Financial woes dog Detroit casino group

Companies controlled by key investors in Detroit's proposed Greektown casino are nearly $100 million in debt and have frequently missed tax payments, the Detroit News reported Sunday and today.

The newspaper said it has investigated the three groups chosen to develop Detroit casinos. The others are MGM Grand Inc. of Las Vegas and a partnership of Circus Circus Enterprises of Las Vegas and Detroit's Atwater Group.

The Detroit News said it will report in coming weeks on the finances of MGM Grand and the Circus Circus-Atwater Group.

MGM Grand and Circus Circus have publicly traded stock and gaming licenses in multiple jurisdictions, therefore it would be surprising if the newspaper were to reveal significant new information on those companies.

The three casino developers plan to erect temporary casinos this year while building their permanent resorts, which would open in three or four years.

The Greektown group is considered to be the weakest of the three Detroit casino developers chosen by Mayor Dennis Archer. In choosing Greektown, Archer invoked a local developer preference clause in the law bringing casino gaming to Detroit. Among the companies passed over for Detroit casinos were Steve Wynn's Mirage Resorts of Las Vegas and Donald Trump's Trump Hotels & Casino Resorts.

The Detroit News reported Greektown's financial problems could become an issue when state regulators decide whether to license the company. Michigan regulations require gaming applicants to be financially stable and have a history of fair and honest business dealings.

"The idea of not paying taxes .. will be a particular item of concern," UNLV gaming expert Shannon Bybee told the newspaper. "The main reason for legalizing casinos is for the tax revenue, and one of the reasons for screening is to eliminate the people who are going to be a problem."

In a separate story, Wynn told the news that Mirage may keep Detroit in its long-range expansion plans. Mirage is already expanding from Las Vegas to Mississippi and New Jersey.

"There's always tomorrow," Wynn told the News. "That means if things work out well in Michigan, they may go further, or there may be another day, or there may be changes."

Detroit's Greektown group is an equal partnership of the Sault Ste. Marie Tribe and Monroe Partners LLC. The tribe owns five successful casinos. Monroe is led by Detroit businessmen Ted Gatzaros and Dimitrios "Jim" Papas.

The newspaper said businesses controlled by Gatzaros and Papas have debts approaching $100 million, most of it owed to taxpayers and city pension funds. For much of the debt, the partners are making mostly interest payments and not significantly reducing the principal.

The News also said companies the two control have fell behind on more than $1.4 million in federal, state and local taxes over the past 20 years. Papas said the partners are now up to date on all taxes.

Papas has also been accused by a former employee of an attempted sexual assault and he settled a sexual harassment case out of court. Papas declined comment on those charges beyond saying he is targeted for lawsuits as a successful businessman. But those issues could be examined by Michigan gaming regulators.

The Greektown partners insist their finances are sound.

"We've met and exceeded the criteria" for a gaming license, Papas told the News.

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