clarionledger.com

Joe Ellis/The Clarion-Ledger The view north on Commerce Street shows several restaurant-bars and commercial buildings. LAND USE Proposed land use for Old Capitol Green project: Parking garage: 3,000 spots Office space: 550,000 square feet Retail: 134,000 square feet Entertainment-restaurant: 80,000 square feet Cultural-community: 78,000 square feet Residential: 500,000 square feet/500 units Hotel: 100,000 square feet/100 rooms Population projection: 5,500 Job projection: 1,400

A plan to transform eight blocks of downtown Jackson with new residences and businesses could hinge on passage of a bill in the Legislature.

Supporters say the "Old Capitol Green" project - bounded by State, Pearl, Jefferson and South streets -would include apartments, office space, retail and entertainment venues. For Entergy, that means more customers.

Other businesses in the proposed district say the same will be true for them. "I think it's a fantastic project for downtown Jackson because it will get more people living downtown," said state Sen. John Horhn, D-Jackson. "This is vitally needed if we are going to continue to grow as a city." Malcolm White, co-owner of Hal and Mal's restaurant in Jackson, called the project a "dream come true."

Courtesy of Entergy A concept for a revised Commerce Street would include apartments and commercial-retail property. IF SENATE BILL 2500 PASSES The state's property will be sold either to Entergy or a quasi-governmental economic development agency formed to take control of the land. Or the state will grant an option on the land, agreeing to sell it to a real estate developer once a deal is inked. Once control of the leased land is finalized, the property will be marketed for mixed-use development.

"I've been waiting patiently for 25 years, and it's a joy to me now to see someone as ... well-connected as Entergy to get behind this project," White said. "They basically came to me and said, 'Would you endorse your dream? We're going to make it happen.' "

Entergy and the state own more than 60 percent of the land in the proposed district. The power company owns two blocks and leases two other blocks from the state. Eight others own the remaining property. Senate Bill 2500 would allow the state to transfer ownership of the leased property to Entergy or a public-private partnership so the entire area could be marketed to a developer. The bill passed the Senate and is being considered by a House committee.

"If we have a developer willing to come in, we need an option on that property," said John Turner, director of economic development for Entergy. "If you have 65 percent of eight blocks of downtown real estate, you can pitch to a national audience of developers."

Harold Gater/The Clarion-Ledger HOW IT CURRENTLY STANDS Entergy owns two blocks in the proposed eight-block project. Entergy also leases two blocks from the state.

House Public Property Committee Chairman Tom Weathersby, R-Florence, suggests the project may have to wait for legislative approval.

"I just want to make sure we're doing it in the right way and make sure everything is handled correctly," Weathersby said.

Horhn said he will be pushing his colleagues in the House to pass the bill this year. Haley Fisackerly, vice president of customer operations for Entergy, said his company's aim is not to get into the real estate business. He said the goal is to make it easier for economic development groups to sell the site.

"We have a limited service area in Mississippi. The only way I can get more customers is to attract more business and industry and people to our service area," Fisackerly said. He said the company would keep some of its operations in its current location but would move the rest to other parts of the city.

Jimmy Heidel, Jackson's economic development consultant, said the city has been working to rezone the land to allow mixed-use development since he took his job five months ago. "It gives property owners a lot more freedom to choose what they want to do with their property," Heidel said.

He said the movement toward creating neighborhoods that blend living areas with office space and retail development has worked in bigger cities like Chicago, Atlanta and Memphis. "I don't think there's any question this concept could work in downtown Jackson," Heidel said. "Look at the Electric Building. There's living quarters in those facilities and there are waiting lists to get in."

The developer of the Farish Street Entertainment District, another project aimed at bringing business and people back downtown, welcomes the project and thinks it will help his efforts to recruit business to Farish Street. "A rising tide lifts all the boats," said John Elkington, whose Memphis-based real estate group Performa is working on a $12 million project on Farish Street. "The more development you have, the more chances you have to attract more."

But Elkington said outdated building codes, reluctant financiers and a complex approval process have hampered progress on his development and may hamstring efforts to fast-track the project.

Entergy spokesman Checky Herrington said the Old Capitol Green project is a first for the company in Mississippi. "We have been involved in economic development and bringing industries to the state," he said.

John Lawrence, president of Downtown Jackson Partners, has been working with Entergy and others to put the deal together. He said the timing is crucial to getting the property developed. The city has seen office space gobbled up since Hurricane Katrina hit the Gulf Coast. Occupancy rates in downtown office buildings have topped 90 percent, he said.

Lawrence, a downtown resident and advocate of redevelopment, also points to legislation Congress passed late last year as a potential catalyst.

The Gulf Opportunity Zone provides tax breaks for companies willing to locate in communities impacted by 2005 hurricanes. "The GO Zone is giving us 24 months to use the incentives that are offered," Lawrence said. "We've got some incentives. Now we've got to get the property."

Terry Butler, manager of W.C. Don's, lives and works in the proposed district. Butler, who lives upstairs from the restaurant and night spot, said more residential development downtown would be a boon to his business, especially during slow weeknights.

The project could help what Butler called a burgeoning entertainment district. "It's like a ghost town here in the early afternoons during the week and during the day on weekends," Butler said. "We definitely need that increased traffic."

Jackson seeks ways to help historic Farish district

By Jack Mazurak and Kathleen Baydala

Melton

While construction in the two-block Farish Street Entertainment District has ground to a halt, community and city efforts are under way to revive other parts of the historic district.

Developers had said businesses in the first block of the Entertainment District — between Amite and Griffith streets —should open in April, but state environmental officials stopped construction because workers ran into hazards including asbestos and mold.

"They were working off an old environmental study. There are more hazards than just loose bricks and shaky foundations," said Carl Allen, city deputy director of Planning and Development.But city administrators met with members of the Scott Ford Collaborative on Tuesday evening to discuss incentives for property owners to renovate their homes or businesses. Albert L. Adams, 53, a Cohea Street resident, was one of the 15 property owners who attended the meeting.

He said he wants to find out about housing assistance available to him through the city. He said it's clear businesses have opportunities through grants, but homeowners need funding to repair properties.Mary Merck, city zoning administrator, said if property owners fix up their homes, their property values would increase and they would have seven years before the city reassessed their properties, causing them to pay higher taxes. She also said property owners could qualify for state and federal tax credits because they are in a historic district.

Allen said the city is marketing several areas including the Farish Street Historic District.

"We are talking to investors every day about the new incentive package," he said, referring to recent GO Zone tax abatement legislation that allows new investments to depreciate before taxes come due.City Chief Administrative Officer Robert Walker said he plans to form task forces to attract businesses and work with homeowners.

Alferdteen Harrison, coordinator of the community-based collaborative, said the district was still a thriving African-American community in the late 1970s."I feel guilty that we have allowed it to have national recognition, but we have done very little to protect its national cultural heritage," she said.

The Farish Street Historic District downtown area is roughly bordered by Amite, Mill, Lamar and Fortification streets.

Mayor Frank Melton pushed developer John Elkington on Tuesday to speed up construction. Elkington's Memphis-based company, Performa, is working on the two blocks of Farish Street between Amite and Hamilton streets. The $12 million project has commitments from businesses such as the Funny Bone Comedy Club, B.B. King's Blues Club and Mississippi BBQ Co."We've got taxpayer money in there so this guy needs to step it up. He's the one who said April," Melton said.

But Elkington said Tuesday workers clearing out buildings found more asbestos than anticipated."We're fighting battles, but we're making progress," he said. "We don't announce a lot of things because this is a long-term process. Jackson is not used to development so it makes it a little more difficult."