Friday, April 15, 2005

Barden seeks stake in casino

Business mogul and Gatzaros apply to buy 1% ownership stakes each in Greektown.

By R.J. King and Joel J. Smith / The Detroit News

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DETROIT -- Casino owner Don H. Barden and businessman Ted Gatzaros have filed separate applications with the Michigan Gaming Control Board to become 1 percent owners in Detroit's Greektown Casino.

The requests, filed over the last two months, require extensive investigations into current and past business deals, operations and other matters by Barden and Gatzaros, said Dan Gustafson, the gaming board's executive director.

"The board has begun background checks on Barden and Gatzaros," Gustafson said. "It could take anywhere from six to 18 months."

Barden, chairman of The Majestic Star Casino LLC, which operates four casinos in Indiana, Mississippi and Colorado, has long sought to establish a foothold in the Detroit casino market. He's chairman of Barden Development Inc., which operates Fitzgeralds Las Vegas, a casino in Las Vegas.

In the late 1990s, Barden made a bid to operate one of Detroit's three casinos after state voters approved a ballot initiative allowing the gambling houses in 1997.

Barden wasn't selected. At the time, he owned the Majestic Star, a riverboat casino in Gary, Ind.

Several attempts to contact Barden about his interest in Greektown were unsuccessful this week.

Gatzaros owns or is a partner in several Detroit ventures, including Fishbone's Rhythm Kitchen Café, Atheneum Suites Hotel, Marquette Building and Shore Crest Apartments in St. Clair Shores.

He said he applied a month ago to the gaming board for his casino license.

"I was one of the very first ones to start casino efforts in Detroit," Gatzaros said. "Now I'm revisiting the issue and looking at my options. I bought my shares at large."

Gatzaros declined to be more specific about whom he bought the share from and his future plans at Greektown Casino if he's approved by the gaming board.

In 2000, Gatzaros along with a former partner, Jim Pappas, and their wives sold a 40 percent stake in Greektown for around $265 million to the Sault Ste. Marie Tribe of Chippewa Indians that owns 90 percent of the gaming operation.

The remaining 10 percent is owned by several investors, including Detroiters Art Blackwell and Chris Jackson. Blackwell, a former Wayne County commission chairman, was recently appointed financial manager of Highland Park by Michigan Gov. Jennifer Granholm.

Blackwell and Jackson could not be reached for comment Thursday.

Gatzaros said he and Pappas made an economic decision to sell their interests in Greektown Casino prior to its opening in November 2000.

"We could either submit ourselves to background checks that could have taken months, or allow the casino to open without us," Gatzaros said.

"We chose to sell our interest. I want to stress that I am now applying to the gaming board personally."

Last year, Gatzaros and Pappas had a falling out over various business deals and decided to split up some of their holdings, Gatzaros said.

Jacob L. Miklojcik, president of Michigan Consultants, a gaming analyst in Lansing, said Barden and Gatzaros would have access to Greektown Casino's operations, including accounting figures, based on their purchase of 1-percent shares.

"An outsider like Barden (or Gatzaros) gets to see the books after being approved by the state," Miklojcik said. "If you ever want to make a bigger move, you're already through that process."

It was unclear whether present or future partners of Greektown Casino would have a first right to buy other shares put up for sale. Roger Martin, Greektown Casino's spokesman, said he wasn't aware of any exclusive right to buy Greektown shares among existing partners.

Analysts estimated the casino is worth about $800 million, meaning a 1 percent share would cost about $8 million.

Greektown Casino is ranked third financially among Detroit's three gaming operations. Last year, it recorded revenues of $319.9 million.

Earlier this week, Detroit businesswoman Marian Ilitch won state approval to become sole owner of MotorCity Casino. She previously owned 25 percent.

You can reach R.J. King at (313) 222-2504 or rjking@detnews.com.