[StBernard] Mississippi experiences reversal of fortune

[Westley Annis]

Mississippi experiences reversal of fortune 
In casino towns, aid and speculation fuel post-Katrina boom

By Spencer S. Hsu
The Washington Post
Updated: 7:38 a.m. ET March 10, 2006


BILOXI, Miss. - On a recent Saturday night, traffic inching toward the
1,100-room Imperial Palace Hotel and Casino backed up for a mile on
Interstate 110. Inside, gamblers jammed all 52 tables and 1,900 slot
machines on the casino's three burgundy-carpeted floors.

Dickie Doucet, an IP executive host, smiled amid the electronic din of the
casino floor, the $15-minimum blackjack tables and the whirl of cocktail
waitresses in black skirts. Since reopening Dec. 22, the IP can scarcely
find rooms to comp for guests, even on weeknights, he said.

"It's like New Year's Eve every night," Doucet bragged.

Six months after Hurricane Katrina smashed through a fragile necklace of
Mississippi coastal towns, the region is enjoying a post-storm boom. Fueled
by insurance money, federal reconstruction aid and speculative capital,
surviving hotels and restaurants are filled to overflowing, beachfront land
prices are soaring, and developers are placing billion-dollar bets that
shattered antebellum mansions will give rise to condominium resorts.

The shared sense here is that Mississippi's recovery, while still in its
early stages and reliant on continuing outside help, is moving much faster
than Louisiana's. Blessed with less damage, more federal aid and greater
political clout -- and know-how from past storms -- Mississippi's lightly
populated coastline is emerging from chaos, while large parts of the
metropolis next door remain a silent, rotting wasteland.

The guarded optimism is tempered by continued human suffering in one of the
nation's poorest states, where 36,000 families remain housed in trailers and
hundreds more live in plywood barracks and tents in the winter chill. To the
west, the smaller towns of Waveland (population 7,100), Bay St. Louis
(8,300) and Pass Christian (6,800) remain largely obliterated by Katrina.

'A long journey'
"It's going to be a long journey -- we know that," said Pass Christian Mayor
Billy McDonald, whose beach colony lost every business that generated sales
taxes and 75 percent of its housing. Only about 2,000 residents remain.
"First, we have to get cleaned up. Then we have to get people to come back.
The hard part is in front of us."

But evidence of short-term recovery is everywhere in the cities President
Bush visited this week. In Biloxi, a city of 50,000 that lost a quarter of
its structures to Katrina, the three casinos that have reopened did $63
million of business in January -- close to the $83 million taken in by the
city's nine gambling venues a year ago.

Harrah's Entertainment is building two new casinos at a cost of more than $1
billion. Landry's wants to build a Golden Nugget casino and boardwalk on
part of 23 parcels it has bought, and MGM Mirage is pouring $1 billion into
its Beau Rivage resort. The city has approved a $500 million Bacaran Bay
casino complex.

Brent Warr, mayor of neighboring Gulfport (population 72,000), said the
nation's discovery of the area's 26 miles of white-sand beaches has boosted
land prices along the devastated shoreline by 50 percent -- between $1
million and $2 million an acre. Investors are also seizing on federal
post-storm tax legislation, which lets companies immediately write off half
the cost of new investments.

'FEMA cash'
Sales tax revenue has surged 30 percent ahead of last year's total in
Gulfport, the largest city on the Mississippi coast. Contractors in U.S.
Army Corps of Engineers caps pack bars each night, and displaced families
flock to home-improvement stores and auto dealerships on six-lane U.S. 49,
the highway that leads north to Jackson. Doctors such as Philip Hage, 75,
are coming out of semi-retirement to treat waiting rooms of patients flush
with "FEMA cash."

"I'm jam-packed now, as a matter of fact," said Hage, who hired a fifth
assistant after the storm and plans to start rebuilding his
7,000-square-foot house, the largest on Gulfport's east beach before it was
swept away by the waters.

Warr, a developer sworn in seven weeks before Katrina hit, has hired New
Urbanist architects from Oakland, Calif., to redesign the local banking and
retail center into a pedestrian-friendly Dixie Riviera, combining the
residential charm of Charleston, S.C., with the resort life of Palm Beach,
Fla.

"We want it to be a city that is uniquely Southern and a city that our
residents -- who lived here and built it -- still recognize, like and want
to live in after it's been redeveloped," said Warr, 42, who envisions new
shopping, dining, museums, even an aquarium. "The quality level will step
up, but we want to make sure that culturally it addresses what is charming
about the South."

