Investments Property - Go Zone Investment Real Estate


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Mississippi Gulf Coast “GO Zone” – It’s Not JUST Casinos! Industry experts and local officials believe that Katrina is only one of the factors that should lead to an excellent real estate opportunity in the years to come. Other factors are the continuing expansion of the Casinos, jobs created by the expanding defense industry and the migration of baby boomers to lower cost warm weather spots near the Gulf. Most experts agree that the real estate boom has only started and may run for the next 3 to 5 years. As an added incentive to investors, the State of Mississippi is offering significant “GO Zone” tax incentives to invest in the areas that were most impacted. The combination of a high growth area, with the opportunity for appreciation and added “Go Zone” tax incentives, make investing in Mississippi an attractive alternative for real estate investors. According to the OFHEO.gov House Price Index report of Quarter 1, 2007, Biloxi-Gulfport was the sixth greatest appreciating market in the country for year over year appreciation, appreciating at 16%. The Mississippi Gulf Coast “Go Zone” story has been dominated by the massive influx of the Gaming and Hospitality industry. But that is only part of the story. Aerospace & Defense South Mississippi's aerospace infrastructure includes federal and university research units that focus on propulsion, remote sensing, visualization and scientific computing. It also has aerospace parks, military aviation bases, technology transfer offices and test ranges. Let’s take a look at the short list of companies in the “Go Zone” that populate the Mississippi Gulf Coast Aerospace Corridor; BAE Systems, Pratt & Whitney, Rocketdyne Rocket Engine Assembly Facility, Applied Technologies, General Dynamics, ITT Industries Inc., Lockheed Martin, Northrop Grumman, Pratt & Whitney, Rolls-Royce Naval Marine Inc. South Mississippi has leading-edge research and practical experience with composites that go into aircraft; it has the plants that use composites to make fixed-wing and rotary unmanned aircraft; it builds the next generation of warships that will launch robot aircraft; it has a weapons maker working with lasers; it has the satellite makers whose high-flying craft and remote sensors are key to command and control as well as surveillance; it has the companies that build the engines that power aircraft and spacecraft; it has the engine testing facilities. As one Defense Company executive said: "I think you're finding our futures really are coming together here in quite an unusual way." With a high quality of life and low cost of doing business, the Mississippi Gulf Coast has been a contender for some of the most high-profile projects in the aerospace industry. And it's now even more appealing, thanks to the availability of major “Go Zone” incentives designed to help companies that want to invest in the future of Mississippi and the Gulf Coast region . NASA Stennis Space Center NASA’s Stennis Space Center is a significant source of employment and income in the local area. If SSC had not been in operation in 2006, considering both direct and indirect effects, a very conservative estimate of reduction in employment for the local area would be more than 19,500 jobs. Kessler Air Force Base & Medical Center Just down the road 30 minutes and you will find Kessler Air Force Base. Kessler AFB is the leading training center in high tech surveillance. Kessler currently employs 11,200 people, including nearly 7,600 military positions. In addition, the base's presence created more than 3,500 local and contract jobs. As one of the Air Force's major training centers, on any given day more than 3,500 students train at Kessler in more than 460 courses in technical subjects such as communication-electronics, medical, personnel, airfield management, weather forecasting and air traffic control. Kessler Medical Center, the second largest Air Force medical center, has made great strides in rebounding from the damage inflicted by Hurricane Katrina. The facility is rapidly returning to its pre-Katrina status, both from the standpoint of the physical rebuilding as well as service levels. In early 2006, the 81st MDG provides medical care with a staff of more than 700 people, less than one-third of the more than 2,220 assigned Aug. 28, 2005. By the time the graduate medical education programs returned in July 2007, the staff increased to more than 1,770. Air Force, Air Education and Training Command officials have allocated more than $138 million to pay for repairs to the medical center and replace Katrina losses with new state-of-the-art equipment. High Tech Marine Manufacturing In addition to the Aerospace Corridor there is also high tech marine manufacturing. Located in Pascagoula, Mississippi, and in continuous operation since 1938, Ingalls is Mississippi's largest private employer, with more than 10,000 employees. Ingalls is located on the Pascagoula River at the Mississippi Sound, strategically positioned for easy access to the deep