Property in Downtown Detroit with a history of Ilitch Ownership

As a reminder... At one time or another, during the last decade members of the Ilitch family, Michael Malik or their affiliates and enterprises controlled all these properties in the down town Detroit area.

Take a look.

Casino Syndicator Couldn't get a Michigan Gambling License; Yet he's Worthy of a Stanley Cup Championship Ring?

Is Michael Malik sporting a Stanley
Cup Championship ring?

If controversial character Michael J. Malik, Sr. isn't affiliated with Ilitch Holdings, Inc., Olympia Entertainment, Olympia Development, the NHL Red Wings or any of the other Ilitch companies, why is it he apparently sports a 2008 Stanley Cup Championship ring?  His reputation suggests he's a rather dishonorable character but apparently someone thinks he's worthy of an NHL Stanley Cup Championship ring.

Malik, who holds himself up to have been, along with Mrs. Marian Ilitch, one of MotorCity Casino's founders, failed to receive a Michigan gambling license in 1999, reportedly due to character and tax issues; and it was reported Marian Ilitch arranged a buyout of Malik's interest in the casino necessary before the Gambling Commission would allow the gambling hall to open its doors. Not licenseable as a proprietor of a gambling hall but worthy of a Stanley Cup ring?

The terms of his "buyout" with Ilitch have never been revealed publicly. Clearly there's something controversial involved.  However, since being formally pushed out of MotorCity Casino, Malik has made his offices in the executive suites at Ilitch Holdings, Inc.'s Fox Theater headquarters. Some consider him to be Mrs. Marian Ilitch's political bag man and others even say he's her Consigliere.  Certainly he plays "bad cop" to her "good cop."

Despite more than a decade of legal and personal problems that pile upon the reasons he failed to get a Michigan gambling license, it has been reported that Malik is partners with Ilitch in various unfulfilled schemes to build an Ilitch gambling empire expanded to New York, California and Hawaii.

However, because of the often controversial, even illegal, nature of Malik's activities, it's always denied that he's directly affiliated with Ilitch Holdings or any of its venerable subsidiary brands.  Yet he's worthy of wearing a Stanley Cup ring?

No wonder some people he attempts to influence, intimidate or even bully walk away from meetings with Malik thinking he's part owner of the Detroit Red Wings. Or is he? And is that why he's sporting a championship ring?  Was Red Wings ownership a part of the buyout of his MotorCity Casino interests?

Forbes Reports Ilitch-Owned Franchise one of NHL's Most Valuable

Detroit Red Wings Second  Most Profitable US Franchise;
 MotorCity Casino Workers Forced to Pay Own Healthcare Costs

Forbes' 2011 NHL Team Values

Forbes is out with its 2011 NHL Team Values: The Business of Hockey. Despite economic woes among other US sectors, Forbes reports the NHL valuations have hit an all-time high. The Detroit Red Wings, owned by Michael and Marian Ilitch, valued at $336 million, ranks #4 out of 30 NHL teams. That's up 7% over 2010.

Forbes Profile
Billionaire Michael Ilitch, through Olympia Entertainment, has a highly integrated and valuable entertainment empire. In sports, Olympia controls the Red Wings, Little Caesars AAA hockey club and baseball's Detroit Tigers, as well as their stadiums, Joe Louis Arena (hockey) and Comerica Park (baseball). Outside of sports, Olympia runs the Fox Theatre (over 4,800 seats), Cobo Arena and Hockeytown Cafe,voted the number two sports bar in the country week after week by ESPN2’s Cold Pizza. Olympia also owns food distribution businesses that Ilitch leverages at his stadiums and a casino in Detroit.

The Red Wings are a significant part of the annual marketing plan for the Ilitch-owned MotorCity Casino frequently making guest appearances and hosting star-studded poker tournaments. Unfortunately for the Ilitch bank the same isn't true for the Ilitch-owned Detroit Tigers baseball team. Given its history of scandals, Major League Baseball has specific regulations prohibiting the mingling of baseball and gambling interests.

The Ilitches realized a $16.3 million operating income from their NHL franchise this past season ranking it the #2 most profitable US franchise; and players and management continue to draw multi-million dollar paychecks. Ilitch continues to fuel up the Gulfstream Jet for the clan's personal travel and vacation in Boca Raton, FL. Their business partner paid $5.4 million cash for a New York Penthouse. Those aren't the circumstances for the hardworking staff at MotorCity Casino. In a labor negotiation that took place earlier this Fall, the Ilitch gambling hall workers were told to start paying some of their own healthcare costs or face job loses.

#Occupy Ilitch Holdings, Inc.

Ilitch Unlikely to get Taxpayer Subsidies for a New Detroit Hockey Arena

New Detroit hockey arena likely faces funding hurdles
Unlike Comerica Park, Ford Field, public money likely a tough sell this time around
10.22.2011

By Louis Aguilar

When Detroit Red Wings and Detroit Tigers owner Mike Ilitch recently pledged again to build a new arena in downtown Detroit, economic analysts said it was not an empty promise.

Despite an uncertain economy and a lack of public appetite for sports facility subsidies, building an arena in Detroit is still doable, but would require some creativity, they said.

"He's going to have to make a dramatic statement of faith in Detroit again to build a new hockey arena," said Scott Watkins, an economist for Anderson Economic Group in East Lansing, who has done analyses on building sports venues. A new hockey arena would cost an estimated $300 million to $400 million to construct.

