by Keith Burton  GCN 7/28/10    Updated 7/29/10

Gulfport's plan to develop a new casino and other retail businesses at the city's harbor and at Jones Park may have to be put on hold due to a decision by the Secretary of State to require a Tidelands lease.

The state has begun to act on a convoluted process to enforce its ownership of lands that has long been ignored regarding property at the Gulfport harbor and Jones Park

Secretary of State Delbert Hosemann has notified the city that his office will require a state Tidelands lease for the harbor and Jones Park for the first time. This is because the state has decided to finally enforce its ownership of filled-in bottom land properties as it does with other shoreline properties including the casinos in Biloxi. The state also has a lease with the City of Biloxi for state property at Point Cadet. The state legally owns all shoreline property defined from when the state came into the union. This includes all filled in lands even if it has been held by other entities and individuals for years.

Earlier this summer, Hosemann's office sent the city the paperwork on the Tideland's lease to begin the process. But as of this time, the city has not acted on the requirement. Instead, the city has been quietly moving forward on a city-planned effort to develop property owned by Marine Life and Misco Marine to locate a gambling boat in the harbor, just south of the Coast Guard station and north of the Gulfport Yacht Club.

The Secretary of State's tidelands lease is a major change for the ownership of the harbor and Jones park. State law and court rulings all the way to the U.S. Supreme Court have confirmed state ownership of the lands that include the area of the city's long-time harbor and park. Most people have presumed that the city owned the area where Jones Park and the small craft harbor sit, but that is not the case.

This issue was first reported by GCN three years ago, and at the time the report was criticized by Gulfport city officials.

In the lease sent to the city, the ownership of the property and all of its activities are under the control of the state, and the city becomes a lessee to property. The city would also make a lease payment to the state as part of the agreement. At this time, the amount of the payment for the city to lease the property is to be negotiated based on amenities at the harbor and Jones park.

More importantly, the lease prohibits the city from establishing a casino within the property and that any such casino would have to be negotiated with the state with all proceeds from such lease going toward the state and not the city.

(Page 6 of Lease Document) "LESSOR and LESSEE agree that any lease to a gaming operation or casino to locate on the LEASE PREMISES or other Public Trust Lands at the Gulfport Small Craft Harbor location shall, in addition to all other determinations or permissions of other agencies as required by law, require a first party lease between the casino entity and this LESSOR. The LESSOR, in its sole discretion, shall decide whether or not a casino lease will be offered. The LESSOR shall retain one hundred percent (100%) of the revenues from any casino lease," reads a section of the document.)

This provision would seem to throw a huge hurdle into the the city's current ongoing plan to bring a casino boat to the harbor. Just this past week, Gulfport city officials successfully lobbied for a zoning change for the former Marine Life and Misco Marine property that would allow the proposed casino to locate at the site. The city doesn't own the property even from the previous owners and is seeking a Mississippi Development Authority grant to buy the Marine Life and Misco Marine property.

This past March 26, Rotate Black, Inc. (OTCBB:ROBK), a Michigan-based gaming resort development and management group, reported that it had signed a letter of intent to lease and develop six acres at the former location of Marine Life Aquarium and Misco Marine in Gulfport. The company plans to eventually dock a 240 foot by 65 foot gaming vessel at the site.

GCN contacted the Secretary of State and city officials about the Tidelands lease issue. A spokesman for Hosemann said that the secretary "doesn't comment on leases in negotiations."

Gulfport city spokesman Ryan LaFontaine acknowledged to GCN June 21 that the lease was before the city to consider, but he indicated little knowledge about the issue. Calls later made to Mayor George Schloegel and City Administrator John Kelly were not returned.

The lease issue was placed on the city council's agenda June 22, but the issue was withdrawn. However, the city's planning commission later acted on a connected zoning issue. The property the city wanted for the casino was neither zoned properly nor large enough. According to a report in The Sun Herald:

"The Gulfport Planning Commission recommends the developer of a proposed casino near Jones Park get the 6 acres it has leased on the waterfront rezoned and that the casino ordinance be rewritten to require at least 7 acres of land to develop a casino," reads the Sun Herald on July 23.

The newspaper reported that the new casino development was opposed by representatives of the Island View Casino. Island View leases its property from the Mississippi State Port Authority, which is also state property. Casino representatives objected because the city was the entity asking for the zoning change rather than the property "owners" Mississippi Coast Marine (Misco) and Marine Life.  Both Misco Marine and Marine Life acquired their property before the state acted on its ownership of the land. But both may now be required to apply for a lease from the state.

Meanwhile, the Tidelands lease may impact on other issues. As the state is the actual owner of the harbor and Jones Park, it would be the state that has final decision responsibility for all future development and  funds for the area. Perhaps even funds being used for the existing harbor improvements and repairs. GCN sought an answer to those issues from the Secretary of State's office but has yet to receive a response.

At the present time, a considerable amount of work and various approvals has to be accomplished to see the new casino at the harbor. The site itself is completely in disorder, the harbor repairs are unfinished and even the road to the property is torn up. More on this story as it develops.

Update July 29, 2010

 Mayor George Schloegel called early Thursday morning after the story was published to respond. Schloegel said that the city is no longer interested in acquiring the Marine Life and Misco Marine property. "That was something we were looking at earlier this year," Schoegel said. Schloegel also said that the city is negotiating with the Secretary of State office, but said he disputes some of the  boundary lines in the lease document. He said that Hancock County Cinque Bambini case, which defined the state-controlled shoreline property, (See earlier story) had not been litigated for Gulfport and probably would take years to decide in court. Never-the-less, he said that he is "just trying to get the harbor open in the first quarter of 2011," and the city is negotiating with the Secretary of State. Schloegel declined to offer any details of the negotiations. He said that he was leaving the negotiations to other staff members. The harbor was severely damaged in the 2005 from hurricane Katrina and is undergoing repairs and improvements.
 

More Information:

Gulfport Harbor/Jones Park Tidelands Lease - .pdf file

Casino Developer Takes Steps for Approval - Sun Herald

Rotate Black Completes Acquisition of Gaming Vessel "The Big Easy" - globenewswire.com

Will Casino Boat Plan Stay Afloat? - gulflive.com

Gulfport Jones Park Ownership Questions - GCN 3/22/07

Cinque Bambini

Supreme Court Finds for Mississippi's Tidelands: Phillips Petroleum Co. v. Mississippi

108 S. Ct. 791 (1988), 98 L. Ed. 2d 877. The U.S. Supreme Court in this important tidelands decision ruled that all tidelands in Mississippi, and not only shorelands to navigable waters, are subject to the public trust interests. The oil company and others argued that only shorelands to navigable waters are subject to public, rather than private, ownership. The court found for the state that the public trust had attached to these lands under the sovereignty of the state as vested upon entry into the Union. The Court reached back to, e.g., the seminal public decision in Shively v. Bowlby, 152 U.S. 1 (1894) (Oregon's title to submerged lands in the Columbia River mouth near Astoria, Or.) to confirm Mississippi's interest. The decision will affect more than 9 million acres of coastal wetlands. 98 L. Ed. 2d at 897 (dissenting opinion of O'Conner et al.). For the opinion of the Mississippi Supreme Court see Cinque Bambini Partnership v. Mississippi, 491 So.2d 508 (Miss. 1986).