Former Ilitch partner bids to takeover troubled Detroit Casino

3.27.09

Tom Celani makes bid for Greektown Casino

By Nancy Kaffer

Longtime Detroit casino advocate Tom Celani said he’s making a bid for the troubled Greektown Casino. Celani owns a host of business ventures including Luna Entertainment in Novi, Farmington Hills-based Motor City Harley-Davidson and Napa Valley, Calif.-based Celani Family Vineyards.

He was instrumental in financing a 1996 statewide ballot referendum that approved gaming in Michigan, according to a 2007 Crain’s profile of Celani, and once was a partner in MotorCity Casino L.L.C., selling his share to current owner Marian Ilitch in 2005.

Greektown Casino entered Chapter 11 bankruptcy in 2008, but Celani said he believes the casino can emerge profitably.

“With the right people in place, absolutely,” he said. “But you’ve got to put the right people in place. The best option would be someone like myself that lives here and has a passion for gaming.”

The Greektown offer is a joint venture between Celani and Greenwich, Conn.-based Plainfield Asset Management L.L.C., Celani said, as LPF Holdings. Celani says he is competing against other bidders in the process.

To renovate or abandon historic Joe Louis Arena

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:"

RENOVATE OR MOVE?

• Speculation on a site for a new arena include property west of Woodward Avenue behind the Ilitch-owned Fox Theatre, where the family already owns land; along Temple Street between the Ilitch-owned MotorCity Casino and the Ilitch-operated Masonic Temple; and the triangular site between Grand River, Cass Avenue and south of I-75.


• A new stadium could cost $200 million-$300 million.


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

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)

Leaders of tribes that have pursued Barstow casinos meet for first time

3.18.09

Tribal leaders meet to clear the air over Barstow casino projects

By ABBY SEWELL, staff writer

BARSTOW • The leaders of two Indian tribes that have proposed to build two separate off-reservation casinos in Barstow sat down together for the first time in Barstow last week.

At the urging of Barstow’s Mayor Joe Gomez, Chemehuevi tribal Chairman Charles Wood and Spokeswoman Francine Kupsch with the Los Coyotes Band of Cahuilla and Cupeno met March 10 at Quigley’s Restaurant in an attempt to clear the air between their tribes.

In the past, there had been tension between the proponents of the two casino projects, particularly over Measure H, a ballot measure voted down by Barstow voters in 2006, which would have created a casino zone encompassing the area where the Chemehuevi planned to build their casino but not the site of the Los Coyotes project.

The March 10 meeting was the first formal meeting that had ever taken place between the leaders of the tribes.

“I think the meeting went very well, and it was long overdue,” Wood said.

He said he would anticipate future meetings between the tribes. Although he and Kupsch agreed to work cooperatively in the future, Wood said he does not anticipate the tribes forming a joint venture on the casino project.

Kupsch said that after discussing the histories of their respective tribes and the struggles they had faced in the past, the leaders had a better understanding of each other’s situations. The possibility of forming a joint venture did not come up during the meeting, she said.

Gomez said he asked the tribal leaders about a month ago if they would be willing to meet, in hopes that they could find ways to support — or at least not interfere with — each other.

“I think it should have been done a long time ago,” he said. “I think we would have had a better opportunity to get a casino if they had met from the very beginning and got their input from the very beginning.”

Gomez said that he and the two leaders took part on their own time and at their own expense and that after introducing the tribal leaders and making sure they felt comfortable together, he left the meeting.

Both tribes previously applied to the U.S. Department of the Interior to have land in Barstow held in federal trust to be used for off-reservation gaming. The Department of the Interior rejected both applications in January 2008 because of new federal standards requiring off-reservation Indian casinos to be within commuting distance of the reservation. Only the Los Coyotes have so far filed an amended application.

