Ilitch Family Amasses Debt for Sports, Entertainment & Gambling Affiliates

Debt Part of Ilitch Equation

10.19.2010
Featured originally as a side-bar to a story entitled Ilitch teams with tribe on N.Y. casinos: Long Island plans could top $1 billion

By Bill Shea

As the Ilitch family assesses how it will pay for the Detroit Pistons, Palace Sports & Entertainment Inc. and possibly a new downtown arena, debt remains on the family's past projects.

In January 2009, Marian Ilitch injected $45 million into her MotorCity Casino after lenders -- including Highland Capital Management LP -- threatened to hike interest rates to 18 percent on the $625 million loan her CCM Merger Inc. got in 2005 to finance purchase of the casino and for the later construction of its 300-room hotel.

The lenders reportedly wanted the additional investment because the casino was in jeopardy of violating its loan terms, a situation created when gambling revenue began to fall with the recession.

Deutsche Bank and Merrill Lynch arranged the loan in 2005.

The total financing for MotorCity is believed to be $950 million through a highly leveraged mix of fixed- and variable-rate bank debt and junk bonds, according to Forbes.

Ilitch paid $525 million to buy the majority ownership of the casino in April 2005 from Las Vegas-based MGM Grand/Mirage Casinos' Mandalay Resort Group, the MGM subsidiary that owned MotorCity.

She also paid Detroit entrepreneur Herb Strather $106 million for his Atwater Entertainment Associates LLC's 11.5 percent stake in MotorCity.

Another $85 million to $100 million went to former Ilitch partner Tom Celani for his 10 percent stake.

The Detroit Tigers, owned separately by Mike Ilitch, borrowed $140 million in August 2005 from a syndicate of 11 financial institutions, led by what is now Sumitomo Mitsui Bank, to refinance what had been $115 million remaining in debt from the original $145 million loan to build Comerica Park, industry magazine Sports Business Journal reported at the time.

The team has declined to comment on its current stadium debt.

Public debt on Comerica Park is through the Detroit-Wayne County Stadium Authority.

Analysts question Ilitch finances, Tigers spending

7.20.09

Tigers' ticket sales fall, Ilitch still spending
Are team finances now at full count?

By Bill Shea: (313) 446-1626, bshea@crain.com

The division-leading Detroit Tigers have a large-market payroll with midsize market attendance that's off 22 percent from last year, something the team said it was prepared for but has baseball insiders speculating about the team's long-term financial health.

And to the delight of fans, if not economists, the team's owner is willing to spend even more to return to the World Series — even if it's a money-losing endeavor.

Attendance through last week's All-Star break was averaging 30,875 per game through 40 games at 41,255-seat Comerica Park compared to last season's 39,761 through the same number of home games.

At an average ticket price of $25.15, that roughly translates into $8.9 million less in ticket revenue so far this season.

The fan drop-off is attributed to both the team's last-place finish in 2008 and the subsequent national economic plunge that's been especially harsh in metro Detroit — vaporizing fans' disposable income and making them hesitant to buy tickets for a team three years removed from the Fall Classic.

Season ticket sales dropped to 15,000 this season from 27,000 a year ago.

“The attendance decline is out of step with the rest of the league. Attendance is down about 5 percent leaguewide, so the Tigers' 20 percent decline is not good,” said J.C. Bradbury, an economist and associate professor at Kennesaw State University near Atlanta. He's the author of The Baseball Economist and operates the baseball site www.Sabernomics.com ...

Economic news Web site Forbes.com, which tracks pro sports finances, reported that the Tigers had minus $26.3 million in operating income last season on revenue of $186 million. Gate receipts were $75 million.

“With his payroll and attendance and loss of corporate sponsorships, I think he's losing money,” said Andrew Zimbalist, professor of economics at Smith College in Massachusetts and author of several books on the business of baseball...

(Original Post)

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.

10,000 fans a game reject Detroit Tigers after Ilitch hiked ticket prices

6.21.09

10,000 fewer Detroit Tigers fans fill seats each game
'08 heartbreak, weak economy are blamed

BY JOHN GALLAGHER
FREE PRESS BUSINESS WRITER

Boosted by their World Series appearance in 2006, the Tigers drew more than 3 million fans to Comerica Park for the first time in 2007, and topped 3.2 million fans in 2008, when expectations ran high.

But the Tigers, with a disappointing finish last year, combined with a collapsing economy, saw a plunge in ticket sales this year. The Tigers are averaging about 28,000 fans per game this year, down from 38,000 per game at this time last season...

...The Tigers have troubles beyond about 10,000 more empty seats per game this year than last. Forbes magazine, in its annual ranking of sports teams' values, put the Tigers in 21st out of 30 Major League Baseball teams, with a total value of $371 million. That estimate marked a 9% decline in value from the year before.

Moreover, the Tigers have one of the most expensive payrolls in baseball, with first baseman Miguel Cabrera signing a $153-million, 8-year.contract last year, breaking the $75-million, 5-year contract signed by outfielder Magglio Ordóñez in 2005. Combined with lower ticket sales, the team is losing money this year, Forbes estimated.

Meeting that payroll is one reason owner Mike Ilitch raised ticket prices this year.