waters of the Gulf of Mexico, via a totally unobstructed 350-foot-wide by 40-foot-deep, 12-mile channel -- with no air draft restrictions. The shipyard is also easily accessed by the nation's interstate highway system, and by rail. “In an appeal to business and government leaders in Jackson County, Northrop Grumman Ship Systems President Philip Teel said the Ingalls shipyard needs workers to keep up with the $9 billion backlog of Navy ships it has slated. “At the highest levels of government there are questions of whether we will be able to get that work done in the time frame they need it to be done,” Teel told members of the Jackson County Area Chamber of Commerce at its annual membership meeting in Moss Point Tuesday. Teel said the Ingalls yard is short 400 craftspeople and 250 salaried positions. He blamed housing and insurance as two big problems. He said the yard has a three-year plan to solve the work force problem.” Bottom Line The first being that although the Casino industry is adding tens of thousands of good paying jobs to the area it is not the only industry that is thriving along the Gulf Coast of Mississippi. We have not even touched on the infrastructure business and general service industry that is booming. Two years after Katrina there is still a major affordable work force housing shortage. WeI can tell you from being actively involved in this market that it is about to explode. From single family homes in Waveland being lovingly rebuilt by church volunteers, to north county subdivisions where dozens of houses will soon rise, to Bayside Park “People are really starting to pick up the pace,” says Mickey Lagasse, the county’s chief building official. “I think we’re going to see a huge boom in construction in the next few years.” One area of High Ground that is south of 1-10 is now getting much attention from developers. Platted and zoned lots in Bayside Park. Our builder has been building Hurricane resistant homes, built to withstand 140 mph winds and now brings their expertise to South Mississippi. Where others have been building homes in the $250,000 plus range north of I-10 we are offering investors homes starting in the low $120s to meet the overwhelming demand for affordable workforce housing. This is area is experiencing double digit appreciation and offers the investor a great opportunity for ROI. Home values are appreciating in this area fast as well. According to the OFHEO.gov House Price Index report of Quarter 1, 2007, Biloxi-Gulfport was the sixth greatest appreciating market in the country for year over year appreciation, appreciating 15.16%. Last quarter alone, Biloxi-Gulfport appreciated 4.77%. Lot's in Bayside Park that were $1500 6 months ago are now listed at $15,000. With all investment opportunities timing is everything. The same is true here. I feel this is a great investment opportunity for those that get involved at this stage. To gain maximum benefit from this investment opportunity I encourage those interested to lock in today. Don’t overlook the fact that Rental Property owners can qualify for the ”GO Zone Investor incentives” including the 50% accelerated depreciation incentive that translates into a substantial tax windfall. This investor incentive can be carried back 5 years and forward 10. The builder is also offering up to $5000 in contributions toward interest payments and closing costs. Biloxi MI was one of the best performing cities in the country in 2006 with Biloxi logging its highest appreciation rate since the OFHEO price index was created for the area with a 12 month price increase of 15.7% CNN Money categorized Biloxi a bust free market. Biloxi and the Mississippi Gulf Coast is currently a growth area for housing Hurricane Katrina devastated the entire Mississippi Gulf Coast, destroying over 65,000 homes and 47,000 rental properties. The need for affordable and habitable housing is critical. Affordable Houses Address Gulf Needs January 16, 2006 - Since Katrina's surge...wiped out whole neighborhoods in...Gulfport and Biloxi...the charette participants recognized two urgent needs...fast, affordable replacement shelter...and a way to reconnect with their town's distinct character." - Mississippi Renewal Forum Rental Market - 80,000 people are still living in 23,000 FEMA trailers on the Mississippi Gulf Coast - 30% of Mississippi residents are renters - Current Rental rates for single family homes range from $1,000 to $1,300 per month Mississippi Economy - Economy finally starting to recover after Katrina - As of late 2006, 5,000 to 10,000 living in tents, 30k-40k in trailers, 100,000 families displaced - Gross state product and employment have surpassed pre-Katrina levels - Reconstruction boom anticipated for the next 5 years The need for affordable and habitable housing is critical & the Govt has made $260 million available to encourage investors FEMA programs are ending... evicting over 30,000 families from temporary trailers where they have been living since the hurricane disaster. GOVERNMENT ASSISTANCE can help builders and investors develop new properties. Currently over $260 million