Error processing SSI file
Mayor Kwame Kilpatrick, flanked by MotorCity Casino Chief Operating Officer Rhonda Cohen and Councilman Alonzo Bates, says Detroit needs the tax revenue the new casino complexes will bring.MGM, MotorCity plan to build casino complexes
Court clears the way for hotels, but Greektown says its facility is in doubt.
Casino plans
Should Detroit casinos be required to stick to their original plans?
Error processing SSI file
Comment on this story
DETROIT -- An appeals court ruling Thursday ended a legal logjam and cleared the way for Detroit's three casinos to build permanent gambling, hotel and entertainment complexes.
The MGM Grand Detroit Casino and MotorCity Casino reaffirmed plans to build permanent gambling houses but said they will need time to re-examine plans before breaking ground.
Greektown Casino officials would not commit to building a permanent facility, saying they will weigh all their options in light of a 33 percent casino tax increase passed last year by the state Legislature.
In a news conference Thursday, Detroit Mayor Kwame Kilpatrick vowed to push all the casinos to begin building as soon as possible. "I have a big hammer ... they have got to start," he said.
The 6th U.S. Circuit Court of Appeals in Cincinnati dismissed claims against MGM Grand by the 500-member Lac Vieux Desert Band of Lake Superior Chippewa Indians.
The temporary casinos, which opened in 1999 and 2000, employ 8,000 people and have poured millions into state and city tax coffers. But the promise of Atlantic City-style gaming complexes that could stimulate Detroit's downtown has gone unfulfilled.
The construction of permanent casinos had been blocked by an injunction since 2002 in connection to the lawsuit, which claimed the city's 1997 casino selection process was unfair.
The Lac Vieux tribe claimed MotorCity and Greektown casinos were given preferential treatment when former Detroit Mayor Dennis Archer awarded the original casino licenses.
As the case weaved through the courts, MotorCity and Greektown agreed to settle with the tribe by paying $39 million over 20 years.
A separate out-of-court deal with two former Greektown investors will bring the tribe an additional $15 million for a total of $94 million.
But MGM refused to settle and won a court injunction preventing construction of any permanent hotel-gambling complexes in Detroit until the matter was resolved.
The appeals court approved the settlements for Greektown and MotorCity but threw out the suit against MGM and lifted the injunction barring expansion.
The news was long overdue, said Al Wierzbicki, a Madison Heights resident.
"It's about damn time," said Wierzbicki, who was headed into Greektown Casino Thursday. "This has been going on for four years now. The (casinos are) making money and they're not doing anything with it."
Detroiters Collie Davis Jr. and his wife, Patrecia, said they voted for the casinos because they thought permanent casinos and hotels would be built.
"We voted for them and that's what we want to have done," Patrecia Davis said.
The attorney for the Lac Vieux tribe voiced a mixed reaction to the court's ruling Thursday.
"We are pleased the court has approved the settlements and feel vindication our constitutional rights in the bidding process were at least partially violated," said Conly J. Schulte, an Omaha, Neb., lawyer. "On the other hand, we are disappointed the court of appeals dismissed our claims with regard to the MGM."
Schulte said the tribe has not decided whether to appeal.
City officials said the court ruling was a timely shot in the arm for Detroit. Kilpatrick said the city needs the tax revenue and business activity the hotels, conventions and other amenities the permanent facilities will bring.
The mayor, however, would not estimate how much new revenue permanent casinos would bring to the city.
While none of the casinos would say when they plan to break ground, Kilpatrick said he expects them to open during the 2007-08 fiscal year.
"We want it to be a race to see who finishes first," Kilpatrick said.
One gaming expert said the casinos are smart to move slowly. He said that many factors have changed since the first proposals for permanent casino complexes were drawn up.
"I wouldn't say all speed ahead," said Jacob L. Miklojcik, president of Michigan Consultants, a Lansing-based firm that does casino consulting. "These casinos are just going to have to stop and look at such things as the interest rates and Detroit gaming market.
"We'll see casino hotels in Detroit. But the market will determine the size."
MotorCity, just purchased by Marian Ilitch, plans to construct its permanent complex adjacent to its temporary home at Grand River and the Lodge Freeway. Plans call for the use of the current casino as part of the project.
MotorCity still needs zoning approval from the city for the property where the hotel will be built.
"We're really looking forward to bringing a high-quality hotel and entertainment complex to the city," said Rhonda Cohen, the casino's CEO.
The MGM Grand has Detroit City Council and zoning approval for a permanent facility on property it owns close to the DTE headquarters, near its current location.
Greektown has gained clearances to begin work on its permanent site across the street from the Frank Murphy Hall of Justice and near Ford Field.
In February, Casino Windsor announced plans for a $320 million expansion that will include additional hotel rooms and convention space.
Detroit News Staff Writer Oralandar Brand-Williams and News wire services contributed to this report. You can reach Joel J. Smith at (313) 222-2556 or jsmith@detnews.com.
Copyright © 2005
The Detroit News.
Use of this site indicates your agreement to the Terms of Service (updated 12/19/2002).