Public hearing on casino license held

Tuesday, June 22, 1999 | 9:30 a.m.

State investigators told a public hearing of the Michigan Gaming Control Board on Monday that there was no reason not to award a casino license to MGM Grand Detroit LLC - the joint venture of MGM Grand and seven Detroit-area investors.

John Redmond, a vice president of MGM Grand Detroit, said the company's $200 million temporary casino would be ready for state inspectors by the end of June.

The gaming control board adjourned until July 20, when it will rule on whether MGM Grand Detroit and its partners are financially and morally suitable to get a license. MGCB Executive Director Nelson Westrin said the board might also vote at the same meeting to allow MGM Grand Detroit to open.

The hearing held no surprises for MGM Grand, and only three people showed up to speak against its application. The company had been targeted by some Detroit activists who claimed it had the fewest black investors among the three groups picked by Mayor Dennis Archer to apply for casino licenses.

The company dropped two of its black investors last week. The two were among three investors who received notices earlier this month that they could be disqualified due to problems with their applications.

Investigators reportedly found that William Pickard had made political contributions barred by the state's casino law. Roy Roberts reportedly didn't tell regulators about a 1956 petty larceny conviction, and Anthony Gramer reportedly failed to tell regulators he'd been arrested - but not charged - for spousal abuse.

Gramer is white; Pickard and Roberts are black.

Redmond told the board the minority investment group, Partners Detroit, still had six black members and one Hispanic. He also said the group would own between 11 and 16 percent of the casino, depending on how much it earns.

But Ernest Johnson, who heads the Detroit group that challenged the selection of MGM Grand, said the casino needed more involvement from black residents.

"We understand today that most of the market for the casino is right here," he said. "Most of the people that are going to be losing money in the casino are African-Americans. We don't feel like they're reflecting the community."

More details about MGM Grand's business plan came out in a 55-page state investigative report on the group. It was made public Monday, but some confidential information was kept sealed. The board received the full report.

MGM Grand expects its temporary casino to operate for four years before it builds a $718 million permanent casino along the Detroit River. The new casino will have 2,900 slot machines, 115 table games, an 800-room hotel, a 1,200 seat theater and a wedding chapel.

The report also said MGM Grand had a spotless record with its Las Vegas casinos and that the company had more than adequate financial resources. MGM Grand Inc. is controlled by Kirk Kerkorian, the largest shareholder in Chrysler Corp. before it merged with Daimler-Benz AG.

Westrin said Detroit's other two casino groups, Atwater/Circus Circus and Greektown, would likely have public hearings in August and October on their applications.