Contact the writer:
(760) 256-4123 or asewell@desertdispatch.com

Herb Strather Defaults on Detroit's St. Regis Hotel Project

3.18.09

Wall Street Journal
Real Estate Deal of the Week

In Motown, a Hotel Project Hits a Sour Note


Few cities have been hit harder by the recession than Detroit, and few property types have suffered more than hotels.


So the odds were stacked against an effort to revive the city's Hotel St. Regis by a group of investors, some with ties to Motown's recording industry. Indeed, that effort has fizzled.


The group, led by Detroit entrepreneur Herb Strather, defaulted on its $8.7 million construction-and-mortgage loan made by Chicago-based ShoreBank, which provides loans in inner cities and underserved communities. The 124-room hotel has received shutoff notices from utilities, has failed to pay taxes and insurance and has missed some ...

Expert says casinos won't help Detroit's convention prospects

2.09.09

Detroit: The odds are long



Las Vegas might have gaming to thank for at least getting it started down the road to its exalted tradeshow status. So shouldn’t the same strategy work elsewhere? Apparently, it hasn’t been enough for hard-hit Detroit, which boasts three casinos.

According to William Thompson, a professor of public administration at the University of Nevada Las Vegas, Detroit has a fine convention facility in Cobo Center, “but casinos won’t help.”

Thompson added, “There isn’t much in Detroit in the way of nightclubs and restaurants, its image is bad and its hotels aren’t inexpensive.”

David Austin, director of sales and marketing at Cobo Center, agreed that negative perceptions are a continuous struggle and Chris Baum, Detroit Metro Convention & Visitors Bureau senior vice president of sales and marketing, acknowledged that Detroit isn’t many planners’ first choice. However, convention business that was booked years before the recession will tide the city over, he added.

Still, corporate meeting business is “horrible,” Baum said, which is why, although the CVB’s marketing department has experienced some staff attrition and may send three people, instead of four, to industry tradeshows, “we’re still marketing very aggressively.”

Austin said the CVB has done a great job letting people know that this isn’t the same old Detroit.

“I grew up here,” Austin added. “When I returned in 2003 after 17 years, a change had truly occurred, and today Detroit is being transformed. Invariably, when meeting planners visit for the first time, the positive comments are, 'I didn’t know Detroit was like this,’ or, 'This is not what I was expecting.’ So, if we can overcome this perception issue, we certainly can beat this economic downturn.”

Michigan only has three non-Indian gaming licenses, all in Detroit. Even so, Thompson said it is hard to see how the presence of the MGM Grand Detroit, MotorCity Casino Hotel or Greektown Casino have stimulated the tourism or tradeshow business. Most casino visitors come from within 50 miles of the city; otherwise, the state has 20 Indian-owned casinos to satisfy gamblers, he added.

Each of the Detroit casinos has a hotel with about 400 rooms, but they haven’t been much help drawing convention or tradeshow attendees to town, Thompson said.

“The casino hotels are small and not luxurious,” he added.

Nevertheless, Austin said there hasn’t been much of a downturn in Cobo tradeshows.

“We have a decent 2009 lined up and 2010 is shaping up as the best year at Cobo since 2003, but, obviously, with the automotive industry taking a huge hit, everybody is tightening their belts,” he said.

Austin noted that 2006 union work rule changes at Cobo now allow exhibitors and show management to do more of their own work, and recent legislation will create an authority to operate Cobo, as well as generate funds for a renovation and expansion.

Chris McClain, director of the MGM Grand Detroit, which opened in October 2007, said he is encouraged by the city’s potential for conventions and meetings. “We have remained steady in comparison with 2008 and our 2009 projections,” McClain added.

–Gary Tufel

BusinessWeek: Detroit Tigers, Inc. like CCM Merger is a subsidiary of Ilitch Holdings, Inc.

