Crown Sydney could face delay after community groups file legal challenge

TAGs: Australia, crown resorts, crown sydney, James Packer

crown-sydney-legal-challengeAustralian casino operator Crown Resorts is facing a legal challenge over the validity of the company’s planned Crown Sydney venue.

Crown Sydney received final planning approval from the New South Wales Planning Assessment Commission (PAC) in late June but a local community group is now challenging the legal justification behind the PAC’s ruling.

The challenge was filed in the Land and Environment Court by the Environmental Defenders Office (EDO) on behalf of Millers Point Fund Incorporated, which represents a collection of local community groups.

EDO solicitor Sue Higginson told Australian media that the groups’ principal concern was Crown Sydney’s impact on the public accessible open space on the foreshore. The land in question had been earmarked for a public park before Crown Sydney planted its flag. The PAC ordered Crown to make certain adjustments to ensure the public maintained access to the waterfront and to incorporate a slightly larger green space than called for in the original design.

The PAC said its approval was based on a 2013 amendment to the Casino Control Act that specifically authorized a casino to be built on the foreshore of the southern section of Sydney’s Barangaroo district. Higginson took exception with the PAC’s claim that its hands were tied because the amendment had “effectively legislatively settled” the question of the gaming floor’s location.

Higginson argued that the ultimate responsibility remained with the PAC to “make a decision about where a casino can and cannot be built based on planning law.” Higginson believes the PAC’s error was “so significant” that its approval of the Crown Sydney project was “invalid and of no effect.”

The judicial proceedings are expected to get underway later this month. In a statement to the Australian Stock Exchange, Crown said it intends to “defend these proceedings vigorously.”

Delays to expansion projects notwithstanding, Crown’s majority shareholder and former chairman James Packer stands to gain an extra $1.1b from Crown’s plan to split its operations into separate domestic and international businesses, while setting up a new real estate investment trust (REIT).

Macquarie analysts believe Crown’s restructuring could boost the value of Crown shares by as much as $3.12 from their current price. Given Packer’s 364.3m Crown shares, the increase could push the value of his Crown holdings to $4.8b, which should be enough to keep Packer squeeze Mariah Carey in pricey baubles for the foreseeable future.


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