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Showing posts with label Gateway. Show all posts
Showing posts with label Gateway. Show all posts

Tuesday, September 4, 2012

Shinnecock Casino Fiasco




Push for Shinnecock casino plan stalls

Photo credit: Nancy Borowick | At the Resort World Casino in Jamaica, Queens, more than 4,000 video lottery terminals with varying themes spread out across the two floors. (July 27, 2012)
[PLEASE NOTE: The counts of Slot Machines keeps changing in each report. Can't they count?]
 
 
The Shinnecock Nation's longtime plans to launch a Long Island casino are being stalled by internal squabbles and wavering political support.

The casino effort comes as competition for gaming dollars is intensifying, with the growth of racinos within the state, new casinos opening in neighboring states and some Indian casinos such as Foxwoods in Connecticut struggling financially. The tribe also faces the prospect of as many as seven new non-Indian gaming ventures in the state if Gov. Andrew M. Cuomo's proposed referendum on commercial gaming is approved next year.

Until July, the Shinnecock and its backers at Gateway Casino Resorts of Detroit had been negotiating to acquire an 80-acre parcel in Yaphank adjacent to the Brookhaven Rail Terminal. But delays in seeking full tribal approval for the site, and authorizing a $3 million check for an option to purchase the land, ultimately led the deal to fall through.

Shinnecock spokeswoman Beverly Jensen and a spokeswoman for the rail terminal declined to comment.

Lack of progress 'alarming'

"It's alarming," Suffolk Legis. Wayne Horsley (D-Lindenhurst) said of the lack of progress on a casino. "They have friends out there who want them to succeed, but the issue has gone quiet.

"It's disturbing and it's sad," said Horsley, who formed a legislative gaming task force to help the tribe find sites for a casino in Suffolk County.

The tribe won federal recognition in October 2010 after a 30-year effort, sealing its status as a sovereign nation eligible for governmental, housing, police and health programs, and gaining the right to open casinos and lower-level gaming facilities.

Two years later, the tribe remains determined to better its lot -- even as frustration increases over the lack of progress. Just last week, four tribal leaders, who were removed from their posts last month amid allegations they were negotiating business deals without tribal authority, argued before the tribe that their efforts were for nongaming enterprises and were for the long-term benefit of the tribe.

The official removal of trustees Lance Gumbs and Gordell Wright, men who are frequently the voice and face of the nation, has left those who typically interact with the tribe wondering what comes next.

The men have denied wrongdoing and their removal remains subject to a tribal investigation. The tribe called the decision an "internal" matter.

Tribal chairman Randy King declined to be interviewed.

Former New York Gov. David A. Paterson, who wrote a letter while in office backing the tribe's recognition request, suggested the Shinnecock's unwillingness to pursue a casino in communities that have opposed them may be slowing its progress.

"They have their internal squabbles, but they have also tried to show a sense that they want to be good neighbors," Paterson said. He added that any other group given the leeway the tribe has won through federal recognition "would have taken advantage of their status."
Jon Schneider, Suffolk County's deputy executive, acknowledged that "there have not been any recent developments regarding the Shinnecocks or a casino" in Suffolk.

For tribal members, the hope that blossomed with federal recognition has gradually segued into frustration. Anii Brown, chairwoman of the tribal council, an advisory group, in many ways represented that hope. A 30-year-old entrepreneur with her own marketing and promotions company, she made the decision recently to leave Shinnecock to launch a business venture with an Ojibway woman from Arizona.

"It's a good time to get away," she said of her decision to leave the reservation after 29 years.
"The gaming part puts a different dimension of division," she said. "It's personal now, it's families and everybody's fighting. It's caused drama and internal strife."

Brown and others have put some of the blame on Cuomo, whom tribal members say has declined to meet with the tribe to discuss a gaming compact and other economic development. Cuomo "needs to be willing to sit down with us," she said. "This is about the survival of an entire people."
A spokesman for Cuomo did not respond to a request seeking comment.

Tribe's lobbying efforts

Tribal efforts to lobby the state have been considerable. Last year, tribal financial backer Gateway paid former Sen. Alfonse D'Amato's lobbying firm, Park Strategies, $97,500, according to state lobbying records. The firm largely lobbied the State Senate to back a casino, the records show. A Park Strategies spokeswoman didn't return a phone call seeking comment.