"Mr. Ilitch and Red Wings fans see Hockeytown — a city and region very loyal to professional hockey," Watkins said. "What global lenders see is a risky investment. Their view is there would be no guarantee that for 10, 20, 30 years a hockey franchise can be supported in an area with declining population and declining income."

The hockey arena has been a long quest. Ilitch for five years has actively explored building a new arena downtown to replace the 35-year-old Joe Louis Arena and more recently said he wants to construct such a facility. The hockey team and city-owned Joe Louis Arena are still negotiating an extension of the lease.

"Like I've stated before, we're gonna have a new arena," Ilitch told The Detroit News last month during an exclusive interview. "That's the best thing I can say." On Friday, Ilitch Holdings announced that Eric Larson, an A-list real estate developer with a long track record of high-profile deals, is now in charge of all current and future real estate transactions for Olympia Development, the Ilitch entity that would play a big role in a new hockey arena deal.

There are bigger obstacles for Ilitch to clear on a new arena than he had to overcome to build Comerica Park, the home of his Tigers. The path of public and private financing Ilitch took to create the ballpark is likely unavailable to him now, several analysts contend.

Comerica Park opened in April 2000 and cost $300 million to build. Ilitch paid $185 million of the cost of the stadium, owned by the Detroit-Wayne County Stadium Authority, and subleased to the team. The rest was paid for by the city of Detroit, Wayne County and corporate investors. The state of Michigan provided infrastructure improvements.

The stadium authority issued $85 million in 30-year tourist tax bonds in 1997 for the baseball stadium and, with interest, will pay about $176 million by 2027, according to the stadium authority. The bonds are paid twice yearly with revenue from a 2 percent rental-car tax and 1 percent hotel tax in Wayne County. The tax needed Wayne County voter approval.

In this era of painful budget cutting, getting voter approval for another venue is a tough sell, said Bernie Porn, president of EPIC-MRA, an opinion research firm in Lansing that does polling on statewide issues.

"The Tigers could win the World Series, the Red Wings could win the Stanley Cup, and I still don't see how he (Ilitch) gets voter approval for an arena," Porn said.

"Not that I have done any polling about the issue, but in this climate, I think it would be seen as a billionaire is asking for a tax break," he said. "But if you are asking me if he gets it done, I think that answer is yes."

What Ilitch has is rock-solid support in Michigan's corporate community and plenty of his own resources. Mike Ilitch and his wife, Marian, owner of Detroit's second-largest gaming hall, MotorCity Casino, have a combined fortune of $2 billion, according to Forbes magazine. That includes their Little Caesar's pizza franchise empire headquartered in downtown Detroit.

He also could get major help from other Michigan businesses. In September, the Red Wings announced the organization signed a "presenting" sponsor agreement with Amway, the private Ada-based company owned by the DeVos and Van Andel families. Terms of the multiyear deal were not disclosed, but the deal includes Amway's logo being embedded in the ice and signage elsewhere at Joe Louis Arena, and community programs to help young people in Grand Rapids and Detroit.

What the Ilitch, DeVos and Van Andel families share are deep pockets and a love of professional sports.

Amway co-founder and billionaire Richard DeVos owns the National Basketball Association's Orlando Magic, and the team backed $100 million worth of bonds issued by the city of Orlando to build the $480 million Amway Center, which opened last year.

DeVos also supplied $50 million to help build it and $1 million in rent each year and $40 million to put the Amway name on the building.

"The resources are there for the arena to get done," Watkins said. "I'm looking forward to see what the formula will be."

Detroit Red Wings Generates Millions for Ilitch; Franchise can always be subsidized by other Ilitch Holdings enterprises

Wings can flex financial muscle

Team's below salary cap, can bulk up roster

10.23.2011

By Bill Shea

...Estimates for the 2009-10 season by Forbes show Detroit seventh in the 30-team NHL with $119 million in revenue and sixth in operating income at $15.3 million.

The team doesn't comment on its financials.

The salaries are offset by a deeply loyal fan base that keeps the Red Wings near the top of the NHL's attendance rankings every year.

Detroit has played two home games out of a slate of 41 this season, and both have been sold out at 20,066 each. That puts the Red Wings third in the 30-team NHL in per-game attendance average. It finished last season fourth in the league at 19,680 per game.

A single fan is worth $101.48 per game to the Red Wings, according to Chicago-based sports research firm Team Marketing Report's Fan Cost Index published last year. The National Hockey League's FCI average is $101.66.

The calculation is derived by a simple formula: A fan at Joe Louis buys a ticket at $51.73 (average price), a $6 beer, a $3.50 soft drink, a $3.25 hot dog, $20 for parking, a $7 program and a $10 hat.

A full season of sellouts at Joe Louis, based on the Fan Cost Index, would generate $83.4 million over the 41 home games. Part of that is handed over to the city in a form of a 10 percent ticket tax, 10 percent surcharge on concessions and 7 percent on suite sales.

The team once had 396 consecutive sellouts from 1996 through the start of the 2007-08 season -- which coincides with the economic collapse locally and nationally.

Detroit also picks up supplemental revenue from pricier tickets, suite rentals and advertising during the playoffs. And the deeper into the playoffs the Red Wings get, the more money the team collects.

The Red Wings also have made moves on the corporate sponsorship front. In September, the team inked a deal with Ada-based Amway Corp., the network-based direct-marketing giant, to become the team's first-ever presenting team sponsor. Financial terms were not disclosed, but that contract is thought to be a two-year, seven-figure deal.

