Why the Mississippi GO Zone?
So you are thinking about investing in the GO Zone and are wondering which part of the GO Zone?
When Hurricane Katrina rampaged through the Gulf Coast in 2005, its devastation could be felt in a string of cities in its path. New Orleans, however received the bulk of media attention in the aftermath of the hurricane, and the devastation in the other affected areas like Biloxi, Mississippi was sidelined. Katrina’s impact in Biloxi, the state’s governor reported at the time, was akin to the destruction in Hiroshima after the bombing. Around 90 percent of Mississippi’s oceanfront buildings were destroyed in the hurricane, and casino barges were thrown dozens of miles inland. The Biloxi-Ocean Springs Bridge was almost completely shattered.
Now, Biloxi stands to create a record making moment in the country’s history as the city is rebuilt from scratch, reconstructing an estimated 55,000 homes over the next few years. The scale of potential in this part of Mississippi is mind boggling – less than 10 percent of the homes needed have been built, totaling just 10,000 homes in all. Because this is the first time that an American city is being rebuilt as an oceanfront city, possibilities for creating up to-date infrastructure and facilities are high. These new buildings will be built according to 21st century standards, unlike other oceanfront properties in the country which were built in the 19th and 20th century.
Plans are underfoot to enhance access to the Biloxi area, and the Biloxi-Ocean Springs Bridge is already complete. At the Gulfport-Biloxi International Airport, traffic is up 20 percent since 2005, and a new $51 million expansion promises to increase terminal space by 8 percent. Two new airlines will be given access with the enhanced square footage. All these steps promise to unleash Biloxi’s economic potential, leading to a huge appreciation in real estate values here.
Biloxi has long had a reputation for the quality of its nightlife, particularly the casinos, many of which were forced to shutdown in Katrina’s aftermath. At least seven of these have already re-opened, and construction of 10 new ones is on the docket. A new state law that permits casinos to be built on dry land instead of being restricted to barges has led to an influx of cash from the billion dollar casino industry. A notable entrant into the casino business in Biloxi is the $1.3 billion Harrah’s-Jimmy buffet oceanfront casino property in Margaritaville.
Casino companies have purchased huge chunks of land in the city, totaling 175 acres, and the industry is expected to employ more than 30,000 casino staff in the coming months. All this competition is proving healthy for the casinos that are already operating in Biloxi – record revenues have been reported over the last 11 months.
Another factor that is bound to drive Biloxi’s real estate boom further is the current lack of housing for the city’s casino workers. Most of them are still housed in trailers provided by the FEMA. There is an immediate need for high quality housing for these people, and current demand far exceeds supply. More than 60 percent of casino workers live in rented properties. The one thing that’s for certain in the real estate is what when supply runs low and demand shoots up, rental prices can go nowhere, but up. That’s what is happening in Biloxi today. Already, rentals are being leased for 10 to 20 percent higher than their market values within a few days of being put on the market.
A range of economic stars are aligning in Biloxi’s favor to create a favorable investment climate. There is a steady construction boom propelled by the casino industry, and a huge demand for good housing with a low rate of supply. Investments in casinos are higher than ever, and there have been sufficient upgrades to transportation infrastructure. An investment in the Mississippi GO Zone makes more sense than ever.