As Mississippi caught national headlines with its "miraculous" economic recovery in the 1990s, the Gulf Coast region, anchored by the cities of Biloxi and Gulfport, has often been heralded as the economic engine of this renaissance.

From 1992 to 2000, more than $3.5 billion was invested in new development, adding more than 38,484 jobs to the economy. The Biloxi-Gulfport area is now home to more than 7,000 businesses and two of Mississippi's top five employers. The region continues to offer opportunities to developers and investors looking for new markets in the retail, housing, tourism, office and industrial sectors.

Industrial

Expansions, the clustering of suppliers to serve growing companies and movement into the call center sector highlight industrial activity in the Biloxi-Gulfport area.

DuPont recently completed a $25 million expansion and renovation of its titanium dioxide line at its plant located just west of Gulfport in Delisle, and supplier MG Industries recently located in the region, making a $33 million investment.

Oreck Manufacturing has expanded its Long Beach floor care products manufacturing plant, adding 203 jobs to this location. This expansion led to the recruitment of Puget Plastics, an injection-molding services supplier. Puget started construction on a 60,000-square-foot facility this fall and will ultimately employ 250 people.

Cingular Wireless opened a 700-person call center on the Mississippi Coast in August. The new facility is located in a former Wal-Mart building in neighboring Ocean Springs, just east of Biloxi.

Development officials, working to capitalize on the location of Nissan to Mississippi, have met with potential suppliers that could access the deep water Port of Gulfport and air cargo facilities at the Gulfport-Biloxi International Airport. Contacts have been made with a Brazilian automotive component warehouse and distribution facility and a Chilean polyurethane company during recent trade missions.

Suppliers to the growing gaming industry have also located in the region. Mikohn Gaming, International Gaming Technologies and Southern Linen Services have completed projects totaling more than $7.2 million.

Office

Overall occupancy levels in the Biloxi-Gulfport market are at 96 percent. Class A median rents have rolled to $15.50 per square foot this year on a relatively small inventory centered in Gulfport. New construction of four- to five-story, 100,000-square-foot or larger office buildings is projected to meet new market demand. The Class B market is virtually at capacity with a 99.7 percent occupancy rate.

New office developments in 2000 and 2001 have been primarily centered in downtown Gulfport along Pass Road, a major east-west artery, or near the growing Gulfport-Biloxi International Airport.

In downtown Gulfport, the historic Gryder Building was recently restored by The Hyneman Company for retail and office operations. Several other buildings are undergoing renovations in anticipation of the opening of the new Federal Courthouse in 2003.

Central Park, a 6-acre office development on Pass Road opened in early 2001 to serve a mixture of medical and office clients. Coldwell Banker Alfonso Realty is marketing the property. A new airport office park, marketed by the Sawyer Insurance Group, has leased three two-story office complexes across the street from the Gulfport-Biloxi International Airport and has additional land for build-to-suits.

Gateway Plaza, a new 32,424-square-foot office complex north of Interstate 10 in the growing Orange Grove area, is under construction. The project is part of a 7.5-acre mixed-use development that will include an 80-room hotel.

Multifamily

To meet the demand of new residents, seasonal visitors and retirees, the Biloxi-Gulfport area has experienced growth in the multifamily, condominium and single-family sectors.

On the multifamily front, occupancy rates remained steady at 93 percent on a base of 8,559 units, despite the addition of more than 600 units in 2000 and 2001. Rents fell by 2 percent in the Biloxi-Gulfport area with the new supply. Rent on a two-bedroom, two-bath apartment averages $600 per month. With a large service industry and high mobility rates of the military population, the demand for these units remains high.

Condominiums, a prominent product in most beach resort areas, emerged strongly in 2001 with the announcement of several new projects. Beau View Towers, a 480-unit project on Beach Boulevard in Biloxi near Edgewater Mall, is being developed by Richard Landry. The Mitchell Company of Mobile, Alabama, is working on The Legacy, a 200-unit upscale complex located on Beach Boulevard in Gulfport. Smaller townhome-style products have opened in the bedroom community of Long Beach to service snowbirds and the growing market of retirees.