The Amway logo now appears on all Wings-branded signage at Joe Louis, on tickets and elsewhere.

Detroit also extended a deal with Chrysler Group LLC in another relationship that it declined to discuss the financials.

Another line of revenue comes from broadcast rights: The Red Wings, Tigers and Detroit Pistons have separate 10-year broadcast deals, signed in 2008, with Fox Sports Detroit and collectively are worth about $1 billion.

And if there isn't enough revenue from the team and its various deals, owners Mike and Marin Ilitch can dip into their other businesses to subsidize it.

The family fortune comes from its $2.2 billion in annual sales from its Little Caesars pizza chain or the $446 million from Marian Ilitch's MotorCity Casino.

The Ilitches, who are planning to build a new downtown arena for the Wings in coming years, bought the then-moribund team for $8 million from Bruce Norris in 1982. Mike Ilitch also owns the Tigers.

His stewardship of the Wings has led to him be recognized as one of the top owners in pro sports by Sports Illustrated, ESPN and Haddonfield, N.J.-based Turnkey Sports & Entertainment Inc., which measures brand effectiveness and values of pro sports teams.

The Red Wings are the top team in The Hockey News' weekly power rankings.

"Another year, another spotless start for the NHL's model franchise," the magazine said. (Complete Story)

Another Ilitch Leaves Family Business

Atanas Ilitch to leave Olympia Development real estate company

6.14.2011

By Daniel Duggan

Atanas Ilitch is leaving the family business.

The son of pizza and sports icon Mike Ilitch said today that he is resigning as president of Olympia Development. The real estate company, owned by Mike and Marian Ilitch, handles the real estate for all their companies.

The move was announced in a press release issued today in which Atanas Ilitch cited “outside business interests” requiring his attention as he leaves Olympia Development.

“The team we have at Olympia Development is highly capable, which makes me very comfortable in making this move at this time,” he said in the press release.“ My personal business interests continue to require more of my day-to-day time and attention.

“In my opinion, this is a win-win, and I look forward to recruiting a highly capable and experienced individual to lead Olympia Development into the future.”

A request for an interview was sent to Ilitch this afternoon, but no response was given.

Chris Ilitch, president and CEO of Ilitch Holdings Inc., said his brother has been a key part of the business.

“I greatly appreciate the leadership that Atanas has provided at Olympia Development over the last six years and the tremendous vision and leadership he has shown in our community,” Chris Ilitch said in the statement.

“My brother is one of the most passionate and creative persons I know, and he is absolutely committed to making our community a better place for all.”

Atanas Ilitch became president of Olympia Development in 2005. He has held other positions in the Ilitch companies over the years, including president of Olympia Entertainment from 1993 to 2000.

The search will begin immediately for a new president of Olympia Development. Atanas will help find his successor and stay on until that person is appointed, according to the company’s statement.

Ilitch not renewing existing lease on Joe Louis Arena

6.26.09

Ilitches not renewing old Joe Louis lease, negotiating for new deal

By Bill Shea

The statement today that the owners of the Detroit Red Wings aren’t renewing their expiring Joe Louis Arena master lease leaves it unclear if they will pursue a new hockey arena or renovate their 30-year-old city-owned home.

The owners say they now plan to negotiate a new lease for Joe Louis, which could be a long-term commitment and what insiders say would be a $150 million renovation job, or it could be a shorter deal that buys them time to arrange financing for a new venue that could cost $300 million to $400 million.

Olympia Entertainment, which manages Joe Louis and Cobo Arena under a single lease and is owned by team owners Mike and Marian Ilitch, was required to notify the city by Tuesday of their intentions with the contract, which expires on July 1, 2010. Otherwise, it automatically renewed for 20 years.

The statement from Olympia today says the lease isn’t being renewed to allow the city to forge ahead with an expansion of Cobo Center, which is managed by the city but includes the Ilitch-run Cobo Arena.

The city needed Ilitch-owned Olympia Entertainment to renegotiate the master lease because it includes language that gives Olympia say over any project that would significantly impact Cobo Arena.

Not renewing basically turns Cobo Arena back over to the city, paving the way for the long-debated control and expansion of Cobo Center — something needed to prevent the loss of the annual North American International Auto Show.

Olympia has been negotiating for years on the lease with the Detroit Economic Development Corp., and the statement Friday said the Ilitches will continue to pursue a new lease for just Joe Louis.

“The existing lease was crafted more than three decades ago by individuals no longer associated with either Olympia Entertainment or the city,” Ilitch Holdings Inc. President and CEO Chris Ilitch is quoted as saying in the statement. “It does not fully contemplate one: the evolution of the sports and entertainment industry; two: the current economic environment in which both the city and Olympia Entertainment are operating and; three: the infrastructure replacement and repair needs of a 30-year-old building in order to meet the competitive industry standards of today.”

The statement notes that Joe Louis Arena is the fourth-oldest venue in the National Hockey League. Teams seek new arenas because modern facilities provide deeper revenue streams than older facilities.

Ilitch spokeswoman Karen Cullen said no comment would be made on the specifics of the new lease talks.

The Ilitches bought the Red Wings from former owner Bruce Norris in 1982 for $8 million, and today it’s valued by Forbes.com at $303 million.

Wayne County Executive Robert Ficano has said he’s been approached by the Ilitches about financing a new arena, but has declined to say more.

