Wednesday, September 06, 2006

At Johnny White's Sports Bar, a dingy French Quarter saloon at the corner of
Bourbon Street and Orleans Avenue, bartender Peter Gregory is convinced that
casinos, especially Harrah's New Orleans, are helping the city recover from
the aftermath of Hurricane Katrina. Money won, he said, fuels the local
economy. "We've had a few customers come in the bar and buy a round of
drinks for the house because they won $1,500 or so at Harrah's," Gregory
said. "I'm just guessing, but it seems to me Harrah's reopening has helped
the French Quarter." Harrah's New Orleans, a 115,000-square-foot casino at
the end of Canal Street, is Louisiana's largest casino and the state's
biggest generator of gaming revenue, accounting for close to 15 percent of
the overall total. It is also one of the few places along Canal Street that
was relatively untouched by the hurricane-induced floods that decimated
parts of the city on Aug. 29, 2005. The French Quarter was also not affected
by the flooding. Much of New Orleans remains in flux a year after Katrina.
Housing is still a challenge; more than half of the city's residents whose
homes were destroyed have fled the area. Rebuilding is at a crawl and many
of the flooded-out homes remain, decaying and overcome by weeds. On Canal
Street, in the heart of downtown, hotels, restaurants, retail shops and
other businesses are struggling to recover. The Ritz-Carlton won't reopen
until December. The tony Shops at Canal Place, across from Harrah's,
reopened earlier this year, but the mall's anchor tenant, Saks Fifth Avenue,
won't be ready until Nov. 17.
Harrah's New Orleans reopened in February during Mardi Gras and the casino
is already reporting revenue that exceeds its pre-Katrina earnings. In July,
Harrah's had a gaming win of $31.6 million, 7 percent higher than July 2005.

Two other New Orleans casinos, Pinnacle Entertainment's Boomtown and Boyd
Gaming Corp.'s Treasure Chest, have also been reporting double-digit
increases in gaming revenue since reopening within seven weeks of the storm
hitting.

Overall, the New Orleans riverboat casinos are up almost 33 percent in
gaming win from 2005.

But Harrah's New Orleans, adjacent to the French Quarter, has seemingly
helped bring back the tourists.

Moe Bader, who manages the Oceana Louisiana Grill on Conti Street in the
French Quarter, said business seemed to pick up once Harrah's returned. His
restaurant reopened two weeks after Katrina to sparse crowds.

Harrah's executives said the casino's reopening was advertised to a regional
audience and its database of more than 40 million customers.

"They told everyone that they were reopened, and that was good for all of
New Orleans," Bader said. "It's just like when the casinos reopened in
Mississippi. That helped bring people to the Gulf Coast. So, it would seem
Harrah's helped bring people back here."

Tourists have seemingly rejoined the locals populating the businesses in the
French Quarter, albeit at a much slower clip than before the storm.

On a steamy Sunday evening just before the hurricane's anniversary, music --
the sounds of jazz, blues, zydeco -- flowed out to Bourbon Street from the
many clubs and bars. The souvenir and specialty shops had returned for
business along with the walk-up daiquiri bars and triple-X-rated burlesque
clubs.

"It's still pretty slow, even for summer," said Raven, who doesn't use a
last name, a sales person at Marie Laveraur's House of Voodoo on Bourbon
Street.

The hurricane spawned new, somewhat questionable businesses. French Quarter
shops sell T-shirts emblazoned with vulgarities directed toward the Federal
Emergency Management Agency. Other shirts make fun of the highly publicized
looting that took place after the flooding and others insult the New Orleans
Police Department.

One touring company sells bus tours to the hurricane damage.

"Yeah, that's just what I want to do," an elderly male tourist commented to
his wife while looking at the company's brochure.

Some of the French Quarter's best-known restaurants are still on limited
schedules. K-Paul's Louisiana Kitchen on Chartres Street is only open from
5:30 to

9:30 p.m., Monday through Saturday; Galatore's on Bourbon Street reopened to
an abbreviated schedule on New Year's Day and returned to prehurricane hours
Friday.

Doc Lewis, a street performer playing his trombone for tips in front of
Brennan's on Royal Street, said the city is slowly coming back.

"Day by day, it seems like there are few more people," Lewis said. "It takes
time, man, but it's New Orleans. People want to come here."

That's a statement Anthony Sanfilippo is banking on. As president of
Harrah's Central Division, he's responsible for Harrah's New Orleans and the
company's other properties in the Gulf Coast.

While the monthly revenue the casino has been reporting are encouraging, the
opening this month of a 450-room, 26-story Harrah's hotel, on Poydras Street
across from the casino, will signal a second rebirth.

At a cost of $150 million, the project also includes shops and restaurants
along Fulton Street, which was closed to vehicle traffic, creating a Bourbon
Street-style pedestrian path. Large statues of jazz musicians are the
centerpiece of the walkway. A Chef Todd English restaurant, Riche, will open
in the fall.

Construction began before the hurricane, but the storm set back the timeline
by almost a year.

The casino reopened with 1,600 employees and had increased to 2,300 workers
by August.

"New Orleans is slowly coming back," Sanfilippo said. "As more hotel rooms
open, we think the convention business will return, and that's good for
everybody in question."

At Pat O'Brien's Bar on St. Peter Street, a French Quarter institution since
the 1700s and famous for its potent drinks, manager Sid Seruntine thinks the
convention business is the key to reviving tourism.

Seruntine, who has managed the open-air bar since 1991, said Harrah's has
helped bring customers back to the city.

"The convention traffic is what really drives customers," Seruntine said.
"Once more of the hotels reopen, they'll need workers and that's the biggest
problem, because there's not enough housing in the city."

Casinos were the first entertainment venues to reopen in posthurricane New
Orleans, but despite the increases in gaming revenue, Sanfilippo doesn't
think Harrah's will see additional competition.

A floating casino operated by Columbia Sussex Corp. was destroyed in the
storm. The company is rebuilding the boat but moving the gaming license
south and out of New Orleans.

Despite a push by some local groups to get Pinnacle Entertainment to move
one of its recently acquired casino licenses from Lake Charles in western
Louisiana to New Orleans, Sanfilippo doesn't think it will happen.

"If the business was there, don't you think Columbia Sussex would have kept
their boat in New Orleans?" Sanfilippo said. "For now, I think the New
Orleans casino market is at capacity."