Sault Ste. Marie Tribe of Chippewa Indians seek greater stake in casino

Tuesday, May 16, 2000 | 8:37 a.m.

If the deal is approved, the 28,000-member tribe that runs five Upper Peninsula tribal casinos would hold a 70 percent stake in the Greektown gambling hall, the Detroit Free Press reported Tuesday.

The remaining 20 percent of shares for sale in the Greektown casino would be bought by a small group of union pension funds. The remaining 10 percent of the casino is owned by a group of local minority investors.

"We would hope that this would expedite the licensing and opening of the casino," Greektown Casino spokesman Roger Martin said Monday.

The two other temporary casinos allowed in Detroit under state law opened last year.

The Greektown casino is virtually finished and could be ready to open in late summer if the Michigan Gaming Control Board grants a license to all the parties. The tribe has been notified that investigators have cleared its leaders for licensing, the Free Press said.

The 40 percent stake for sale belongs to Greektown investors Ted Gatzaros, Jim Papas and their wives. Gaming Control Board investigators found problems in their backgrounds that could keep them from getting licensed.

On Monday, Martin said he did not know which pension funds would buy the other 20 percent.

Earlier reports had said the Papases and Gatzaroses had agreed to sell their 40 percent stake to Las Vegas-based Millennium Management, a consortium of pension funds. Millennium previously was hired to run the Greektown site.

Millennium is made up of former casino executives who reportedly pulled together five union pension funds to invest up to $250 million to buy or finance the purchase.

By selling now, the two couples can get $200 million or more market value for their shares. If they went through licensing and were turned down, they could only recoup tens of thousands of dollars they invested.

The gaming board had planned to vote on the sale Tuesday but could not because it is incomplete. It is to decide whether to extend that vote to July 11.

The casino hoped that the pension funds, as institutional investors, could avoid lengthy state investigations into their backgrounds. For that to happen, gaming board staff had told casino attorneys the pension funds would have to buy their shares, no more than 10 percent each, in a publicly traded company registered with the Securities and Exchange Commission.

The board staff said in documents filed Friday that they still don't know the identity of the pension funds, how much each fund would own or the price. The staff can't determine whether the pension funds need to be investigated until they know who they are.