Crown Might Sue New South Wales over Barangaroo Central Plan

Sunday, July 8th, 2018 | Written by April Bergman
Crown Might Sue New South Wales over Barangaroo Central Plan

Crown Resorts Limited could be headed towards a legal battle with the government of New South Wales over an urban development plan. Crown might file a lawsuit to stop an urban renewal plan launched by Sydney government agency. Meanwhile, the New South Wales premier is trying to broker mediation.

If the Barangaroo Delivery Authority goes ahead with its plan to turn an unused container terminal in downtown Sydney into a residential and commercial district, it could block the premium view of Barangaroo Harbour from the Crown Sydney casino.

The Barangaroo Delivery Authority has a plan, called the Barangaroo Central urban renewal project, which would see an increase in the size of residential and commercial building rise by over 150%.

Star Sydney vs. Barangaroo Central

Barangaroo Central’s buildings currently have an upward limit of 635,070 sq ft, but the new plan could see buildings with a maximum space of 1,614,586 sq ft. The $4.4 billion plan would place buildings on a 12.8-acre lot of land adjacent to the planned Crown Sydney.

Crown Sydney, originally known as Crown Barangaroo, sits on a 2.4-acre plot of land next to Barangaroo Central. Crown Resorts Limited has invested over $2 billion dollars in its Sydney casino development. When completed, it will end Star Entertainment’s (Echo Entertainment’s) long casino monopoly in Sydney — Australia’s largest city.

VIP High Roller Casino

James Packer and Crown Limited had to fight hard to receive the casino license from New South Wales. Echo Entertainment (now Star Entertainment), a subsidiary of Tabcorp, had decades-long ties to New South Wales and they had closed out Crown from Australia‘s biggest city for years.

Both sides submitted plans for a new 21st century integrated casino-resort for Sydney Harbour. Several concessions had to be made, including the stipulation that Crown Sydney would serve only VIP high rollers, while the Star Sydney is allowed to host mass market players.

The VIP high roller stipulation was based on the idea that Asian high rollers would flock to Sydney with their newfound wealth. Especially, Chinese high rollers were the intended customers for the Crown Syndey.

Lose of $20 Million a Year

If an iconic view of Sydney Harbour is ruined by the Barangaroo Central urban renewal project, it could mean economic trouble for Crown’s prize casino project. Crown estimates it could lose up to $20 million a year in sales if the six-star property has its northwestern view blocked.

Crown planned to charge visitors $800 a night to stay on the 75th floor of the Star Sydney. Some apartments have an asking price themselves of over $20 million. A heigher Barangaroo Central neighborhood would all-but-ruin those plans. Given the seriousness of the danger, many believe Crown is ready to take the matter to court.

The Daily Mail claimed that “losing views of the Opera House and Harbour Bridge could cost $2 billion.”

Presumably, that would be the total cost over the length of Crown’s 99-year lease.

Gladys Berejiklian Might Appoint a Mediator

To head off that possibility, New South Wales Premier Gladys Berejiklian said she might appoint a mediator in the standoff. If so, then a resolution to the issue might happen either way in the fall of the 2018.

Of course, that would mean Crown Resorts Limited would have its legal options limited. James Packer, the flamboyant former CEO and 47% shareholder in Crown, is not involved in the day-to-day operations of the casino company at the moment. He is living in Baja, Mexico, recuperating from mental exhaustion.