The First Ones In.

Katrina didn’t slow down business development, local business leaders say. It’s the economy that really hurt. When investors couldn’t get money from lenders, development just stopped. But are things starting to change?

story by Dan Oshinsky / photos by Dan Oshinsky
published September 14, 2010

I ask Hank Smith when we’ll know the coast is coming back. If the coast is going to — and Smith thinks it will, and so does just about anyone else who still lives here, because they’d have bolted years ago if they didn’t — then there are going to be signs. They’ll be economic indicators. I ask him, simply, What are they?, but Smith instead gives me a look and a who.

We are, he says.

What Smith is trying to tell me is that his industry tends to be a good gauge for economic development. Smith is a second-generation architect. His father, Harry Baker Smith, Sr., started this architecture firm in the 1960s. Then Hank went off to architecture school in New Orleans, and traveled the country building things, and now he’s back on the coast. His daddy’s firm, HSBA, was handed down to him. Hank added some Roman numerals on the end, and now HSBA II is all his, with offices in the Big Easy and Biloxi.

When the economy is about to go sour, developers and builders stop paying Smith to design new buildings. But when the economy is about to bounce back, Smith says he sees a spike in business.

“We’re the first ones in,” he says.

As far as the coast goes, Smith has some good news to report. Last month, the Biloxi city council approved a Smith-designed project, called Porter Place, to be built just steps from the Gulf of Mexico, Biloxi’s historic lighthouse and the city’s new multi-million visitor’s center. It’s $34 million of investment on Biloxi’s east side, and city is very encouraged by that news.

There are other positive signs for Biloxi, says Jerry Creel, the director of community development for the city. When someone comes to the city with a plan, it’s Creel’s job to try to make it happen.

Right now, he’s looking at $250 million in construction projects in the works. The city opened a pricey new convention center just down Beach Boulevard, and several hotels may soon break ground.

All of this fits within the city’s Vision 2020 Comprehensive Plan, a dream for the city that was initially published in 1996, and that Creel helped re-write after Hurricane Katrina. It took three years to put the new version together, and Creel says it was heavily influenced by suggestions from citizens at post-Katrina town hall forums. The plan outlines a Biloxi beyond gaming, one that’s walkable and bikeable, but one that fully utilizes the drawing power of the Gulf of Mexico.

“It’s going to help us get to that tourist resort type of destination that we’ve been discussing for years. but, you know, it was kind of being done hodgepodge in the past,” he says. “Now we have the ability to really get it done.”

Local entrepreneurs are just as fearful, he says, of an economic climate that’s here to stay. “When you talk to the businesses, they say, ‘We’re hanging in here,’” Whitt says.

But the plan only works in a steady economy. Understand this: Katrina didn’t slow down business development, both Creel and Smith say. Investors had so much money in Biloxi properties that construction continued immediately after the storm. But the recession did force investors to pull money out of the market, and now banks are unwilling to lend at pre-recession levels. That’s the main factor slowing down development on the coast, they say.

“It’s not because of want or desire,” Smith says. “It’s because of money. Nobody is investing in these properties because they’re not sure where the economy is going.”

That holds true even for massive properties like Jimmy Buffett’s Margaritaville, the $700 million project that Harrah’s Entertainment has on hold. Creel says he has occasional conversation with the Harrah’s team. They’re not sure when they’ll return to the Biloxi property, though Creel says he hasn’t given up on that casino.

“I feel like if the economy gets this much better,” says Creel, holding up his thumb and pointer finger a half-inch apart, “and if financing looses up this much, you’re going to see someone come in and take that over.”

But everyone’s facing that problem. A team of 20 country music stars, including George Jones, came down to Biloxi earlier this year to talk to Creel about the vacant west Biloxi property that used to be the Broadwater Golf Club. They wanted to turn it into something like Branson, Mo., with a theme park and housing. But Creel says the financing isn’t there to make it happen.

¶ ¶ ¶

Porter Place, home to a massive new construction project

(At top) Stephen Whitt. (Above) The land that will become the home of Porter Place, a few paces away from the Gulf of Mexico.

¶ ¶ ¶

Financing is even tougher to find for locals not quite on the level of country music superstardom. Small businesses are especially sluggish this year, says Stephen Whitt, executive director of Biloxi’s Innovation Center, a business incubator that Harrison County helped found 20 years ago. The center brings in budding entrepreneurs and offers classes and aid to help them build a business from scratch. Currently, Whitt has 40 small businesses that rent office space inside the center.

When Whitt arrived in Biloxi three years ago, he says the businesses at the center were doing well. When the economy fell, and when developers were pulling their money out of Biloxi, Whitt says his entrepreneurs were  still reporting steady sales. But the Deepwater Horizon blowout proved one disaster too many for Biloxi’s small businesses.

“I would say that we were on a damn good track until this oil spill,” he says.

He says two businesses in his incubator failed directly because of the spill. Both were businesses that dealt in furniture — not seafood, or tourism or anything even remotely water-related. One saw sales slip to zero for two straight months. Whitt says that the spill has scared consumers in all industries, and scared consumers aren’t making luxury purchases.

His entrepreneurs are just as fearful, he says, of an economic climate that’s here indefinitely.

“When you talk to the businesses in here, they say, ‘We’re hanging in here,'” he says.

But there is one area on the coast where business is growing: D’Iberville, just to the north of Biloxi. The city was incorporated in 1988 by a group of citizens that didn’t want to be a part of Biloxi anymore. After Katrina, the city saw significant growth, especially in the multi-million dollar Promenade shopping center, now home to several major chain stores, including Target, Walmart, Lowe’s and Best Buy.

“D’Iberville is just poised for growth,” says Hank Rogers, D’Iberville’s building official. He’s been pouring through plans for a new casino — the CanCan, which would be the city’s first gaming establishment — and construction on what the city is calling the French Village, which they hope will boost local businesses along the Back Bay. If it’s all built, it could turn the city into the gateway to the Gulf Coast.

Rogers also knows, though, that “a city can’t just survive on supermarkets.” D’Iberville’s expansion depends on residents returning to south Mississippi — and like everyone else on the coast, those residents are waiting for the economy to improve just a little more before they decide to invest again in housing near the Gulf.

¶ ¶ ¶

The D'Iberville Warriors break the huddle on a Friday nigh at Warrior Stadium.

A Friday night at D’Iberville High School’s Warrior Stadium.

¶ ¶ ¶

Just south of the Back Bay, Biloxi officials know that they need to do their part to rebuild their business community. Getting development moving means having projects in the works. Creel points to the Porter Place development as one project the city can be proud of.

Porter Place was developed by Gulf Coast Investment Developers, with whom HSBA II shares offices space in downtown Biloxi. The 3.8-acre project will feature a Holiday Inn Express, a second hotel to be named and thousands of square feet for retail, offices and condominiums. Most of the property is already financed; a second portion still needs an extra partner, HSBA II’s Smith says. But he hopes that phase one of the property — which includes the Holiday Inn Express — will be finished in the next 14 months.

The new development has even stirred interest from some of Biloxi’s longest-tenured residents. Roland Weeks, the former publisher of the Gulfport-based Sun Herald newspaper, has watched this community grow for over four decades. He says he’s seen his fair share of government folly over the years, and Biloxi has often suffered from it. Since Katrina, though, he think he’s starting to see some progress.

“We have been doing a lot of dreaming and just wasting our time with a lot of dreams,” he says. “But lately, people with real ability have been carrying these dreams beyond.” ❑