EconSouth Second Quarter 2012 Quarter Second 4 EconSouth L Coming Back Economy Keeps Biloxi-Gulfport Biloxi, Mississippi these days. these easily don’t scare coast Mississippi the on simply, people put And, crisis. financial the amid spell adry after life showing was industry gaming all-important the in ment Invest rate. statewide the lower than was unemployment April, In upward. headed generally are for Biloxi-Gulfport trends longer-run the For another, few years. vious pre the with compared trivial are setbacks recent most the For thing, one bravado. jobs. 500 lost area metropolitan Gulfport Biloxi- the and fell, coast the on collections tax Sales group. development economic and tank athink Council, Business Coast Gulf Gulfport-based the from areport says 2011, during coast Mississippi the along grassroots alotworse.” “We’ve through been said. King downswing,” of another beginning aproblem. Not really recession. recent more the and Katrina Hurricane 2005’s from remain wounds deep Second, of Mexico. Gulf the in 2010 spill the oil up cleaning after decamped workers contract thousand several First, Council. Business for the policy and of research director King, Scott to according sons, the long view. long the take to one compels 21st century the in Coast Gulf Mississippi the on ife “W B So Ac Fo Th r instance, “growth was stymied” stymied” was “growth r instance, tivity dipped mainly for two rea- for two mainly dipped tivity e don’t see it as an indicator, or the the or indicator, an itas e don’t see at attitude is more than just just than more is attitude at iloxi-Gulfport had a rough year? year? arough had iloxi-Gulfport - -

in. drive visitors Biloxi-Gulfport’s of most as either, helped haven’t prices gas blow. body Higher athird economy coastal the delivering season, tourist summer 2010 the fouled spill BP oil the Finally, casinos. existing the to waste laid Katrina after here envisioned resorts gaming lar spectacu the build to needed investment constrained crisis financial the slowdown, economic general the to addition In crisis. financial and recession the came later years Three jobs. 25,000 Biloxi-Gulfport costing temporarily havoc, wreaked Katrina Hurricane First, years. seven atraumatic endured have coastline 70-mile entire Mississippi’s and Biloxi-Gulfport another blow after One 1990s, the gaming houses, along with with along houses, gaming the 1990s, Mississippi’sshows casinos. of coastal stage and cards, dice, slots, the years: 20 past for the it’s been what remains draw main The prospects. tourism area’s of directors. board Branch New Orleans Fed’s Atlanta of the chairman former and Gulfport in Inc. &Associates Contractors of Specialty president Dennis, Dave said

“I Si De t’s tough right now, but it’ll pass,” now, pass,” it’ll but right t’s tough nce their inception in the early early the in inception their nce nnis’s optimism centers on the the on centers optimism nnis’s

- 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. The metro area the Golden Nugget, and invest $150 million represents the nation’s third-largest casino market, behind only Las Vegas and to add restaurants, amenities, and up- Atlantic City. graded hotel rooms. Also, Jimmy Buffett’s Margaritaville Casino & Restaurant–Biloxi opened just before Memorial Day. The $60 million project employs about 1,000 people. Margaritaville’s opening marks the first time since Katrina that the coast had 12 casinos. Add in a recently opened art museum as well as technology and marine science 8.8 percent and the United States’ 8.1 Department of Revenue. “The gaming attractions, and the Biloxi-Gulfport area percent rate. The population is down only industry on the Mississippi Gulf Coast has hopes to attract a diverse group of visitors. about 4 percent from its pre-Katrina total, proven to be very resilient,” King said. “If you can look out beyond a one- or compared with the roughly 9 percent Even better, a spate of recent invest- two-year myopic view of where we are on reduction in the New Orleans metro ments—some private, some public— is the coast,” Dennis said, “the horizon is area. Combined revenue from the coastal raising hopes. The Port of Gulfport is un- extremely bright.” z casinos has fallen from its 2007 peak of dergoing a $500 million expansion funded $1.3 billion. But it has been remarkably by federal money for Katrina recovery. On This article was written by Charles Davidson, stable at $1.1 billion in each of the past the casino front, Landry’s Inc. announced a staff writer for EconSouth. three years, according to the Mississippi in March that it plans to buy the Isle of

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