Wednesday, April 15, 1998 | 10:29 a.m.
DETROIT - The view from Mayor Dennis Archer's 11th floor office in City Hall is apparently all he needed to convince himself that bringing casino gambling to Detroit's riverfront would be well worth the emotion and divisiveness that have clutched this city so tightly in recent days.
There, across the murky waters of the Detroit River, in Windsor, Ontario, sit two shimmering casinos operated by the Canadian government, drawing thousands of Michigan gamblers each day through the bridge and tunnel that connect these international neighbors.
"They have a corner on the market because there's nothing nearby to challenge them," Archer said, in an interview this week. "To the extent that there's any burden with casinos, we have it already with the Windsor casino, and we have none of the benefits."
Betting on hope and luck to restore a city built with the steel and bolts of the auto industry, the City Council approved a plan Thursday to make Detroit the first major city in the United States with casinos. If the state's casino control commission approves, three casinos will be built on 57 acres next to the world headquarters of General Motors Corp.
Michigan voters had already approved land-based casinos for Detroit, but Thursday's vote in favor of specific plans for a $1.8 billion complex of three hotels and casinos was pivotal. Archer's decision last fall not to award any of the city's gambling licenses to a black-owned developer created dissension in a city with a 76 percent black population, a black mayor and a predominantly black City Council.
A grass-roots effort to overrule the mayor's decision had been expected to gain momentum if the council had rejected his plan. Also hoping for a defeat were anti-gambling organizations, which had begun campaigning for a ballot initiative to overturn the city's right to build casinos.
Archer, who won his second term with 80 percent of the vote last November and has had strong support from local businesses, has not only been vilified by some blacks as a "miseducated Negro," but has also angered many white business owners for breaking a promise not to place the casinos along the waterfront, in what the city calls its renaissance riverside district.
"I have taken a lot of heat," Archer said after the vote. "I learned who my friends are."
One person probably not included among those friends is Don Barden, a local black businessman who made millions as a cable television operator and owns a riverboat casino in Indiana. Barden, whose bid for a casino license was deemed inferior by the mayor last fall, has vowed to continue fighting.
"This is not over yet," Barden promised outside the City Council chambers Thursday. "This is a matter of principle in a city with this kind of population base. When blacks are in control of the political process and they find that there are qualified blacks, then they should be duty-bound to make the decision on behalf of their own."
A group organized on Barden's behalf is placing a question on the August primary ballot that would require that one of the casinos be controlled by blacks. A group supporting Archer, who has insisted that he chose the three proposals that were best for the city, is sponsoring a ballot measure that would reaffirm his decision.
But the mayor, voicing a widely held view, said that "with the City Council voting yes, I believe that we will be able to diffuse any enthusiasm" for repealing the licenses or changing the criteria.
Barden's plan to build a $500 million project lacked sufficient equity, Archer said. By placing the casinos together on the waterfront, he noted, the annual revenue projected by industry analysts grew from $1.2 billion a year to $1.5 billion.
"My fiduciary responsibility called for me in a competitive situation to do what was best for the city," the mayor said. "I could not lead with my heart. I had to lead with my head."
The casinos are projected to create 11,000 permanent jobs, which would make the gambling industry the city's sixth-largest employer, rivaling GM's entire Detroit-based work force. The projected annual tax revenue is $130 million for the city and $100 million for the state.
Two of the three development partnerships are headed by Las Vegas-based companies, MGM Grand and Circus Circus Enterprises. The third development group is Greektown Casino, a partnership of local businessmen named after the Detroit neighborhood. More than 100 blacks have purchased equity in the three partnerships. All three have named blacks to their boards.
Temporary casinos could open by late this year, and permanent ones as early as 1999. In addition to the opportunities for local builders and engineers, other local businesses will compete for an estimated $300 million a year in continuing contracts.
"This will create a minimum of 50 real, solid black millionaires" predicted Herb Strather, a black real estate developer and president of Atwater Entertainment, a local group of investors that has a 55 percent equity stake in the Circus Circus project, though Circus Circus will maintain management control.
"There has never been an issue like this in our city's history," said Strather, a Detroit native who grew up poor but now owns apartment and office buildings. "But this has split the community so bad, we need some peace and healing."
That split was vividly illustrated in City Hall, as the council voted. Like minimoguls in the making, supporters of the plan paced importantly through the corridor leading into the council's meeting room, with ultra-compact cellular telephones stuck to their ears. Down the hallway, where an overflow crowd watched the proceedings on a television monitor, Barden's supporters, dressed in African robes and hats, loudly voiced their displeasure.
"The ones who voted against us in the community are definitely traitors," said Helen Moore, a member of Community Coalition, the grass-roots group seeking to change the licensing criteria.
In a city that was widely viewed as a post-industrial wasteland, there have been several encouraging signs in recent years. Politicians proudly point out that Greektown, a neon-lighted neighborhood of restaurants and jazz bars, is thriving, that ground was broken recently for new stadiums for baseball and football, and that increasing numbers of workers are living in the city.
But given the large number of battered vacant buildings that cover the landscape, there is no way to hide the reality that much work remains to be done.
As in so many other places in the United States that have turned to casino gambling to energize economic development, in Detroit people have grand visions of gambling's potential as a catalyst for growth. Though Wall Street analysts view the city as only a regional gaming market, Archer and others contend that the casinos will help turn the city into a tourist destination.
"We're trying to bring people from all over the world," Archer said on a radio show this week.
But what casino operators want for now is to bring in many of the 20,000 people who visit the Windsor casinos each day, as well as many of the 9.3 million people who live within 150 miles of Detroit. City officials estimate that more than 75 percent of the visitors to the Windsor casinos come from Detroit and the region and that $400 million in gambling money crosses the river annually from Michigan alone.
People in Michigan have indeed proved their willingness to wager. State residents support a lottery, as well as 13 Native-American casinos in the Upper Peninsula and in Western Michigan. And in Detroit, illegal numbers and backroom dice games once flourished among the blue-collar workforce.
The new casinos are expected to bring the total gambling space in the region to about 500,000 square feet, more than the amount on Mississippi's Gulf Coast.
Despite all their boosterism, city officials have been careful to heed the cautionary tales of cities like New Orleans, where wildly exaggerated expectations and poor planning have led to the failure of an attempt to open a land-based casino, and Atlantic City, N.J., where urban blight has remained in the shadow of the boardwalk casinos.
A mayoral task force sent around the country to study gambling jurisdictions "saw what can happen if you aren't analytical," said Karen D. O'Donoghue, a task force member.
If the casino plan receives approval from state regulators and the developers begin building this year, it will mark the realization of a dream first pursued more 20 years ago by Mayor Coleman Young. Young will not see casinos finally come to Detroit; he died last year.
But another Detroit legend, Martha Jean "The Queen" Steinberg, was at City Hall as the votes were tallied.
Ms. Steinberg, a 35-year veteran of Detroit radio and a recent inductee into the Rock and Roll Hall of Fame, served on a commission to study casinos under Young and is one of 10 local investors in the MGM Grand casino. The company would not say what percentage of its equity is held by the local investors.
Ms. Steinberg - a minister who recounts for her listeners her conversations with God - explained why she believes that casinos are the city's saving grace.
"I prayed on this," she said. "He spoke to me and said my name.
"Detroit is a woman." she continued. "She opens her arms to immigrants and to migrants. She brought them here. The woman has been beaten down and talked about by everyone in the world, and now the Lord has lifted her up and anointed her with a new opportunity. We're going to heal our wounds."
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