A ray of hope? Integrated Resorts in Spain

After the failed Las Vegas Sands project and the disappointing inheritance of El Reino de Don Quijote and Los Monegros, last December a ray of hope was shed all over the European entertainment panorama in the form of an application made by the Cordish Companies to the regional government of Madrid. Also, the urban planning for the BCN World project gave another push to the other great upcoming integrated resort development in Spain. With all due respect to the upcoming project in Cyrpus, one has an obvious natural inclination for any Spanish development, thus, we will focus on the progresses taking place there.

 

As regards Madrid, for the first time, an actual documentary file with a detailed description of the different project phases and layout was officially presented via the public register of the administration of Madrid. As opposed to what occurred in prior occasions, where there was no documentary process initiated, the Cordish Companies proceeded accordingly to the scale of the project: A groundbreaking development including hotels, convention, retail and entertainment and cultural space ranging across over 130 hectares Northeast of Madrid that would change the regional landscape (and economy) forever.

However, despite the efforts of the Cordish Companies to provide firm and relevant proof of their seriousness and determination to develop the Live Madrid! Project, it seems like the Madrid public authorities have not entirely checked the track record of this group, their potential to deliver and engage committed brands nor, let alone, grasp their potential to attract investment and to execute a once in a lifetime development.

While it is (partially) understandable that projects of this magnitude do require an extra layer of analysis by qualified technicians in the economy, urban planning, environmental and gaming areas of the government of Madrid, it is a disappointment to witness, as a born and raised “madrileña”, how our administration has, to date not recognized what this is all about.

They have not got it all wrong, of course, as technically, they were putting forward a series of arguments such as the alleged lack of guarantees on the full execution of the project or certain demands for the region to spend hundreds of millions on connecting Live! Madrid to surrounding infrastructure that seem like a valid “excuse”, as I said, for now and not to turn down the project for good, but to submit it to further analysis.

Yes, the project has never been “rejected” – this has to be made clear as the press has not been as accurate as expected: the project has NOT been turned down, as there was nothing to turn down to begin with. In other more technical words, only a filing for assessment of the development by the competent authorities was made for them to issue an “opinion” on the potential for Live Madrid! to fit in as a “CID”. That’s it.

Hence, there is plenty of room for Cordish Companies, and other developers who could have an interest in the region of Madrid, to request a tender for a CID to be called. In fact, just as I am finishing up these lines, I am savoring the news of a new filing by Cordish including further details on the project and bank guarantees for the full execution. Bravo!

But … what is a CID? CID stands for Center of Integrated Development (Centro Integrado de Desarrollo) and is a sub-type of a legal urban planning category called “Project of Regional Significance” – the name says it all.

The CID figure was created back in the Sheldon Adelson days (2012) and has never been used before, so there is a (logical?) reason for extra caution to be taken by an administration that has no precedent in running a process of this scale that involves a competitive tender concerning significant and sensitive regulatory areas. If a CID is awarded after this tender, all urban planning restrictions will be lifted and all activities comprised in the future property would be grandfathered by an automatic license. This is “pretty big” for both the promoters of the project and for the competent authorities. The recast filing is a fantastic opportunity for the public servants in charge to start believing.

Once more, as a madrileña, a lucky world traveler and witness to some of the greatest gaming and integrated resort operations of our times, I truly hope that the new round on the Live Madrid! project, this time, will be looked at as the great opportunity it is.

And back to Barcelona, I also do hope that the public officials in charge understand the depth and the commitment that the potential bidders are putting into this project as well. It takes a great amount of effort and there is a lot of manpower involved in getting this through the finish line, but as the Spanish economy is growing and recovering political stability (which is the greatest challenge to the Barcelona project) it really calls for these “exciting” projects that will add not only jobs and investment, but also bring some much-needed energy to the table.

The regulations are there; still, some clarifications are needed for both projects to become the success they should become and there are stakeholders of all kinds that need to be shaken off old nightmares. I think both have significant differences and are more advanced and consistent, compared to past experiences.

And for those (logically) shaky public officials who have to deal with the great amount of responsibility and paperwork, one piece of advice: trust the industry, hear out the stakeholders and look around the great projects that have been built successfully around the world.

A ray of hope has been shed, let’s not let politics get in the way!

José Ramón Romero Rodríguez

Cristina Romero de Alba

Partners – LOYRA

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