Friday, December 13, 2013
MADRID (AP) — Casino operator Las Vegas Sands on Friday scrapped plans to build a "EuroVegas" resort near Madrid after the Spanish government rejected as illegal concessions demanded for the investment.
The company, led by 80-year-old American tycoon Sheldon Adelson, had proposed a 22 billion-euro ($30 billion) project that was to include 12 hotels, six casinos, a convention center, golf courses, theaters, shopping malls, bars and restaurants.
The government in Spain, where unemployment stands at 26 percent, had hoped it might create some 260,000 jobs, especially among the young, where unemployment is around 50 percent.
But the plan had been fiercely opposed by many who feared the resort would lead to a change in non-smoking laws, promote prostitution and provide only low-paying jobs.
Negotiations over the terms of the deal hit a wall and Las Vegas Sands Corp. on Friday pulled the plug on the project. It said in a statement that the project was not in line with its immediate development plans, which will be focused on its Asian business.
Spain's Deputy Prime Minister, Soraya Saenz de Santamaria, said the company had made late demands for legal and financial guarantees that "did not comply with Spanish law or that of the European Union."
She said the demands included tax benefits, financial compensation in the event of any future law change that could affect the project, and an assurance that new operators would be not be allowed in the sector.
Initially, Adelson had also assessed Barcelona, on the Mediterranean coast, as a possible location for EuroVegas before opting for Madrid. One obstacle had been that Las Vegas Sands would fund only 35 percent of the complex. Other investors were supposed to make up the rest.
With Spain's economy immersed in a deep financial crisis and a two-year recession, some analysts said raising capital for 65 percent of EuroVegas was going to be difficult. Banks are mainly focused on coping with losses from failed construction projects, not embarking on ambitious new investments.
The planned multibillion-dollar project was due to have been built in wasteland on the edge of the relatively colorless suburb of Alcorcon, 17 kilometers (10.5 miles) to the southwest of downtown Madrid.
Associated Press writer Ciaran Giles contributed to this report.