Street Talk

Street Talk: Lansing casino battle being fought in GR court

January 26, 2013
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The U.S. District Court in Grand Rapids heard arguments last week in the state’s attempt to block the Sault Ste. Marie Tribe of Chippewa Indians from asking the federal government to take its newly purchased Lansing property into trust so it can build a casino there.

Some other Michigan tribes with casinos don’t like the idea of a new casino in Lansing, either. Michigan AG Bill Schuette, who filed suit against the Sault tribe in federal court, maintains its plan violates the gaming compact it has with the state. The tribe already operates five Kewadin Casino properties in the U.P.

With the city of Lansing’s support, the tribe and a Lansing development group hope to build a $245 million casino downtown next to the Lansing Center. Lansing Mayor Virg Bernero has said it would “help boost the economic revitalization of Michigan’s capital city and transform our downtown into a major entertainment destination” and “create thousands of good jobs, attract tens of thousands of tourists to the region.”

At the federal court hearing was James Nye, a spokesman for a coalition opposed to the casino: the Nottawaseppi Huron Band of Potawatomi, the Saginaw Chippewa Indian Tribe, Greektown Casino and the MGM Grand Detroit. The Nottawaseppi Huron and Saginaw Chippewa also filed amicus briefs with the U.S. District Court in support of the state’s lawsuit.

“We are confident in the state’s arguments presented before the court,” said Nye immediately after the hearing. “We certainly would not want to be in the Sault tribe’s position, which is asking the court for permission to open unlimited off-reservation casinos wherever it chooses. The Sault tribe does not deny the fact that it’s also seeking a casino near Detroit and could even target sites in other states.”

Nye added that “the state of Michigan recognizes that the tribal gaming compacts require all tribes to consent to off-reservation casinos. Tribes oppose the Lansing casino and this is the basis for the state’s lawsuit against the Sault tribe. Today, the assistant attorney general informed Judge (Robert) Jonker that the state will seek closure of the Sault tribe’s Upper Peninsula casinos if it moves forward with the Lansing casino proposal because that would violate its gaming compact.”

Aaron A. Payment, tribal chair for the Sault tribe, was also at the hearing. He said the state argued that if it fails to get an injunction against the tribe, “they plan to file a petition to adjoin our existing revenue” from the Kewadin casinos.

Payment said it would be a dangerous concept to create a path enabling the state government to seize a tribe’s casino revenues, “and if I were a member of the Saginaw Chippewa tribe, I would not be happy with that.”

“They need to be careful about who they get into litigation with, because that’s a risk for them as much as it is for us.”

Judge Jonker said a ruling on Schuette’s lawsuit could come within 30 days.

Turnaround bound

Representatives of Business Leaders for Michigan were in GR the other day to update the Business Journal on the progress of the organization’s Michigan Turnaround Plan.

“We’ve made significant progress,” said Mike Jandernoa, who is on the board at Perrigo and also vice chair of the BLM board. He was joined by BLM President and CEO Doug Rothwell and Vice President Kelly Chesney.

The three wanted to focus specifically on The Plan’s fourth pillar: strategically invest the state government’s revenue for future economic growth, and that means investing in people and infrastructure.

Rothwell said there was built-up frustration with state government among businesses across the state when the BLM and The Plan were born back in 2009. The governor was Democrat Jennifer Granholm, and the frustrations had to do with the state government’s inability to balance the budget, even as state taxes on business kept getting bigger and more complicated.

“Those things now have largely been addressed,” said Rothwell, with Republican and former business executive Rick Snyder in the governor’s office. But, he said, there is still an obstacle to fixing the state’s highway infrastructure, which Snyder wants to do and the BLM is all for. The public consensus, said Rothwell, is that nobody wants an increase in state taxes — but everybody wants the roads fixed.

Rothwell conceded that there “has been a bit of a shift” of the state tax burden away from business and onto individual tax payers, although he said Michigan had always been heavy on business taxes — and he noted that the state’s 6 percent tax on C corporations is still slightly above the national average. Most of the relief in the new state business tax really is being felt by small business, according to Rothwell and Jandernoa.

Chesney noted it is unfortunate so many people in Michigan don’t understand the Michigan gas tax, which is earmarked for roads. Snyder raised the issue in his State of the State speech, calling for an end to the 19 cents per gallon tax on gasoline and going to a percentage of the wholesale price.

Consumers tend to blame the gas tax as part of the reason why gasoline prices are so high, although Chesney noted that the tax actually hasn’t gone up since 1997.

Increased funding of higher education is another key proposal by BLM to improve the level of talent in the Michigan work force. “Today, we fund prisons more than colleges,” said Rothwell.

The BLM favors increased recruiting of out-of-state students for Michigan’s colleges and universities — “but not at the expense of our own students,” added Chesney.

More talk about the state’s infrastructure brought a mention by Rothwell that the state’s airports need to be considered.

The Business Journal wondered if the BLM is in favor of the federal government’s controversial Essential Air Service subsidy, provided for decades to small regional airports around the nation. Muskegon County Airport and eight others in Michigan receive the subsidy to attract commercial air service, with Muskegon’s 2012 subsidy being more than $1.5 million. Other Michigan airports getting an EAS subsidy are in Alpena, Escanaba, Houghton/Hancock, Ironwood, Iron Mountain, Manistee, Pellston and Sault Ste. Marie.

“The BLM doesn’t have an opinion” on the EAS subsidy, said Jandernoa.

“I have an opinion,” he added — but he was not inclined to share it.

Hey, that’s us!

For the first time in recent memory (maybe ever!), Mayor George Heartwell referenced the Business Journal in his State of the City speech. Hizzoner made mention of reporter Mike Nicholsstory, “GR no longer ranked as ‘Dying City’” and took a poke at Newsweek for its slam two years ago.

The mayor’s compliment was a bit left-handed, but we can overlook that. “The Grand Rapids Business Journal printed a comprehensive list of accolades Grand Rapids has received since the Newsweek slam. Business Journal forgot a couple, but I’m happy to add them,” Heartwell said, breaking into a lengthy list of recent city accomplishments.

Forgot a couple? Heck, we won’t even point out that it’s called the Brookings Institution, as opposed to the Brooking Institute. Oops, sorry, Your Honor.

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