Both Comerica Park, where the Ilitch-owned Detroit Tigers play, and Ford Field, home of the National Football League’s Detroit Lions, are owned by the Detroit-Wayne County Stadium Authority, a quasi-public board of city and county appointees, and are leased to the county and then subleased to the teams.

The authority, along with the DEGC, also partially financed both ballparks.

Any use of tax dollars to subsidize stadium construction — either in the form of a direct levy or by extension of current taxes — generates fierce criticism that it’s nothing more than welfare for rich owners and players.

Speculation is that a new hockey arena would be built on Ilitch-owned land in the Foxtown area or between Grand River and Cass south of I75.

Not renewing the master lease means the Ilitches give up a cap on property taxes at Joe Louis, which limits them to $252,000 annually. Without the cap, the taxes would be about $1 million. While the city owns Joe Louis, the lease called for the Ilitches to pay the property taxes — something that could continue under a new lease, or be changed.

The lease, first negotiated under Mayor Coleman Young after the Detroit Lions and Detroit Pistons left for the suburbs, has drawn criticism, including from the Detroit City Council, that it tilts too far in favor of the Red Wings.

Detroit gets a cut of tickets, concessions, corporate and suite sales at both venues, which would have been lost if the lease was renewed. New surcharges could be negotiated under a new lease, and at a new arena.

If the Ilitches, who have a year to work out a new lease, decide to pursue a new arena, financing options include particular-use taxes, use fees built into ticket prices, new lottery games, or the city and/or county issuing revenue bonds. Private money from the owners and from corporate investment, especially from naming rights, also will finance any new stadium.

Building a publicly owned stadium and leasing it to the team, which was done for the Tigers and Lions, is also an option — but one that carries political risks because it would require tax dollars in economically tough times.

Debt financing by the team is also iffy because banks are hesitant to loan money at the favorable rates from even a year ago, something that’s hampered stadium projects elsewhere in the country.

A new short-term lease at Joe Louis buys time for the markets to improve.

Ilitch must announce intentions for Joe Louis Arena June 30

Bill Shea at Crain's Detroit Business blogs:

... Mike and Marian Ilitch, the franchise’s owners [Detroit Red Wings] since 1982, have until June 30 to tell Detroit if they will modernize the 30-year-old, city-owned Joe Louis Arena or construct a new venue that likely would cost $300 million to $400 million.

Renovating Joe Louis reportedly could cost $180 million or more.

The lease expires July 1, 2010, but the Ilitches are contractually obligated to tell the city a year ahead of time their intentions. Doing nothing renews the lease for 20 years.

The team and city have been hush-hush about their Joe Louis talks. Scuttlebutt says the Ilitches want an extension to continue negotiations while they map out a plan for a new venue — likely on the land in the Foxtown area they’ve been buying up in recent years. (Full Post)

Forbes reports Detroit Tigers lost $26M; saw 9% drop in value

4.22.09

The Business Of Baseball
#21 Detroit Tigers

The skinny
Just two seasons after reaching the World Series the Detroit Tigers won only 74 games in 2008. The Tigers managed to accomplish this despite having a $136 million payroll, fourth highest in baseball. But Tiger fans stayed faithful, with a team-record 3.2 million of them pouring through the turnstiles. Billionaire owner and pizza chain king Michael Ilitch is taking a big risk this season, albeit probably a necessary one: With the Detroit economy crumbling he is raising ticket prices for "premium games" by $2 to $7 and many season ticket holders are getting a similar price hike. With the auto companies imploding and discretionary income plummeting for many fans, Ilitch's strategy looks like it has backfired. Season ticket holders have fallen [44%] from 27,000 in 2008 to a reported 15,000 this year. If attendance does not pick up during the summer, Ilitch will no doubt regret this gamble.

Forbes: #21 Detroit Tigers

Forbes: 2009 MLB Valuations

Crain's Detroit Business: Forbes.com reports 9% decline in value of Detroit Tigers franchise

Highlights of current Ilitch hockey arena lease

Originally published 3.22.09 as a sidebar to comprehensive coverage surrounding a Crain's Detroit Business story, "Where will Wings roost? Joe Louis Arena lease nears end:"

THE JOE LOUIS LEASE

The Ilitch family’s lease for its Red Wings to play at Joe Louis Arena is part of the Cobo Arena master lease. The deal includes:

• The city provides free police and landscaping services, including snow removal, for both the Joe Louis Arena and Cobo Arena, and up to $500,000 annually for capital improvements for the hockey venue.


• The Ilitches pay property taxes on city-owned Joe Louis, but they are capped at $252,000 annually. Without the cap, the tax would be about $1 million.


• The Ilitches pay $25,000 monthly rent for Joe Louis and $12,500 for Cobo.


• Detroit collects a 10 percent ticket tax for Joe Louis events and a 7.5 percent ticket tax for Cobo events. The city collects a surcharge of 10 percent on concessions and 7 percent on suite sales.


• If the lease is renewed, the city immediately loses the ticket taxes and in five years loses the surcharge on concessions and suites.


• A new arena would mean the city could charge for police and snow services and collect full property taxes on the venue. The city also could lose its ticket, concession and suites surcharges. All this depends, of course, on a new lease or stadium deal, its financing and who owns the new venue.

Latest comprehensive update on Ilitch hockey arena saga

3.22.09

Where will Wings roost? Joe Louis Arena lease nears end
Cobo expansion complicates plans for Joe Louis

By Bill Shea

Mike Ilitch has until June 30 to say if he’ll modernize The Joe or build a new facility.

