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Best of Liz Benston

Gaming Guru

Liz Benston

A Race to Refloat Gulf Casinos

25 October 2005

Some experts thought it would take years for the Gulf Coast's casino industry to rebuild after being flattened by Hurricane Katrina.

Beau Rivage's recently appointed president, George Corchis, has other plans. Corchis, on the job for just a month, wants to reopen the area's most expensive property by the end of next summer.

While other casino companies in the region have pledged to open temporary casinos in lobbies or ballrooms by early next year, Corchis is overseeing a massive rebuilding effort by MGM Mirage to create an improved resort from the ground up.

"We're committed to a first-class facility," Corchis said. "We run world-class resorts. That's our business model."

Corchis, who formerly managed casinos for Jack Binion's Horseshoe GamingHolding Corp., said it was a difficult decision to leave the company where he had spent the past 11 years.

"I've learned so much with Binion and Horseshoe. I left teams of people I helped cultivate. I left great executives, and I left great people," he said.

Corchis most recently worked for Harrah's Entertainment, managing the Horseshoe in Tunica, Miss., after Binion sold his company to Harrah's last year.

Corchis has the distinction of being the only Horseshoe executive to hold key positions at all three of Binion's casinos in Indiana, Mississippi and Louisiana.

"This was more compelling to me," he said of his decision to join MGM Mirage. "It offered me additional fulfillment that keeps me going."

Corchis, 36, is one of the youngest top casino executives working in Mississippi -- the country's third largest nontribal gaming market behind Nevada and Atlantic City.

Besides the daunting task of rebuilding, Corchis and his company are faced with insurance claims in the hundreds of millions of dollars -- an industry record.

"When we walked in there after the fact, there was just mud everywhere," he said. "Some of the casino washed away to the gulf. This was an absolute disaster what happened down here."

Corchis said MGM Mirage is working "feverishly" to rebuild the property from the ground up. The company is creating a new master plan for the property that will include re-creating some elements and adding new and improved features. The company expects to spend in the hundreds of millions of dollars.

"I'm extremely excited," Corchis said of the building process. "I had one of the best weeks of my career last week."

Corchis declined to reveal specifics of the new master plan, saying they weren't final.

"We have a clean sheet of paper to start rebuilding," he said.

More than 500 people are working at the building site each day, with much of the demolition work and debris removal already complete.

Hundreds of the property's 3,400 employees also have been put to work for the company's vendors and building contractors as well as for sister properties in Mississippi, Detroit and Las Vegas.

Mississippi Gov. Haley Barbour signed a bill into law last week allowing Gulf Coast casinos to build up to 800 feet inland. Barbour joined industry supporters to lobby for the change, saying casinos would be able to build sturdier structures on land and obtain insurance against future storms.

Mississippi casinos, which pay 12 percent of the money won from gamblers to the state, won't have to pay higher taxes to help pay for the rebuilding effort.

Casinos that move inland will continue to pay into a "tidelands fund," however. Gulf casinos had paid leases to sit on publicly owned tidelands. Casinos such as the Beau Rivage that remain on the water will keep their existing leases.

Casinos are expected to be among the businesses that will benefit from federal tax breaks for creating jobs as well as rebuilding their properties.

Corchis said he was pleased with the outcome of Mississippi's special legislative session, which resulted in several bills to help rebuild after hurricanes Katrina and Rita.

"I think this is a tremendous opportunity for the future," he said.

The Beau Rivage intends to rebuild on the shoreline instead of moving ashore as some of the area's 13 damaged casinos have proposed.

"We are happy with how the casino fared in the hurricane," Corchis said. "A big part of our infrastructure is still standing."

Designed and opened by Steve Wynn in 1999, the property's $700 million price tag was unheard of for a casino outside of Las Vegas. Sometimes called a "mini Bellagio" after its sister resort in Las Vegas, its hotel tower was one of the few tall buildings still standing after Katrina.

The damage inside was extensive, with the casino, restaurants and shops destroyed.

A powerful tidal surge hit the casino, knocking out interior walls and leaving nothing more than a ceiling and a floor. Many of the slot machines and other contents of the casino washed out to sea. Waves as high as 30 feet hit the casino ceiling.

Unlike most other Gulf Coast casinos that were simply built atop floating barges, the Beau Rivage's casino had a "semisubmersible" structure that is designed to withstand hurricane-force winds and water. Similar to an oil derrick, the casino sits on pilings that plunge deep into the ground. The force of gravity was enough to keep the infrastructure intact even as the walls and interior were destroyed, Corchis said.

The lower floor of the hotel, which was built on land to seamlessly merge with the above-water casino, also was damaged. But the exterior is in "very good shape," he said.

"We consider ourselves very, very fortunate," Corchis said. While other casino barges were flung ashore, causing further damage, "our entire structure stayed right there."

The Beau Rivage, which drew customers from across the South including Florida, Georgia and Louisiana, expects some heated competition from other casinos that will soon be sprouting from the muck.

"I know the great folks over at Harrah's, and I know we'll have great competition," Corchis said. "The better the competition is, the better we can become.

"It will enhance our ability to operate as leaders and help the Gulf Coast become a better casino resort destination."

A Race to Refloat Gulf Casinos is republished from