Give these kinds of circumstances, you can bet analysts at Moody's as well as Standard & Poor's are keeping a close watch on MotorCity Casino's parent company, CCM Merger, Inc -- the entity Marian Ilitch formed to acquire MotorCity Casino from MGM Mirage/Mandalay Resort Group and other minor investors in 2005. In late August, Moody's reaffirmed its negative credit rating outlook for CCM Merger.
- Ilitch -- falls on Forbes' list of "400 Richest Americans" for second year in a row. Forbes' attributes the fall to troubles at MotorCity Casino which is "facing new competition from MGM Mirage" as well as an "economic downturn depressing casino valuations."
- MotorCity Casino (MCC) -- MGCB reports indicate revenues for Summer 2008 (Jun - Aug) fell 6.5% over Summer 2007.
- MotorCity Casino (MCC) -- revenues at the new and improved MotorCity Casino through August 2008 were down 1.65% over the previous 12 month period. (MGCB)
- MotorCity Casino (MCC) -- completion of what's now reported as a $300 million construction project was celebrated in September 2008 nearly a year after construction was originally anticipated to be complete.
- MotorCity Casino (MCC) -- construction, originally set to be completed by end of 2007, was ongoing through March 2008.
- MotorCity Casino (MCC) -- An expanded (25% larger) gaming floor opened in June 207 and despite an initial bump in revenues in June and July 2007; for each of the subsequent three months, revenues declined. Revenues posted in October 2007 were second lowest in that calendar year.
- MotorCity Casino (MCC) -- hotel opening delayed.
- MotorCity Casino (MCC) – August 2007 revenues were down as compared to the prior month; just two months after opening its expanded gaming floor.
- Detroit -- labor authorizes strike against three Detroit Casinos beginning Tuesday, Oct. 16. MotorCity Casino is labor's first target among Detroit casinos. On Oct. 17, MotorCity Casino locks its doors to gambling patrons.
- Detroit – realized a short-run UAW strike against GM in September.
- Detroit - UAW workers walked off the production lines at Chrysler in October.
- Detroit – second highest foreclosure rate in the Country. CNN’s Money.com reports that this past year, one of every 29 Detroit area households recorded a foreclosure filing there, almost double the rate of a year ago.
- Michigan – faced the possible shutdown of Detroit’s Casinos in the event of an anticipated Oct. 1 state government shut down.
- MGM Grand Detroit -- will celebrate a Grand Opening of its new $775 million casino hotel the Week of October 2, 2007.
- MotorCity Casino -- 400-room hotel is set to open in November completing the property’s $275 million renovation and expansion; MotorCity Casino announced the hiring of a V.P. for hotel operations in July who mysteriously has come and gone from the yet to open property; and MCC announced the hiring of a second V.P. for hotel operations in September.
- MotorCity Casino – lost its head chef in September to a restaurant in Chicago.
- MotorCity Casino – trying to gain some local marketing advantage by developing some synergy with other Ilitch-owned brands – namely the Detroit Red Wings and Detroit Tigers. MLB has a ban on mixing gambling and baseball; and an announcement for a Red Wings’ gambling tournament scheduled to coincide with MotorCity Casinos grand re-opening was pulled from the NHL’s official Red Wings’ Web site in light of recent NHL gambling scandals.
- Ilitch - falls 55 spots on Forbes 400 List; MotorCity Casino credit ratings fell, Tigers fail to make playoffs, Red Wings fail to sellout
CCM Merger, Inc. is the entity which obtained nearly $1 billion from "investors" through traditional bank loans and junk bond offerings in 2005. Ilitch used $525 million to buyout MGM Mirage, projected $275 million to renovate and expand the casino property and the balance primarily to assist in financing the acquisition of the funds in the shortrun.
It should be noted that one year after Ilitch purchased MotorCity Casino, both Moody's and Standard & Poor's were forced to downgrade their credit ratings for the Ilitch-controlled CMM Merger, Inc. because the entity was leveraged beyond what investors were told originally that they might expect.
first posted 10.03.07
updated 10.10.07; 10.15.07, 10.17.07, 10.25.07, 11.21.07, 11.28.07, 9.15.08