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The original $700 million estimated cost of the casino resort on the beach in Biloxi is being revised "down, down," Harrah's officials said during a conference call Friday.
About $110 million has been invested in Margaritaville as of June 30, and the company anticipates another $40 million to $45 million will be spent through the remainder of the year.
Harrah's President Gary Loveman said they slowed construction of Margaritaville casino for a couple of reasons. "First, because business conditions in that market are very trying and new capacity is not exactly what that market needs in the short term."
Loveland said Harrah's also intends to refine the scope and the cost estimates for Margaritaville Casino "as carefully as possible to make sure that we build exactly what it is we think is prudent in that market. So we have slowed down the pace to regather ourselves" he said, to ensure Margaritaville "is appropriately sized and configured for the marketplace."
About a week before the July 22 announcement of the construction slowdown, Biloxi issued $13 million in plumbing and mechanical permits for Margaritaville Casino. All seemed to be going well with the project on Feb. 29, when Harrah's reported to the Securities and Exchange Commission construction was under way on the resort.
"We license the Margaritaville name from an entity affiliated with the singer/songwriter Jimmy Buffett," Harrah's reported to the SEC. "The project, which is expected to cost approximately $700 million, is expected to include approximately 75,000 square feet of casino space, 250,000 square feet of retail, a Margaritaville Restaurant, 420 new hotel rooms, and other amenities. We expect Simon Property Group, Inc. to be involved in developing and operating the retail space. We expect to complete the project in the spring of 2010."
Harrah's brought on Simon Property Group, the largest public real estate company in the United States. Now all mention of Margaritaville is gone from Simon's Web site, including the original announcement of the project.
Loveland said Harrah's considered the company's Horseshoe brand for the new Biloxi resort but, "we're very much of the view that Margaritaville is a better brand for that facility."
Since partnering with Harrah's to build Margaritaville Casino on Biloxi, Pascagoula-born Buffett teamed with Coastal Marina, which purchased Trump Marina in Atlantic City. They plan to turn that property into a Margaritaville casino resort.
To see more of The Sun Herald, or to subscribe to the newspaper, go to http://www.sunherald.com. Copyright (c) 2008, The Sun Herald, Biloxi, Miss. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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