"With the auto companies imploding and discretionary income plummeting for many fans, Ilitch's strategy looks like it has backfired," Forbes suggested earlier this year

Being privately owned by the Ilitch family empire, the Tigers do not release hard financial data. But Gilette said that absent a second-half collapse by the team (which, in fact, has failed to generate much offense lately despite its first-place standing), the Tigers should muddle through this season. (Complete Story)

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)

Amended complaint links Detroit's Ilitch family to that of confessed Iraqi spy Najib Shemami

An amended court complaint filed in Wayne County 3rd Judicial Circuit Court by Lisa Wood, a former girlfriend of Ron Ilitch, now names Jimmy Shemami as a defendant along with Michael Ilitch, Little Caesar Enterprises, Inc., Ilitch Holdings, Inc., and Richard Fenton, vice president of security for Ilitch.

Among the five counts outlined in Wood's amended complaint are charges the Defendants were involved in breach of contract, negiligence and conspiracy.

Jimmy Shemami is the son of confessed Iraqi spy Najib Shemami. Wood has alleged that Jimmy Shemami was part of the team that provided personal security services to members of the Ilitch family -- namely Ronald Ilitch, the oldest son of Mike & Marian Ilitch -- at the time she was the victim of an attack by Ron Ilitch in August 2004.

Following the August 2004 assault by Ron Ilitch, Troy Police were called to the Ilitch home where Wood had been living as Ilitch's girlfriend. Once police arrived, Wood was taken by ambulance to a local hosptial for medical care and subsequently refused re-entry to the Ilitch home. When officers arrived on the scene they were told Ilitch was not home but never entered the residence.

Ron Ilitch plead "no contest" to two counts of Domestic Violence related Assault & Battery but Wood alleges in this newly amended lawsuit that the Defendants and/or those working at their direction cleaned up crime scene evidence and went through her personal effects at the Ilitch home, secreting and destroying executed contracts and supporting documents that were her personal property.

Jimmy Shemami was reportedly present following the August 2004 assault by Ron Ilitch and in subsquent court proceedings on that matter, the court singled out Shemami and ordered him to avoid having any future contact or communication with Wood.

Najib Shemami was among several Detroit-area men arrested in April 2007 and indicted on charges that he was a spy for the former government of Iraqi dictator Saddam Hussein. He's been in custody since and on January 16th, U.S. Attorney Stephen J. Murphy announced Shemami had admitted to spying for Saddam Hussein's government. According to the Detroit News, the elder Shemami is expected to be sentenced in U.S. District Court in Detroit on May 11th.

A search of various FaceBook.com profiles suggests that Shemami and Ilitch family members are further acquainted. It has been reported to TVT that from time-to-time Shemami family members have been hosted as guests in the owner's suites at Comerica Park and Joe Louis Arena which reportedly makes Mrs. Marian Ilitch very uneasy.

Attorneys Irwin Alterman (Kemp Klein Law Firm) and Harold Fried (Fried Saperstein Abbatt PC) are representing the Defendants in this matter. Fried also represented Ron Ilitch in the 2004 Assault & Battery incident.

Ilitch Holdings building management monopoly over Detroit entertainment venues

2.20.08

Ilitch entertainment muscle

With the agreement to operate the Masonic Temple, Ilitch Holdings Inc. now controls entertainment venues of almost every size in downtown Detroit.

City Theater: Located inside the Hockeytown Café, small auditorium has 500 seats.

Loyal Order of Moose: A long-empty Cass Avenue club with a 1,500-person capacity, purchased quietly last year.

Soundboard: The theater being built at the MotorCity Casino described as "House of Blues-type venue" with a capacity that recently was expanded to 1,800 seats.

Fox Theatre: The converted movie palace seats 5,000 and also is home to the headquarters of Ilitch Holdings Inc.

Masonic Temple: The debt-ridden landmark includes two auditoriums. The main chamber seats 4,300; Scottish Rites hall seats 1,600.

Cobo Arena: The classic downtown hotspot for concerts seats 12,191.

Joe Louis Arena: Besides being the home of Red Wings hockey, the Joe can seat 20,058 for concerts.

Comerica Park: The baseball park can host stadium-size shows, with some 30,000 seats.

Source: Olympia Entertainment

Detroit forum affirms Ilitch paid record price for .17 acre Foxtown parcel

On 12.24.07 a forum participant, 3rdworldcity, posted the following affirmation of a previous TVT post in a forum thread, "Motown site (Woodward/75) back in the news:"

Dennis K [Keffalinos] was paid $1,600,000 for the .17 acre parcel on Grand River. That's $234/sq. ft., not a bad price. (Price reported by Verifiable on this forum, which I verified from the seller.) What is amazing is that the Ilitch entity took no steps to prevent the public from seeing the purchase price, such as filing a Valuation Affidavit. Unbelievable. That [apparent] slip-up will cost them a fortune when negotiating future purchases and may sink an arena behind the Fox if they have much more land to acquire.

YouTube: A promotional video for Olympia Entertainment, an Ilitch Holdings Inc. company

Promotional video of Olympia Entertainment a division or subsidiary of Ilitch Holdings, Inc. that manages Detroit's Fox Theater, Cobo Arena, Comerica Park, Joe Louis Arena, Hockeytown Cafe and other area entertainment venues.

http://youtube.com/watch?v=jMAvMrMRWFU

Tigers running lottery at Comerica Park

12.02.07

Tigers lottery? MLB eases up, a bit, on gambling

By Bill Shea
Crain's Detroit

Feeling like a little game of chance at Comerica Park?

Two kiosks at the stadium this past season sold $5 scratch-off Michigan Lottery tickets emblazoned with the Detroit Tigers logo. Prizes varied up to $100,000, and included team merchandise and even season tickets.

