STATE OF MICHIGAN
MICHIGAN GAMING CONTROL BOARD
PUBLIC MEETING
Cadillac Place
3062 W. Grand Blvd., Suite L-700
Detroit, Michigan
TUESDAY, August 13, 2002
6:00 P.M.
MINUTES
On Tuesday, August 13, 2002, the Michigan Gaming Control Board held a public meeting at the Board office in the Cadillac Place, 3062 W. Grand Blvd, Suite L-700, Detroit, Michigan.
Present: In attendance were the following Board members:
Judge Roman S. Gribbs, Chairman
Rich Davis
Judge Geraldine Bledsoe Ford
Larry Garberding
Also attending were:
Nelson Westrin
Patty James
Eric Eggan
D/F/Lt. Darwin Scott
Ben McMakin
Business: The meeting was called to order at 6:00 p.m., by Board Chairman Roman Gribbs. Chairman Gribbs noted for the record that this was the first meeting to be held in the Board’s new Detroit Office, Cadillac Place. Chairman Gribbs also noted for the record that Judge Stacey was excused from the meeting due to a prior commitment. Chairman Gribbs further advised that copies of the agenda were available for the public at the receptionist’s desk.
Chairman Gribbs stated that the Board members have received copies of the minutes from the last Board meeting and there being no comments, changes or corrections to the minutes, he requested a motion to approve the minutes from the June 11, 2002 meeting.
It was moved and seconded that the minutes of the June 11, 2002 meeting be approved. Motion carried.
Nelson Westrin next presented the Executive Director’s report. Mr. Westrin first congratulated Nancy Horton, and other staff, for their hard work on the Board’s efficient office move to the Cadillac Place.
With regards to staffing, Mr. Westrin reported that Lisa Forrest has been hired as an auditor for the Audit Section of the Enforcement Division. Mr. Westrin further advised the Board that the MGCB staff now total 91 and that the Board was in the process of filling its remaining 16 approved vacant positions.
Mr. Westrin next introduced Mr. Gary Elliott, a regulation officer, who was recognized and honored as the Board’s Second Quarter Distinguished Employee for his outstanding job in conducting background investigations of supplier license applicants. Mr. Westrin continued by introducing the MGCB’s current student interns, Tim Wood, Bryon Eggan, Mark Scozzafave and Steve Kolk, who were also recognized at the July 30th staff meeting for their valuable service to the Board.
Mr. Westrin proceeded to give an update regarding the Board’s budget. Mr. Westrin reported that the Board has incurred expenditures in the amount of $10,240,712 from October 1, 2001 through July 31, 2002, leaving the unexpended balance of $6.6 million in appropriated funding for the remainder of the fiscal year, which ends September 30, 2002.
Mr. Westrin next advised the Board that for the seventh straight month in a row, the three casinos have once again produced greater adjusted revenues than they posted for the same months in the prior year. Mr. Westrin further advised that through the first seven months of the year, all three casinos have generated an aggregate total of $665.9 million in adjusted gross revenues, which is a 20 percent increase over the same period last year.
With regards to the development agreements between the City of Detroit and MGM Grand Detroit, Detroit Entertainment and Greektown Casino, Mr. Westrin reported that on August 2, 2002, the Detroit City Council approved several amendments to all three of the permanent casino development agreements. As a result of the Council’s approval of these 30 year amended agreements, all three permanent casino hotel complexes are now back on schedule for opening before January 2006. Mr. Westrin advised the Board that during the business portion of the meeting, Mr. Derrick Miller from Mayor Kilpatrick’s office, would give a presentation outlining the key provisions of the amended development agreements.
Next Mr. Westrin informed the Board that on July 9, 2002 United States District Judge Robert Bell denied a motion by the Lac Vieux Desert Tribe of Lake Superior Chippewa Indians to declare the city’s existing development agreements null and void and order that a re-bidding for new development agreements take place. The Tribe, in turn, appealed to the Sixth Circuit Court of Appeals from Judge Bell’s decision and has also requested a temporary injunction to prevent the City of Detroit and its developers from entering into or carrying out the terms of the amended agreements during the pendency of its appeal.