The tribe also has hired law firm Meyer Suozzi English & Klein, among other firms, to lobby the State Assembly on its behalf for a tribal casino, records show.

A person close to the tribe who is familiar with those efforts said it's not so much Cuomo's refusal to meet with the Shinnecock tribe as the tribe's need to push ahead and galvanize support that has slowed its casino efforts.

"I don't believe the governor is necessarily the obstacle," said the person, who is not authorized to speak for the tribe. "They don't have a site in Suffolk. That's the number one issue. [And] they have to clean up the mess they have internally."

Support disappearing

The person also said the tribe holds out hope for a casino at Belmont Park in Nassau County, a site that was prominent in the tribe's plan, until Cuomo said earlier this year that the site would "not make sense" given its proximity to the racino at the Aqueduct Racetrack.

A contingent of largely Republican state lawmakers who earlier backed the tribe's plan for a Belmont casino now appear opposed to it.

"A casino at Belmont is not going to happen," said Joe Rizza, a spokesman for Sen. Jack Martins (R-Mineola).

Asked why, he said, "Upon further study, a casino wasn't a viable option for the site and there wasn't a consensus among the communities that would be affected by a casino."

Nassau County Executive Edward Mangano, who initially proposed the site last year after support for a casino at Nassau Coliseum collapsed, also withdrew support.

"While there is no pending agreement with the Shinnecock Nation, we are always open to meeting with the leadership," Mangano spokeswoman Katie Grilli-Robles said.
 

Sunday, October 24, 2010

House of Financial Cards, Greedy Investors, Democracy Sold

Several articles similar to the one below have appeared and Sandy Adell said it best.

Marian Ilitch and New York’s Shinnecock Native Americans
Sandy Adell

In an earlier blog post I wrote about billionaire casino moguls, like Lyle Berman, whose enterprises broker the deals to gain Federal recognition for Native American Tribes and then work as middle-men between the tribes and the Federal government to hold land in trust in order to build “Native American” casinos. (See my post dated August 12, 2009)

Well now we can add a “middle-woman,” Marian Ilitch, to the list. According to an October 19, 2010, article on Crain’s Detroit Business website, Marian Ilitch has teamed up with the Southampton, New York based Shinnecock Native Americans in a new casino deal.

As I wrote in a comment on Crain’s website, it continues to boggle my mind that people like Marian Ilitch and other casino moguls, really wealthy people, are looking to expand gambling throughout this country under the guise of helping bring economic development to the less fortunate among us, this time to a community of 1200 Native Americans.

Gambling is not a philanthropic enterprise; The only real winners in the casino industry are billionaire owners, operators, and middle-men-and-women like Marian Ilitch and Company.



Ilitch teams with tribe on N.Y. casinos: Long Island plans could top $1 billion
By Bill Shea

Debt part of Ilitch equation

As the Ilitch family assesses how it will pay for the Detroit Pistons, Palace Sports & Entertainment Inc. and possibly a new downtown arena, debt remains on the family's past projects.

In January 2009, Marian Ilitch injected $45 million into her MotorCity Casino after lenders -- including Highland Capital Management LP -- threatened to hike interest rates to 18 percent on the $625 million loan her CCM Merger Inc. got in 2005 to finance purchase of the casino and for the later construction of its 300-room hotel.

The lenders reportedly wanted the additional investment because the casino was in jeopardy of violating its loan terms, a situation created when gambling revenue began to fall with the recession.

Deutsche Bank and Merrill Lynch arranged the loan in 2005.

The total financing for MotorCity is believed to be $950 million through a highly leveraged mix of fixed- and variable-rate bank debt and junk bonds, according to Forbes.

Ilitch paid $525 million to buy the majority ownership of the casino in April 2005 from Las Vegas-based MGM Grand/Mirage Casinos' Mandalay Resort Group, the MGM subsidiary that owned MotorCity.

She also paid Detroit entrepreneur Herb Strather $106 million for his Atwater Entertainment Associates LLC's 11.5 percent stake in MotorCity.


[If the name Herb Strather sounds familiar, it might be his connection to the Mashpee Wampanoag Tribe that he financed in order to gain recognition to build a casino.]

Another $85 million to $100 million went to former Ilitch partner Tom Celani for his 10 percent stake.

The Detroit Tigers, owned separately by Mike Ilitch, borrowed $140 million in August 2005 from a syndicate of 11 financial institutions, led by what is now Sumitomo Mitsui Bank, to refinance what had been $115 million remaining in debt from the original $145 million loan to build Comerica Park, industry magazine Sports Business Journal reported at the time.

