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Biloxi, Mississippi These Days

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Biloxi, Mississippi These Days One blow after another Biloxi, Mississippi Biloxi-Gulfport and Mississippi’s entire 70-mile coastline have endured a traumatic seven years. First, Hurricane Katrina Biloxi-Gulfport wreaked havoc, temporarily costing Biloxi-Gulfport 25,000 jobs. Three years later came the recession and financial Economy Keeps crisis. In addition to the general economic slowdown, the financial crisis constrained investment needed to build the spectacu- Coming Back lar gaming resorts envisioned here after Katrina laid waste to the existing casinos. Finally, the BP oil spill fouled the 2010 summer tourist season, delivering the coastal economy a third body blow. Higher ife on the Mississippi Gulf Coast in gas prices haven’t helped either, as most of the 21st century compels one to take Biloxi-Gulfport’s visitors drive in. L the long view. “It’s tough right now, but it’ll pass,” For instance, “growth was stymied” said Dave Dennis, president of Specialty along the Mississippi coast during 2011, Contractors & Associates Inc. in Gulfport says a report from the Gulfport-based Gulf and former chairman of the Atlanta Fed’s Coast Business Council, a think tank and New Orleans Branch board of directors. economic development group. Sales tax Dennis’s optimism centers on the collections on the coast fell, and the Biloxi- area’s tourism prospects. The main draw Gulfport metropolitan area lost 500 jobs. remains what it’s been for the past 20 Activity dipped mainly for two rea- years: the slots, dice, cards, and stage sons, according to Scott King, director shows of coastal Mississippi’s casinos. of research and policy for the Business Since their inception in the early Council. First, several thousand contract 1990s, the gaming houses, along with workers decamped after cleaning up the 2010 oil spill in the Gulf of Mexico. Second, deep wounds remain from 2005’s Hurricane Katrina and the more recent recession. So Biloxi-Gulfport had a rough year? Not really a problem. “We don’t see it as an indicator, or the beginning of another downswing,” King said. “We’ve been through a lot worse.” That attitude is more than just bravado. For one thing, the most recent setbacks are trivial compared with the pre- vious few years. For another, the longer-run trends for Biloxi-Gulfport are generally headed upward. In April, unemployment was lower than the statewide rate. Invest- ment in the all-important gaming industry was showing life after a dry spell amid the financial crisis. And, put simply, people on the Mississippi coast don’t scare easily these days. 4 EconSouth Second Quarter 2012 grassroots Biloxi-Gulfport, Miss. Biloxi population 44,054 Gulfport population 67,793 Harrison County population 187,105 Median household income (Biloxi) $46,550 Median household income (Gulfport) $36,104 Median owner-occupied home value (Biloxi) $160,400 Median owner-occupied home value (Gulfport) $132,100 The Beau Rivage casino in Biloxi is the largest Biloxi- Source: U.S. Census Bureau, 2008–10 American Community Survey and tallest building in Mississippi as well Gulfport as Biloxi’s largest employer, with more than 3,800 workers. a couple of military installations, have Smith, a history professor at the Univer- ment, roughly double the share statewide powered the Biloxi-Gulfport economy. sity of Southern Mississippi’s Gulf Coast and more than twice the share nation- Biloxi-Gulfport is the nation’s third-largest campus and author of the book Hurricane ally, according to figures from the BLS. casino market, behind Las Vegas and Katrina: The Mississippi Story. In Biloxi-Gulfport, leisure and hospital- Atlantic City. The casinos boosted tourism Among the projects that have not ity provide nearly one of every three from about a million visitors a year to happened: Trump Entertainment Resorts private-sector jobs, compared to one in more than 8 million before Katrina, and Inc. backed off plans it announced in 2006 eight across the country. And that’s after accounted for 35 percent of the city of Bi- to build a casino resort. The Mashan- Katrina. loxi’s $55 million in tax revenue in its most tucket Pequot Indian tribe, which operates Some of the jobs lost were in the recent fiscal year, according to the city. the country’s largest casino in Connecti- casinos, of course. Most of them have All 12 of Biloxi-Gulfport’s casinos rank cut, also abandoned plans to develop a rebuilt on land, but generally with fewer among the metro area’s 20 largest private- $400 million property in Biloxi. Harrah’s hotel rooms and less convention space sector employers. Combined, the gaming in 2008 halted construction of what was than they housed before. Many smaller, houses employ more than 11,000 people. announced as the $704 million first phase independent hotels and tourist attrac- Until Katrina, the 1990 Mississippi of a potential $1 billion project. The pilings tions