Mr. Westrin continued his report by advising the Board that the Licensing Division has completed its investigations on a number of supplier license applicants and certain key persons and qualifiers for each of the three Detroit casino licensees, which the Board would be considering during the business portion of the meeting.
Mr. Westrin then proceeded to update the Board on the status of the issuance of temporary supplier licenses, full supplier licenses, vendor registrations, and supplier licensing exemptions, as well as the status of the issuance of temporary and permanent occupational licenses for the three casinos.
Upon conclusion of Mr. Westrin’s report and there being no questions for Mr. Westrin or comments from the Board regarding the Executive Director’s Report, Judge Gribbs proceeded to the first item on the business agenda.
Chairman Gribbs began the business portion of the meeting by introducing Mr. Derrick Miller, Chief Administrative Officer for Mayor Kilpatrick. After Judge Gribbs introduction, Mr. Miller proceeded to give a brief overview of the amended casino development agreements recently approved by the Detroit City Council.
Upon conclusion of Mr. Miller’s presentation, the Board next considered the Licensing Division’s staff recommendations regarding 445 pending Level 1 and 2 occupational license applications.
Chairman Gribbs advised the Board that the Deputy Director of Licensing, Ben McMakin, was present to answer any questions the Board members might have regarding the Licensing Division’s staff recommendations regarding the pending occupational license applications.
The Board having no questions, it was moved by Judge Ford and seconded by Mr. Garberding that the Board enter an order accepting and adopting the Licensing Division’s staff recommendations regarding the 445 Level 1 and 2 occupational license applications as summarized in Exhibit 1, and also directing that the Executive Director issue occupational licenses to the named applicants in accordance with the staff’s written recommendations. The following roll call vote was then taken on the motion:
Chairman Gribbs: Aye
Mr. Davis: Aye
Judge Ford: Aye
Mr. Garberding: Aye
Motion carried.
The next order of business was to consider the Executive Director’s Report and Licensing Division’s staff recommendation regarding the pending application for approval of debt transactions by MGM Grand Detroit, Inc., MGM Grand Detroit, L.L.C., and MGM Grand Detroit Business Development Fund, L.L.C., Board File No. MGM-2002-004.
Mr. McMakin, Deputy Director of the Licensing Division, and Mr. Jim Candler of the law firm Dickinson, Wright, acting as counsel for MGM, introduced themselves to the Board. Mr. Candler also introduced Mr. Scott Snow, Chief Operating Officer and Mr. Wayne Smith, Vice Present and Chief Financial officer of MGM Grand Detroit, L.L.C.
Upon completion of Mr. Candler’s summation of this transaction, Mr. McMakin’s comments and questions from the Board, it was moved by Mr. Garberding and seconded by Judge Ford that business item IV.C. involving the debt transaction by MGM Grand Detroit be deferred to the September 17, 2002 Board meeting in order to receive and consider additional information from MGM along with a proposed order for approval of the debt transaction in question. A voice vote was taken.
Motion carried.
The Board next considered the Executive Director’s Report and Licensing Division’s staff recommendation regarding three pending applications for approval of transfer of interest in supplier licensee A.C. Coin, from Max Seelig to Jerald Seelig, Jeffrey Seelig and Jason Seelig, respectively, Board File No. TR0243-02-001.
It was again noted for the record that Deputy Director McMakin was present to answer any questions the Board members might have regarding the proposed transfer and acquisition and the Licensing Division’s related report and recommendation.
The Board having no questions, it was moved by Mr. Garberding and seconded by Mr. Davis that the Board enter an order approving the proposed three transfers of one-percent ownership interest, in A.C. Coin from Max Seelig to each of his three sons, Jerald Seelig, Jeffrey Seelig and Jason Seelig, based upon the written recommendations and finding of the Board’s Licensing Division staff. The following roll call vote was taken on the motion:
Judge Gribbs: Aye
Mr. Davis: Aye
Judge Ford: Aye
Mr. Garberding: Aye
Motion carried.
