Hurricane recovery, Republican-style

Many are still struggling on the Gulf Coast. But casino and real estate investors are living large -- thanks to Republican officials.

By Tim Shorrock

Read more: New Orleans, Poverty, Politics, Mississippi, News, Gambling, Hurricane Katrina

Photo: Reuters/Mark Wallheiser

A resident looks at the waterfront where he used to live in Biloxi, Miss., Aug. 29, 2005; (inset) Beau Rivage Resort and Casino.

Aug. 29, 2007 | As residents of Mississippi's Gulf Coast gather today to commemorate the second anniversary of Hurricane Katrina, they will recall a cataclysmic storm that spared no one, rich or poor, from its destruction. Virtually every structure along the 90-mile stretch of coastline was either wrecked or swept away after Katrina's 140-mile-an-hour winds and 40-foot storm surge came ashore like a steamroller from hell. Yet, while the national media has focused its attention on New Orleans, it has given relatively little coverage to the hurricane's impact elsewhere, even though the destruction to coastal Mississippi, which bore the full brunt of the storm, was as bad as, and in some places worse than, the calamity that struck New Orleans when the levees there broke.

Two years later, some of these areas are still distressed. One reason for the lack of attention paid to the Gulf Coast may be the massive investments made in the region by casino, hotel and real estate interests. That has created the appearance of a recovery that business promoters say has brought, and will continue to bring, enormous growth to the area. But many locals say that the casino-led development has done little to alleviate post-disaster conditions for most residents, including the 37 percent of the population -- approximately a half million people -- who earn below what federal guidelines deem low to moderate income. Moreover, maneuvering in Washington by the state's Republican leaders has diverted aid money away from some of the people who need it the most.

Hurricane Katrina "leveled everybody" on the Gulf Coast, says Reilly Morse, a civil rights lawyer from Biloxi who works for the Mississippi Center for Justice, a statewide organization that provides legal assistance to low-income residents. "For a very short while, everybody had the same experience, and that spawned a sense of community that I don't think ever existed before." But since the aid money began flowing, said Morse, "there's really been two recoveries here: one that generally favored homeowners with resources, and another one that basically priced the poor out of the housing market."

Katrina's impact is still visible from U.S. Highway 90, which hugs the coast from New Orleans to the Florida panhandle. The two Mississippi bridges destroyed in the storm have been rebuilt. But a visitor driving east from Gulfport to Pascagoula encounters mile after mile of empty lots where homes, motels and retail outlets used to be. The slow pace of reconstruction is evident from the many housing trailers provided by the Federal Emergency Management Agency still peeking through the trees.

"We've still got a mighty tall mountain in front of us," Haley Barbour, the state's Republican governor, admitted this week after releasing an otherwise upbeat report on Mississippi's recovery. The official story is that Mississippi is back, thanks to nearly $24 billion in federal aid negotiated by Barbour, a former Washington lobbyist. The federal funds, he claims, have benefited all citizens in the stricken area and allowed most people who lost their homes to rebuild. As a result, only about 17,000 people remain in FEMA trailers today, down from about 36,000 less than one year ago. That is little consolation, however, to those who must still endure the cramped quarters and toxic fumes that permeate the trailers.

The $23.5 billion in federal funding that Mississippi's governor and its two Republican senators managed to obtain was unprecedented in scope for a state recovering from a natural disaster. But the distribution of the $4 billion the state obtained specifically to help residents rebuild their housing, thanks to Barbour, has been badly skewed toward wealthy homeowners.

Under the Department of Housing and Urban Development's Community Development Block Grant program, 70 percent of the funds are supposed to be allocated to low- and moderate-income people. But the governor successfully lobbied to waive that requirement, undercutting its impact on Katrina survivors. As a result, only 25 percent of the money has reached the poorer segments of the population. Renters, who make up 40 percent of the population in some sections of the coast, have received nothing. "Only a minuscule fraction has actually gotten into the hands of those that need it most," said Morse.

Meanwhile, Mississippi officials are touting the spectacular return of the casino industry to the Gulf. In November 2005, Barbour called the state Legislature into a special session to pass a law allowing casinos, once restricted to barges, to be built on land within 800 feet of the coast. The new law -- which the gaming industry had been seeking for years -- sparked a flood of investment from casinos, hotels and condominium developers. Since Katrina, nine casinos have opened for business on the coast. Eight of them are in Biloxi, whose mayor, A.J. Holloway, has relentlessly promoted the industry.

State officials predict casinos will bring in a record $3 billion in revenue to the state this year, 10 times what it was in 2006, when they earned a little over $300 million. "I hate to think where we would be today in this post-Katrina world were it not for the revenue and jobs created by this industry," Holloway declared last week.

The first casino to open after the storm was the spectacularly garish Beau Rivage Resort and Casino, a subsidiary of MGM Mirage. Badly damaged during Katrina, it was quickly rebuilt in time for Labor Day 2006, at a cost of $1.3 billion. The latest project to get off the ground is "Margaritaville," a $700 million joint venture between soft-rocker Jimmy Buffett, who was raised in nearby Pascagoula, and Harrah's Entertainment. When it opens in 2010, it will include a 420-room hotel, a spa and a convention center, all spread along Biloxi's publicly owned beach.

But to many locals, the casinos -- and the hotels, shopping malls and condominiums that accompany them -- are hardly the answer to the region's devastation and economic crunch. They believe that the Biloxi model for development has made it difficult for many local residents to remain in the area, and they chafe at the idea that the post-Katrina emergency is over.

"We're still a long way to recovery, maybe 30 percent [there]," says Bill Stallworth, the only African-American on Biloxi's City Council and the driving force behind the East Biloxi Coordination and Relief Center, a local advocacy organization founded after the disaster struck. Instead of casinos and high-rise condominiums, local organizations are advocating for low-income housing and daycare centers that would make life easier for casino workers and local residents. "There's a shortage of affordable housing, but we see boutiques, stores, rich houses and casinos being built," says Sharon Henshaw, a Biloxi native who launched another group, Coastal Women for Change, after Katrina. "We want the people to understand that we are nowhere near recovery."

Next page: Attempts to turn Biloxi into "a little Las Vegas"