by Keith Burton - GCN Filed 7/17/08

A unanimous decision by the Mississippi Gaming Commission ended plans for the proposed South Beach Casino envisioned by RW Development Thursday afternoon at the Biloxi Community Center. In a room packed with both supporters and opponents to the project, Commissioner Jerry St. Pe (pronounced: Saint Pay - .ed) made the motion to deny the application. The silence in the audience was palpable. With the unanimous vote the commission ended a huge controversy for the city, which could have placed the area's entire gaming industry in jeopardy.

When the state allowed on-shore gaming after hurricane Katrina destroyed the shoreline properties, lawmakers sought to keep the spirit of the law that restricted where casino could be located. Part of the restriction included a provision that required gaming property owners to control land to the shoreline. As the beach is public property, only those properties that actually touch the water fulfill the requirement. In the case of all the existing casinos, they all control property to the shoreline. The RW site did not.

St. Pe noted that the issue was not that the RW project would not be beneficial to Biloxi, but the commission understood the intend of the legislation that restricted where casinos could be located. As such, their only conclusion was that the RW proposal did not meet the requirement of the law and had to be rejected.

"This doesn't represent the merits of the project," said Commissioner St. Pe. "But the bottom line is that the applicant didn't comply with our regulations." St. Pe is well-known on the Coast as the former president of Ingalls Shipbuilding in Pascagoula, which is now Northrop Grumman.

Commissioners Thursday heard comments from two dozen people for and against the project, including lawyers, legislators, city representatives and residents.

Opponents to the RW proposal felt that opening up the areas north of U.S. 90 would change the rule of the game that has worked well for the industry to date. It would also allow areas from one end of U.S. 90 to the other to be opened for gaming. This would have an impact on such sites the former Gulfport V.A. property, and many more. The result could have turned the whole Harrison County coastline into a quagmire of casino properties, forever changing the Coast in ways that would hurt both the present recovery and future of the area.

In addition, Biloxi has spent millions of dollars in sub ground infrastructure and roads to encourage future casino development around Back Bay and east Biloxi. If the front beach was to be approved for casinos, that money would have been wasted.

GCN caught up with a very stressed-out Mayor A.J. Holloway after the decision. Holloway told GCN that he felt the commission had ruled the only way it could. The commission's decision was a huge concern for him. Holloway was on record supporting the casino proposal.

"I had heard rumors that the commission was having trouble with the proposal, but if you open this issue up, you open a pandora's box up and down the 26 miles of beach in Harrison County," Holloway said.

Holloway said the the RW developers did not have a major gaming company partnering with them for their proposed gaming project. This could suggest that the big players in the gaming industry were not behind an expansion of where gaming can be located on the Coast.

Holloway also told GCN that RW development had plans for their properties prior to the opening of land-based gaming and that he expects those plans to go on. RW Development has previously said they were going to spend a billion dollars redeveloping property the company has purchased along the Biloxi central beachfront and up Veterans Avenue to Pass Road including condos, retail shopping areas and apartments.

Will the issue find its way again to the commission? St. Pe said, "Nothing is ever permanent, but that will depend on the developers."

There may be some who may take the issue up in some future legislative proposal and ask for a redefinition of where the boundary line should be, but no one wants to see the state legislature mess with the existing gaming laws. Many insiders feel that reopening gaming issues would create an environment that could result in changes to the state's gaming laws. Such a situation in the state legislature could jeopardize the industry throughout areas where gaming is currently allowed.

The gaming commission doesn't have the only say in the matter. Both the governor and Secretary of State also have a role in the decision over changes such as presented to the commission, and both had indicated that any expansion of where casinos could be located would would be received unfavorably.

The audience at the Biloxi Community Center on Howard Avenue was a who's who of Biloxi that were for the project. Among them was Ward 5 Councilman Mike Fitzpatrick, who had lobbied hard for a similar land-locked casino project at the former Tivoli hotel site in east Biloxi that was vetoed by Mayor Holloway earlier this year.

Other beachfront property owners at the meeting included restaurateur Bob Mahoney and former Biloxi Mayor Jerry O'Keefe whose home is on the beachfront.