The gamblers are crowding three deep around the blackjack tables and slot machines at Detroit's new, $225 million MGM Grand Casino these days, jump-starting an ambitious economic development program that city officials say will transform one of the most blighted and economically depressed big cities in the nation into a model of urban renaissance.
Other promises of economic revival have been made since Detroit lost nearly half of its population to suburban flight before and after the 1967 riots. But the magnitude of the gambling industry's plans here and an additional $10 billion in economic development projects underway or on the drawing board suggests that the turnaround envisioned by Democratic Mayor Dennis Archer could be more than just a pipe dream.
Two new sports stadiums--one for pro baseball's Tigers and another for pro football's Lions--are going up near the MGM Grand's temporary casino, which will give way in four years to a permanent, $800 million, Las Vegas-style hotel and gambling complex alongside two similarly sized casinos scheduled for sites close to the Detroit River.
General Motors Corp. and Compuware Corp. are planning major office relocations downtown, which city officials say will contribute to a total of 37,000 new workers in the inner-city within five years. Nearly 60 major housing developments are underway, and lending institutions have injected or pledged more than $1 billion for economic development projects since Detroit became one of six U.S. cities selected for the Clinton administration's Economic Empowerment Zone program.
Some boarded-up downtown office buildings--ugly symbols of Detroit's fall to ruin--are being gutted and converted into luxury hotels and apartments. Derelict warehouses are being turned into loft apartments, and several chain stores that long ago fled to suburban shopping malls are opening new outlets in the city or considering doing so.
Unemployment has fallen from a rate of nearly 17 percent five years ago to 6.3 percent today, and Detroit's credit rating has gone from junk-bond to A-minus in six years. The booming national economy and relatively low interest rates have stimulated investment here, as they have in a number of other big U.S. cities including Chicago, Cleveland and Baltimore that are benefiting from a surge in development.
"We hit bottom, but we are starting to have a total fix for our city," Archer, a former state Supreme Court justice who was elected in 1994, said in an interview. "Our problems are not over, but we are making headway."
The casinos are only a portion of the development activity here, but they are the most visible part because of their enormous short-range potential for providing jobs and tax revenue. They also have been the most controversial because opponents of the gaming houses predict that Detroit will suffer the same social costs--gambling addiction and family breakups among them--that have beset other U.S. cities that have turned to legalized gambling for their economic salvation.
The MGM Grand, owned by the Las Vegas casino of the same name, opened its temporary gambling house just three weeks ago in a renovated Internal Revenue Service building near a downtown interstate highway. Already, about 24,000 people daily are playing its 2,370 slot machines and video poker games and 83 table games, including blackjack and craps.
Two other casinos are scheduled to open in temporary facilities in downtown Detroit by the end of this year, one to be operated by Las Vegas's Circus Circus Casino and Resort and the other being financed by two Greek investors and a Chippewa Indian tribe.
Some independent economic analysts estimate that when the three casinos are operating in their permanent buildings four years from now, their potential market will be as much as $1.5 billion a year, which would put Detroit behind only Las Vegas, Atlantic City, and Tunica, Miss., in the legal gambling industry.
Detroit, which is the largest U.S. city with casino gambling, is counting on gambling tax revenue of $50 million for its $2.9 billion budget this year and $250 million over the next four years. Under an agreement, the city and the state will share 18 percent of the casinos' gross profits and the casinos will pay millions more in infrastructure development.
In addition, the temporary casinos are expected to create about 11,000 jobs--as many as GM has in the city--and that figure will rise when hotels and entertainment complexes are added to the three permanent casinos, city officials said.
Deputy Mayor Freeman Hendrix said he expects the casinos to boost Detroit's convention and tourism business. He said that soon after voters approved the casinos in a statewide referendum three years ago, convention bookings jumped.
"The casinos signaled an important message, that they could be an important part of a larger tapestry," Hendrix said. "The decision by Compuware to locate downtown sends another message--that our economy can be broad and diverse. But the casinos give us an opportunity to build an important entertainment base, and there was no reason for us to turn our backs on that."
But opponents of legalized gambling contend there will be a heavy social price to pay because the casinos will become a source of addictive behavior, bankruptcy and family breakups--in short, a "cancer on the soul of the nation's cities" as Sen. John D. Ashcroft (R-Mo.) put it.
"We've let the carnival that used to come into town and leave establish itself in town permanently," said the Rev. Tom Grey, director of the National Coalition Against Gambling Expansion. "It's not good economics, it's not good public policy and it's not good for people's well being."
Grey, a Rockford, Ill., Methodist minister, noted that voters passed the 1996 referendum by 51 percent to 49 percent after Michigan Gov. John Engler (R) "marshaled the forces of politicians seeking a constant flow of cash, both for government and political campaigns." Michigan voters previously had turned down ballot initiatives for Detroit casinos four times between 1976 and 1988.
Grey said 55 small businesses in the riverfront area where the casinos will be will shut down just as the neighborhood was beginning to pull itself to together. "It's the first time we've seen them [officials] go into the city and, under the guise of economic development, use their power of eminent domain to hand a windfall to the 800-pound gorilla from Las Vegas," he said.
"Addicted, pathological gamblers are going to be the biggest social cost for Detroit, and the result will be increased crime, broken homes and ruined lives," Grey said.
However, Detroit Police Chief Benny Napoleon said the only increase in crime he expects from the casinos is a slight rise in pickpocketing and "distraction thefts" in the gambling halls and, perhaps, prostitution. But he said the police will adjust and that those crimes tend to occur anyway when large conventions are held.
"The typical gambler brings $100 or so to the casino and is prepared to lose it," Napoleon said in an interview. "That kind of loss is not going to be an incentive for a career in crime." He said that while he had taken no public position for or against casinos, "If the city says this is what they want, my job is to make it as safe as possible."
As it happens, the casinos are opening as crime appears to be declining in Detroit. Napoleon released figures Wednesday showing that for the first six months of this year serious reported crimes fell by nearly 16 percent from the same period last year, the biggest drop since 1977. Homicides, though, increased by almost 17 percent.
Archer said he was sensitive to the potential social costs attached to legalized gambling. But he said Detroit already was suffering them without getting any of the benefits of having its own casinos.
He pointed out his 11th floor office in the City-County Building here toward a big casino just across the Detroit River in Windsor, Ontario, and recalled how frustrated he felt every time he saw cars lined up on the Detroit side of the tunnel leading to Canada. City residents were spending their money in Windsor and then bringing home whatever social problems might arise from legalized gambling, Archer said.
"The price [in social problems] will be no greater now than what we were already paying with that casino over there," the mayor said. "We had all the burden with no benefits." He also noted that at least a dozen Indian casinos are operating in Michigan within driving distance from Detroit, and that the state provides legal gambling through its lottery.
During the 1990s, legal gambling has expanded steadily throughout the United States to the point where there is some form of casino gambling in 26 states. Casinos have become virtual cash machines for states like Mississippi, where casinos provide an estimated 10 percent of tax revenues that fund the state budget.
Archer said he would be "quite content" with three casinos and doubted that Detroit would seek statewide voter approval to expand beyond that. He said he wanted Detroit to be a "city with casinos, not a casino city" like Las Vegas or Atlantic City.
"They [casinos] are an important piece of the economic development puzzle, but not all of it. They are just part of the diversity we are trying to build here," Archer said.
CAPTION: Gamblers play craps at the temporary MGM Grand Detroit Casino in downtown last month, one of three to open by November. Three permanent casinos are to open within four years.