Isle of Capri, citing delays, postpones Biloxi expansion

Matt Moore

Thursday, Jan. 6, 2000 | 9:54 a.m.

JACKSON, Miss. - Isle of Capri Casinos Inc. will postpone "indefinitely" plans to expand its operations in Biloxi.

The company said Wednesday the planned expansion was being delayed by bureaucratic hangups and by challenges to a lease arrangement it has with the city of Biloxi.

The casino had sought to build a 400-room hotel, new casino barge, parking garage and retail and restaurant operations on six acres at Point Cadet.

But the decision by the city to sublease the property to Isle of Capri sparked an outcry from critics who said the property needed to be used for the public, not a private company.

Another speculative casino developer, Point Cadet 2000, also filed suit against the city because a clause in the sublease given to Isle of Capri gave it veto power over any other commercial development at Point Cadet. The developers contended the clause effectively derailed their proposed mega-resort development in East Biloxi, despite the fact the group had no contract or commitment from the state College Board to use the property.

David Blount, a spokesman for the Secretary of State, said the conflict was a delicate thing.

"It's a complicated situation down there involving three different public bodies - the Secretary of the State, the Institutions of Higher Learning and the city of Biloxi," Blount said. "We have been attempting to work out an arrangement that protects the state's interest and we're going to continue to do that."

Point Cadet is owned by the College Board, but Biloxi controls it through a long-term lease through 2085.

Biloxi Mayor A.J. Holloway defended the Isle of Capri sublease, a financial agreement that would have brought the city additional revenue that could be used to buy land for public parks or reduce taxes.

The agreement signed by the city last year also has a two-year window permitting the state's J.L. Scott Marine Center to expand on the eastern section of the property leased by the city to Isle of Capri.

In a statement, John Gallaway, president and COO of Isle of Capri, said the expansion was postponed because of "delays we encountered and because of our need to optimize the utilization of our capital resources, we have determined that the Biloxi expansion will be postponed indefinitely."

Isle of Capri will also terminate its sublease with the city.

Isle of Capri chairman and CEO Bernard Goldstein said his company would continue to operate in Biloxi and expressed hope that the expansion might happen at another time.

"We regret that the Biloxi expansion had to be postponed; however, we remain committed to Mississippi, to our Biloxi property and the rest of our millennium expansion plan," he said in a statement. "We hope that at some point in the future we will be able to expand the Biloxi facility as originally planned."