Thursday, April 9, 1998 | 10:55 a.m.
DETROIT - The City Council on Thursday approved Mayor Dennis Archer's $1.8 billion plan to revitalize the city's economy by building three gambling casinos on the Detroit River.
If the proposals are approved by the state, the city of 1 million would become the nation's largest city with casinos.
Archer says casinos will create 11,000 permanent full-time jobs and bring in $130 million in gambling taxes and $50 million in property taxes a year. The council approved the plan despite concerns about the casino's location and lack of black-majority ownership.
"We're obviously very happy and very pleased," said Herb Strather, chairman of Atwater group, a partnership that includes Las Vegas-based Circus Circus.
The other franchises are MGM Grand and Greektown/Chippewa Indians.
"This is great news for Detroit," said Archer spokesman Greg Bowens. "Detroit can move forward now with some significant development and we have just now entered into the international marketing scene."
A beaming mayor briefly stuck his head out of his office and waved to well-wishers, then stepped back inside without commenting. A news conference was scheduled for Thursday evening.
Residents also said they were happy about the plan.
"It truly is the right thing for the city," said Brian McDonald, manager of the Soup Kitchen Saloon in the riverfront district. "It will bring a lot of revenue and physical improvements."
The vote followed weeks of controversy about Archer's decision to relocate the proposed casinos from the central business district to an area along the Detroit River a few miles away. Archer said the area near the river was the only viable site.
The mayor also came under fire from some for not awarding one of three available casino franchises to blacks in a city that is 80 percent black. He said blacks had stakes in all three casino groups and also would benefit from casino jobs and contracts.
Don Barden, a black Detroit businessman whose proposal was rejected by Archer, emphasized that the state still must approve the casinos.
"This is not over yet," Barden said. "This is just a first phase. We could be back to square one in a number of months."
Archer had given the council a Friday deadline to pass the plan or risk torpedoing the project.
"Detroit cannot continue to be a boom-or-bust economy," Archer told the council Tuesday. "There is no other economic development initiative that provides that kind of opportunity."
He said the timetable to present a plan to the Michigan Gaming Control Board was "extremely tight" and a failure to act this week would endanger financing and embolden casino opponents statewide.
Archer spokesman Anthony Neely has said that the board could act within four to six months, paving the way for temporary casinos to open by the end of 1998 or beginning of 1999. Permanent casinos would follow two to three years after that.
Proposal E, a statewide ballot issue that won approval in November 1996, allows for limited casino gambling in Detroit and provides for three casino franchises in the city.
The council approved the MGM Grand proposal by a vote of 5-4. The other two groups were approved by 6-3 votes. Council member Kenneth Cockrel switched his vote to no for MGM.
Council member Nicholas Hood III said he voted all three proposals down because of their location.
"It doesn't have any economic spinoff for the downtown," Hood said of the riverfront site.
The casinos would be taxed at 18 percent. Fifty-five percent of the tax revenues would finance anti-crime and other programs in Detroit, and 45 percent would support schools statewide.
Supporters say gambling would give a boost to a city that has been striving to come back after a long slide. Since the late 1950s, the city has lost nearly half its people and more than half its jobs. A steady flight to the suburbs was accelerated after the 1967 race riots that killed 43 people and left blocks and blocks of burned-out hulks.
Supporters of bringing gambling to Detroit point across the Detroit River to two casinos in Windsor, Ontario, where business is booming and an expansion is in the works. Indian tribes also have opened casinos on reservations across northern Michigan.
David Anders, an analyst with Credit Suisse First Boston, said the Motor City's casinos should flourish by drawing bettors within a few hours' travel distance, much like Atlantic City, N.J.
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