State gaming regulators OK sale of Greektown casino stake

Jim Suhr

Monday, Aug. 7, 2000 | 3:19 a.m.

DETROIT - State gaming regulators Monday approved a revised plan for two couples to sell their 40 percent Greektown Casino stake, inching the virtually finished site closer to becoming Detroit's third gambling hall.

The Upper Peninsula's Sault Ste. Marie Tribe of Chippewa Indians, which through the sale will own 90 percent of the $150 million temporary casino, hopes for a late October or early November opening.

"Obviously, this is a big step forward, and a lot of our time frame was based on this step," Bernard Bouschor, the tribe's chairman, told reporters.

After a licensing hearing later Monday, the Michigan Gaming Control Board is to vote Sept. 5 on whether the investors are suitable to own a casino. Nelson Westrin, the board's executive director, said the panel won't vote to license the casino until the site is ready to open, or about eight to 10 weeks after the September meeting.

"November is the worst-case scenario," for when it will open, said casino spokesman Roger Martin.

Monday's move by the board came after Ted Gatzaros, Dimitrios Papas and their wives dropped a provision that would have let them buy back their shares. The couples had shopped their stakes since early this year, after state-mandated investigations uncovered problems with their backgrounds.

Under the ownership transfer unanimously approved by the board, the couples will sell their stakes in effect to the 28,000-member tribe for more than $200 million over 10 years. The tribe plans to sell 10 percent of its ownership to local minorities.

During a July 11 hearing, the gaming board challenged the buyback provision, which board chairman Thomas Denomme called "suspicious" and a likely snag to the casino's licensing prospects.

"My advice is you take it out and make it a clean sale," Denomme told the couples' attorney then. "As long as it's in there, we're going to have a hard time" signing off on the transfer.

"If you want a smooth-sailing transaction here, take it out. Today's our day to tell you how we feel in plain English, and that's how I feel."

On Monday, Michael Atkins, an attorney for the tribe, assured the board that all options for the Gatzaroses and Papases to reinvest in the casino have been scrapped.

"Obviously, (the buyback provision) added complexity to the deal. We wanted to make sure that was gone," he said.

Steven Elek III of accounting company PricewaterhouseCoopers testified Monday that a five-week analysis of the tribe's records showed it had sufficient financial wherewithal to cover the buyout.

With each passing day, Greektown's casino falls farther behind its competitors, giving the local MotorCity and MGM Grand gambling halls that opened last year more time to build customer loyalty and costing the city additional tax revenue.

The temporary Greektown site is to feature 2,500 slot machines and 96 table games in a 75,000-square-foot building in the city's downtown Greektown entertainment district.