Crown Resorts Taking NSW Government to Court Over Views at Barangaroo Casino

Posted on: August 12, 2018, 10:00h. 

Last updated on: August 10, 2018, 07:50h.

Crown Resorts is taking legal action against the New South Wales government, with the goal of stopping a proposed development that Crown says could disrupt the views at its Barangaroo luxury casino complex.

Crown Resorts Barangaroo views
Crown Resorts is taking action over new developments in Barangaroo that could ruin views of landmarks — such as the iconic Sydney Opera House — from its casino resort, which is currently under construction. (Image: Wikimedia Commons/Diliff)

The dispute is over developments taking place in Central Barangaroo, which were approved by the Barangaroo Delivery Authority (BDA). Crown says that allowing these new developments would violate its own existing contract with the BDA.

A Room Without a View

Crown announced on Thursday that it was taking action in the Supreme Court to stop the governmental BDA from increasing the size and height of projects that are adjacent to its Crown Casino.

The dispute comes down to the views that patrons might have from the resort once it’s completed. Crown purchased the property with the understanding that it would have a view of the Sydney Opera House and the Harbour Bridge.

They contend that the BDA has essentially sold that view multiple times, with both Crown and major property developer Lendlease  — which is building nearby residential properties — saying that they paid for a view of those famous sites. Now, Crown’s argument states, the BDA is trying to sell those views again to new developers.

That’s why both companies are now filing injunctions over a BDA planning application for Central Barangaroo. But there remains a question as to how much financial damage this new wave of development would have on the Crown complex.

The resort tower will have 71 levels, with the primary hotel occupying floors six through 22. According to a report in the Sydney Morning Herald, it is expected that the proposed developments could impact the view from about 20 percent of the hotel rooms.

Those rooms probably won’t fetch premium prices if they have obstructed views of Sydney’s signature landmarks. And considering that Crown has a 99-year lease on the property, those reduced room rates could add up fast.

VIP Casino Still Several Years from Completion

Crown didn’t cite any specific development applications as being problematic while talking about the issue during its Thursday earnings announcement, according to an Australian news site. The Central Barangaroo development is expected to include a mixed commercial and residential building, as well as a Metro station.

The AUD$2.2 billion (US$1.62 billion) Crown casino is expected to open in 2021. When it was first proposed, the facility was pitched as a resort that would exclusively cater to a VIP audience, limiting the potential for problem gambling it could inflict on the local population.

As time has gone on, however, Crown has switched gears. While the complex won’t have slots (or “pokies,” as they are called in Australia), its table games may appear to higher-end mass market customers, along with the aforementioned well-bankrolled whales.

“It would be wrong to see Barangaroo solely as a VIP property,” Crown Executive Chairman John Alexander said during an earnings announcement in February 2017. “We believe it will be very attractive to the local market, the local VIP market, which is quite strong and growing.”