The next order of business was to consider the report of the Executive Director and Licensing Division’s staff recommendation regarding the application of Bruce Dall as a required key person and qualifier of Greektown Casino, L.L.C., Board File No. GTC-2002-003
Once again, Chairman Gribbs noted for the record that Deputy Director McMakin was present to answer any questions the Board may have regarding the eligibility and suitability of Mr. Dall. Judge Gribbs further noted that neither Mr. Dall nor a representative from Greektown Casino were present at the meeting.
It was moved by Mr. Davis and seconded by Judge Ford that the Board enter an order finding Bruce Dall eligible and suitable as a key person and required qualifier of casino licensee, Greektown Casino, L.L.C., under the licensing standards and requirements of the Act and Board Rules, based upon the background investigation report and recommendation of the Executive Director and the Board’s Licensing Division staff. The following roll call vote was taken on the motion:
Judge Gribbs: Aye
Mr. Davis: Aye
Judge Ford: Aye
Mr. Garberding: Aye
Motion carried.
Judge Gribbs next advised that the Board would be considering the Executive Director’s report and corresponding Licensing Division’s staff recommendation regarding the application of Gerald Koslow as a key person and required qualifier of supplier licensee, Shuffle Master, Inc.
Once again, Chairman Gribbs recognized Deputy Director McMakin’s presence and also noted for the record that a written notice was sent to Mr. Koslow and Shuffle Master, Inc. advising that the Board would consider this application at the meeting. It was further noted that neither the applicant nor representatives for Shuffle Master, Inc. were present at the meeting.
Judge Ford moved and Mr. Davis seconded that the Board enter an order finding Gerald Koslow eligible and suitable as a required qualifier of supplier licensee Shuffle Master, Inc. under the licensing standards and requirements of the Act and Administrative Rules of the Board, based upon the background investigation report and recommendation of the Executive Director and the Board’s Licensing Division staff. The following roll call vote was taken on the motion:
Judge Gribbs: Aye
Mr. Davis: Aye
Judge Ford: Aye
Mr. Garberding: Aye
Motion carried.
The Board next considered the Executive Director’s Report and Licensing Division’s staff recommendation regarding the pending nongaming-related supplier license application of Chicago Beef Company, Board File No. SL0498-02-001.
Judge Gribbs once again acknowledged Mr. McMakin’s presence and further noted that there were no representatives for Chicago Beef Company present at the meeting.
Mr. Garberding moved and Judge Ford seconded that the Board enter an order finding and concluding that Chicago Beef Company and its qualifiers are eligible and suitable for licensure under the licensing standards and requirements of the Michigan Gaming Control and Revenue Act, as amended, and Administrative Rules of the Board, and, accordingly, granting the nongaming-related supplier license application based upon the background investigation report and recommendation of the Executive Director and the Board’s Licensing Division staff. The following roll call vote was taken on the motion:
Judge Gribbs: Aye
Mr. Davis: Aye
Judge Ford: Aye
Mr. Garberding: Aye
Motion carried.
The next order of business was to consider the Executive Director’s Report and the Licensing Division’s staff recommendation regarding the pending supplier license application of the Women’s Economic Empowerment Group (WEEG), Board File No. SL0600-02-001.
Judge Gribbs noted for the record that Sondra Kent, President and Vera Heidelberg, Vice President of WEEG were present at the meeting. Judge Gribbs further noted that there were no questions from Board members for Deputy Director McMakin.
After hearing comments from Ms. Kent and Ms. Heidelberg, it was moved by Mr. Davis and seconded by Judge Ford that the Board enter an order finding and concluding that the Women’s Economic Empowerment Group and its qualifiers are eligible and suitable for licensure under the licensing standards and requirements of the Act, and Board Rules, and, accordingly, granting the nongaming-related supplier license application of Women’s Economic Empowerment Group, based upon the background investigation report and recommendation of the Executive Director and the Board’s Licensing Division staff. The following roll call vote was taken on the motion:
Judge Gribbs: Aye
Mr. Davis: Aye
Judge Ford: Aye
Mr. Garberding: Aye
Motion carried.
