Sydney Crown is James Packer's top priority and he's frustrated at the delays -
2nd February 2015

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Australian gambling tycoon James Packer is frustrated that Crown Sydney has been delayed. Photo: Reuters

Crown Resorts chairman James Packer is losing patience with planning delays that threaten to push back construction on his $2 billion luxury casino and hotel in Sydney.

Crown has been waiting for the resolution of a legal fight between property developer Lend Lease and the Barangaroo Delivery Authority before it can apply for planning approval for its project.

In The Philippines on Monday, where Mr Packer officially opened his City of Dreams Manila casino, the billionaire told reporters he was increasingly frustrated by how long the process was taking.

Artist's impression of Crown Sydney at Barangaroo.

"There's nothing more important to me than Crown Sydney," he said.

Crown originally intended to open its six-star hotel in late 2018, although the casino would not begin operating until November 2019.

The timing restriction on the gambling side of the development is because rival Echo Entertainment Group, which operates Sydney's The Star casino, has an exclusive licence up until that point.

Mr Packer said that when Crown Sydney got parliamentary approval in 2013, November 2019 "seemed a long way away".

"Because the BDA and Lend Lease still haven't settled their dispute I don't think we are going to open on time," he said.

After getting the project across the line with government, with bipartisan support, Crown then received a greenlight for a casino licence from the NSW gaming regulator last year.

The planning approval, which is the final step in the process and must occur before construction begins, will be the first time that the controversial casino project will be opened up for community consultation. The government gave the initial green light after Crown proposed the casino via the "unsolicited proposal" process, which is designed to encourage the private sector to come directly to the state with unique project ideas and bypass a public tender.

A source with knowledge of the project said Crown had originally intended to submit its planning application in February 2014.

Lend Lease won a long-running contract dispute over profit sharing against the BDA in August 2014, although there are outstanding issues regarding the claim.

Mr Packer declined to go into detail about what had contributed to the hold-up since then. "I'm not in the middle of it," he said.

The proposed cost of the project has increased to $2 billion, up from previous estimates of $1.5 billion. Mr Packer said Crown Sydney would have 350 hotel rooms and 80 apartments. "There's never been a hotel [development] in the world that's cost $4.5 million per key," he said. "We are trying to build something truly iconic."

Further underlining his frustration at the delay, Mr Packer said more recently revealed Crown projects such as the $1 billion hotel and apartment tower for the Melbourne casino and a new casino and entertainment complex in Las Vegas could possibly be up and running before the Barangaroo development.

Delays in Sydney are the latest cloud to drift above Crown's $9 billion development pipeline. The company's bid to redevelop prime Brisbane waterfront is in doubt after the shock election result at the weekend. It is expected Labor will form a government and the party has not made clear its position on the Queens Wharf tender being fought out by Crown, in a joint venture with Greenland, and a consortium led by Echo.

Mr Packer would not be drawn on his expectation of Labor, should it form government. However he took a swipe at Echo, saying Echo's loss of its monopoly casino licence in Sydney to Crown was the catalyst for the company putting up a strong proposal for Brisbane.

The two bidders revealed plans for their multi-billion dollar bids in December.

"What I'm proud of is that without Crown [bidding in the tender], Echo wouldn't have put forward the proposal they did," he said.

"Crown has played a role in getting our competitor to try harder."

He described the smaller casino operator, which also runs Brisbane's Treasury Casino and Jupiters Gold Coast, as a "lazy company" that has abused its monopoly licences.

"[Crown in] Melbourne and Perth, we have never abused or milked our monopoly," Mr Packer said.
After a period of under-investment in its casinos, Echo has recently begun to turn around its performance. It spent $870 million on a refurbishment of The Star, which has begun to boost profits which soared when combined with more targeted marketing and cost control.

At a press conference to mark the official opening of City of Dreams Manila, which operates under a subsidiary of Mr Packer's Macau joint venture Melco Crown and cost 37 billion pesos ($1.1 billion) to build, he said casino operators had a responsibility to deliver when given a casino licence. "If you don't do it well you are abusing that privilege," he said.

Mr Packer also said he was disappointed that a $US400million project to build a casino and hotel in Sri Lanka was knocked back by the country's new government. Although some money was lost in the pursuit of the the failed venture, Mr Packer said that was the risk of doing necessary "business development".

He also said he had a lot of respect for former president Mahinda Rajapaska, especially his peaceful passing on of power to new President Maithripala Sirisena.

The journalist travelled to Manila as a guest of Crown Resorts.

(The Sydney Morning Herald)