BusinessWeek's profile of Detroit Tigers, Inc.:

Detroit Tigers, Inc. offers sports and entertainment services. The company manages a professional baseball team that participates in Major League Baseball. Additionally, it auctions game memorabilia and markets match tickets, sports merchandise, apparels, and accessories through its Website. The company was formed in 1901 and is based in Detroit, Michigan. Detroit Tigers, Inc. operates as a subsidiary of Ilitch Holdings Inc.

BusinessWeek's profile of CCM Merger, Inc. (parent of Detroit Entertainment LLC which does business as MotorCity Casino) indicates it too is a subsidiary of Ilitch Holdings, Inc.


John M. Kotlar, VP of Tax Affairs at Ilitch Holdings is Resident Agent for Ilitch Holdings, Inc., CCM Merger, Inc. and Detroit Tigers, Inc.



Mich.gov: CCM Merger, Inc.; Detroit Entertainment, LLC; Ilitch Holdings, Inc.; Detroit Tigers, Inc.

BusinessWeek: Ilitch Holdings, Inc.

BusinessWeek's profile of Ilitch Holdings, Inc.:

Ilitch Holdings, Inc., through its subsidiaries, engages in sports, entertainment, food distribution, and real estate development businesses in the United States and internationally. The company owns and operates Detroit Tigers baseball team and Detroit Red Wing hockey team, as well as provides sports premiere franchises. It also owns and operates carryout pizza chain and restaurants; theatres that provides performances, concerts, broadway shows, classic movies, and family entertainment; and a hamburger and malt shop, which offers hamburgers, hand-dipped shakes and malts, American fries, sandwiches, flavored soda pop, and baked apple pies. The company also owns and operates a sports bar; and a gift shop that offers various gifts, including furniture, pottery, crystal, china, jewelry, frames, and children's toys and clothes, as well as engages in booking and operating arenas and comerica parks. In addition, it offers a fundraising program for schools, churches, sports teams, and various nonprofit organizations; and engages in the real estate development activities. Further, the company operates as a foodservice distributor and restaurant equipment provider; and manufactures private label and branded food products, including packaged retail pizza, par-baked pizza crusts, and tubs of cookie dough products for foodservice distributors, restaurant chains, industrial toppers, schools, universities, and supermarkets. Ilitch Holdings, Inc. was founded in 1999 and is based in Detroit, Michigan with distribution centers in the United States and Canada.

In a separate BusinessWeek profile, CCM Merger, Inc. (parent of Detroit Entertainment LLC which does business as MotorCity Casino) is reported as a subsidiary of Ilitch Holdings, Inc.

BusinessWeek also reports Detroit Tigers, Inc. is as a subsidiary of Ilitch Holdings, Inc.


Mich.gov: CCM Merger, Inc.; Detroit Entertainment, LLC; Ilitch Holdings, Inc.; Detroit Tigers, Inc.

Ilitch Assault & Battery arrest tied to latest lawsuit alleging Ilitch Conspiracy

from the archives of the

8.12.04

ILITCH SON PLEADS NOT GUILTY TO ABUSE

Frank Witsil
Free Press Staff Writer

Ron Ilitch, one of Detroit Red Wings and Tigers owner Mike Ilitch's sons, was arraigned Wednesday and charged with two counts of domestic violence for allegedly twice beating his former girlfriend, Lisa Wood, at his Troy home.

Wood of West Bloomfield told police Ron Ilitch also assaulted her in Aurora, Colo., on July 10.

Police said the Michigan incidents occurred on June 24 and Aug. 1. Ron Ilitch was released Wednesday on bond of $10,000 after pleading not guilty in 52-4 District Court in Troy. Bond conditions included counseling for substance abuse and no contact with Wood.

"There is a lot I don't know yet," said Ilitch's attorney Harold Fried.

However, he said, in domestic violence allegations, there often is more than one version of events.

Each charge is a misdemeanor, punishable by up to 93 days in jail, police said.