Legalized gambling, once unthinkable in relation to Major League Baseball, has gradually gained limited acceptance in the game as a source of revenue. The same Major League Baseball that once banned Willie Mays and Mickey Mantle for being associated with casinos has cautiously embraced advertising and sponsorships from various legalized gambling outlets — provided the casinos or lotteries don't permit betting on games.

Betting at games and betting on games is the crucial difference.

But those who keep tabs on the business side of the game agree that baseball is more tolerant of some forms of legalized gambling, especially when there is money to be made for teams and American culture has come to increasingly accept casinos and lotteries.

"Baseball will continue to change the configuration of its rules as their business practices shift and change. Their views on things that may have been taboo in the past change," said Maury Brown, president of Portland, Ore.-based Business of Sports Network, which includes a Web site devoted to the business side of baseball. "There's definitely a softening of (prohibitions against legalized gambling) in baseball."

New York-based lottery ticket maker Scientific Games Inc. spent more than six years trying to persuade baseball to sign a deal to allow team logos on state lottery scratch-offs, said Steve Saferin, vice president and president of properties. The company has licensing deals with Ford Motor Co., Chrysler L.L.C. and a variety of popular culture icons such as the TV show "American Idol."

"Lotteries now are in all but seven states and are viewed by a lot of people as a legitimate way to raise money for good causes," he said.

Finally, in 2006 the team owners unanimously approved a five-year deal.

The commissioner's office and the team owners' primary concern was the question of permitting any form of gambling in connection with the game, Saferin said. The memory of Pete Rose's lifetime banishment in 1989 for betting on games while managing the Cincinnati Reds is still very much alive.

"A scratch-off lottery ticket is about as far from betting on teams as you could get," Saferin said, noting that the National Basketball Association and National Hockey Association already had deals with Scientific Games.

"The league decided this is a legitimate way for teams to generate incremental revenue. It got easier the past three years because a lot of other people had embraced the lottery category, including sports. It was difficult. They've come to the realization that their position needs to be more finely tuned. The real problem is sports betting. This is not sports betting."

Commissioner Bud Selig wanted a unanimous vote from the owners to OK the lottery tickets deal, Saferin said. The approval from owners was also to change MLB's bylaws that forbid team logos on lottery tickets.

Scientific Games rolled out the MLB tickets last year with a Boston Red Sox instant game. This year, 22 teams participated and Scientific Games printed about 175 million tickets since games began.

The Tigers-themed scratch-off tickets were a success this year, lottery officials said.

Since going on sale April 2, about $10 million worth of the scratch-off Tigers lottery tickets have been sold, the state said, which is about 10 percent higher than average $5 tickets sales. Detroit Red Wings and Detroit Pistons scratch-offs have also been sold in the past.

The lottery reported fiscal year 2007 annual sales of $2.3 billion.

Each team receives a cut of the money that Scientific Games paid MLB for the rights to the team logos. Neither MLB nor Scientific Games would say how much the deal is worth, but it's believed to be in the millions of dollars. Teams also got money from local marketing Scientific Games did in each market, Saferin said.

Susan Goodenow, Major League Baseball's vice president of business public relations, declined to comment on the lottery tickets.

Rob Matwick, Tigers vice president of communications, said the team has had an advertising relationship with the lottery for several years, but the scratch-off promotion was through Major League Baseball.

A veteran of more than 20 years in baseball, Matwick said he's seen a shift in attitude about some forms of gambling.

"From an advertising and sponsorship standpoint, it's less restrictive than it used to be," he said. MotorCity Casino and MGM Grand Casino each advertise at Comerica Park. That's allowed because neither offers sports wagering.

"There are still prohibitions that are still in place that have to do with casinos," Matwick said, noting casinos are not permitted to show such things as playing cards or slot machines in stadium advertising.

MotorCity Casino is owned by Marian Ilitch, wife of Tigers owner Mike Ilitch. Baseball forbids its team owners from having a stake in casinos, but the Ilitches say she was never an owner, and baseball agrees — a position with its share of critics, including ex-Commissioner Fay Vincent.

Mike Dietz, president and director of Dietz Trott Sports & Entertainment in Bingham Farms, spent 17 years with Ilitch Holdings Inc., which includes the Tigers and Red Wings. He believes money from legal gambling is a natural source of revenue for sports leagues. Baseball reached a record $6 billion in revenue last year, thanks in part to gambling-related advertising and sponsorships.

"Everything costs more — to field a team, to give fans what they want. There are a lot of bills to pay and a lot of reasons to be open-minded about new sources of revenue," he said. There's only so many (sponsors) and so many are cutting back."

So what does the future hold for baseball and legalized gambling?

Business of Sports Network's Brown thinks it will be driven by profits.

"Are we going to see video poker at the ball park? I don't know. In 20 years, it wouldn't surprise me," he said. "Baseball has gotten wise and smart about how to extract revenue out of things other than baseball. It's a much more sophisticated league."

And perhaps another sign of shifting attitudes: Baseball's 2008 winter meeting will be held in Las Vegas.

Bill Shea: (313) 446-1626, bshea@crain.com

Tiger lottery facts:

• New York-based Scientific Games Inc. spent more than six years persuading Major League Baseball to allow team logos on state lottery scratch-off tickets. Other lottery games from Scientific include scratch-offs featuring Chevy, Dodge, Jeep, Lincoln, NASCAR, NBA, NHL, "American Idol," Hershey's and TV Guide.



