Greektown cuts plan for permanent casino - Friday 12th of August 2005

Greektown Casino will ask state gaming regulators to approve a $635-million financing package next month that would include $200 million for a permanent casino, about half of what it said last year it would spend to build a glittering gambling complex near Ford Field.

The finance package, discussed Tuesday at the Michigan Gaming Control Board meeting, also would absorb old debt and go to pay off some local investors.

"There are details to be worked out, no doubt about it. But we are moving ahead," Greektown spokesman Roger Martin said.

While board members echoed some city leaders in questioning the pace of Greektowns progress toward a permanent casino, the casinos representatives were reassuring yet vague.

Greektown attorney John Pirich of Lansing told the board that its overall plans for the permanent casino have not been finalized because the casino is still negotiating with property owners at the seven-acre site at I-375 and Gratiot Avenue.

City leaders have planned a closed-door meeting for Aug. 23 to discuss the construction delay. A 2002 injunction that prohibited construction of the three permanent casinos was lifted in April.

Greektown said last year that it planned to build a $450-million casino and 400-room hotel with amenities such as a swimming pool, several restaurants, a theater and convention space.

The financing package also would cover $24.5 million in temporary funds, a refinancing of existing debt, fees and working capital and money owed to previous owners Jim Papas and Ted Gatzaros.

The Sault Ste Marie Tribe of Chippewa Indians agreed to pay Papas and Gatzaros about $265 million to leave the partnership in 1999 because they could not get gaming licenses. The payments were to be spread out over many years.

The men were among those who first proposed casinos in Detroit, and both plan to retain a 1% share in Greektown Casino. Both were judged unsuitable as casino owners because of unspecified unscrupulous business practices but have applied to the gaming control board for casino licenses to hold the shares.

Dan Gustafson, executive director of the gaming control board, said those applications are still under review. The board is to meet next Sept. 13 to review Greektowns financing.

The tribe owns 90% of the casino, with a group of Detroit minority investors owning the rest.

Greektown saw the largest rise in casino revenues for July. Greektown revenues climbed 14% to $31.3 million, while MotorCity saw a 3.4% rise to $37.3 million and MGM Grand Detroit was up 4% to $38.6 million.

Together, the casinos paid $12.9 million in state taxes and $12.75 million in city taxes during July.

Greektowns market share was up slightly in July to nearly 30%, compared to about 35% for MotorCity and 36% for MGM Grand.

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