In neighboring Biloxi, veteran Mayor A.J. Holloway, 66, expects that casino
operators will more than double their pre-Katrina presence of 15,000 jobs
and 7,000 hotel rooms in the region, which has been historically reliant on
the military, seafood processing and shipbuilding.

"My prediction is . . . within the next 10 or 12 years, Biloxi will be the
second casino revenue-producing center in the United States," said Holloway,
a 13-year incumbent who has steered a pro-business recovery. "Casino gaming
is going to be the economic engine for Biloxi and the Mississippi Gulf
Coast."


Although the storm drew no distinctions between rich and poor, middle- and
upper-class residents are rebuilding. But low-income people, fixed-income
seniors and renters in poor, low-lying areas -- about 20 percent of the
storm victims -- are being squeezed out by demolition and redevelopment,
according to such groups as Oxfam America.

Biloxi fueled that perception by razing neighborhoods that housed black
longtime residents and Vietnamese immigrants who have taken up the region's
fishing tradition in the highly desirable but low-rent East Biloxi
peninsula. State and local officials made the area more valuable after the
hurricane by authorizing gambling operations to expand to 800 feet onto dry
land. Previously, gambling was restricted to offshore barges.

In Gulfport, a commission appointed by Gov. Haley Barbour (R) identified the
intersection of I-10 and U.S. 49 as the coast's economic hub, linked to the
nearby Gulfport-Biloxi International Airport. But it is also home to the
historic African American communities of Forest Heights and Turkey Creek,
the latter established in 1866 by freedmen after the Civil War.

Save Biloxi for whom?
"For lack of a better term, you're almost looking at the gentrification of
the Mississippi coast," said Derrick Johnson, president of the Mississippi
NAACP. He said the state has not released plans to replace public housing
lost in the storm.

"There's too much concern with casinos and not enough for residents," said
Sharon Hanshaw, 51, head of Coastal Women for Change. Hanshaw said her home
on a corner lot near Bayview Avenue "is gone, it's flat, it's a parking lot
for the casino -- there's no sign I was ever there." Only two of 18 families
on the block have returned. A vacant lot priced at $18,000 before the storm
now asks $125,000, she said.

"They say they want to save Biloxi, but if there's nowhere to live, who are
we saving it for?" she said.

Affordable housing is a key challenge, Warr and Holloway said, for which
they could use help to plan.

Overall, housing will take years to recover, but progress is visible. Power
has been almost fully restored; more than 80 percent of displaced families
have received temporary housing; and federal advisory flood maps -- which
dictate required elevations and availability of flood insurance for
rebuilding -- were released in November, after Katrina hit.

In New Orleans, only about 34 percent of residents in the city of 460,000
are back and drawing power. Temporary housing is available to about half the
98,000 families who need it to return to the region and rebuild, and FEMA
maps were not due until this month at the earliest, paralyzing homeowners,
city planners and lenders.

Although Katrina crushed Mississippi, driving floodwaters as far as 10 miles
inland and dragging structures within a quarter-mile of the beach into the
Gulf of Mexico, water subsided in a few hours.

In New Orleans, by contrast, the contaminated water and mud of Lake
Pontchartrain and the Mississippi River flooded dozens of square miles of
urban and suburban neighborhoods for weeks last year, doing much greater
damage.

New Orleans's below-sea-level status has also required agreement on
multibillion-dollar levee-restoration projects before rebuilding plans can
proceed. And the complexity of leading a city that is generally older,
poorer and more dependent on outside aid -- and more divided racially and
politically -- has slowed New Orleans's recovery.

Clout in Washington
While officials in politically conservative Mississippi say proudly that
small cities and counties are pulling themselves up, much as they did after
Hurricane Camille in 1969, the state's powerful GOP leadership has also
secured a disproportionate share of aid compared with each state's share of
lost housing.

Former Republican National Committee chairman Barbour, Senate Appropriations
Committee Chairman Thad Cochran (R), former Senate majority leader Trent
Lott (R) and Rep. Gene Taylor (D) enjoy staunch support for their efforts,
which helped limit Louisiana's share of $11.5 billion in federal Community
Development Block Grant funds for rebuilding homes to 54 percent. (Bush has
asked for $4.2 billion more for Louisiana.)

Rep. Bobby Jindal (R-La.) said his state's crisis is simply bigger and more
complex, but he acknowledged being "impressed" that Mississippi moved faster
to develop state and local rebuilding plans and took care in making its case
to Congress.

"There is a lot of anxiety that things haven't happened as quickly," Jindal
said. "Certainly we are learning from their example."

C 2006 The Washington Post Company

C 2006 MSNBC.com

URL: http://msnbc.msn.com/id/11752115/