Long odds don't faze slots tycoon Don Barden
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Matt Freed, Post-GazetteDon Barden stands on an upper floor of the Carnegie Science Center, overlooking the spot on the city's North Shore where he hopes to build a new casino.
Casino bidders working hard to prove diversity
DETROIT -- Don Barden has worked more, gambled more and prospered more than heavier-financed, higher-educated, and better-connected businessmen for the past 40 years.
The casino mogul, who wants to be a billion-dollar player in the industry, figures he can do the same in Pittsburgh.
The most prominent African-American in the gaming business, owner of the eighth-largest minority-owned company in the nation last year, he's unworried about the public relations campaign that bigger Isle of Capri casinos and the Pittsburgh Penguins are using for their casino plan, which would include a new arena.
Rocking in a leather chair in the Downtown office building he owns across from the Detroit Tigers' Comerica Park, Mr. Barden, 62, is also unfazed by the size and political influence of his other Pittsburgh competition, the Harrah's Entertainment-Forest City Enterprises partnership.
Long odds are nothing new.
When you reach his status despite being one of 13 children from a hard-working but poor family, despite lacking a college degree, despite starting from nothing in an Ohio steel town unaccustomed to entrepreneurial black men in the 1960s, despite being shut out in your hometown when pursuing the biggest business venture of your life -- a Detroit casino -- you make a habit of perseverance.
Mr. Barden owns two casino boats on the Gary, Ind., waterfront. One of them represents his first casino operation in 1996, the other a $253 million purchase from Donald Trump last December to end a strained, decade-long relationship with side-by-side casinos. Both boats are now named Majestic Star, which will also be the name for Mr. Barden's North Shore casino, if he wins the license later this year.
His three other casinos, in Downtown Las Vegas, Black Hawk, Colo., (near Denver) and Tunica, Miss., (near Memphis) were acquired for $149 million in 2001 from the financially strapped Fitzgeralds firm, and they still bear that brand name.
Combined, the five casinos have nearly 6,000 slot machines and more than 170 table games, and they represent more than 90 percent of his company's revenues. The company earned $372 million last year and could reach a half-billion dollars this year with the Trump acquisition.
The slots-only Pittsburgh facility, estimated to cost at least $350 million, would start with 3,000 machines and build to 5,000 on riverfront property between Carnegie Science Center and the West End Bridge. Mr. Barden has an option to buy the 17 mostly unused acres from MAXT Corp., headed by Terry Wirginis of the Gateway Clipper Fleet, who worked with him in planning the Gary casino.
Mr. Barden, also known as "Mr. B" among staff and acquaintances, has settled on profits from America's gamblers as his primary business after making a fortune from sales of cable television systems he built in Michigan in the 1980s. His first financial success came in real estate ventures in Ohio in the '70s, after he'd toiled as a parts mechanic, plumber's assistant and short-order cook.
Going in cold
He entered the casino business a dozen years ago with no background, just as he had done in cable a dozen years earlier. An admitted risk-taker credited by peers with uncanny business vision, he has a track record of positioning himself on the leading edge of profitable new growth industries.
"I want them to be businesses where I can make money while I'm sleeping," Mr. Barden says. "A casino is a cash flow business, 24 hours a day, seven days a week."
He's been backed in business by George Steinbrenner when young and Michael Jackson later, and counts numerous other celebrities as associates. He holds a private suite at Ford Field, where he hosted friends and politicians during the Super Bowl.
His third wife, Bella Marshall, is the chief operating officer for Wayne County, in which Detroit is based. They are widely recognized as a power couple prominent at the city's biggest social and philanthropic events, and they host hundreds for an annual Christmas party in their mansion abutting the Detroit Golf Club. The still-trim former high school football and basketball captain is a member there who loves to play -- and plays well.
Of course, life did not always include a Bentley in the garage and palling around with Smoky Robinson.
Growing up in Inkster, Mich., a Detroit suburb that was more countrified at the time, he shared a bed with three brothers, "two at the top and two at the foot." The children all had to help care for chickens, hogs and other animals used for food. They raised vegetables in the garden to be canned for year-round use.
Their father worked multiple jobs, but there was no money for comforts in a family of 15. Mr. Barden has always worked extra jobs himself and prides himself on multi-tasking today. (During a lengthy interview in his office, he monitored CNBC's financial news on his plasma TV while occasionally dipping into paperwork or making a phone call, all the while answering questions with measured responses.)
As a youngster, he took it upon himself to sell some of the family's fruits and vegetables at a roadside stand for income, which none of his eight older siblings or parents had ever considered. In high school, he drove a tractor to school so he could plow gardens on his way home after football practice, to earn a few dollars.
