Cleveland Cavaliers owner andQuicken Loans founder and Chief Executive Officer Dan Gilbert’s Athens Acquisitions LLC has scaled back renovation plans at Greektown Casino-Hotel in downtown Detroit. Now, instead of 0 million in renovations, the company will spend – million on new slot machines, carpeting, heating, ventilation and air conditioning. The work will be completed in late 2015. Gilbert bought majority interest in Greektown in April 2013.
Company spokeswoman Jennifer Kulczycki said, “Our initial thought was to have a pretty robust plan for the property. The feedback from analysts and our own analysis led us to re-evaluate that initial plan. Our ownership of this place is new, let’s do these things that are really important and will make an immediate impact. We don’t like to see the arrow going down. It’s not something we’re okay with. We are making some of these improvements because we do think it will help revenue. We think the pie can get bigger.”
The less-ambitious renovation plan most likely is associated with the fact that in 2013 Greektown had the largest revenue decline of Detroit’s three casinos, down 6.7 percent, to $328.3 million. At MGM Grand revenue fell 6.3 percent and at MotorCity, 1.2 percent. Through the first four months of this year, revenues at Detroit’s three casinos dropped 6.5 percent or $112.3 million. In April, MGM’s revenue fell 4.1 percent to $47 million, MotorCity’s dropped 3.8 percent to $38.2 million and Greektown’s revenues decreased 13.6 percent to $27.1 million.
Part of the blame goes to Ohio’s new casinos, including Hollywood Casino, which opened in May 2012 in Toledo, a one-hour drive from Detroit. The new Ohio casinos are expected to cause Detroit casino revenue to fall for the third consecutive year. Greektown revenue dropped 6.7 percent following the opening of Hollywood Casino. That is “not grounds for an emergency,” said Ohio-based gaming consultant Jeffrey Compton. “But that might be grounds not to invest $150 million.”
Added casino restructuring expert Alex Calderone, “I don’t think Greektown is a cursed location. I don’t think the issue is mismanagement, poor customer service or anything of that nature. I just think we’re in a mature market.”
