Casino controversy heads back to court

James Prichard

Thursday, May 2, 2002 | 9:49 a.m.

GRAND RAPIDS, Mich. -- The legal relief a small Indian tribe is seeking for a chance to operate a Detroit casino would cause great harm to the city, a lawyer for the city said Wednesday.

But an attorney representing the Lac Vieux Desert Band of Lake Superior Chippewa Indians argued in federal court that such relief for the tribe would benefit Detroit.

The tribe, which runs a casino in Watersmeet in the western Upper Peninsula, has asked Chief U.S. District Judge Robert Holmes Bell to reopen the bidding process for Detroit's three casino licenses. The licenses were awarded to other interests in 1997.

During a hearing Wednesday afternoon, seven lawyers argued before Bell, who is not expected to issue a ruling for at least a month.

The judge ruled Feb. 7 that Detroit acted improperly when it preferentially granted casino licenses to two companies that had campaigned for approval of gambling in the city.

His ruling came about a month after the 6th U.S. Circuit Court of Appeals in Cincinnati returned the case to Bell, who twice before had upheld Detroit's ordinance regarding the casino-selection process. Both times, the appeals court overruled the judge.

The courts say the city improperly gave preference to Greektown Casino LLC and Atwater Entertainment Associates LLC, which received licenses and are operating casinos. Atwater is part owner of MotorCity Casino.

Detroit's third casino is MGM Grand Detroit Casino, owned by Las Vegas-based MGM MIRAGE.

Conly Schulte, an Omaha, Neb., lawyer for the Lac Vieux Desert tribe, reminded Bell that the court system already has determined that Detroit's casino-selection process is broken and needs fixing.

"It all comes down to remedy -- whether the appropriate remedy for (the tribe) is the relief that we've sought," Schulte said.

Revamping the process and then rebidding the licenses would benefit the city, not hurt it, he said.

Morley Witus, a Detroit attorney representing the city, said the relief being sought by the tribe -- which also wants the court to appoint a conservator to take control of the existing casinos until the case is resolved -- is "certainly fraught with problems and unworkable."

Such action would create "massive, real-world consequences for the city of Detroit," Witus said.

Almost 8,000 people work at the casinos, which have contributed about $100 million in tax revenues for the city and another $80 million to the state's school fund, he said.

Meanwhile, a group that was one of 11 original contenders for a Detroit casino license announced Wednesday that it intends to take part in any new casino-selection process.

Detroit Alive Casino Inc. proposed a Detroit-themed casino, the majority of which would be owned by city residents.

Earlier, Detroit businessman and Las Vegas casino owner Don Barden said he too wants the chance to have a Detroit casino.