The team has declined to comment on its current stadium debt.

Public debt on Comerica Park is through the Detroit-Wayne County Stadium Authority.

(This story has been updated to correct information about a lending company that was misidentified in the original version.)

The Ilitches' high-profile pursuit of the Detroit Pistons and plan to build a downtown arena could be dwarfed financially by the family's quiet effort that could top $1 billion to construct casinos for an American Indian tribe on New York's Long Island.

Marian Ilitch, sole owner of MotorCity Casino and matriarch of the family whose fortune is built from the Little Caesar Enterprises Inc. pizza chain she co-founded in 1959, has a casino development deal with the Southampton, N.Y.-based Shinnecock Indian Nation, which recently said it may build up to three casinos now that it has official federal recognition.

Even if the tribe builds just one hotel-casino, because it will serve New York it's expected to be significantly larger than MotorCity, for which Ilitch financed the purchase and expansion for $600 million. A trio of casinos could each still be as large as or even larger than the Detroit property.

MotorCity reported $446 million in 2009 revenue and had 2010 revenue of $333.5 million through September.

"The location will dictate the size of the casino, but it certainly will be larger than the operation at MotorCity," said Tom Shields, owner and president of Lansing-based Marketing Resource Group Inc. and spokesman for Ilitch and her partner in the casino effort, Birmingham developer Mike Malik.

The U.S. Bureau of Indian Affairs this month rejected final objections to its acknowledgment of the Shinnecock as a federally recognized American Indian tribe -- one seeking to build a casino, with Ilitch financial backing, to improve the lives of its roughly 1,200 members. They live on about 800 acres, mainly in mobile homes.

Such formal recognition, which the Shinnecock tribe first sought in 1978, is needed to open an Indian-run casino under federal law. It also makes the tribe eligible for federal housing, health and education funding.

Ilitch and Malik have been working with the tribe since 2003 on plans to build and operate a casino in Long Island's upscale Suffolk County -- an area better known as the Hamptons.

Casinos could be built elsewhere on the island to serve a wider population.

Ilitch and Malik are partners in Gateway Casino Resorts LLC and Gateway Funding Associates LLC, the businesses working with the tribe. They are headquartered in Detroit's Fox Theatre, whose offices are home to Ilitch Holdings Inc. and other Ilitch-owned ventures.

Additional state and federal legal, environmental and regulatory approvals are needed before a casino project can start -- something industry insiders have said is a long process with no guarantees and in which longer-recognized New York tribes have been mired for years.

The tribe prefers to negotiate with authorities to build a more lucrative Class III casino, which allows table games in addition to video slot machines under federal law. A Class III casino must share revenue with the state.

Ilitch and Malik will give the tribe financing and guidance on development and operations, Shields said. How much they'll be paid, and how much of a cut of the casino revenue they'll get, isn't yet known.

There is no timeline for the development, Shields added, noting that it's expected to take several years to get approvals and finish construction.

Beverly Jensen, communications officer for the tribe, declined to comment.

Casino spending

Malik and Ilitch have worked on casino efforts in Port Huron and Manistee and in Hawaii and California, but none have reached the stage of the New York project.

Expenditures on the Long Island effort have been significant.

Through Gateway, Ilitch and Malik paid Arlington, Va.-based lobbying firm Wheat Government Relations more than $1 million since 2003 to push for federal recognition for the Shinnecock, records show.

The casino project still needs the approval of New York's governor and Legislature.

Gateway hired Washington D.C.-based Mercury Public Affairs to lobby state government on behalf of the casino. The firm reportedly has met with New York Gov. David Paterson and state legislative leaders to discuss the gambling plan.

A comprehensive anonymous website,
TheVerifiableTruth.com, for several years has tracked news and public records linked to Ilitch and Malik's casino ventures, and it shows that they have donated money to political candidates in positions to influence the tribal recognition or other casino-related issues.

The tribe's federal recognition suggests it was money well spent and eventually might result in new cash flow for the Ilitch empire.

In the meantime, the Ilitches will be conscious of the dangers of over-leveraging themselves, sports insiders say.

"All sports properties are acutely aware of not burdening themselves with debt," said Maury Brown, president of Portland, Ore.-based Business of Sports Network, which includes websites devoted to the business side of pro sports.