Issue 228
January 24 - 30, 2005
Volume 5
page 1

This Issue

Gaming News

Casino has plan for expansion at Detroit convention center

Caesars Entertainment buys riverfront land in Philadelphia, envisioning slots

Soulful Taste of Harlem Comes to Foxwoods Resort Casino Expanding Its Food and Beverage Options with Amy Ruth's

President Casinos, Inc. Announces Broadwater Development, LLP is the Winning Bidder for Its Biloxi Operations

Harrah's to bid on Singapore casino project

Show Time Jimmy Buffet and the Coral Reefer Band performs at the the MGM Grand.

Column Never bet baseball? Get ready for 2005 with these excellent studies By Howard Schwartz

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Casino has plan for expansion at Detroit convention center

DETROIT, Michigan - High-ranking Detroit officials are meeting with a Las Vegas casino and convention center operator to discuss taking over and expanding Cobo Center, Deputy Mayor Anthony Adams said Tuesday.

The Venetian Group, which runs the Venetian Resort and Casino and the Sands Expo and Convention Center in Las Vegas, visited Detroit during the North American International Auto Show on Monday to make a pitch to officials from Detroit and Wayne, Oakland and Macomb counties on its vision for a facility that would include a casino, hotel and expanded Cobo Hall.

Mayor Kwame Kilpatrick talked with the casino group Tuesday in Washington, D.C., where he was attending the U.S. Conference of Mayors, Adams said.

The energetic round of meetings with key political and business leaders demonstrated the group's seriousness, and their proposal was immediately met with delight by Wayne and Oakland county officials, who balk at the prospect of more public dollars being used to expand Cobo Center.

"This is the deal of a lifetime. We're not talking millions, we're talking billions of dollars here," said Oakland County Executive L. Brooks Patterson. "If the mayor doesn't jump on this opportunity, then I've underestimated him."

Wayne County Executive Robert Ficano said the key to the deal was to make sure that the Cobo expansion occurs without any taxpayer dollars.

"The auto show generates $500 to $700 million, and if a company came in and said the same thing, what would we do for them? We would bend over backwards for them," he said. "The bottom line is with a private investor, we're not going to have to raise taxes to do it."

The casino group also met with the Port Authority to discuss the possibility of selling bonds for the project, labor groups and local bankers as well as scouting the city for possible locations for the facility. Gov. Jennifer Granholm also was brought into the discussions within the last few days, said Liz Boyd, Granholm's spokeswoman.

While the proposal has some benefits, said Adams, it has one huge drawback -- the lack of a casino license.

"There are other groups that have come in that have had a lot more details in their plans, but every group brings something to the table," said Adams. "This group has a tremendous balance sheet, but it's really premature to discuss because they don't have a license."

The MGM Grand Detroit's casino license will become available once a deal to merge MGM and the Mandalay Bay Resorts is completed. Mandalay Bay owns a majority of the MotorCity Casino, and under federal antitrust laws, one company can't own two casinos in the city.

But MGM must agree to sell to the Venetian Group and settle an outstanding lawsuit filed by the Lac Vieux Desert Band of Lake Superior Chippewa Indians against Detroit's casino bidding process, Adams said.

"And then they have to be approved by the city," he said. "Those are three major hurdles, but they're not insurmountable."

The Venetian Group is just one option being considered by the city, said Adams. Several other gambling entities have approached the city with proposals. And city officials have not totally abandoned plans for a publicly funded expansion of Cobo.

Even so, he said, "A privately financed deal makes sense. The less public dollars, the faster the deal can move forward."

That assessment comes a year after Kilpatrick called for a new, 1-million-square-foot, billion-dollar convention center run by a regional authority. With dollar signs spinning in their heads, the rest of the political leaders in the region almost immediately said it was too much for taxpayers to bear, despite the need for an expansion of the aging facility.

Kilpatrick has repeatedly said expanding the 700,000-square-foot Cobo is essential to keeping the auto show and attracting other convention business to the city. McCormick Place in Chicago announced last year that it will expand to 1.2 million square feet and has implied that it could easily take over the North American International Auto Show.

Cobo was built in 1960 and last expanded in 1989. The auto show has been calling for an expansion of the facility for several years. Its primary source of funding is a tax levied on hotels and motels in Wayne, Oakland and Macomb counties.

Ron Reese, spokesman for the Las Vegas Sands Corp., would neither confirm nor deny the company's interest in developing a facility in Detroit.

Caesars Entertainment buys riverfront land in Philadelphia, envisioning slots
As reported by the Philadelphia Inquirer

PHILADELPHIA, Pennsylvania - Caesars Entertainment Inc. has put its money where its mouth is.

The operator of casinos in Atlantic City and Las Vegas has paid $64.7 million for a site along the Delaware River that it hopes to turn into a slots parlor, the company confirmed yesterday. The land fronts South Columbus Boulevard between Reed and Dickinson Streets, across from the Riverview Stadium 17 theater complex.

Caesars purchased the property -- 18 acres of buildable land, and an additional 12 acres of water and marsh -- even though it does not know whether it will obtain a slots license.

Indeed, the state board that will award licenses to two slot parlor operators in Philadelphia, and 12 others around the state, is not yet even accepting applications from firms.

But real estate developers and others closely following the intense, behind-the-scenes jockeying for slots licenses said the purchase was a bet Caesars had to take, both to position itself for the expansion of gambling into Pennsylvania and to protect its extensive gambling operations in Atlantic City.

Also, if Caesars had not proceeded with the purchase, it would have had to renegotiate the option that gave it the right to buy the property, according to two sources familiar with deal.

A spokesman for the firm said Caesars had no qualms about the purchase.

"It's a very prime piece of property, and we are confident that whatever happens, we'll be able to get a good return on our investment," said Robert Stewart, a senior vice president.

Caesars, which has $4.5 billion in annual net revenue, operates gambling sites on four continents.

The firm's interest in the site was well known, and in recent weeks Caesars had shown various officials plans for a slots, entertainment and retail complex worth $350 million.

"It's a great strategic move. You wrap up the best riverfront site," said Robert Fahey, executive vice president of CB Richard Ellis, a commercial real estate firm.

But Fahey said the price was high, unless Caesars does indeed get its license.

"That's an exceptional amount of money... for a parcel of land that is not located in the core of the city," said Fahey, "but land values are derived from how much money you can make from it."

Paul Levy, executive director of the Center City Development Corp., which has been closely following slots development, said the Caesars purchase was not a surprise.

"There are going to be two slot sites, and most public discussion has said there may be one in Center City, and one or two on the waterfront. That makes your odds pretty good."

But Levy offered a caution: "We don't know who else is out there, and what else is out there," that will be proposed to the state gaming board.

Until the closing last Tuesday, the property was owned by Associates, which was controlled by Bart Blatstein, a Philadelphia developer.

Sugar Mill Associates purchased the property in 1993 for $8.5 million.

Blatstein declined to comment on the sale but said he would continue with other development projects in Philadelphia and the area.

Meanwhile, a New Orleans business executive yesterday said that a slot machine parlor in Center City doesn't necessarily mean streets full of chartered buses spewing diesel fumes.

Warren L. Reuther Jr., president of that city's convention and visitors bureau, said no chartered buses are used by the six million people who visit that city's one casino each year. Instead, people use cars and walk.

Reuther spoke at a forum on gambling sponsored by the Central Philadelphia Development Corp., the Philadelphia Convention and Visitors Bureau, and CoreNet Global, which provides services to the real estate industry.

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