Casino operator Cordish Companies’ plan to build a €2.2b resort in Spain have hit a major stumbling block after Madrid officials rejected the plan as unviable.
Last December, Cordish announced plans to build a major casino, hotel and resort complex on 134 hectares of land near Madrid’s Barajas airport, which would operate under the name Live! Resorts Madrid. It was to be the first international gaming operation for Cordish, whose stateside properties include the popular Maryland Live.
On Friday, Madrid’s Minister of Economy, Employment and Finance, Engracia Hidalgo issued a statement saying that a “profound, serious and rigorous” review of the Cordish proposal had left the government skeptical that the project was “viable from an economic and organizational point of view.”
The statement claimed that the Cordish proposal would require the community to spend €340m to upgrade the surrounding road and rail infrastructure, which would impose a “significant burden” on the community’s budget.
To go forward, the government would have to designate the Cordish project as an Integrated Development Center (CID), which offers developers significant flexibility in land usage, as well as major tax advantages. But this is no small decision, as Madrid is only allowed to issue a CID once every 10 years.
Madrid expressed concern that certain components necessary for issuing a CID – including sports and cultural facilities – would only be built in later phases of the Cordish project, which the government suspects Cordish might not ultimately proceed with depending on the financial performance of the early phases.
The government left open the possibility that Cordish could file a new plan that hopefully addressed the community’s concerns.
In response, Cordish issued a statement saying the Madrid government “does not understand our application in two major respects.” Cordish insisted that it wasn’t demanding any public infrastructure upgrades nor any public subsidy, “and in fact none is needed.” As for the CID concerns, Cordish said it was “fully committed to a total build-out” of all phases of its resort.
Cordish expressed optimism that Madrid officials would eventually see the light, while suggesting that any delay in approving the project – construction of which is supposed to commence in Q2 2018 – would be harmful to the regional economy. Cordish has said the project would generate up to 57k direct and indirect jobs.
US casino operators have had no shortage of difficulties in getting major integrated resort projects off the ground in Spain. In 2013, Las Vegas Sands gave up on its EuroVegas project after Madrid officials balked at chairman Sheldon Adelson’s demands for significant tax breaks and exemptions from the country’s indoor smoking restrictions.