The ongoing saga of whether to renovate the Joe Louis Arena or build a new home elsewhere in the city for the Detroit Red Wings has entered its version of hockey's third period — and the team owner can force overtime by negotiating an extension on a lease with the city.

Mike Ilitch, the team's owner since 1982, has until June 30 to tell Detroit if he will modernize the 30-year-old, city-owned arena or construct a new venue that likely would cost $200 million to $300 million.

Talks have been ongoing for several years between the Ilitch organization and the quasi-public Detroit Economic Growth Corp.

Even with the clock ticking, no offers are on the table, those involved say.

Adding spice to the drama... (Original Story & extras)

Jack Utsick faces contempt in SEC ponzi scheme case that spawned Paris Hilton & Michael Malik, lawsuits

2.06.09

Ex-promoter faces contempt in Fla. SEC fraud case

By CURT ANDERSON

MIAMI (AP) — A once high-flying concert promoter of acts such as Aerosmith, Elton John and Shania Twain could face contempt charges for failing to show up in Miami for a Securities and Exchange Commission fraud case that has spawned a multimillion-dollar lawsuit against Paris Hilton.

The promoter, John Utsick, 66, now lives in Brazil and refuses to return to the U.S. out of fear he'll be arrested for possible criminal violations, his attorney Richard Kraut said at a hearing Friday. The SEC wants to take his deposition regarding assets he took from his former company, Worldwide Entertainment Inc.

"Mr. Utsick has created this issue. He decided to flee," SEC attorney Robert Levenson said at the hearing.

Kraut said Utsick isn't hiding, but he wouldn't divulge in court where he lives in Brazil. "He's not in the Amazon someplace," the lawyer said. "He's not dodging anything."

The deposition dispute is the latest twist in a case first brought by the SEC in 2006 claiming that Utsick fleeced some 3,000 investors out of nearly $300 million between 1998 and 2005. Utsick, whose company promoted tours and concerts by top rock and country music acts and other shows, allegedly created a Ponzi scheme in which he paid older investors out of money from new investors, while his business actually lost gobs of money.

U.S. District Judge Paul Huck previously found against Utsick and appointed a receiver to identify assets around the world intended to return some of the lost investments. That receiver, Michael Goldberg [Akerman Senterfitt], said he soon will send the first installment of as much as $25 million to be divided among investors, and eventually hopes to recover up to $60 million.

One of Utsick's yet-to-be sold former assets is a 17,500-seat amphitheater in Berlin, Germany. There's also sizable property in northern Florida, condos in the Miami area and six homes in California, Goldberg said.

The SEC wants to take Utsick's deposition to find assets he took personally and may still have. Kraut said Utsick's position is that as chief of the company he was entitled to the assets as a form of salary. Huck said he would give the two sides one more week to reach an agreement before deciding on the contempt issue.

"I don't have a lot of sympathy for Mr. Utsick. He's the one who put himself in this situation," Huck said.

The Hilton lawsuit stemmed from a 2006 film in which she appeared called "National Lampoon's Pledge This!" Utsick's old company, Worldwide Entertainment, invested in the movie and was an executive producer. Part of the deal was that Hilton was to pitch the movie on TV talk shows and media interviews, but Goldberg says that never happened.

"Hilton failed to attend any talk shows or telephonic or in-person interviews," the lawsuit says.

Goldberg said he is seeking about $7 million from Hilton and her management company, with trial in that case set for May 18. Ultimately any money recovered would go to Utsick's defrauded investors.

Hilton's lawyers contend that she fulfilled her main obligation to the film — publicity events at the Cannes Film Festival — and that there were only "vague and unspecific requests" that she do other appearances after it was released. At the time, they said, she couldn't do it because she was filming her reality TV show "The Simple Life."

"Defendants are not currently aware that the producers ever arranged any dates or agreements for Ms. Hilton to appear on any talk show," attorneys Michael Weinstein and Stephen J. Binhak said in court papers.

NOTE: this case also spawned a multimillion dollar fraudulent transfer lawsuit against Detroit casino syndicator and real estate developer Michael J. Malik, Sr., (Goldberg v. Malik) who is a longtime business partner with Mrs. Marian Ilitch. Ilitch Holdings, Inc. subsidiaries include Detroit Tigers (Comerica Park), Detroit Red Wings (Joe Louis Arena), Fox Theatre, MotorCity Casino, Olympia Entertainment, etc.

Joe Louis Arena by any other name is still Joe Louis Arena

1.25.09

Slow economy stalls naming deal for new Metro terminal

By Bill Shea

...The Detroit Red Wings and Detroit Pistons, don't have corporate names on their venues.

The Ilitch Holdings Inc.-owned Red Wings play at city-owned Joe Louis Arena and have the right to sell the venue name but won't, said Karen Cullen, Ilitch's vice president of corporate communications.

That's because the team's lease predates the trend of naming-rights deals, which began in earnest in the 1990s, and the realization fans are very unlikely to call the facility anything but the Joe Louis Arena, making a name deal unattractive to companies.

The Ilitches continue to consider renovating Joe Louis or building a new stadium, and any new venue would likely include a name deal — just as with the Ilitch-owned Detroit Tigers and Comerica Park. The company must tell the city by June 30 if it plans to renew the Joe Louis lease, but may be seeking an extension... (Complete Story)

Judge Huck orders Jack Utsick to return to Miami for SEC deposition no later than Jan. 28th

A Miami-based U.S. District Judge, Paul C. Huck, has ordered defendant Jack Utsick (John P. Utsick) to appear in Miami, Florida for a Deposition with attorneys representing the U.S. Securities and Exchange Commission (SEC) no later than 1.28.09. Judge Huck filed the order on 1.15.09.

