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The Construction of Three Casino Hotels in Detroit
 Remains Up in the Air; Tiny Upper Peninsula Tribe
 Seeks Millions

By Tina Lam, Detroit Free Press
Knight Ridder/Tribune Business News 

Oct. 9, 2003 - A multimillion-dollar deal that would give the go-ahead to construction of three casino-hotels in Detroit remained up in the air late Wednesday. 

The deal was hung up on whether -- and how much -- MGM Grand Detroit Casino should have to pay an American Indian tribe that sued the city over its awarding of the casino licenses, a person familiar with the negotiations said. 

Detroit Mayor Kwame Kilpatrick had hoped to announce a deal today, but, despite a flurry of meetings Wednesday, that looked unlikely. 

Mayoral spokesman Howard Hughey said Kilpatrick wants to reach a deal this week. 

The Lac Vieux Desert Tribe of Chippewa Indians, the tiny Upper Peninsula tribe that filed suit in 1997, wants MGM Grand Detroit to pay the same as each of the other two casinos -- $39.5 million over 25 years. 

Kilpatrick is pushing to get the tribe to accept half that amount from MGM Grand Detroit, the person familiar with the deal who spoke only on condition of anonymity said. 

The tribe's suit alleged that the city's casino ordinance, which directed the City Council to grant preferences for licenses to the groups that founded the MotorCity Casino and the Greektown Casino, was unconstitutional because it favored the two groups. The third license, which was won by MGM Grand, was open. 

However, when the licenses came before the council, there was less support for MGM Grand than for the other two because it had a smaller percentage of local ownership. Then Mayor Dennis Archer insisted on tying all three licenses together. 

The Lac Vieux tribe argued that the move, in effect, gave MGM Grand the same preference as the other two. 

"How they could expect money from us is a little bit mind-boggling," said Alan Feldman, spokesman for MGM Mirage in Las Vegas. "Nothing we're doing should be holding anything up. The tribe's original complaint was that there were preferences, but we didn't receive a preference. We were not part of the lawsuit." 

MGM Grand was not named in the 1997 lawsuit, but asked later to interveneon the casinos' side. 

A term sheet, which lays out all aspects of the settlement, was crafted last weekend for MotorCity and Greektown, but was not signed. Kilpatrick and the parties, except MGM Grand, hammered out the basics at a meeting in Las Vegas nearly three weeks ago after a stalemate that has lasted more than a year. Negotiations continued this week. 

"We're working around the clock," Hughey said. 

On Wednesday, a Chicago lawyer the city has hired to help broker the deal met with Kilpatrick. A few blocks away in downtown Detroit, Ted Gatzaros and Jim Papas met with the chairman of the Sault Ste. Marie Tribe of Chippewa Indians, which owns the Greektown Casino. 

Gatzaros and Papas have agreed to pay $15 million to the Lac Vieux tribe to help settle the suit. But their former casino partner, the Sault tribe, has not paid the two men $11 million due them in August as part of a breakup of the partnership. Gatzaros, Papas and the Sault tribe are in arbitration over the $11 million, which they said in court proceedings they need to be able to pay their share of funds to the Lac Vieux tribe. 

Without their share, the deal could fall apart. 

-----To see more of the Detroit Free Press, or to subscribe to the newspaper, go to http://www.freep.com 

(c) 2003, Detroit Free Press. Distributed by Knight Ridder/Tribune Business News. MGM, 


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