According to the Oakland County Prosecutor's Office, Ilitch and Wood argued at Ilitch's Troy home on Caitlin Court on June 24. He allegedly hit her, causing bruising and a swollen eye and hand. She initially did not report the incident, said Charles Claus, warrants division chief with the prosecutor's office.

Later, they went on vacation to Colorado, Claus said. On the way, they stopped at Valley Community Hospital in Peru, Ill., where Wood was treated for her injuries, Claus said.

On July 10, Wood reported she was assaulted again, Aurora Police Detective Larry Martinez said.

On Aug. 1, after the couple returned, Wood told police she was assaulted a third time.

She said Ilitch hit her in both arms. She ran from the house to a neighbor's home, called Troy police and went to a local hospital for treatment, Claus said.

Wood could not be reached for comment. Ilitch is due back in court Sept. 16.

Mike Ilitch founded Little Caesars pizza restaurant in suburban Detroit in 1959. The family's business holdings now include the Detroit Red Wings, the Tigers, the Fox Theatre and Hockeytown Cafe.

NOTE: Ron Ilitch would ultimately plea "No Contest" to these charges.

To calm casino investors Ilitch forced to pony up $45 million cash injection

2.06.09

Motor City Adds More Equity; Deal Passes

An amendment for Motor City Casino passed last Tuesday after a game of tug-of-war between investors and the company. The two reached an agreement when Motor City parent company CCM Merger committed to a $45 million equity injection.

Deutsche Bank launched the amendment Jan. 13, and investors balked when the company asked for loosened leverage covenants but CCM, a vehicle of Detroit Red Wings owner Marian Ilitch, did not offer to put equity into the deal (CIN, 1/19). CCM then came back to investors with a $20 million equity injection offer.

"It was a non-starter," said one investor. "[The $45 million] is what got the deal done. Everything else was secondary to that."

The pricing on the facility was raised 300 basis points to LIBOR plus 5 1/2%, and a LIBOR floor of 3% was added.

A spokeswoman for the Detroit-based company declined comment, and a spokeswoman for Ilitch Holdings, the parent company of CCM did not return a call.

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.

Ex-promoter faces contempt in SEC fraud case

2.06.09

MIAMI - A once high-flying concert promoter is facing contempt for failing to show up in Miami for a Securities and Exchange Commission fraud case.

A federal judge decided Friday to give 66-year-old John Utsick another week to give a deposition in the case. Utsick moved from Miami to Brazil in 2007.

The SEC claims that Utsick and others fleeced thousands of investors out of $300 million from 1998 to 2005.

Utsick once promoted shows around the world by acts ranging from Aerosmith to Elton John to Shania Twain. Utsick's lawyer says he won't come to the U.S. unless he is guaranteed he won't be arrested on possible criminal charges. SEC lawyers say they have no authority to make such a promise.

Criminal investigators examining ponzi scheme centered around concert promoter Jack Utsick

2.04.09

Fla. rock concert promoter in Ponzi probe

MIAMI, Feb. 4 (UPI) -- Criminal investigators have joined a financial probe of former Miami concert promoter Jack Utsick accused of cheating investors in a Ponzi scheme, sources say.

Utsick, 65, was once of the world's biggest rock concert promoters, staging shows by such music stars as Elton John, the Rolling Stones, Santana, the Pretenders and Aerosmith. But now officials allege Utsick, who is living in Brazil, has refused to obey two court orders to return to the United States in a civil lawsuit, The Miami Herald reported Wednesday.

The newspaper, without naming sources, said Utsick is also part of an FBI criminal investigation for allegedly diverting millions from his concert investors to pay for collector cars, a luxury condo, artwork and other personal expenses. The U.S Securities and Exchange Commission has seized Utsick's company, Worldwide Entertainment of Miami Beach, Fla.

"What we were seeing was a Ponzi scheme," plaintiffs' attorney Michael Goldberg told the Herald.

Court records indicate Utsick is accused paying investors -- many of them former airline pilots -- from revenues of future rock concerts.

