Sensational-Adelaide.com

SkyCity's $300m Adelaide Casino expansion still not a done deal

David Washington

SkyCity says it is still negotiating with the State Government over the long-awaited $300 million redevelopment of its Adelaide Casino, more than a year after it received development approval for the project.

The New Zealand-based company released its interim results today, which show a fall in revenue of 1.7 per cent or $77 million in its Adelaide operations.

In a statement, SkyCity said the “proposed expansion of Adelaide Casino remains under consideration by the Board”, but it has been revealed today that a range of issues are still under negotiation between the casino operator, the State Government and Festival Plaza developer Walker Corporation.

In January last year SkyCity received development approval for the expansion, which will include new gaming rooms, restaurants and an 11-storey luxury hotel.

At that time, the company said construction was expected to begin in mid-2016.

In May 2016, it said it was still committed to the project but there would be a 12-month delay due to the “complicated” nature of the project.

Today, the company insisted that “there has been no change in position on the Adelaide Casino expansion project”.

“Early works on the Riverbank Project have begun, as we stated in this morning’s release,” a spokesman told InDaily.

“The expansion must be a good deal for shareholders, however, and final sign-off by the board on a project worth $A300 million has always been contingent on the successful outcome of negotiations with the State Government on various planning approvals, and with the Walker Corporation over the lease of the carparks we need for the expansion. Discussions with these parties continue and we remain hopeful of a successful outcome.”

The spokesman said the company still needed a finalised development agreement, a car park lease from Walker Corporation (which is rebuilding the Festival Plaza car park), and an “interface agreement with the Riverbank Expansion Project”.

SkyCity is also talking to the State Government about regulatory changes to its operations.

The revelation that the car park deal is still under negotiation comes almost two years after SkyCity announced it had secured a lease with Walker and was pleased with the deal.

It said at the time that the exclusive lease of 750 car parks from Walker had cleared the way for the Adelaide Casino expansion.

“With the announcement of this development and the key terms of the car park lease now confirmed, Skycity can now progress its plans to transform the Adelaide Casino into a world-class integrated entertainment complex,” said then SkyCity CEO Nigel Morrison.

A Government spokesperson told InDaily that it was working with SkyCity and other interested parties in the precinct.

“The State Government continues to work closely with SkyCity and all precinct partners to deliver the redevelopment of Festival Plaza,” the spokesperson said. “Early works have already commenced that include the grade separation of Festival Drive and Northern Promenade works, with further projects to get underway later this year.

“The redevelopment will transform one of the city’s most neglected public spaces in to a world-class entertainment precinct.

“As SkyCity outlined last year in their annual results, the Adelaide expansion is expected to commence in the second-half of 2017, with completion expected in early 2020.”

arki wrote:The more I think about this project the less optimistic I become. I seriously don't believe that anything will happen any time soon as Skycity seem too interested in playing games with the government. At the end of the day they already have a monopoly on the Adelaide market, the conditions are ripe for expansion in the surrounding area of the casino and the government has been very inclusive of the casino in their masterplans for the river.

Maybe Weatherill should look at approaching Packer with the offer of a second casino license should they be happy to invest a few hundred million into the riverbank precinct. At least Crown seem to be doers rather than gonnas. At the very least it might light a fire under SkyCity's bum.

rev wrote:So sick of this shit.
Skycity are a shit operator kick them out and bring in Crown.

crawf wrote:

rev wrote:So sick of this shit.
Skycity are a shit operator kick them out and bring in Crown.

Completely agree. So sick to death of Skycity, they seriously need to go.

Even Star Entertainment would be far better.

citywatcher wrote:Crown would turn over billions
All tax free and bound for Israel

rev wrote:

citywatcher wrote:Crown would turn over billions
All tax free and bound for Israel

The same Crown which has its headquarters in Melbourne?

Jaymz wrote:It's no real surprise though. I'm hardly a financial or business expert, but those results are obviously very poor. $77 million dollars in total revenue sounds woefully inadequate for a major city casino, and it's only just turning a profit by a whisker. Some would argue, and rightly so, that if the casino was expanded properly then it's performance would most likely lift. It's a bit of a catch 22. The company is hardly in a strong financial position, so they are hesitant take a punt on what is a poorly performing business. It annoys me though, because for me the casino expansion is the most important piece of the riverbank development.

Algernon wrote:

Jaymz wrote:It's no real surprise though. I'm hardly a financial or business expert, but those results are obviously very poor. $77 million dollars in total revenue sounds woefully inadequate for a major city casino, and it's only just turning a profit by a whisker. Some would argue, and rightly so, that if the casino was expanded properly then it's performance would most likely lift. It's a bit of a catch 22. The company is hardly in a strong financial position, so they are hesitant take a punt on what is a poorly performing business. It annoys me though, because for me the casino expansion is the most important piece of the riverbank development.

I doubt anyone lives more than a km away from an aussie rules club or pub that's a defacto casino these days. Without meaningful differentiation, nor the fiction of contributing to a local community by ripping granny's pensions, a place like skycity has fallen by the wayside. Investment would pick the joint up but I couldn't imagine what would be required to whisk the high rollers away from the major casinos on the East coast let alone Asia.