Hurricane Katrina

Casinos' comeback returned jobs, restaurants and distractions after Katrina

 Beau Rivage Casino and Hard Rock Casino, right, after Hurricane Katrina. Beau Rivage reopened Aug. 29, 2006, a year after the storm, and Hard Rock at the end of June 2007.
SUN HERALD FILE PHOTO Beau Rivage Casino and Hard Rock Casino, right, after Hurricane Katrina. Beau Rivage reopened Aug. 29, 2006, a year after the storm, and Hard Rock at the end of June 2007. KRT

Hard Rock Casino Biloxi was only a few days from its grand opening when Hurricane Katrina aimed at South Mississippi in August 2005.

Joe Billhimer, general manager at the time, said he and his staff locked the doors and left, thinking they would return in a few days to open the resort.

"We never had the vision of getting destroyed," he said.

Obviously not a fan of rock and roll, Katrina demolished the Hard Rock Casino barge, badly damaged the hotel and even tossed Elvis' Army uniform to the waves, where it later was fished out of the water by a fan and returned. Hard Rock's iconic red guitar sign -- standing tall amid the gray rubble of downtown Biloxi -- is one of the most vivid images after Hurricane Katrina.

The storm tossed casino barges like toy boats and left them stranded north of Beach Boulevard. Treasure Bay's pirate ship casino looked like cannon balls had ripped through the lower floors.

Larry Gregory, then director of the Mississippi Gaming Commission, had undergone surgery for a brain tumor just three weeks before Katrina hit. The day after the storm, former Gov. Haley Barbour asked if he would fly over South Mississippi with him to assess the damage.

"I guess that was my first day back on the job," Gregory said. "That was hard to see, all of that gone, just stripped in a matter of hours."

Gregory had followed these casinos from blueprints to ribbon cutting. With each opening, more people found jobs with benefits.

"It was such a good story for our state," he said.

All 13 casinos were closed, some never to reopen, and 16,000 employees were out of work. At a time when Biloxi and other Coast cities desperately needed resources, local casino tax revenue went from $150 million a month to zero and the casino restaurants and many hotel rooms were empty.

Once all the casino employees were accounted for after Katrina, the conversation quickly turned to getting the casinos rebuilt and people back to work, said Gregory. He and Jerry St. Pé, who was the chairman of the Gaming Commission, flew to Las Vegas and met with the chief executive officers of MGM, Harrah's and other companies that had casinos in South Mississippi.

All of the CEOs said they wanted to build back, but said they could not ask their shareholders to reinvest on the Gulf Coast without being allowed to rebuild on land.

At least four of the casino operators in South Mississippi said they absolutely wouldn't reopen unless casinos could come ashore, recalls Beverly Martin, who was the executive director of the Mississippi Casino Operators Association.

A month after Katrina, a special legislative session was called and a rag-tag delegation of about 75 casino general managers and Coast leaders, many of whom had lost their homes and everything they owned, camped at the capitol in Jackson to convince legislators the regulations must be changed.

"We were fighting for our lives, our livelihoods, our homes, our communities," she said.

Laura Hasty, president of The Ad Group, lost her home and all but one of her clients to Katrina. "We really need your help," she told the lawmakers.

Faced with being homeless and having no job, she said, "You either lay down and die or you get up and fight."

She fought. She reminded legislators that casinos were responsible for turning Mississippi's economy from dead last to thriving once gambling was legalized in 1990.

"It wasn't cotton that got us there, it was casinos," she said,

Keith Crosby, general manager of Palace Casino, was the last person out the door of the East Biloxi casino as Katrina neared and could see the storm coming as he drove home across the Biloxi Bay Bridge that soon would be flattened like a row of falling dominos. It was his first time home in three days and he ran inside to grab a change of clothes before the house flooded.

Apparently tired of seeing him wearing shorts, a legislator at the capitol asked, "Mr. Crosby, are those the only clothes you have?"

"Yes," Crosby told the lawmaker. "Everything else is gone."

The conversation in Jackson went from allowing casinos 2,000 feet from the coastline to 800 feet or less from the water. The "lobbying and wrestling" over the legislation raged on, Crosby said.

He recalls how House Speaker Billy McCoy announced, "Ladies and gentlemen, we've been talking about this long enough." McCoy said he knew people were not in favor of the new law, but they needed to think about the Coast. Some of those who couldn't support the bill headed for the restroom while the others passed the legislation. Six weeks after Katrina, Gov. Barbour signed it into law.

Had the 800-foot legislation not passed the Legislature, "Certainly I don't know if Treasure Bay would be open," said Bernie Berkholder, who was the general manager at Treasure Bay Casino when Katrina hit. The casino that was in the boat south of U.S. 90 moved into the hotel north of the highway.

Despite being shell shocked by Katrina's destruction, people who really didn't think they possessed that kind of resolve stepped forward, he said. "Seeing that in the community was a big enough positive. It almost outweighed some of the negative," he said. "They say the Coast really doesn't work well together. We were definitely united on that."

The first three casinos were back open four months later in time for New Year's Eve, some moving their casinos in the hotel ballrooms and meeting rooms. Beau Rivage Casino reopened on the first anniversary of Hurricane Katrina and Hard Rock, which got so close to opening in August 2005, was rebuilt and debuted in June 2007.

As devastating as it was, Katrina was an economic boost for South Mississippi. Construction workers and government officials in town for the recovery looked for a distraction from the devastation and pushed casino revenue to record numbers.

The casinos invested insurance money in new technology and decor. "The upside is everyone got brand new slot machines," said Allen Godfrey, executive director of the state Gaming Commission. Every property installed flat screen televisions and upgraded their rooms.

The Gaming Commission never went back to permitting floating casinos after Katrina and instead enacted regulations that require at least 300 hotel rooms and upscale amenities.

"We've got to move forward and to move forward we can't go backward. That's just leadership," Godfrey said.