Two more casinos were announced last week in the booming Mississippi Gulf Coast market.
The Mashantucket Pequots of Connecticut last week said it had reached an agreement with a group to partner on a Foxwoods branded casino in Biloxi. The facility would reportedly build and manage a $265-million, 781,000-square-foot complex on 23 acres in Biloxi Pointe, an historic section of the city. The development would include a 50,000-square foot casino, a 500-room hotel, meeting and convention space, restaurants, shops, an outdoor entertainment venue and a spa.
“We have some tremendous partners here that are looking to build more than a casino, a more well-rounded resort,” said Rodney Butler, chairman of the Mashantucket Pequot Tribal Council.
Felix Rappaport, president and chief executive officer at Foxwoods Resort Casino, commented, “Biloxi, Mississippi is a proven destination tourism market with its near-perfect, year-round climate, casual coastal vibe and exciting nightlife, all of which provide a perfect location to feature our world-class entertainment offerings.”
If the project moves forward, Biloxi will commit $9 million toward a $22 million loop road that would connect the Foxwoods site to other casinos around the peninsula. City spokesman Vincent Creel said the state would add $5 million, the city would contribute some BP oil spill money and another $7 million would come from Louisiana businessman Chris Ferrara, who has been trying to develop the 23-acre Biloxi site for years. Foxwoods is teaming with Ferrara and Biloxi Boardwalk Ventures and the Hartmann Group LLC, the resort’s project-management company. Hartmann President Jeff Hartmann, who has served as chief executive or chief financial officer at Foxwoods and the president of Mohegan Sun and other gaming properties, said talks with the Pequots began late last summer. “It’s going to create great brand awareness, having the Foxwoods name,” Hartmann said.
Ferrara already has spent $13 million on the Biloxi Boardwalk Marina and also owns Biloxi Lugger restaurant, both located at the 23-acre casino site, which would transform a 180,000 square foot former pet food factory into the new resort’s convention center and casino floor. “The theme will be old Biloxi,” Ferrara said.
Amenities at the 781,000 square foot complex would a 50,000 square foot gaming floor with 1,380 slot machines and table games; a 500-room hotel; a millennial-focused casino lounge; 71,000 square feet of meeting and exhibition space with a theater; six restaurants and bars, including a steakhouse, buffet, sports bar and café; 3,300 square feet of retail; a spa, fitness center and pool; a 10,000 square foot bowling and shuffleboard space; and other outdoor entertainment and attractions. The property will create several thousand jobs, Ferrera said.
Bill Newby of TFA Capital Partners, which is helping to raise money for the project, said the Pequots’ $2 million is “a real endorsement.” He noted additional money would be borrowed from overseas investors through the E-B 5 Visa program, under which foreigners who invest $500,000 and create 10 jobs in the United States projects can secure permanent U.S. residency.
Former Foxwoods Casino executive Jeff Hartman, who’s involved with the Biloxi project, said the new casino offers “an opportunity to import new players into the market.”
Although considered a tribal casino in Connecticut, Foxwoods in Biloxi will be required to pay Mississippi’s 12 percent casino revenue tax. Also it will have to offer an amenity that will attract new visitors and grow the market. “They will be treated as any other operator,” said Mississippi Gaming Commission Executive Director Allen Godfrey. The commission approved the Foxwoods site for a Biloxi casino in 2012.
In 2009 increasing competition and the recession forced the Pequots to default on $2.3 billion in debt and then violate a restructuring agreement in 2014.
Meanwhile, the city council in Gulfport, Mississippi unanimously approved a 60-year lease for a harbor casino that would be developed by Mississippi Coast Entertainment LP, owners of the $290 million Scarlett Pearl Casino Resort in D’Iberville. That property offers 300 hotel rooms and a miniature-golf course as its amenity required for a gaming license by the Mississippi Gaming Commission. Lubin and his partner Kevin Preston also own the Magnolia Bluffs Casino-Hotel in Natchez.
One of the casino partners, Virginia attorney Robert Lubin, raises money for property developments though the E-B 5 Visa program, which allows foreigners to secure permanent United States residency by investing in projects in the states. “With respect to the casino development, we are actively marketing overseas. We actually ended up doing better than we expected to.” He said there was a lot of interest in the project overseas, especially in Asia.
Mississippi Coast Entertainment will sign a lease for 10.8 acres for the casino with the Gulfport Redevelopment Commission, city’s urban-renewal agency, and two private owners–Marine Life and Misco Marine. GRC attorney Steve Hendrix said the casino group will pay $80,000 a month in rent until the casino opens, then 6 percent of gross gambling revenue. The 60-year lease includes three 10-year renewal options. Hendrix noted the city will receive 40.5 percent of the revenue, equal to the percentage of the acreage it owns.
Mississippi Coast Entertainment also will purchase the Markham Building in downtown Gulfport and Centennial Plaza on Beach Boulevard. Those projects plus the casino equal a total investment of $400 million, Hendrix said. According to the lease, Lubin’s group must spend at least $140 million on the casino resort, which will have a 300-room hotel. The MGC-required amenity is under discussion, Hendrix said. Gaming Commission Executive Director Allen Godfrey said he has seen renderings of the proposed casino and is working with the developers. Construction would begin in the first quarter of 2017, Hendrix said.
“The project is going extremely well. I’m excited,” Lubin said. Hendrix added, “Kevin and Robert have experience in the Mississippi market. They have a very successful casino operation in Natchez. They have been looking to get in the Coast market for the past 10 years, and they believe this is one of the last great casino sites on the Mississippi Coast.”
