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Mississippi experiences reversal of fortune

Six months after Hurricane Katrina smashed through a fragile necklace of Mississippi coastal towns, the region is enjoying a post-storm boom.
People play the slot machines after the reopening of the gaming floor of the Isle of Capri Casino in Biloxi, Miss., in December.Dan Anderson/epa/sipa / EPA
/ Source: a href="" linktype="External" resizable="true" status="true" scrollbars="true">The Washington Post</a

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."