• Point-of-sale and broadcast advertising for the Detroit Tigers instant game was done by Troy-based ad agency Simons Michelson Zieve Inc., which has done lottery work since 2005.
  

Speculation about Ilitch Family real estate development projects

Note: a map of some 160 downtown Detroit properties controlled by the Ilitch Family is available at maps.live.com

11.28.07

Ilitches chart Foxtown moves
New hockey arena relocation downplayed; family turns to lots behind Fox Theatre.

Louis Aguilar and Joel J. Smith

The Detroit News

With the MotorCity Casino complex nearly finished, the powerful Ilitch family will most likely focus on the empty lots and buildings they've steadily acquired behind their Fox Theatre headquarters in downtown Detroit, Marian Ilitch, matriarch of the billion-dollar family empire, indicated Tuesday.

But plans for that roughly 10-block area west of Woodward Avenue may not include a new hockey arena for the Detroit Red Wings, owned by Marian's husband, Mike Ilitch.

At a Tuesday press conference about the opening of her MotorCity Casino Hotel, Marian Ilitch was asked about the family's downtown properties.

"Most likely it will be to expand property behind the Fox Theatre. It may not turn out to be everything that everybody expects -- for instance, an arena -- however, it will be the best when it gets done," she said.

Marian Ilitch owns the MotorCity Casino. Together, she and her husband own Ilitch Holdings Inc., the Little Caesars Pizza chain and numerous downtown Detroit properties, ranging from concert venues like the Fox, restaurants like the Hockey Town Cafe and empty buildings and parcels.

"You have to be very careful about announcing future projects because if they don't come true you end up with egg on your face. But we do have other plans," Ilitch said.

Ilitch Holdings executives are deciding whether to renew the lease for the city-owned Joe Louis Arena, where the Wings now play, when it expires in 2009, or build a new facility. Speculation the Ilitches might build a new arena near the Fox Theatre has swirled as branches of Ilitch Holdings gained land and buildings behind the theater.

But that land certainly isn't the only empty space around the Fox Theatre and nearby Comerica Park, home of the Mike Ilitch-owned Detroit Tigers. The city of Detroit controls many parcels in the area.

In the past, the Ilitches have said they were in discussions with several national retailers about moving to the area, which the Ilitches have played a crucial role in helping rebuild.

Ilitch's comment Tuesday doesn't mean a decision has been made about building any new arena or what to do with the area behind the Fox, said Karen Cullen, spokeswoman for Ilitch Holdings.

"We've always said it's our neighborhood and we would like to continue to enhance it," Cullen said. "What specifically we will do there has not been decided."

You can reach Louis Aguilar at (313) 222-2760 or laguilar@detnews.com.

Find this article at: http://www.detnews.com/apps/pbcs.dll/article?AID=/20071128/BIZ/711280390/1128/SPORTS0103

Detroit taxpayers paid Ilitch $2.5 million as "caretaker" of abandoned Tiger Stadium

posted at AbsoluteMichigan.com:

"The Detroit News reports that seven years after a century of baseball ended at Tiger Stadium, money for its upkeep and hopes it can ever be saved are running dry. Since the Tigers moved to Comerica Park in 2000, the city has paid the team's owner, Mike Ilitch, an estimated $2.5 million for maintenance and security at the old park.

Giuliani scored with the Tigers; the Yankees didn't

Giuliani scored big bucks off the owners of the Detroit Tigers but his presence in Detroit sent the New York Yankees home without scoring a point.

At a fundraiser for his presidential campaign this week, Marian Ilitch, her husband Mike Ilitch and an associate who heads up various casino syndicates for Mrs. Ilitch, Michael Malik, hosted a presidential campaign fundraiser for Rudy Giuliani at their Fox Theater headquarters in Downtown Detroit and some 150 of their family, friends and associates paid $2,300 to meet the former New York Mayor.

Afterwards Marian Ilitch walked Giuliani across the street to Comerica Park where her family's Tigers were playing the Yankees. Rudy may have scored $345,000 for his presidential campaign but the Tigers shut-out the Yankees 16-to-0.

The Detroit Free Press reporters Giuliani had a similar effect on the Yankees when he attended a game between the Angels and Yankees after a recent L.A. fundraiser. That day the Angels scored 18 runs to the Yankees 9 runs.

Detroiters hoping Ilitches will adopt their neighborhood too

8.28.07

Hope for Cass Corridor
Ilitch takeover of Masonic Temple may spur development of decaying area

Robert Snell and Louis Aguilar / The Detroit News

DETROIT -- Ilitch Holdings Inc.-- the billion-dollar family empire of sports, entertainment, pizza and real estate in downtown Detroit -- hopes to venture into a long-abandoned stretch of the city: the Cass Corridor.

Ilitch's Olympia Entertainment is negotiating to take control of the iconic Masonic Temple, a city landmark mired in so much debt its owners, the Masons, face losing the building. The deal could be announced within a week to 10 days, said Bill Betz, president of the Masonic Temple Association, which would continue to own the 16-story landmark.

An Ilitch-run Masonic could be an energizing development for an area trapped in poverty and decay, according to city, business and neighborhood officials. It is the one spot left in the city core that could most benefit from a business titan who revived the Fox Theatre area 20 years ago, they say.

A Masonic deal could be transformational, Betz said.

"In five years -- the whole neighborhood -- you won't recognize it," he said.

Security and money from entrepreneurs willing to back projects near an Ilitch endeavor will likely follow the Little Caesars Pizza owner into "the Corridor," developers and city officials said.