Utsick has attempted to maintain asylum in Brazil where he claims he now lives. Among other things, Utsick represented that the expense of travel prohibited him from returning to the U.S.

Judge Huck ordered the SEC to pay reasonable travel expenses associated with Utsick's return to Miami. The Judge denied Utsick's attempts to win advances on legal expenses.

The SEC alleges that Utsick, a one-time entertainment mogul, was running what amounted to a $300 million ponzi scheme. This is allegedly how he received new capital to pay previous investors and produce theatrical productions, concerts and festivals around the world.

Judge Huck has also ordered all parties in the primary matter to complete Discovery by 1.28.09. But, then again, Judge Huck has attempted to compel discovery on several previous occassions.

Michael I. Goldberg, an attorney at the Akerman Senterfitt law firm, is the court appointed Receiver in the matter. Goldberg has filed numerous actions against individuals who are alleged to have received fraudlent "profit payments" from Utsick or whom otherwise were indebted to Utsick, Worldwide Entertainment Group or any of several other Utsick partners and affiliates. (See: Receivership's Web Site)

Among those who Goldberg has charged: Paris Hilton; two of Australia's top concert promoters Michael Chugg and Kevin Jacobsen; and Detroit-based casino syndicator Michael J. Malik, Sr., who has strong ties to the Ilitch family (Mike & Marian Ilitch) owners of Olympia Entertainment, Detroit Tigers (MLB), Detroit Red Wings (NHL), Detroit's Fox Theater and MotorCity Casino.

The Ilitch Family controls a significant number of Detroit's top theatrical, sports and concert venues including Cobo Arena, Fox Theatre, The City Theatre, Joe Louis Arena, Comerica Park, MotorCity's Sound Board Theatre and the Masonic Temple Theatre.

April trial set in $2.1 million fraud case against Detroit casino syndicator

In Goldberg v. Malik, the $2.1 million fraudulent transfer case brought by Receiver Michael I. Goldberg against Detroit-based Michael J. Malik, Sr., U.S. District Court Judge Paul C. Huck has calendared a two-week trial to begin the week of 4.20.09 in Miami.

An Order setting civil jury and non-jury trial date and pretrial schedule, requiring mediation and referring certain motions to Magistrate Judge John O’Sullivan was filed 1.05.09 by Judge Huck. The motion reads:

Trial is scheduled to commence during the two-week period commencing Monday, April 20, 2009 before the Honorable Paul C. Huck, United States District Judge, 400 North Miami Ave, 13th Floor, Room 13-2, Miami, Florida. Calendar call shall be held on Wednesday, April 15, 2009 at 8:30 a.m. at the same location.

The Malik case is related to a $300 million fraud case brought by the Securities and Exchange Commission (SEC) against one-time entertainment mogul Jack Utsick, other business partners and their affiliates. The SEC alleges that Utisck was running a ponzi scheme to raise the capital he used to produce Broadway shows, concerts and other entertainment festivals and events.

It appears Utsick has taken asylum in Brazil and is battling court orders requiring his return to Miami.

Receiver Goldberg seeks to retrieve $2.1 million from Michael Malik which the Receiver alleges Malik received in the form of so-called "profit payments" funded through Utsick's ponzi scheme. (See: Original Malik Complaint)

As of 1.15.09, the Receiver has entered settlement agreements with 144 persons totaling $5.3 million. The Malik case isn't typical of these other cases as it seems to represent by far the largest sum sought by the Receiver from any individual.

Malik's Partners - Detroit's Ilitch Family

Since the mid-1990s, Malik has partnered with Detroit's Ilitch family (Mike Ilitch, Marian Ilitch and their seven adult children) on various casino development and real estate projects. His business offices are located at the headquarters of Ilitch Holdings, Inc.

The Ilitch family founded Little Caesars Pizza and owns, among other affiliates, the Detroit Tigers (MLB), Detroit Red Wings (NHL), Detroit's Fox Theater, Uptown Entertainment, Blue Line Distributing and MotorCity Casino.

The family owned Olympia Entertainment, a subsidiary of Ilitch Holdings, produces theatrical productions and music events and operates various theaters, concert halls, arenas and stadiums throughout Detroit including: the historic Fox Theatre, Cobo Arena, Joe Louis Arena, Comerica Park, Detroit's Masonic Temple Theatre, and the City Theatre. The Michigan Gaming Control Board (MGCB) recently granted a waiver to the Ilitch organization allowing Olympia Entertainment to manage theatrical and musical events at various venues within MotorCity Casino. (YouTube: Olympia Entertainment Video)

Royal Oak Music Theatre

For a period in the earlier part of this decade, Utsick affiliates had taken over management of the Royal Oak Music Theatre (ROMT) located in the Greater Detroit area. A former Olympia Entertainment executive producer, Greg Young, had joined Utsick's organization and was involved in the acquisition. Young is reportedly the owner/operator of ROMT and has a new partner, AEG Live (a subsidiary of Anschutz Entertainment Group). ROMT owed more than $400,000 to Utsick which Receiver Goldberg has sought to recover. Court documents and other reports suggest that Young brought in AEG as partner, in part, to help him pay off the debt owed to the Utsick affiliates.

