Las Vegas Sands says it will hold off until September before deciding whether to build its massive “EuroVegas” casino complex in either Madrid or Barcelona.
Less than three months after the U.S.-based casino giant promised a decision in April or May, President and Chief Operating Officer Mike Leven announced the delay at a news conference in Barcelona.
The two cities are locked in a heated competition to host the complex, whose plans call for six casinos and 12 hotels in its initial phases, with tens of thousands of total rooms, three golf courses, convention facilities and an array of large-scale leisure attractions.
Now, however, it appears the project may not even get built.
“If the euro disappears or there is no financing, we won’t be able to do it,” Leven said, according to Spanish news sources.
Later, speaking to reporters in Madrid after his tour of the two cities, the right-hand man of LVS Chairman and CEO Sheldon Adelson said the company is in discussions with 30 banks, including some from Spain. Apparently, those talks have been less than promising.
“I think it’s more difficult today because of the international global situation, but it’s certainly not impossible,” Leven said, adding, “If the project is not able to be financed by the banks—in other words, if the world gets worse in the next six or seven months—then of course we would not be able to do the project.”
He said LVS generally requires a minimum 20 percent annual return on investment. An initial 6,000-room EuroVegas would require an investment of US$6 billion, of which $2 billion would come from Las Vegas Sands and $4 billion from bank financing. A project of that size would create 15,000 jobs in the construction phase and another 15,000 when operating.
And that’s only a fraction of the grandiose projections associated with EuroVegas, which at full build-out over several years’ time contemplates 12 hotels, 36,000 hotel rooms and up to 250,000 jobs.
Politicians in economically battered Spain find the prospects so appealing they’re prepared to negotiate with LVS on its demands for a 10-year tax moratorium, exemptions from anti-money laundering laws, a relaxation of anti-smoking regulations and a curtailment of traditional European labor protections, and Leven was greeted on his arrival in Madrid by regional President Esperanza Aguirre and a coterie of capitalists, including executives of Iberia Bank and Banco Santander, textile giant Inditex and FCC Construction. In Barcelona, Leven was feted at a dinner prepared by three Michelin-starred chefs at the home of the vice president of Rothschild Bank. Some 30 Catalan business leaders were in attendance.
There is also growing grassroots opposition to the project, fueled by concerns about crime, corruption and a return to the excesses of the property bubble that landed Spain in the condition it’s in.
“Mr. Adelson should listen to the people’s opposition before building this aberration, whose only goal is to profit from and deepen the crisis that we are paying for, handing the profits as usual to the elite who got us into it,” says a group called Eurovegas No, which claims to have collected the signatures of 35,000 people opposed to the project.
Leven was greeted at his arrival at the Barcelona-El Prat airport by a knot of protestors. One protest sign in English read: “Catalonia is not Nevada. Adelson go home. More farmers and less casinos! We are unemployed, not stupid!”