Ilitch Holdings spokeswoman Karen Cullen would only say "discussions are continuing."

For now, though, much of the Cass Corridor looks forgotten and mean. Across from the Masonic is Cass Avenue Park, where on a recent afternoon a group of bare-shirted men with grocery carts full of personal belongings sat in a circle, sharing a bottle wrapped in a paper bag.

'Lots of things happen'
The Ilitches would not be the first major players to enter the Corridor, specifically the southern part, defined by Cass Avenue between the 1-75 service drive and Martin Luther King Boulevard. Other influential developers have purchased blighted properties with intentions to restore them to housing and small businesses, adding to the few already there. There's a dog day care center and renovated housing that advertises DSL access.

"Obviously a lot needs to be turned around down there," said George Jackson, president of the Detroit Economic Growth Corporation, the quasi-public city agency promoting Detroit development. "But it's the logical place for growth if you want what's happening in Midtown to merge with all the growth that's going on downtown.

"With the Ilitches jumping in there, it becomes very interesting. Because when they set up shop in an area, lots of things happen."

One thing that could happen is the Masonic becomes a solid, steady venue for entertainment again.

But only after the Ilitches pay off the Masonic's outstanding bills, Betz said.

The Masonic association's debt grew in recent years as other Masonic organizations relocated from the Gothic-style building to the suburbs and entertainment bookings plummeted.

The association, which would still own the building under the deal that's being negotiated, owes about $242,000 in delinquent property taxes and unpaid water and sewer bills, and faces possible foreclosure in March.

There are parallels between the Masonic venture and Ilitch's work over the past 20 years that created a sprawling sports and entertainment district along Woodward just south of Cass Corridor across I-75. And while the company has similar deals with Cobo Center, Joe Louis Arena and Comerica Park, all of which they do not own, the company essentially controls all commercial business at those locations and reaps the revenue.


Slide worsened in 1980s
In the 1970s, the Cass Corridor was filled with Appalachian families and still had an area called Chinatown, said Patrick Dorn, executive director of the Cass Corridor Neighborhood Development Corporation, which rehabilitates and builds affordable housing nearby.

Those with enough money left and the neighborhood started to decay once property owners started selling to negligent owners, Dorn said. The slide worsened in the 1980s when the city made the area home to social service providers such as homeless shelters.

"That was the finishing touch," Dorn said.

"Whenever you have isolationism where there's nobody there, except people you wouldn't want to meet in the dark, you're not going to be the first one to put money in."

The neighborhood is exceedingly poor, especially compared to the rest of the city. Median household income is $8,317, far below the city's median household income of $29,526, according to the U.S. Census.

It is the second poorest census tract in the city, and arguably the poorest populated area.

Joel Landy, a 30-year resident of the Cass Corridor, says he's been a part of more than $20 million in investments there and he intends to invest at least that much in the near future. He owns more than 45 properties ranging from small storefronts to multiple housing units to empty lots.

On a recent drive through Cass Corridor, Landy pointed out brothels and drug havens as well as restored buildings and new retailers.

"It looks pretty tough but there's so much opportunity and many beautiful buildings. I welcome the Ilitches because they've been a great force. I just hope they look around the area and notice what else needs to be done in the area," Landy said.

Other prominent developers such as Dwight Belyue have also recently purchased properties in Cass Corridor the past few years. "You know, when the Ilitches set up shop in the Fox, that area didn't look all that different from Cass Corridor," Belyue said, who owns the Belmar Development Group. He and Seattle developer Mike Dunne bought three apartment complexes on the corner of Cass and the I-75 service drive that were known crack and prostitute dens.

Betz, the Masonic president, said a deal to transfer management of the Masonic is imminent, though he refuses to identify Ilitch by name despite a Ilitch Holdings representative confirming the company is in negotiations.

"All the pieces of the puzzle, I believe, are in place," Betz said.

The temple has two theaters, which seat 4,400 people and about 1,550, respectively. A third theater sits unfinished on the temple's seventh floor.

There also are two massive ballrooms that host weddings and meetings, and a vacant 10-story office tower that could house lofts or apartments, Betz said.

You can reach Robert Snell at (313) 222-2028 or rsnell@detnews.com

Family bankrolling Long Island casino plans, expected to raise $345,000 for Giuliani; then host him at Tigers-Yankees game

8.27.07

Giuliani, in town for fund-raiser and Tigers game, suggests Chertoff as Gonzales replacement

By DAVID N. GOODMAN
ASSOCIATED PRESS

Rudy Giuliani suggested today that President George W. Bush might want to turn to Michael Chertoff, a man Giuliani himself once hired, when picking a replacement for outgoing Attorney General Alberto Gonzales.

Speaking before a fund-raiser in Detroit, where the Detroit Tigers were hosting his New York Yankees tonight, Giuliani echoed neither Bush’s effusive praise of Gonzales nor Democrats’ harsh criticism.

After months of attacks, Gonzales announced today that he was stepping down next month.

"I think Judge Gonzales has given service with his contribution both at the White House and as attorney general," the former New York mayor and federal prosecutor said. "He made his choice. I know he’s lived through a lot of fire in many areas."

It now is critical, Giuliani said, that Bush "select a really great attorney general" who has the trust of both Republicans and Democrats.

"I believe that the attorney general is one of the two or three most demanding jobs in U.S. government," Giuliani said. "Everything we do now involves very difficult legal questions."

"You need a great lawyer ... with a great legal mind to be attorney general."