"He was always a go-getter, real entrepreneur-minded, different from the rest of us, though we all got good work ethic from our dad," said an older brother, Douglas, who like all of the siblings has remained in the Detroit metropolitan area.
He has helped out relatives financially, when needed. In 1962, however, his parents had to go door to door among kin and friends seeking donations to enroll him as the family's first college student, at Central State University in Wilberforce, Ohio, a historically African-American college. The funds ran out after a year, and so did his formal education.
Success and frustration
He followed an older brother to Lorain, spending most of the 1960s and 1970s in that ethnic steel town. In two years at the American Shipbuilding Co., he moved up from the mailroom to the company president's assistant, but he wanted to run something himself. He launched his own music, newspaper and restaurant enterprises with varying success. His determination impressed both the community's influential citizens, who invested in him financially, and run-of-the-mill residents who voted him Lorain's first black councilman, representing a largely Polish district.
Carl M. Adams, now retired in Fairhope, Ala., who backed Mr. Barden in everything from his weekly newspaper to his Detroit cable franchise, said, "It was his personality and accomplishments that won you, because anything he did, he kept his word."
Mr. Barden describes himself as also having a knack for being "in the right place at the right time." When cable television arrived in Ohio in the late 1970s, he was already in broadcasting from having hosted a weekly recap of Lorain news and a public affairs talk show for two Cleveland TV stations.
Applicants to develop cable systems in Lorain and nearby Elyria were looking for diverse community support to win government approval. It was one time, Mr. Barden acknowledges, when his race was an asset. His backing of the cable firm netted him shares in its ownership, which he was able to cash out later for several hundred thousand dollars.
His study of the cable business and contacts in Inkster from developing an office building there led him back to Michigan to win new cable franchises in that community and two other Detroit suburbs. When he proved himself with those, he won the confidence of Detroit's new cable commission to select Barden Cablevision for its new system.
Bigger cable operators, he recalls, "were afraid of the ethnicity of Detroit, that people wouldn't pay their bills, or their trucks would get their tires slashed -- the stereotypical fears I wasn't worried about. ... I risked everything going into it."
Like most of his gambles, it paid off. He netted $110 million in 1994 by selling Barden Cablevision to Comcast. By that time, his interest in casinos had emerged.
Mr. Barden had been making occasional trips to Las Vegas himself to play blackjack at $100 or more a hand. Betting on the golf course and playing poker afterward were longtime customs. Those were nothing, however, compared to running businesses with millions at stake. Shortly after the Sept. 11 terrorists attacks, when economic concerns had others in his industry fearing expansion, he bought the Fitzgeralds properties.
"An entrepreneur is by nature a gambler," he explains. "You take risks. Otherwise, you don't get anywhere."
After winning a casino license in Indiana, Mr. Barden set his sights on Detroit, which took applications in 1997 for three new casino licenses to be awarded within city limits. There was wide interest from the biggest names in the industry, including Steve Wynn and the MGM Grand. Mr. Barden contended one of the licenses should go to someone from Detroit, someone the same color as most of the city's residents, someone committed to reinvesting in the community. Someone, in other words, like him.
Then-Mayor Dennis Archer, who controlled the licensing process, didn't see it that way. He wanted bigger companies with stronger finances, and Mr. Barden lost out.
Back then, Mr. Barden was angry, trying unsuccessfully to have the Detroit licenses overturned by lawsuit and ballot initiative. Possibly, it was his worst personal defeat since being "slaughtered," as he put it, in a 1975 bid for the Ohio Senate from Lorain. Mayor Archer's reasoning didn't make any sense to him, considering the wide-open market of potential gaming customers.
"The truth was a homeless person off the street could have [operated the casinos], there was so much money to be made, but they decided to go after the Las Vegas guys," he says, shaking his head. "I never had a snowball's chance in hell from day one."
Ownership of a Detroit casino remains a goal. He both bought and sold a 3.8 percent share last year in the Greektown Casino there, saying the purpose was to be reviewed and approved as an owner by Michigan regulatory officials. That would speed the process if he's able to buy one of the three existing operations, though none are on the market and if they were, the asking price could be a billion dollars.
If successful in his Pittsburgh bid, Mr. Barden figures the casino and its accompanying restaurants and entertainment would add more than $400 million annually to his revenues, although government taxes would take 54 percent of that. While the tax bite is higher than anywhere else he operates, he says it allows "a reasonably decent return" on his investment.
Simultaneously, he is monitoring the ongoing debates in Ohio and Maryland over legalized gambling there, in case he wants to expand further.
"I can't speculate on where the next jurisdiction will be," he says. "Right now, my focus and attention are strictly on Pennsylvania, Pittsburgh in particular. It is real, and it is now."
First Published April 9, 2006 12:00 am