The Sault Ste. Marie Tribe of Chippewa Indians recently said it now owns enough land in Wayne County near Detroit Metro Airport to legally develop an off-reservation casino complex. The tribe owns a 7-acre parcel of land, including the bankrupt and partially demolished Pinnacle Race Course site in Huron township, which it purchased in 2010 for 9,000. The tribe has not publicly announced its plans for the seven acres, and has refused to sell it to prospective developers. The tribe also owns a 71-acre tract that includes a 70,000 square foot abandoned church building that would house the casino and offices for social services for tribal members.
The Sault tribe filed a land-trust application to the U.S. Department of Interior in 2014 and amended it in 2015 to state, “There are thousands of Sault tribal members in the immediate area who do not have adequate access to tribal employment or tribal services, and the existing 7-acre parcel is not large enough to serve the needs of such a large population base.” The Sault tribe also has a pending application for an off-reservation casino in downtown Lansing. An Interior Department spokeswoman said the tribe’s requests are still under review.
The Metro Airport-area casino would impact revenue at Detroit’s three casinos and Hollywood Casino Toledo, industry analysts said. Tribal casinos n Michigan are exempt from local, state and federal taxes, which gives them an advantage over the Detroit operations that pay tens of millions of dollars in annual taxes. Most tribes, however, share two percent of their casinos’ net winnings with state and local governments.
James Nye, a spokesman for Detroit’s casinos and a tribal government coalition, said, “It does not surprise me in the slightest that they are holding onto that parcel at the racetrack for dear life because that is the foothold that they’re using to open a casino 20 miles from Detroit.” Casino gaming analyst Alex Calderone said, “An overwhelming majority of the new destination’s revenues will more likely than not come at the expense of the Detroit Three. In other words, even though we might see some growth in the overall pie, introducing a new property that close to Detroit will almost certainly still result in the existing operators’ slices shrinking.”
In documents, the Sault tribe stated if the Metro Airport-area casino is built, the tribe would share with Huron Township 0.5% of its net wins on slots and make payments to the township in lieu of property taxes, which otherwise would be exempt on tribal lands. In return, the township would not stop the tribe’s efforts to develop the casino complex and would send the Secretary of the Interior a letter of support for the plan. Meanwhile, Tribal General Counsel John Wernet said, “The Sault tribe is not prepared to discuss future potential uses for that land at this time.”
The tribe claims the Interior Department must take the land into trust for any potential use, including operating a casino based on the 1997 federal Michigan Indian Land Claims Settlement Act, which was designed to compensate the Sault tribe for land taken in the 1800s.
Gaming and Indian law attorney Lance Boldrey said tribe could convince the U.S. government to take the Huron Township church site into trust, but restrictions in the Indian Gaming Regulatory Act could thwart casino plans. “They’ve got some interesting legal theories and they take them a long way toward satisfying the federal requirements, but I don’t think they take them over the finish line,” Boldrey said.
Pinnacle Race Course in Wayne County closed in 2010 after three thoroughbred racing seasons. The project cost more than $50 million, including $28 million in private investment and $26.6 million in sewer and infrastructure improvements. Last month the main pavilion was demolished as a step toward redevelopment and deterring vandalism.
The owners, a corporation formed by past Pinnacle investors, purchased the initial 320-acre tract for $1 from the Wayne County Land Bank. Today the owners are asking $8 million for the remaining 313 acres. About $2.3 million also is owed in past property taxes.
Jack Krasula, head of the corporation that owns the site, is feuding with another investor, Jerry Campbell, the Pinnacle founder who filed for personal bankruptcy last month, citing $4.8 million in debt connected to the racetrack debacle. Campbell owes that money to Krasula, whose corporation bought a defaulted loan from one of the track’s commercial lenders.
However, Campbell now is partners with the Sault tribe in their proposed casino complex, as manager of a non-tribal investor group called JLLJ. The group includes Krasula; Robert Liggett, chairman of Big Boy Restaurants, and Winfield Cooper III, president of the Flint-based real estate firm Cooper Commercial Group. At least one of the investors paid $950,000 to buy the church property out of foreclosure to hold for the tribe.
In a newsletter distributed last summer to fellow casino investors, Campbell wrote, “Overall, we are quite optimistic on the status of the project.” He said the Sault tribe has retained Atlantic City-based SOSH Architects for preliminary work on converting the church into the proposed casino, and added his Interior Department sources expected the agency to issue a favorable decision for the tribe by September 2015. It still remains unclear why that decision has not been announced.
The largest Native American tribe in Michigan, the Sault tribe opened Detroit’s Greektown Casino as a non-tribal venture but lost it in bankruptcy in 2008. The tribe currently operates five small Kewadin casinos in the Upper Peninsula.