He said he would make any suggestions confidentially, not in public, then pointed out that one of those whose name has come up is Chertoff, now U.S. secretary of Homeland Security.

Giuliani was U.S. attorney in New York in the 1980s when he hired Chertoff as an assistant, and Chertoff led several high profile organized crime cases. President George Bush named Chertoff U.S. attorney for New Jersey, and President Clinton retained him, at the urging of then Democratic U.S. Sen. Bill Bradley.

Giuliani also joked with the head of his Michigan campaign, U.S. Rep Candice Miller, about the rivalry between her Tigers and his Yankees.

"I want to thank you very much for sitting with me at a Tigers-Yankees game," he told her.

Giuliani recalled the sadness he felt flying home after watching the Tigers eliminate the Yankees in last year’s American League playoffs.

"The Tigers have a great team — great pitching," he said before entering the $2,300 a head, 150-person fundraiser at the Fox Theatre, across from Comerica Park.

Find this article at:
http://www.freep.com/apps/pbcs.dll/article?AID=/20070827/NEWS07/70827093

Detroit Tigers owner doubled his net worth gambling on casinos

Mickey Mantle, Willie Mays, Pete Rose and Wayne Gretzky got black eyes or worse; Ilitch gets fat and happy and a virtual pot of gold.


When it comes to Mike Ilitch, owner of the Detroit Tigers and Red Wings franchises, the editors of Forbes magazine estimate he doubled his net worth between 2004 and 2006 with the acquisition of MotorCity Casino and bets on Indian gaming.


As part of the due diligence involved in putting together this year’s list of the “Ilitch Holdings, Inc., IH Gaming, Inc., acquired Circus Circus Michigan (a Mandalay Resort Group subsidiary) and its 53.5% share in MotorCity Casino. Then Ilitch rounded up all other miscellaneous shares giving Marian Ilitch 100% control of MotorCity Casino. Under previous owners, reports on file with the SEC indicate MotorCity Casino was the top operating income producer in a portfolio of properties that included Las Vegas sisters like Mandalay Bay, Circus Circus, Excalibur, Luxor and Monte Carlo.

Ilitch and his wife founded the Little Caesars pizza carry-outs in 1959 and established Ilitch Holdings, Inc. in 1999. Ilitch Holdings, Inc. is the parent to brands like Little Caesars; Detroit Tigers; NHL’s Detroit Red Wings, Fox Theater; Johnny Rockets; Olympia Development; and various management and booking companies overseeing Comerica Park, Joe Louis Arena, Cobo Center and other Detroit sports and entertainment venues; and more recently, IH Gaming Management and IH Gaming Inc. (parent of various Ilitch gaming interests including MotorCity Casino)

Sure Forbes recognized the Detroit Tigers finally had a winning season in 2006 but that didn’t score any additional points in their review. In fact, editors said that he'd doubled his net worth, "despite" ownership of the Tigers. Forbes also indicates Little Caesar Enterprises is planning a new era of expansions after a decade of big losses. But the most significant difference Forbes editors point to between their 2004 and 2006 analysis was the acquisition of MotorCity Casino valued at $1 billion.

To think that Mickey Mantle and Willie Mays got black eyes and were banned from coaching roles with baseball once because they got jobs at Atlantic City casinos; or that Pete Rose was TKO'd because he gambled but "not on baseball" and so he wrote a book; or that the Nutting family, owners of the Pittsburgh Pirates, were forced in the last month or two to chose between owning a ball team or a casino; or that "The Great One," Wayne Gretzky, took it on the chin earlier this year because his wife placed a few bets "but not on hockey."

Gretzky's wife had a career as an actress who watched her husband play hockey from the stands. Ilitch's wife was the corporate Secretary/Treasurer of the Tigers, she is the Secretary/Treasurer of the Red Wings and has her name engraved on the Stanley Cup. Ilitch took on $950 million in debt in 2005 to finance the MotorCity Casino acquisition. The Michigan Gaming Control Board authorized Deutsche Bank and Merrill Lynch to lead the offering targeted primarily at institutional investors. A notice distributed internationally announcing the investment opportunity notes Marian Ilitch is Vice President of the Detroit Tigers.

While owning two major sports teams the Michigan couple quietly doubled down on commercial and Indian casinos, boosting their restaurant and entertainment holdings empire with serious steroids. And by Forbes' independent account, Mike & Marian Ilitch got twice as rich (from $750 million to $1.5 billion) betting on casinos.

In the 21st Century, the Ilitches are re-tooling that famous iconical reference to American values ...

"As American as gambling backed baseball, motherhood and apple pie."

You may also want to review these posts:
Forbes Magazine: Mike llitch has backed losing sports teams and pizza ... But casinos in Detroit?
The Verifiable Truth: Baseball and Casinos Don’t Mix, or Do They?
The Verifiable Truth: New York Times sports writer recognizes conflicts in Ilitch casino ownership

first posted 12/20/06

Ilitches host Rudy Giuliani fundraiser at tonite's Tigers-Yankees MLB game in Detroit

8.22.07

POLITICALLY SPEAKING
Fund-raiser offers Tigers, Giuliani

Need a ticket to Monday's Detroit Tigers game against the New York Yankees? You better want this one badly. Then again, you have to be on the invitation list.

Marian Ilitch, who is married to Tigers owner Mike Ilitch, is hosting the fund-raiser at Comerica Park for GOP presidential candidate Rudy Giuliani, an unabashed Yankees fan.