R.S. Siegel & Associates predicts demand for new housing between now and 2004 will be 2,969 units annually - 2,629 in new sales housing, 340 in new rental units. These levels represent a slight decline from the previous 4-year period from 1997 to 2000; however, the permit levels are higher than those recorded from 1992 to 1996.

Retail

Since 1995, sales within the Biloxi-Gulfport-Pascagoula metropolitan statistical area (MSA) have doubled to $4.9 billion. The combination of new residents and a strong tourism industry spurred the addition of 1.3 million square feet of retail space in 1999 and 2000. The area now has 10 million square feet of retail space with an overall occupancy of 91.6 percent. Class A occupancy rates are near capacity at 97.3 percent, while mall occupancies are at 96 percent. Class A rents average $12 per square foot.

The CrossRoads Center, located at I-10 and Highway 49 in Gulfport, continues to enjoy new tenants. The over 600,000-square-foot power center, which was developed by Dave Berndt in 1998, currently boasts a 90 percent occupancy rate and is the dominant retail power center for the region. Stirling Properties Inc.'s Biloxi office is the exclusive marketing agent for the center. Current tenants include Barnes & Noble, Albertsons, Office Depot, Circuit City, TJ Maxx, Old Navy, Goody's Family Clothing, Service Merchandise, Kirschman, PetsMart, Academy Sports and a 16-screen, stadium seating CineMark theater. New leases have recently been signed for the second O'Charley's restaurant located in South Mississippi as well as the development and construction of a Cracker Barrel restaurant. Stirling Properties continues to work on the expansion of Phase II, which will encompass approximately 180,000 square feet of retail, as well as The Fashion Collections at CrossRoads, which will encompass 40,000 square feet of upscale womens ready-to-wear fashion retailers and other regional boutique stores. Upon completion, CrossRoads Center will encompass approximately 1 million square feet.

Crossroads has complimented the tenant mix at the Prime Outlets at Gulfport, located just south of the intersection. Banana Republic, Coach, Polo, Tommy Hilfiger and several other brand names opened stores at the outlet mall in 2001.

Two other developments of note are underway at the intersection of Interstates 10 and 110 in Biloxi. Lakeview Village, a 96-acre development by Encore Enterprises, is anchored by a new Super Wal-Mart and Lowe's Home Improvement Warehouse. A third big box store to be announced will compliment the smaller strip centers, restaurants and hotels in the development. A $10 million, 12-screen cinema complex is planned for Phase II, with eight to 10 restaurant sites available. Goldcoast Plaza, planned for the southwest quadrant of the interchange, will feature 500,000 square feet of additional retail space. Peyton Cottrell is developing the project and the Woodmont Company is marketing it.

Stirling Properties is also in the process of redeveloping the former Howard Shopping Center located on Bienville Boulevard and Hanley Road in the bedroom community of Ocean Springs, Mississippi. This market continues to be one of the highest per capita income municipalities in the state of Mississippi. Current plans are to re-brand the center and rename it The Bienville Place. The approximately 46,000-square-foot community center will be anchored by Big Lots, Family Dollar, an 11,000-square-foot Tuesday Morning, and additional local shop space.

Tourism

Since the advent of gaming in 1992, the region's hotel inventory has grown to more than 17,000 units. An estimated 11 million tourists now visit the region annually. With 12 casinos and revenues in excess of $1 billion annually, the Biloxi-Gulfport market is one of the top five gaming markets in the United States. Since the opening of the $680 million Beau Rivage in 1999, the region has been growing more rapidly, especially with the opening of new fly-in markets.

While a handful of gaming sites exist, no new casino construction is anticipated for at least 18 to 24 months. Instead, the focus will be on non-gaming related amenities. Two new upscale, daily fee golf courses are in development: a 27-hole Arnold Palmer course north of Gulfport and an 18-hole golf course north of Ocean Springs by Tracy May and Texas developer William Mason. Developers are also evaluating sites in D'Iberville and Long Beach for a water park and exploring sites for an IMAX theater.

Transportation improvement projects in Biloxi along the peninsula on Bayview Avenue and Caillavet Streets will open up room for additional development on Biloxi's Back Bay and ease traffic on Beach Boulevard.

Brynn W. Joachim is the commercial development manager for the Harrison County Development Commission in Gulfport, Mississippi.


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