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Casinos' fate back in court

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Casinos' fate back in court

Detroit sites on hold as settlement is considered

February 18, 2004

BY TINA LAM

FREE PRESS STAFF WRITER

Detroit's three permanent casinos -- or at least two of them -- got a step closer to reality Tuesday, but it's a small step.

Several attorneys said it could take another month or two before casino owners can put shovels in the ground to start new gambling palaces. The casino-hotels are unlikely to be ready in time for the 2006 Super Bowl in Detroit.

On Friday, the U.S. 6th Circuit Court of Appeals in Cincinnati sent back to a Grand Rapids federal judge the drawn-out 1997 lawsuit between the Lac Vieux Desert Band of Chippewa Indians and the city over casino licenses. Attorneys received the order Tuesday.

"I think it's a positive sign that the court is ready to move," said Mayor Kwame Kilpatrick, on his way into a closed session with the City Council on the lawsuit.

The appeals court said that U.S. District Judge Robert Holmes Bell, who has handled the case since it was filed in 1997, should decide whether to approve a settlement proposal. The case has been overturned twice on appeal.

The settlement announced by Kilpatrick in November covered only MotorCity Casino and Greektown Casino. The two agreed to pay the tribe $39.5 million each and $500,000 each in court fees. The two were the subject of the lawsuit in 1997, in which the tribe alleged the owners got unconstitutional preferences for casino licenses.

MGM Grand Detroit Casino was not part of the settlement. MGM Grand Detroit's owners contend they did not get a preference and are not part of the lawsuit.

But Conly Schulte, an attorney for the Lac Vieux tribe, said the tribe will continue to try to get MGM Grand Detroit's license rebid.

"The non-settling party should not be prejudiced by the actions of the settling parties," the court order said in part. The court also noted it was sending the case back to Bell because he has knowledge of the case.

Bell is now likely to hold a hearing on the settlement, although no date had been set Tuesday afternoon. Bell has already told the appeals court he would approve the settlement. In an earlier opinion, he had also said he considered MGM Grand Detroit a victim in the lawsuit.

If Bell approves the settlement, it doesn't automatically lift an injunction that has prevented construction. The appeals court would have to lift the injunction. The tribe is likely to oppose lifting the injunction for MGM Grand Detroit, attorney Schulte said. MGM Grand Detroit has filed a motion asking the court to either lift the injunction against all three casinos or keep it in place.

The appeals court issued the injunction in September 2002, halting the building of any of the three permanent casinos until the issues were decided. MGM Grand Detroit has had all the other necessary approvals for its permanent casino for a year. The other two casinos have yet to win final City Council approval for zoning changes.

The appeals court ruled in January 2002 that MotorCity and Greektown got unconstitutional preferences for licenses in the city's casino ordinance. The tribe contends MGM Grand Detroit benefited from the preference because then-Mayor Dennis Archer insisted that approval of the three casinos be tied together. City Council members could only vote up or down on all three. Council members have said that MGM Grand Detroit did not have enough council votes to win its license, and therefore the preference helped seal its deal.

Contact TINA LAM at 734-432-6502 or [email protected]

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