Tickets range from $1,000 to $2,300. For that price, how about the Yankees play Giuliani at third instead of A-Rod?

---

NOTE: Rep. Candice Miller (R-MI 10th) is chairman of Rudy Giuliani's Michigan presidential campaign committee; and in recent years, Miller has introduced several key bills in Congress to pave the way for Ilitch-backed off-reservation Indian casino proposals. The Ilitch's and their agent Michael Malik have personally contributed more than $88,000 to Rep. Miller although they don't live or work in her district; and helped her raise thousands more. Ilitch spokesman Tom Shields served as chief political consultant for Rep. Miller's re-election campaign.

Forbes includes Ilitch casinos in calculating his net worth

Mike Ilitch: “Is he, or isn’t he” a billionaire casino mogul, people want to know

Ok, so as is the case with many folks who make it onto the back half of Forbes’ annual list of the "400 Richest Americans," you come and you go ... and you come, and you go.

Mike Ilitch, of Little Caesars pizza fame, is one such character. Over the last decade he has made the list five times and including a return to the 2006 list following a one year hiatus at #242 (sharing the spot with Oprah Winfrey). With the return he breaks into the top 300 for the first time and represents he is joining the “Billionaires Club.”

Forbes estimates Ilitch’s 2006 net worth to be $1.5 billion, twice that reported by Forbes in 2004 , the last time he was on the list. And twice that reported by Forbes a year earlier as part of its 2005 rankings of (Valuation) Major League Baseball franchises.

Sure, Ilitch’s Stanley Cup champion Red Wings hockey team returned to the ice during his Forbes hiatus.

And sure, his beloved Detroit Tigers baseball team unexpectedly made the 2006 play-offs for the first time in nearly 20 years, won the American League Championship and advanced to the World Series, but on a venture that Forbes estimates has a 73% debt-to-value ratio and annual operating income of approximately $3.5 million, this recent blip of success certainly can not account for Forbes’ doubling its estimate of Ilitch’s net worth estimate. After all, Forbes says of the Tigers, it is “hardly a stellar investment" and indicates the team in 2006 is worth little more than it was in 2000.

The only significant change at Ilitch Holdings, Inc. since 2004 was the acquisition of Mandalay Resort Group’s 53% ownership interest in Detroit’s MotorCity Casino, and advances with other casino ventures. Previously it was understood Marian Ilitch held 25% interest in the MotorCity Casino.

10.09.06
Forbes

. . . Now he's rolling the dice on casinos. Grand River Avenue is certainly not the Strip. Still, there's life in Detroit's three gambling palaces, which raked in $1.2 billion in revenue last year and have been growing at 4% compounded annually, compared with 12% year-over-year for Vegas, reports Moody's Investors Service.

Michiganders, who once flocked to nearby Canadian slots, are now, apparently, staying home.

The Ilitches placed their first bets a decade ago by backing a referendum to legalize gaming. (It passed.) To give form, if not substance, to a Major League Baseball rule banning joint ownership of baseball and gambling, Marian, who owned none of the Tigers, bought a 25% stake in MotorCity and held it separately from the other Ilitch businesses.

Mandalay Resort Group ran the casino and was the majority partner. But last year Mandalay needed out because it was merging with MGM Mirage (mgm: NYSE - news - people ), which had to trim its casino assets in Detroit.

To acquire 100% of MotorCity, Marian, long considered the family's financial brains, borrowed $950 million: $300 million in junk bonds, yielding 8%, and $650 million in fixed- and variable-rate bank debt.

There is little room for error.

Last year MotorCity pulled in $125 million Ebitda on revenue of $432 million. Annual debt service totals $70 million or so. Moreover, the casino is undergoing a $275 million expansion, $225 million of that in bank debt and bonds, to blow out the existing 75,000 square feet of tables and slots and add 400 hotel rooms, a restaurant, a spa and additional parking. MotorCity's bottom line will be helped by 2008, when the casino's state and city gaming tax declines to 21% from 26%, part of a deal Marian struck last year.

Analysts believe the casino's Ebitda could hit $180 million a year within two years. But that probably requires getting more slots players from outside Detroit--and spending more on marketing.

Whatever the long odds, Marian has already shelled out around $10 million to buy up land and explore management con­tracts for proposed Indian casinos in Barstow, Calif. and on New York's Long Island. Those iffy projects are still years off.
http://www.forbes.com/forbes/2006/1009/068.html

But here’s the kicker … Michael Ilitch swears he has no financial interest in any gambling ventures or casinos; after all, it would be a violation of MLB prohibitions. Ilitch publicists and attorneys have vehemently denied any representations to the contrary and have been quick to set the record straight.

Certainly the editors of Forbes’ annual list are aware of Major League Baseball’s gaming prohibitions and the controversies that first beset Ilitch when it became public ten-years ago that his wife Marian had a financial stake in MotorCity Casino.

The editors must know it is not Mike but rather Marian Ilitch who "independently" (without direction from, or benefit to Mike) has made significant investments in gaming and casino ventures (Global Gaming, a leading industry publication, ranked Marian Ilitch #1 on its list of the "Most Powerful People to Watch" in 2006); and while Marian does have an interest in the Red Wings hockey franchise, she has sworn absolutely no financial stake or interest in the Tigers baseball franchise -- except, of course, that she owns and manages all the concessions and parking at Comerica Park.

One has to wonder if the Ilitch attorneys and publicists are demanding a correction from Forbes with the same aggressive posture and passion they’ve taken previously to explaining and defending their client's situation. Allowing ambiguity on this topic in the Ilitch organization can only ensure controversy will prevail and questions will continue.

