Greektown Casino

[Black Dynamite]

Gaming board declines to extend revenue deadline

December 13, 2006

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BY MARGARITA BAUZA

FREE PRESS BUSINESS WRITER

The Michigan Gaming Control Board rejected Tuesday a request by Greektown Casino LLC to extend deadlines it has to reach revenue goals.

Greektown expects to fall short of its revenue target in 2009. If it misses the goal, it must put itself up for sale, according to a financing agreement the casino reached with creditors and the state's Gaming Control Board.

A shortfall also hurts the casino's credit standing and its ability to secure favorable interest rates on future loans.

Greektown officials say construction delays -- for which it blames the City of Detroit -- will hamper its ability to open its permanent facility on time, making it impossible to reach the revenue goals established in a 2005 accord.

The agreement sets revenue targets the casino must meet each year. Those goals are established depending on its debt.

The casino projects it will be $23 million short of the goal mandated for 2009.

On Tuesday, Greektown Casino attorney Eric Eggan told regulators that the Sault Ste. Marie band of Chippewa Indians, which owns the casino, would be willing to put up the $23 million in 2009 if the board extended the deadlines.

The board rejected the plea to extend deadlines by 12 months in a 4-0 vote, arguing that if the tribe was willing to come up with the money, there was no need for the extension.

The tribe says it would rather use the money for health care and other tribal expenses.

Eggan, an attorney with Honigman Miller Schwartz and Cohn LLP, argued that the deadlines to reach revenue goals should be extended because they were set to coincide with the opening of the casino.

The deadlines were based on assumptions that a 20-story, 400-room hotel complex would open on time and generate the estimated profits.

A 2005 financing deal between the casino and the gaming board led to the approval of a $675-million financing package to build a hotel and casino.

The casino was slated to open in January 2008. Now it is expected to open in September 2008.

Board President Damian Kassab told Eggan he wasn't comfortable moving the deadlines.

"If we keep pushing back targets, where does it end?" he said.

Board member Barbara Rom told casino officials that there would be plenty of investors interested in buying the casino if the tribe couldn't handle the responsibility.

"Nobody forced them to buy this casino," she told Eggan.

Eggan told regulators that it sounded like the board had a bias against minority ownership, which angered board member and retired Wayne County Circuit Court Judge Michael Stacey.

"What did you just say? Are you accusing us of some sort of anti-tribe bias?"

Eggan told Stacey he took it back.

Warren Beatty, a Greektown casino investor and owner, said casino officials would meet to discuss future options.

"Greektown Casino and its construction is not in trouble," Beatty said. "There is an issue of a potential shortfall based on a covenant that we felt should have never been there in the first place."

Contact MARGARITA BAUZA at 313-222-6823 or mbauza@freepress.com.

http://freep.com/apps/pbcs.dll/artic...SS06/612130313

[Uncle Mxy]

As I understand it, the casino tribe and Detroit agreed to the $30+ million price for the much-needed attached parking garage in 2005, but hadn't actually consummated the deal until September 2006 or somesuch. The disputes were "building permit" related -- where the exits can be, what building structure will/won't be permitted, etc. Kwame K. claims complete ignorance, of course, ostensibly because developers are throwing millions to build within his fine city all the time. Yup, gotcha.

[Zip Goshboots]

I joined "Gamblers Anonymous". I bet the counselor 20 bucks I'd conquer my habit!

[Zip Goshboots]

Warren Beatty better watch out. I had a dream that he was shot one night while in his home in Las Vegas.

[Glenn]

Greektown Casino files for bankruptcy

By Robert Ankeny
Crain's Detroit Business

Greektown Casino L.L.C. filed for Chapter 11 bankruptcy protection late Thursday in U.S. Bankruptcy Court in Detroit and will continue normal business operations during the restructuring process, the Sault Ste. Marie Tribe of Chippewa Indians announced Friday.

Casino Management Board Chairman Tom Miller, who also is a member of the Sault Tribe board of directors, said in a statement that “the casino will continue to operate normally for all guests, player’s club members, employees, vendors, suppliers and contractors, as we work through the reorganization process.”

Greektown will continue to pay gaming taxes to the State of Michigan and City of Detroit, said Roger Martin, of Lansing-based Martine Waymire Advocacy Communications, which represents the casino.

Miller said Greektown is finalizing $150 million in additional financing for operations and to complete the construction of its 400-room hotel and gaming floor expansion.

The casino, located in the former Trappers Alley block in Greektown, has faced financial and logistics problems, chiefly with parking, since it opened Nov. 10, 2000. It has lagged behind MotorCity Casino and MGM Grand Detroit Casino in revenue. Greektown revenue through April 2008 was down 4.6 percent compared with its 2007 revenue figures.

On May 13, the Michigan Gaming Control Board set a June 10 show-cause hearing to decide whether to order a forced sale of Greektown Casino because it isn’t hitting prescribed financial goals.

On May 2, Bloomfield Hills-based Entertainment Interests Group Inc., owned by Jerry Campbell, signed an agreement to purchase a 40 percent stake in Greektown Casino for a reported $100 million. That deal is undergoing due diligence reviews and also would need regulatory approvals from the MGCB and city of Detroit.

The casino company noted in its announcement that casino operators Tropicana Entertainment and Trump Hotels & Casino Resorts, as well as many other companies, including Delta Airlines, Macy’s, Dow Corning and Federal Mogul, have used Chapter 11 protection for financial reorganization.

Van Conway of Birmingham-based Conway MacKenzie & Dunleavy, a financial consulting firm working on Greektown Casino’s reorganization, said the casino is “a healthy, profitable business” as it enters Chapter 11 reorganization. In the Greektown statement, Conway said:

“Greektown Casino is finalizing debtor-in-possession financing that enables the company to complete its permanent casino and hotel, pay all obligations, and continue normal business operations during the entire process,” Conway said.

[gusman]

greektown is my favorite casino in detroit, I can take pride in saying that I helped pay for that parking structure

[Glenn]

Gus, if you ever get the chance, check out the new Four Winds Casino in New Buffalo.

I checked it out a couple of weeks ago and that place is awesome, so is the surrounding area. Great beach, great restaurants, etc.

[Black Dynamite]

I checked it out a couple of weeks ago and that place is awesome, so is the surrounding area. Great beach, great restaurants, etc.

Thats why Our casinos fail.