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Vegas casino may bet on Cobo

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Wednesday, January 19, 2005

Vegas casino may bet on Cobo

The Sands considers building a gaming hall and hotel tied to the convention center.

By R.J. King Joel J. Smith and John Wisely / The Detroit News

DETROIT - Cash-strapped Detroit's campaign for a new downtown convention center may be getting new life.

William P. Weidner, president and chief operating officer of the Las Vegas Sands casino company, visited Detroit Monday to explore a potential deal to build a downtown hotel, casino and convention center, according to several city and county government officials.

Las Vegas Sands' apparent interest in Detroit raised hopes that private capital - not taxpayer dollars - will underwrite the long-sought replacement or expansion of Cobo Center.

In a series of private meetings, Weidner discussed the potential project with top-ranking Oakland, Wayne and Macomb officials, along with labor leaders, real estate executives and the Detroit-Wayne County Port Authority.

Weidner, a Northville native and graduate of Michigan State, also toured the North American International Auto Show going on this week at Cobo Center.

A key figure behind the negotiations is Oakland County Executive L. Brooks Patterson, who has hinted in recent weeks that he wanted to bring in a private entity interested in building a convention center or expanding Cobo Center.

Patterson declined to discuss specifics of Weidner's visit but passed along a message to Mayor Kwame Kilpatrick, who was quoted this week as saying waiting on a private casino operator to replace or expand Cobo is like "waiting for Santa Claus."

"To say we're in some sensitive negotiations is an understatement," Patterson said Tuesday. "But after seeing some of the recent comments from Mayor Kilpatrick, you can tell the mayor for me that Santa Claus was in town."

Detroit Deputy Mayor Anthony Adams, who also met with Weidner, took exception to Patterson's comments.

He said Kilpatrick has met with Weidner in the past and is aware of his interest, even though the city had little involvement in the talks this week.

"Brooks has a habit of making the media think that everything is his show," Adams said. "Clearly the mayor will be controlling the process here, and we will be seeking cooperation of elected officials throughout the region and state."

Any potential deal faces plenty of obstacles.

Las Vegas Sands would have to obtain a casino license, most likely through the purchase of MGM Grand Detroit Casino or the MotorCity Casino.

One of the two casinos must be sold in the next few months as a result of a pending merger between MGM Mirage, the lead partner in the MGM Grand Detroit Casino, and Mandalay Resort Group, which co-owns the MotorCity Casino.

Dan Gustafson, executive director of the Michigan Gaming Control Board, which oversees the state casino industry, said state law forbids any company or person from owning more than 10 percent of two Detroit casinos.

Gustafson said he is aware of four "major players in Las Vegas" that have submitted bids to purchase MGM Grand Detroit, including Las Vegas Sands. He declined to name the other three bidders.

"At this point, they are focusing on selling MGM Grand Detroit" rather than MotorCity, Gustafson said.

He added that it will take the state three to six months to complete a background investigation into any casino company that intends to purchase either the MGM Grand Detroit or MotorCity Casino.

The MGM Grand Detroit and MotorCity casinos are highly profitable. Each generates about $400 million in annual revenue with gambling receipts expected to be up 4 percent to 5 percent in 2005.

Any potential deal involving Las Vegas Sands could rankle Metro Detroit's labor unions. Sands chairman and majority owner Sheldon Adelson has been criticized as anti-union by organized labor in Las Vegas.

The development comes after public and private leaders in Metro Detroit have been meeting for close to two years to formulate plans to either expand Cobo Center or build a convention center. The key reason cited for expanding or replacing Cobo Center is that it's considered too small to host the auto show.

Next month, the Tourism Action Group, a committee set up to research the Cobo issue, is expected to recommend that Cobo Arena next to Cobo Center be torn down and replaced with a 300,000-square-foot addition at a cost of about $700 million. Cobo Center offers 600,000 square feet of exhibit space on one level, along with a 100,000-square-foot lower level, far less than other convention centers that host major auto shows.