Either Forbes misrepresents that Mike Ilitch – not Mike & Marian Ilitch; the Ilitch Family, etc. – is among the "400 Richest Americans" and a member of the “Billionaire’s Club;” or Mike Ilitch hasn’t been truthful in representations denying any financial interest in MotorCity Casino or any of other gambling ventures that have attracted his wife Marian.

Is Mike Ilitch a billionaire or not? It's not so much the answer people want to know as it is the implications of the answer.

By their own “black & white” representations, both Marian and Mike Ilitch are millionaires -- and by Forbes' estimates it looks like Marian Ilitch might actually be the wealthier of the two. If they want to eliminate or even limit ongoing controversy surrounding Ilitch ownership of a MLB franchise concurrent with ownership of one of the largest commercial casinos in the U.S., they should demand Forbes make a correction and remove Mike Ilitch from its 2006 list of the "400 Richest Americans. "

Either he is, or he isn’t, one of the "400 Richest Americans" – there should be little room for grey; and certainly responsibility for that starts with Mike and Marian Ilitch.

originally posted 12/4/06

Ilitch plans depend on Quicken picking his downtown property, the former Statler Hotel & United Artists property

MLive Map detailing ownership of parcels in the greater Foxtown area of Downtown Detroit

8.24.07

A DOWNTOWN DILEMMA: Quicken considers a move to Detroit; two key sites spark pros, cons debate


BY JOHN GALLAGHER
FREE PRESS BUSINESS WRITER

It's unanimous: Detroit's civic and corporate leaders all hope Quicken Loans founder Dan Gilbert will move his company downtown.

But far from unanimous, and sparking debate in Detroit development circles, is where in downtown Gilbert should relocate his Livonia-based company, if and when he decides to come.

The key question is: Which of the two sites offered to Gilbert would produce more spin-off benefits for downtown, bringing downtown closer to its goal of becoming a lively, walkable, 24-hour community?

The two parcels offered include the site of the old Hudson's store, demolished in 1998, and an irregular site off Grand Circus Park that once housed the now-demolished Statler and Tuller hotels and vacant United Artists Theater.

Of course, Detroit's leaders would welcome Quicken to either site should Gilbert decide to move.

"I'd be happy with them being in Detroit, period," George Jackson, the city's chief development officer and president of the Detroit Economic Growth Corp., said.

But as Gilbert mulls a decision, two camps have evolved. And both have strong arguments for each of the sites.

Quicken looked at other locations, including General Motors Corp.-owned riverfront just east of the Renaissance Center. It also has considered buying an existing office building, such as Comerica Tower at 500 Woodward.

But the Hudson's and Statler-Tuller sites are the main ones under consideration, according to Jackson and others close to the negotiations...

The Ilitch family, owner of the Tigers, Red Wings, Fox Theatre and other holdings, owns a portion of the Statler-Tuller site [and United Artists Building]. The family, which declined to comment for this article, hopes to lure Quicken to that site to bolster overall redevelopment in the vicinity.

And that could become an important consideration if the family decides to build a new hockey arena for the Red Wings behind the Fox.

The arena is something that the Ilitches have been weighing for more than a year, although no decision has been announced.

But two other factors may play into Gilbert's decision, assuming he makes the move.

Cost is one. The Hudson's site is development-ready, complete with a 1,100-space city-owned parking garage operating below ground, as well as foundations already in place for a future building.

No such foundations or parking exist at the Statler-Tuller parcel, so building there would be more expensive.

The second consideration is the matter of prestige. People close to the negotiations say that Gilbert, should he choose to come, fears that locating on the Hudson's site might seem like taking second place to Compuware's headquarters...(Complete Story)

Contact JOHN GALLAGHER at 313-222-5173 or gallagher@freepress.com.

"New Proposal for Tiger Stadium" WXYZ.com | ABC-7 Detroit Video Story

click to watch video

"New Proposal for Tiger Stadium"
on WXYZ.com ABC-7 Detroit, 8.22.07



Harwell Floats New Plan to Save Tiger Stadium

Retired Detroit Tigers broadcaster Ernie Harwell says the long-vacant Tiger Stadium should be revived as a venue for boxing, amateur football and amateur baseball with 10,000 to 14,000 seats.

"In America, we have a tendency to knock down anything that's over 30 years old and make a parking lot out of it," the 89-year-old Hall of Fame member said Tuesday. "Whereas in Europe, they preserve all these beautiful buildings and structures that have a history. I sort of like the European approach."

Mayor Kwame Kilpatrick has set an Oct. 1 deadline to hear the plan before proceeding with plans to demolish the stadium. It has stood at the site since 1912 but saw its last Tigers game in 1999. Team owner Mike Ilitch moved the ballclub to Comerica Park in 2000.

Harwell and lawyer S. Gary Spicer propose reducing Tiger Stadium's seating while adding music and sports memorabilia museums.

The City Council voted 5-4 on July 27 to give the public-private partnership the Detroit Economic Development Corp. the authority to demolish the park.

Development group President George Jackson called the plan a "PR gimmick." "Our decision will not be based on a public relations campaign," he told the Detroit Free Press. "It's going to be based on financial substance, period."

Harwell told The Detroit News that his plan was "picking up steam." (MORE)

Video Link: http://www.wxyz.com/mediacenter/local.aspx?videoId=4998@wxyz.dayport.com