|By Jewel Gopwani, Detroit Free
PressMcClatchy-Tribune Regional News
Feb. 25, 2010--Years of disputes between the City of Detroit and Greektown Casino-Hotel are now settled.
The bankruptcy judge overseeing Greektown Casino's Chapter 11 case signed off this week on a settlement between the casino and the city -- a move that clears the slate for the casino as it moves closer to emerging from bankruptcy under the ownership of its bondholders.
At the heart of the dispute were allegations that the casino didn't live up to several terms of its agreement with the city.
The city, in a lawsuit filed last year, contended that Greektown violated zoning laws, failed to build a theater that it promised and never offered Detroit residents an ownership stake in the casino.
In a deal that settles these issues, and other disputes, the casino will pay the city $13 million.
The settlement also allows both sides to avoid costly litigation. The city will drop an ongoing lawsuit and an appeals case against Greektown Casino.
"It's in the best interest of both parties to reach a settlement," said Krystal Crittendon, corporation counsel for Detroit.
The city pledged to help the casino win a 5% tax rollback it needs from the Michigan Gaming Control Board.
"It allows the casino to devote its energies towards its business rather than towards the courtroom," Dan Weiner, who represents the casino in its bankruptcy case, said of the settlement.
The tax rollback that the casino seeks is critical to its financial success after its bankruptcy emergence.
Greektown Casino currently pays a 24% gaming tax, compared with the 19% tax paid by competitors MotorCity Casino-Hotel and MGM Grand Detroit.
The taxes of competing casinos were lowered when they became fully operational, a status that Greektown Casino never reached because of the alleged defaults.
Based on 2009 revenues, the tax rollback would add $19.4 million to Greektown Casino's bottom line.
Contact JEWEL GOPWANI: 313-223-4550 or email@example.com
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