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Tuesday, April 27, 1999
Copyright © Las Vegas Review-Journal
Newspaper: Investors have troubled histories
Associated Press
DETROIT -- As state investigators probe the suitability of those seeking to run casinos here, a newspaper says some investors in the Atwater/Circus Circus group have troubled financial histories.
It is one of three city-chartered groups seeking state approval to open casinos in Detroit. The others are the Greektown-Chippewa and MGM Grand groups.
The Michigan Gaming Control Board will decide this spring or summer whether each investor meets strict moral and financial standards.
Forty-five percent of the Atwater/Circus Circus casino is controlled by Las Vegas-based Circus Circus, whose key employees have withstood licensing scrutiny in other states.
Local investors -- 120 in all -- own a 55-percent stake in the company. The biggest individual shareholder is Marian Ilitch, with 17.5 percent.
The Detroit News reported Sunday on its review of public records on the local investors.
It said companies owned by local investor group leaders Herb Strather and Nellie Varner of Detroit have paid taxes late, and the U.S. Department of Housing and Urban Development cited a real estate company they own for several violations.
A bad real estate deal in 1986 led to the foreclosure of nearly 40 properties. This month, HUD issued five violations against a Detroit apartment building they own; courts have awarded their tenants about $750,000 in negligence claims.
Investor Michael Malik of Grosse Pointe, Mich., was arrested in 1997 and accused of hitting his girlfriend's 12-year-old son, the newspaper said. The child is now Malik's stepson, but the boy's biological father is seeking custody. The charge was dropped after Malik served one year of probation and met conditions set by the judge.
Circus Circus President Glenn Schaeffer said his company won a rare opportunity to capture a new market when it signed on with the Atwater group in May 1997.
"If the mayor's vision for Detroit plays out like we expect it to, it's going to set an example," Schaeffer said.
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