Friday, July 1, 2005

Ilitch enmeshed in N.Y. casino dispute

The Detroit mogul is funding an Indian tribe's effort to build a gaming house in Southampton.

By Eric Mayne / The Detroit News

Ilitch The Long and the Short of it Approximately 80 miles from New York City, Southampton sits on the south fork of 128-square-mile Long Island. Home to about 55,000 residents year-round, its population doubles in summer. Tourism and the vacation home industry drive the town's economy. The Shinnecock Nation is a self-governing, state-recognized tribe. Its population is just under 400. Comment on this story Send this story to a friend Get Home Delivery

In Detroit, Marian Ilitch is a well-known figure.

In Southampton, N.Y., the matriarch of her family's pizza-sports-gambling empire is a virtual unknown.

Yet Ilitch has thrust herself into the center of a bitter controversy by bankrolling efforts by a tribe of Shinnecock Indians to establish a $20 million casino on the posh Long Island resort community.

The tribe filed a lawsuit demanding for the return of 3,600 acres -- which includes the historic Shinnecock Hills Golf Club -- unless Southampton leaders allow it to build a casino overlooking scenic Peconic Bay.

"There is distinct opposition to a casino out there," said lawyer Michael Cohen, who is acting for the Town of Southampton in its fight against the Shinnecock plan. "We don't think that it's a very good bet that Mrs. Ilitch has made."

The conflict has its roots in the 17th century, when the Shinnecock, which means People of the Shore, claim they were swindled out of eight square miles of Long Island. English settlers paid them $20 for it.

A century later, investors in the Long Island Railroad conned the tribe into forfeiting its claim to more real estate.

Today, the Shinnecock are left with an 800-acre corner of the picturesque island that has become a summer sanctuary for the super-rich.

In a bid to better their economic standing, the Shinnecock proposed building a $20 million casino on its land. Development began in 2003, but was stopped by court order after Southampton cited the tribe with code infractions.

Enter Ilitch, who also owns MotorCity Casino. Through Gateway Funding Associates, which she established with partner Mike Malik of Detroit, Ilitch is funneling cash to the Shinnecock Nation.

"Marian Ilitch and Mike Malik have signed an agreement with (the Shinnecock Nation) to assist them with any economic assistance the tribe wants," said Ilitch spokesman Tom Shields. "It's an extension of the entertainment business that she's been looking at."

Having been rebuffed in its casino bid, largely because the tribe does not yet have the federal status required to establish commercial gaming, the Shinnecock have filed a claim against a 3,600-acre tract of Long Island valued at $1.7 billion.

Cohen is unfazed, particularly in the wake of a recent New York case where the courts rejected a similar claim by another tribe, the Cayuga.

The Shinnecock project is not the only Indian casino on Ilitch's radar, Shields said. She and Malik have also formed a company called Barwest to help two California tribes set up a casino in Barstow.

In that case, Shields said, the tribes have support from municipal government. Barwest is currently in discussions with the state to win the necessary approvals.

She also set up Holomua Hawai'i in a campaign to set up commercial gambling in Hawaii.

That bid failed, but Indian casinos are a growth industry in the U.S., said Alan Meister, who has researched the enterprises for the Analysis Group, a consulting firm.

"There are definitely more and more Indian tribes working with developers," Meister said.

A simple slot parlor might struggle in Southampton, but a casino-spa combination could thrive. "You want to know your customer base," Meister said.

Southampton barber shop owner Carl Vail cut right to the chase when it comes to the Shinnecock controversy. Marian Ilitch and her pizza mogul husband, Mike Ilitch, who also owns the Detroit Tigers and Red Wings, mean nothing to the locals.

"Nobody cares," said Vail, owner of the Jobs Lane Tonsorial Barber Shop in Southampton. "All they know is the Shinnecocks have a backer."

Many are sympathetic to the tribe for the way they've been treated.

"We had a whaling boat crash, and who came out to save everyone? The Shinnecocks," Vail said. "If I had tons of cake, I'd help 'em, too."

You can reach Eric Mayne at (313) 222-2443 or emayne@detnews.com.