is available to encourage the construction of affordable rental housing. MORE THAN 80,000 Mississippians still live in government trailers, and over 40,000 families live in temporary housing with family or friends. "Yet amid primitive living conditions, promising signs of Mississippi's comeback are emerging. Federal money to help homeowners rebuild is pouring in, bridges are being replaced and hotel casinos reopened. Schools are ready for children to return." -USA TODAY, June 25, 2006 Casinos driving a rebirth of the once ravaged region The extensive rebuilding after Hurricane Katrina has encouraged the growth of this important economic asset. LARGE-SCALE CASINO EXPANSION is now taking place. After Katrina, laws were changed allowing casinos to be built on dry land instead of barges. Currently 8 casinos are open in Biloxi, with 4 under construction... and 8 more are proposed. Casinos are also open and operating in Hancock County, Bay St. Louis, and Gulfport. The casinos employ thousands of people - on average 2200 per casino - who will need affordable housing. Casino industry expected to require 40,000 employees, 12 Casinos within 30 miles, will be 3rd largest casino industry in the U.S. - Tourism expanding due to Baby Boomers and Casinos - Defense industry infrastructure repaired and growing, significant military presence in the area - Long term outlook is promising, but some challenges remain - Rental absorption far exceeds inventory - Large employers in the area include Northrup Grumman, Chevron, Dupont, Triton Systems, GE Plastics NASA adding a research facility, shipyard coming in with several thousand jobs 1 BEAU RIVAGE RESORT & CASINO - opened August 2006 2 SILVER SLIPPER - opened November 2006 3 ISLAND VIEW - opened August 2006 4 HOLLYWOOD CASINO - opened August 2006 5 BILOXI GRAND - opened August 2006 6 IP CASINO RESORT AND SPA - opened December 2005 7 ISLE OF CAPRI - opened December 2005 8 PALACE CASINO RESORT - opened December 2005 9 BOOMTOWN CASINO - opened June 2006 10 TREASURE BAY - opens summer 2007 11 HARD ROCK HOTEL AND CASINO - scheduled to open July 2007 12 ROYAL D’IBERVILLE CASINO AND HOTEL - approved for construction 13 BACARAN BAY CASINO RESORT - $500 million project scheduled for Fall 2008 14 BROADWATER - $1 billion project including casino, golf course, 3,375 condominiums, 1,900 hotel rooms 15 Harrah’s - acquisition of old Casino Magic Resort 16 Proposed - Casino Resort & golf course 17 Proposed - Casino Condo/Hotel & Marina PLUS - several casinos listed above are expanding their facilities to include convention space, ballrooms, and other facilities. THOUSANDS OF PEOPLE will be working at these hotels, and other tourist attractions. They have to live somewhere...and they have to be able to afford their homes! Currently the shortage of such housing is acute. This translates into a great opportunity for those who understand the future housing and property market of the Biloxi area. "Biloxi's casinos reported March 19, $86.2 million in gross gaming revenue in February, the largest February in city's gaming history, according to figures released by the mayor's office." -Gulf Coast News - May 19, 2007 "Harrah's Entertainment and world-renowned singer-songwriter Jimmy Buffett unveil plans for Margaritaville Casino & Resort, a $700-million-plus investment that represents the single largest investment in Mississippi since Hurricane Katrina." - Gulf Coast News - May 19, 2007 (For more information on the revival of the post-Katrina casino industry, visit www.gulfcoastnews.com and click on "Current Casino Plans") Our Gulf Coast Target Area: Bayside Park in Hancock County & Ocean Springs Biloxi area Bayside Park is a ready - for - development area meeting all our carefully researched standards for growth and creation of value. · 30-minute drive from the main casino area of Biloxi, and near four of the new or proposed casinos · Perfect area for service personnel working in the tourist/casino industry...I-10 creates an easy commute · Excellent housing opportunities for families who don't want to live in the center of the casino activity. · River Walk project approved in nearby Bay St. Louis - 1,650 riverfront residential units and commercial shopping area... investor confidence is high. · Casinos and nearby military base form a strong economic base for growth and expansion. · Keesler Air Force Base provides over $1.2 billion in economic impact per year in our area ...9,000 military retirees live within 50 miles ...7,900 military and civilian personnel live off the base ...almost 86,000 military/civilian employees and families live in the surrounding areas "Officials have approved ambitious plans for a live-work complex along the Jourdan River, signaling continued recovery from Hurricane Katrina and the largest multistory residential development in city history." -Bay St. Louis SunHerald, April 10, 2007 · In the works: a casino, hotel, and marina complex on the west side of St. Louis Bay, a short way from Bayside Park · Government-approved architectural patterns available for the construction of affordable new homes in the area