The expansion, if approved, would give Cobo about 900,000 square feet of space on one level. Funding for the project has not been identified.

Another option is to build a convention center nearby that would offer around 1.1 million square feet of convention space along with a hotel and casino. The cost of such a project would top $1 billion.

Wayne County Executive Robert Ficano said he met Weidner on Monday at a lunch reception at Coach Insignia restaurant atop the Marriott Hotel at General Motors Corp's Renaissance Center.

"Weidner was interested in the possible convention center, but he was cautious ..." Ficano said. "It was an interesting first step in my book, but we still have a long way to go. There are many hurdles. They have to obtain a casino license. Right now, people should be cautious and take a deep breath and make sure there is a sentiment out there to get a deal done."

Nancy White, chairwoman of the Macomb County Board of Commissioners, said she came away from the same luncheon Monday believing that all the momentum in the discussions had moved toward a private entity funding a new convention center.

"I'm beginning to believe that it's the only way this is going to happen," White said. "People are trying real hard to make this happen."

White said she didn't get all the details on the project but was impressed with what she learned.

"There has to be a lot of pieces that come together, but I'm hopeful," she said.

Jewel Ware, chairwoman of the Wayne County Commission, said she did not support a plan to use public money to finance a new or expanded Cobo Center. She did not meet with Weidner on Monday.

"The taxpayers of Wayne County have been very generous in the past with offering assistance to build (Comerica Park and Ford Field)," Ware said. "I suggest we look to the Detroit Wayne County Port Authority to see if they can float bonds to (help) fund the project."

A call to the Detroit Wayne County Port Authority was not returned Tuesday, but the nonprofit group recently approved using its bonding program to help finance a $43 million parking deck east of the Renaissance Center.

Jacob L. Miklojcik, president of Michigan Consultants, a Lansing-based group that specializes in the casino and convention industries, said Detroit may not need a large convention center.

"Detroit can get a zillion more conventions, but they aren't going to be the gigantic ones," Miklojcik said. "They need to fill up hotel rooms with small conventions. A hotel has to be connected with the convention center to make it work. I don't think a large, large Cobo Center is that important to them."

Liz Boyd, spokeswoman for Gov. Jennifer Granholm, said she couldn't disclose whether the governor met with Weidner.

"I can't comment on who the governor spoke to, but I can tell you that since last Friday the governor has become a party to the discussion about Cobo Center's possible expansion."

Boyd declined to elaborate.

Ron Reese, director of corporate communications for the Venetian Resort Hotel Casino, declined to comment Tuesday.

"I can neither confirm nor deny your inquiry regarding a possible appearance by a Las Vegas Sands executive in Detroit," Reese said. "It is company policy, for personal security and business reasons, not to publicly disclose the travel plans of Sands' officials."

You can reach R.J. King at (313) 222-2504 or [email protected]

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As much as I hate to agree with LBP, I think a partnership with a casino is probably the only way to make this happen. $400 million in profits a year?!?! It will be nice to finally see the benefits of the casinos. I wonder if it would be renamed to reflect the casino? e.g. Sands Convention/Expo Center. I hotel connected directly would be great thing for the city.

They really need to start getting little conventions down in Cobo. The Novi expo center has something going on every weekend, from boat shows, bridal shows, ect. Get these down there.

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What other shows do they have at Cobo other than the auto show anyway? I agree that they definately need to attract more conventions and shows.

Unfortunately a partnership with a casino is the only way an expansion could be accomplished. Why can there not be some sort of regional cooperation? The lack of regional cooperation will eventually lead to the further decline of metro Detroit. People will not realize this until it is too late, however.

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We should just demolish that ugle thing; it blocks the downtown from the riverfront


Agreed. But unless you can convince the casino of this, it's not going to happen. Unless you have a money tree in your backyard....

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