Dana Warg, was hired as president of Olympia Entertainment in 2007. He was previously a vice president of AEG.

Oddly, documents of UCC Liens against Royal Oak Music Theatre and various affiliated organizations indicate the address for four of five affiliated debtor entities at 2211 Woodward Ave., Detroit, MI 48201. That's the headquarters of Ilitch Holdings, Inc.

Was Ilitch pursuing Port Huron opportunities?

6.09.08

Olympia Entertainment bids to run Port Huron arena

Contributed by Bill Shea

Detroit-based Olympia Entertainment Inc. is among the potential bidders seeking to manage city-owned McMorran Place in Port Huron.

The venue includes a hockey rink, 1,200-seat theater and 1,000-seat secondary pavilion and is home to the minor-league Port Huron Icehawks of the International Hockey League. The team, owned by Howell-based Datapak Services Corp., also is seeking the management contract.

Bids are due June 13, and the City Council is expected in August to award the contract, McMorran General Manager Larry Krabach said.

The city wants a private management company to run the 50-year-old arena to help offset a $335,000 annual subsidy from taxpayers.

Other likely McMorran bidders include Philadelphia-based SMG Inc.; Mechanicsville, Va.-based Rink Management Services Corp.; Ames, Iowa-based VenuWorks Inc.; and RG Sports & Entertainment of Vancouver, British Columbia.

Note: Marian Ilitch, president of Olympia Entertainment, and her family including husband Mike Ilitch, support plans to build a Casino in Port Huron that have been championed by her partner Michael J. Malik, Sr. for more than a decade. This article and a column by Mike Connell published 1.11.09 in the Port Huron Times Herald suggest the Ilitch family's greater interest in developing business opportunities in Port Huron. However, despite representations in the article above, a review of Port Huron City Council Minutes confirms that Olympia Entertainment did not end up submitting a propsoal.

UCC Filing ties Malik, Ilitch headquarters to Royal Oak Theatre affiliates?

Casino syndicator Michael J. Malik, Sr. is facing $2.1 million fraudulent transfer charges in Florida Federal Court (Golderg v. Malik). That complaint is related to an investigation and charges by the Securities and Exchange Commission (SEC) against entertainment promoters Worldwide Entertainment, Entertainment Group Fund, Inc., American Enterprises, Inc., Entertainment Funds, Inc., Jack Utsick Presents, et al.

Michael I. Goldberg (Akerman Senterfitt) is the appointed Receiver in the matter. Goldberg is represented by Jeffrey R. Sonn (Sonn & Erez).

Circumstances surrounding the Royal Oak Music Theatre in Michigan have been of interest to Receiver Goldberg.

Curiously in 1993, Michigan National Bank, a creditor, originally placed a UCC lien (Filing No. C731010) against the six related debtors listed below; and has twice since renewed that filing: 1998 (Filing No. D339142) and 2003 (Filing No. 2003042961-4).

Those six debtors facing lien by Michigan National Bank include:

1. Fourth Street Asylum
2. Paragon Investment Company
3. Paragon Investment Company
4. Paragon Investment Company dba Paragon Theatres dba Royal Oak Music Theatre dba Fourth Street Asylum
5. Paragon Theatres
6. Royal Oak Music Theatre

Curiously, the ongoing UCC lien indicates five of the six debtors are located at:

2211 Woodward Ave.
Detroit, MI 48201

That’s the address of Detroit's Fox Theater building which is the headquarters of Ilitch Holdings, Inc. and its affiliates as well as the address of record for numerous other Malik affiliates. (See: Compiled List of Affiliates)

Until now, there have been few details directly linking Ilitch or Malik affiliates to the Royal Oak Theatre circumstances or circumstances that would explain how it is that Malik is tied into the SEC complaint against Worldwide Entertainment, Utsick Presents et al.

So why does the Michigan National Bank filing identify those five entities at that Woodward Ave. address? After all, that's not the address of record those entities have on file with Michigan's Department of Labor & Economic Growth.

Filings to date in Goldberg v. Malik have yet to disclose the true nature of Malik’s involvement/relationship with Worldwide Entertainment, Jack Utsick Presents, etc. Currently counsel for Malik is arguing the case on procedural and adminisrative grounds. Malik has yet to deny the charges.

Could the UCC lien provide a hint of what that relationship might be?

It's noted that Ilitch affiliates, namely Olympia Entertainment, own or manage many of the concert halls, theaters and sporting venues in the greater Detroit area (Comerica Park, Joe Louis Arena, Fox Theater, Cobo Arena, Detroit’s historic Masonic Temple Theatre, etc.). The Royal Oak Music Theatre has never publicly been acknowledged in the Ilitch portfolio.

While Malik is reportedly not an employee of Ilitch Holdings, Inc. or any of its subsidiaries, his office is among the executive suite of offices at Ilitch Holdings, Inc. and many ways he acts in a capacity as senior employee or affiliate -- often in the capacity of "bad cop" or "tough guy." And despites such denials by Malik and Ilitch spokespersons, according to OpenSecrets.org, Malik has made contributions totaling $24,100 to 16 different political committees which recorded his employer as Ilitch Holdings.

Defendant Malik is represented in Detroit by Abraham Singer and James D. VandeWyngearde (Pepper Hamilton, LLP) and in Miami by Gary T. Stiphany (Garbett, Stiphany, Allen & Roza, P.A.).

