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Biloxi seeks $600,000 from state for Point Cadet funds

By Adam Ganucheau

Mississippi Today

City of Biloxi officials are seeking more than $600,000 they say the state owes them and are asking a judge to strike down a 2016 law that swept $79 million of special funds into a state reserve.

A court motion, filed by the city on May 5 in Harrison County Chancery Court, says several state officials knowingly violated a 2002 settlement between the Secretary of State’s office and the city of Biloxi by sweeping a special fund that was designed to send monthly rent payments from the Golden Nugget Hotel & Casino to the city.

Because that special fund, held by the Secretary of State, was swept into the state’s multi-million dollar Capital Expense Fund through 2016’s House Bill 878, the city said it has not received $606,000 in payments agreed upon in the 2002 settlement.

“A letter from the Secretary of State’s office clearly stated that moving this money, which was Biloxi money, was a violation of a court agreement,” Biloxi Mayor FoFo Gilich told Mississippi Today. “There really seem to be a number of smoking guns here, but the underlying fact is that city of Biloxi rent money was moved into the state’s Capital Expense Fund.”

The city’s motion calls into question actions by several state officials, including Gov. Phil Bryant, Secretary of State Delbert Hosemann, his chief of staff Doug Davis, Senate Appropriations Chairman Buck Clarke and Herb Frierson, former House Appropriations chairman and current Department of Revenue commissioner. Here is a timeline of the events.

Last week’s court filing is the latest development in a years-long dispute about the land on Point Cadet in Biloxi. In small increments between 1985-1987, the city of Biloxi purchased a total of four acres on Point Cadet. Developers leased the land from the city in 1992 and built the Isle of Capri casino there. Golden Nugget has since taken over that land lease.

In 2002, the Secretary of State claimed that land, which backs up to the Gulf of Mexico, was part of the Public Tidelands Trust, a state fund established in 1989 which takes money mainly from casino leases — about $10 million per year — and sends it to the Legislature, which then awards annual grants to Gulf Coast towns for the upkeep and maintenance of beaches, piers and other special projects.

The Secretary of State, the city of Biloxi and Institutes for Higher Learning (for the University of Southern Mississippi Gulf Coast campus) settled the dispute over the land in a 2002 court settlement. The terms of that settlement directed the casino’s rent money flowed straight into a Secretary of State account, which was then split three ways between the entities.