September 1, 2008

Burning Question in Biloxi: Where Does the Water’s Edge Begin?

By Lofton, Lynn

Where does the water's edge begin? That may not be a question of consequence to upstate residents, but down Biloxi way it's of major importance to future front beach casino development. The question comes into play in compliance with legislation allowing casinos to come onshore 800 feet. The law was enacted soon after Hurricane Katrina in 2005 to help the area rebuild and prevent casinos from being blown away by other storms.

A billion-dollar casino project proposed in West Biloxi was recently nixed by the Mississippi Gaming Commission that ruled the site is not a legal gaming site in accordance with the 800-foot rule. RW Gaming, LLC, requested to locate its South Beach Casino Resort at Veterans Boulevard and U.S. 90 north of the beach. Company representatives wanted to begin counting the 800 feet from the seawall, heading north across U.S. 90. The commission did not agree.

"RW Gaming, LLC, was professional and very thorough in its presentation before the Mississippi Gaming Commission," Commission chairman Jerry St. Pe said in a written statement. "The decision of the commission was influenced by the fact that the RW application for site approval was inconsistent with commission regulations setting forth the reference point for determining onshore gaming within 800 feet from the water's edge, and the requirement to have property control to the water's edge."

St. Pe did not say what rule of measurement the commission used to determine the 800-foot requirement. However, RW Gaming attorney Danny McDaniel believes the project is within the rule to use the seawall as the point to begin counting 800 feet.

"We measured from the seawall because that was the mean high water line - that's a 19-year engineering calculation," he said. "We are going to measure again from the water's edge to see if we go forward. It could mean a difference of 200 feet."

He also points to a letter from Secretary of State Delbert Hosemann to the commission that he believes supports the seawall boundary. The Secretary of State's Office oversees public trust tidelands, the area between the seawall and where the water meets the shore. This area is owned by the state in trust as public tidelands. Businesses locating in this area must lease the land from the state.

Biloxi Mayor A.J. Holloway, who supported approval of the South Beach project, said he was disappointed with the Gaming Commission's denial of the site, but that he respected the ruling.

"I think this ruling helps define what a legal and suitable gaming site is," he said. "As much as I think this project would have jump started all development in West Biloxi, I am confident that developer Ray Wooldridge will continue to move forward with his non-casino plans in that area."

Holloway feels this ruling increases the attractiveness of other areas in Biloxi already zoned for casino resorts along Back Bay and in East Biloxi.

McDaniel isn't as confident about the attractiveness of Back Bay sites. "Those sites have been there 14 years without any large projects," he said. "Billion- and million-dollar projects want to be on front beach, but if that is off limits they may go to Back Bay. Do they want to be here enough to put their casino resorts on Back Bay? It's just something we'll have to see."

A gaming attorney with the Phelps Dunbar firm, he has represented a number of gaming projects in the state and is currently involved with another billion-dollar project as well as a $200-million project.

"In the past, the Gaming Commission has wanted large resorts with lots of amenities. Based on my experience, all big casinos want to be on front beach," he said. "If the state does not want any more big casinos, this ruling will do that. It will greatly reduce the size of projects."

Copyright Mississippi Business Journal Aug 4, 2008

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