The next item for the Board’s consideration was the Proposal For Decision in the matter of denial of Hernetha Hamilton’s application for an occupational license, Case No. OLH-2001-22.
For the record Judge Gribbs recognized the presence of Ms. Hamilton and the Board’s counsel, Assistant Attorney General, Jack Cahill.
After brief comments from Ms. Hamilton and Mr. Cahill, it was moved by Judge Ford and seconded by Mr. Garberding that the Board enter a final decision and order in the matter of the denial of Hernetha Hamilton’s application for an occupational license, Case Number OLH-2001-22, accepting, adopting, and incorporating the hearing officer’s Proposal For Decision in the matter in its entirety, and denying the occupational license for which Hernetha Hamilton made application. The following roll call vote was taken:
Judge Gribbs: Aye
Mr. Davis: Aye
Judge Ford: Aye
Mr. Garberding: Aye
Motion carried.
The next item of business to consider was the matter of denial of Jeffery Petties’ application for an occupational license, Case No. OLH-2001-23.
Chairman Gribbs noted for the record that a Board representative from the Attorney General was present, however, neither Mr. Petties nor his representative were present at the meeting.
There being no discussion or questions by the Board, it was moved by Mr. Garberding and seconded by Mr. Davis that a roll call vote be taken on the motion that the Board enter a final decision and order in the matter of the denial of Jeffery Petties’ application for an occupational license, Case No. OLH-2001-23, accepting, adopting, and incorporating the hearing officer’s Proposal for Decision in the matter in its entirety, and denying the occupational license for which Jeffery Petties made application. The following roll call vote was taken:
Judge Gribbs: Aye
Mr. Davis: Aye
Judge Ford: Aye
Mr. Garberding: Aye
Motion carried.
The Board next considered the adoption of proposed Board Resolution Number 2002-04, waiving the requirement in the Board Rules 339(2)(a) and (11)(a)(iii) that occupational licenses and license identification badges contain and display the licensee’s job title.
Judge Gribbs invited Mr. McMakin to briefly summarize the proposed Resolution and Mr. Westrin further noted that the proposed resolution and motion called for a waiver of the job title requirement in both Rule 339(2)(a) and (11)(a)(iii).
After questions posed by the Board to Mr. McMakin, it was moved by Mr. Davis and seconded by Judge Ford that the Board adopt proposed Board Resolution Number 2002-04, waiving the requirement in Board Rules 339(2)(a), (11)(a)(iii) that occupational licenses and license identification badges contain and display the licensee’s job title. The following roll call vote was taken:
Judge Gribbs: Aye
Mr. Davis: Aye
Judge Ford: Aye
Mr. Garberding: Aye
Motion carried.
The Board next considered the proposed public meeting schedule for the Board for the fiscal year 2002-2003, which is required by the Michigan Open Meetings Act.
It was moved by Judge Ford and seconded by Mr. Garberding that the Board adopt and post the proposed schedule of its regular public meetings for the fiscal year beginning October 1st, 2002, in accordance with the Open Meetings Act. A voice vote was taken on the motion.
Motion carried.
Next, it was moved by Mr. Garberding, and seconded by Mr. Davis, that the Board go into closed session immediately following the conclusion of the public meeting for the purpose of receiving confidential notification from the Executive Director regarding the names of individuals placed on the Board’s Disassociated Persons List since the Board’s last public meeting as required by the Act and to discuss pending Board litigation with the Board’s attorneys. The following roll call vote was taken:
Judge Gribbs: Aye
Mr. Davis: Aye
Judge Ford: Aye
Mr. Garberding: Aye
Motion carried.
Proceeding to the public comment portion of the meeting, Chairman Gribbs invited Michael Wynn to address the Board.
After Mr. Wynn’s comments and there being no further Board or public comment, it was moved by Mr. Garberding and seconded by Mr. Davis that the meeting be adjourned. Motion carried and the meeting was adjourned at 7:53 p.m.
______
Patricia S. James
Board Secretary
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