$2.5M taxpayer subsidy so Ilitch can demo its decaying structures in west Foxtown

First, recall the dashboard graphic published in the Detroit News on 9.23.08 to demonstrate the uparralled decline of Michigan's economy and that the week before on 9.17.08 Forbes ranked Michael Ilitch #301 on its annual list of the "400 Richest Americans."

And now, in an article published 12.11.08 in Crain's Detroit Business it has been disclosed that various Ilitch Family-owned entities (Olympia Development of MI LLC, Olympia Entertainment LLC, Elizabeth Street Properties LLC, etc.) will receive $2.5 million from taxpayers to demolish six strucutres that Ilitch boarded up and then left decaying during the last decade. Ilitch purchased these devalued properties with intention or in some cases was nearly gifted them by the Wayne County Treasurer; and now he wants another handout?

Capping the demolition list is the historic Fine Arts/Adams Theatre Building located on W. Adams Ave. in Grand Circus Park.

In the 12.11.08 Crain's story, Fred Beal of J.C. Beal Construction Inc. reports the facade of the Fine Arts Building will remain intact echoing a previous promise by Ilitch spokeswoman Karen Cullen. (Fine Arts is coming down; Ilitch Lifts City Hopes; Ilitches Downtown Power Play)

Included among the other buildings that would be demolished are West Grand River Lofts at 2030 W. Grand River Ave., and the Ancient Egyptian Arabic Order of Noble Mythic Shrine at 2203 Cass Ave.

This is yet another of the Ilitch Family's taxpayer subsidized demolition plans. It will level all but two major structures from property controlled by Ilitch-owned entities in the west end of Detroit's Foxtown -- an area in downtown Detroit that's home to the headquarters of Ilitch Holdings, Inc., and where various Ilitch enterprises are dominate property owners. If this latest round of demo goes forward as planned, left standing on Ilitch owned property in the near vicinity would be just two pre-existing structures: (1) the former Chin Tiki Restaurant building featured prominently in Eminem's 2002 feature film "8 Mile;" and (2) the historic Moose Lodge Building which Ilitch acquired from promoter Blair McGowan.

At a time when working men and women in Michigan are facing some of the most desperate economic times in their adult lives, one of the richest men in America is asking for several million dollars in taxpayers handouts so he can demolish structures he let decay throughout the last decade. Is that just how rich guys in Michigan do it; spend their money flying around on corporate jets and other luxuries while they watch their business enterprises decay and then ask taxpayers to bail them out?

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Ilitch granted exception so family's Olympia Entertainment can be leveraged to benefit her casino

11.18.08

Ilitch casino gets exemption
State says Olympia Entertainment can book acts

By Daniel Duggan

Marian Ilitch has won an exemption from the Michigan Gaming Board and now can use Ilitch-owned Olympia Entertainment to do bookings for the new theater at MotorCity Casino, despite a law prohibiting casinos from using vendors in which they have an ownership interest.

Negotiations on the exemption began before the theater was completed in September and, as a result, only two shows have been booked at the 1,886-seat theater since, both under special one-time-use exemptions.

The gaming board's executive director issued a one-year exemption to the casino Nov. 7, saying the arrangement doesn't “harm the integrity of gaming” in Michigan.

Using Olympia Entertainment is a crucial part of the business plan for the new theater, Sound Board, so that bookings for performers at the casino can be made in conjunction with Comerica Park, the Fox Theatre and shows at other venues booked by Olympia Entertainment, said MotorCity COO Rhonda Cohen.

“Being able to leverage acts with the other Olympia Entertainment venues gives us access to better acts,” Cohen said.

When it comes to Michigan casino owners using vendors they also own, a measure of control is needed, said Richard Kalm, executive director of the gaming board. The spirit of the law is to ensure that a casino company doesn't take over all the vending companies in the area and create a monopoly, he said.

“And we're always worried about organized crime and theft,” Kalm said. “So, entities have to be kept separate.”

In evaluating the case with Ilitch Holdings, Kalm said there is no apparent concern from a gaming standpoint.

“In dealing with Marian Ilitch and Ilitch Holdings, we've never had any problems with them, and they've been perfect in reporting to us,” he said. “But you have to look at these issues carefully.”

Kalm has sole discretion to grant such an exemption to a company as long as it “preserves the integrity of gaming and protects the public.”

Several conditions apply to the exemption. The casino is required to issue quarterly reports on activities with Olympia, and the deal is subject to annual re-approval.

A similar exemption was granted to MGM Grand Detroit Casino because the Las Vegas-based gaming company MGM Mirage (NYSE: MGM) — which owns an interest in the Detroit operation — also owns a travel agency in Las Vegas, which is used to bring guests to Detroit, Kalm said.

Exemptions also have been issued in the past for Olympia so that all three casinos can purchase luxury boxes for sporting events and buy season tickets.

Daniel Duggan: (313) 446-0414, dduggan@crain.com

Michigan gaming regulations restrict relationship between Ilitch-owned enterprises

Excerpted from a story, "MotorCity gets in the concert game," published 10.23.08 in the Detroit Free Press:

As explained by Bill Borenstein, MotorCity Casino's vice president of entertainment and theater; and reported by the Free Press:

"MotorCity Casino is owned by Marian Ilitch. Among her family's holdings is Olympia Entertainment, which arranges concerts at venues such as the Fox Theatre and Joe Louis Arena. But because of Michigan regulations that limit the financial partnerships of gaming operations, Olympia is not involved in MotorCity's concert booking. Casino officials say they hope to take advantage of Olympia's muscle down the road."