Federal case against one-time concert promoter Jack Utsick now includes FBI investigation

2.04.09

Feds want promoter Jack Utsick in Miami for Ponzi case
Miami Beach concert promoter Jack Utsick has rejected court orders to return to Miami, where he is under investigation by the FBI for allegedly fleecing his investors out of millions.

BY MICHAEL SALLAH
msallah@MiamiHerald.com

Three years after his entertainment empire crumbled under debts and lawsuits, Miami concert promoter Jack Utsick is under FBI investigation for allegedly diverting millions from his investors to pay for collector cars, a luxury condo, artwork and other personal expenses.

Utsick -- once one of the world's largest concert promoters -- has been ordered to appear in federal court in Miami on Friday in a civil case filed by regulators trying to recover money they say he took from hundreds of investors who backed his concerts.

But Utsick, 65, who is now living in Brazil, has refused so far to obey two court orders to return to Miami.

Utsick, who promoted shows for Elton John and the Rolling Stones, could not be reached for comment. But documents in the federal civil case say he has requested immunity from arrest if he agrees to travel to Miami.

Lawyers for the U.S Securities and Exchange Commission, which has seized his company, said they could not make those guarantees.

"All I can say at this point is that he hasn't shown up," said Bob Levenson, trial counsel for the SEC.

Judy Orihuela, a spokeswoman for the FBI's Miami office, declined to comment.

The criminal investigation is the latest development in the government's ongoing case against the once-prominent entertainment guru, whose Worldwide Entertainment of Miami Beach consistently put on some of the largest concerts in the United States and Europe.

After disputes between Utsick and his partners, the SEC began an investigation four years ago into the firm's far-flung enterprises.

Initially, investigators determined Utsick and two former partners were selling unregistered securities to finance concerts featuring bands that include Santana, the Pretenders and Aerosmith, according to court records.

Then, regulators said they discovered that Utsick was actually losing money on most venues, though he had been claiming to be earning millions of dollars each year -- $112.5 million in 2005.

"What we were seeing was a Ponzi scheme," said receiver Michael Goldberg, a lawyer [Akerman Senterfitt law firm] who has been tracking down assets for nearly three years.

Along the way, Utsick was tapping into his investors' funds to support a lavish lifestyle, including a condo in South Beach's Portofino Towers, $34,000 for artwork, $200,000 for a yacht, and nearly $500,000 in credit card bills for purchases at Macy's, Bloomingdale's and Victoria's Secret, according to SEC filings.

To keep the company going, Utsick was paying investors -- many of them former airline pilots -- from revenues of future concerts, court records state.

In all, the longtime promoter was accused of fleecing investors out of $293 million, according to the government's lawsuit in 2006.

Goldberg said many of the investors knew Utsick from his days as a TWA pilot in the 1970s.

"What's sad is that some of these people lost their life savings," Goldberg said. "They took money from their retirement accounts because they trusted him.''

In previous statements, Utsick blamed his financial problems on the rapid growth of his business and pledged to work to repay investors. But investors will more than likely realize only a return of "pennies on the dollar," said Goldberg, who is expected to soon disburse more than $21 million in a first round of reimbursements.

Court records show Utsick left his home in Miami Beach and moved to Brazil in late 2007.

Just days before he departed, he sold a Porsche and a Mercedes-Benz and pocketed the money -- a violation of a court order, regulators said.

Despite two court orders to return to Miami in the government's civil case, Utsick has refused, court records state.

Utsick's attorney, Richard Kraut, declined to comment on whether his client would return for the court hearing Friday before U.S. Judge Paul Huck, who is expected to rule on a contempt motion.

Kraut has asked regulators to give assurances Utsick will not be arrested if he returns to Miami, but the SEC has declined to make any such promise.

Goldberg said he didn't believe the SEC could offer any such protection.

"There is no such provision under the SEC that even allows that,'' he said. "At this point, he's not cooperating with us."