On July 23rd, The Sun Herald reported that work was slowing down on the Margaritaville Casino project in Biloxi, Mississippi. Now, Harrah’s says that the scope and size of the project is shrinking considerably:

The original $700 million estimated cost of the casino resort on the beach in Biloxi is being revised “down, down,” Harrah’s officials said during a conference call Friday.

About $110 million has been invested in Margaritaville as of June 30, and the company anticipates another $40 million to $45 million will be spent through the remainder of the year.

Harrah’s President Gary Loveman said they slowed construction of Margaritaville casino for a couple of reasons. “First, because business conditions in that market are very trying and new capacity is not exactly what that market needs in the short term.”

Loveland said Harrah’s also intends to refine the scope and the cost estimates for Margaritaville Casino “as carefully as possible to make sure that we build exactly what it is we think is prudent in that market. So we have slowed down the pace to regather ourselves” he said, to ensure Margaritaville “is appropriately sized and configured for the marketplace.”

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The Sun Herald reports that work is slowing on the construction of the Margaritaville Casino in Biloxi, MS:

The credit crunch has squeezed even the world’s largest casino company and Harrah’s put an end to rumors about the Margaritaville building site in East Biloxi by releasing details.

“Over the next few weeks, residents of Biloxi will notice less activity and fewer workers at the Margaritaville work site,” vice president of communications Marybel Batjer said in an e-mailed statement. “Rest assured that Harrah’s is not canceling the project. We still believe in the Margaritaville concept, and we remain committed to our vision for the property. This is a project that we studied extensively, and we believe that it still has a great potential to benefit the Biloxi market and our company.

“We simply need to adjust the plan for the development to better align with the economic environment, market conditions on the Gulf Coast and the current financing environment.”

Karen Sock, general manager of Harrah’s Grand Biloxi Casino, met with City Council members before their meeting Tuesday and told them she doesn’t know how the construction slowdown will affect the target completion of 2010.