Tuesday, September 13, 2005

A 15-story hotel, with half the convention space originally planned, and a 3,500-space parking garage would be built on Monroe Street.

Greektown Casino will stay put

Instead of $450 million complex, it opts for $200 million plan with a 400-room hotel.

By Nick Bunkley / The Detroit News

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DETROIT -- Greektown Casino, scrapping plans for an all-new downtown casino-hotel complex, plans to announce today it will expand at its current site. It will build a 15-story hotel and 3,500-space parking garage along Monroe Street.

The $200 million project is expected to be finished by January 2008, according to plans being presented to the Michigan Gaming Control Board today. If the proposal is approved by the board and Detroit City Council, construction could begin in February.

The proposal calls for a 400-room hotel to be built on the parking lot of the Annunciation Greek Orthodox Cathedral at Monroe and Interstate 375. An apartment building and city-owned parking garage on the north side of Monroe would be demolished and replaced by a block-long garage for casino patrons. Elevated, moving walkways would connect the hotel, garage and casino.

The casino is ditching its plan for a new $450 million complex at Gratiot and I-375, but officials say the expansion meets or exceeds all of the city's requirements for permanent casinos.

The gaming floor would grow from 75,000 to 100,000 square feet, and a 1,200-1,500-seat theater would be added to the casino building. The hotel would contain 25,000 square feet of convention space, half the amount Greektown Casino had originally planned.

Casino spokesman Roger Martin said officials decided they didn't want to abandon the 265,000-square-foot building that has housed the gambling hall since it opened in 2000 and the $275 million in investments that have been made there. Since announcing its intention to move several blocks north, the casino's management board has changed and the Sault Ste. Marie Tribe of Chippewa Indians, which owns 90 percent of the casino, has elected a new chairman and board of directors.

The plans to move out of Greektown also were hatched before the Legislature increased casino taxes by 33 percent last year and before the settlement of an Upper Peninsula tribe's lawsuit against the city that had delayed construction of permanent casinos for years.

"It was a different time, and it was very much a different business climate," Martin said. "By staying home in Greektown, we remain true to our initial vision."

But plans for permanent casinos are shaping up very differently from what the city envisioned. Voters who approved awarding three casino licenses in 1996 were told a riverfront gambling oasis would stimulate Detroit's downtown.

Soon after the temporary casinos opened in 1999 and 2000, without the attached hotels and meeting rooms seen as critical to drawing out-of-town business, problems acquiring land along the Detroit River caused the casinos to look elsewhere for permanent locations. That and other delays prevented any of the permanent casinos from getting started in time to open before Super Bowl XL is played at Ford Field in February.

The MotorCity Casino now proposes to expand its location at the Lodge Freeway and Grand River instead of building elsewhere. City officials approved site plans this summer for a new hotel, convention space, an expanded gaming floor and more back-office space, said spokesman Tom Shields. MotorCity officials will present their plans to the gaming board today. They have not said when construction might begin.

The MGM Grand Detroit is the only casino in the city that still intends to move. MGM officials are finalizing plans to build a complex on 25 acres at the Lodge and Interstate 75, several blocks north of its current location, said spokesman Bob Berg. The casino is still acquiring land at its new site and has not said when it hopes to submit a design to the city.

As recently as April, Greektown Casino officials would not commit to building a permanent facility, saying they were re-examining their options.

The casino's decision to stay in Greektown and expand comes as a relief to restaurateurs and merchants in the city's most popular entertainment district. Many were concerned that their businesses would suffer if foot traffic from the casino and $6 million in meal comps given to gamblers each year disappeared.

"As far as we're concerned, it would be in our best interests and their best interests to keep it where it is," said Steve Georgiou, president of the Greektown Merchants Association and owner of the Olympia Shish Kebab restaurant. "We are a destination, as opposed to the other casino venues. where you drive in, park, gamble, and go home."

Jacob L. Miklojcik, president of Michigan Consultants, a Lansing-based firm that does casino consulting, said he likes Greektown Casino's decision to stay put rather than moving to a stand-alone complex like most casinos.

"There's very few like that," Miklojcik said. "Outside of Vegas, when you talk about a true urban casino, that's it."

Despite its prime location and high marks from patrons, Greektown Casino's revenues have consistently lagged the city's other gambling halls. Analysts and casino officials attribute that to the lack of attached parking, an amenity that MotorCity and MGM Grand both offer.

"Greektown becomes our biggest strength," Martin said, "but also our biggest disadvantage because we don't have an attached parking garage."

The casino already has bought the apartment building on the proposed parking garage site, Martin said. Negotiations to buy the property needed from the city and the Greek Orthodox Metropolis of Detroit are ongoing.

You can reach Nick Bunkley at (313) 222-2293 or nbunkley@detnews.com.