have not reopened. A combination law allowing gambling confined casinos to of that aborted building remain in the of skyrocketing property insurance rates floating barges. After the hurricane forced ground, “a ghost from the collapse of the and stringent building codes, especially the dozen coastal casinos to close for financial markets in 2008,” Smith said. elevation requirements instituted after several months, legislators amended the Katrina’s flooding inundated ground law to allow casinos on land. This change Katrina’s lasting economic damage floors, has made rebuilding costs prohibi- sparked the widespread belief that casinos That unfinished structure is not the only tive for many smaller businesses, King would rebuild bigger than ever. Four-term evidence of the boom that wasn’t. In the and others said. Along with scaled-down Biloxi Mayor A.J. Holloway and other wake of Katrina and the Great Recession, casino hotels, the absence of smaller officials were quoted in numerous media Biloxi-Gulfport has 25 percent, or about hotels and attractions accounts for much outlets, including in a 2006 Wall Street 7,000, fewer travel and tourism jobs and 22 of the decline in hotel rooms and tourism Journal article, predicting that there would percent, or 4,000, fewer hotel rooms, than jobs, local observers said. be as many as 20 casinos by 2011. Today, it had before the hurricane, according to 12 casinos are generating steady revenue, data from the Business Council and the Better days appear on the horizon but the expected explosion fizzled. U.S. Bureau of Labor Statistics (BLS). Through it all, Biloxi-Gulfport soldiers on. “The mega-casinos that people be- Those numbers stab at the heart of Its preliminary unemployment rate in April lieved would happen and really drive the the local economy. Leisure and hospitality was 7.8 percent, lower than Mississippi’s tourism business to a different place from jobs account for a whopping 21 percent the ’90s haven’t happened,” said James Pat of the metro area’s total nonfarm employ- Grassroots continues on page 17 frbatlanta.org 5 some are doing better than others and rising fuel costs have created a demand enforcing his minimum ticket price per some are doing fairly well, it continues to for more fuel-efficient vehicles and have customer. be a concern everyone is watching closely. shifted the mix away from big trucks Robert Musso, regional executive at the Lee Jones, regional executive at the toward smaller cars. Because this is the New Orleans Branch: High energy prices Nashville Branch: Nashville directors third run-up in fuel prices in recent years, have not had much impact on companies and REIN contacts reported hearing little many observed that consumers and busi- and the way they conduct their business. to no major adjustments in the spend- nesses are not panicking and are counting While many companies acknowledge it ing patterns of consumers tied to rising on prices to recede again soon. Businesses has an impact on the consumer, the com- fuel costs. However, it is a concern on the with a shipping component are passing on panies also admit it has not had a negative minds of many. Sticker shock at the cost of fuel surcharges to the customer or are fo- effect on consumption of their products a fill-up at the gas pump is prevalent, but cusing on reducing fuel consumption and and services. reports of altering business practices are costs through shipment consolidations. The price of energy is viewed as a minimal, with the exception of those who Anecdotes from our contacts included temporary bump and, depending on the drive a lot between business locations. observations that some companies—such type of business, it may not be passed on Often, they are choosing to move their as a local delivery service—were using to the consumer or is done so temporar- schedules around to minimize back-and- GPS technology to map out routes more ily through a fuel adjustment surcharge, forth driving. Several directors noted that efficiently and minimize left-hand turns. where it can be readily and easily with- lower-income workers, particularly those A Knoxville director heard reports of drawn as prices go down. Increases in the living in rural areas with long commutes grade schools modifying pickup-line pol- cost of energy must be sustained over lon- to the job, are disproportionately impacted icies around “no idling.” A carpet clean- ger periods than those we have recently negatively by rising fuel prices. ing vendor indicated that if gasoline experienced to permanently have an Several REIN contacts, along with reached $5 per gallon, he will become impact on production costs and pricing. z branch director Bill Krueger, vice chair- more diligent in scheduling numerous man of Nissan Americas, observed that appointments in one area of town and Grassroots continued from page 5 Capri Casino Hotel in Biloxi, rebrand it as The coastal casinos are a bulwark of the Biloxi-Gulfport economy.
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