Packer’s legal war over $2b Sydney view block
GAMING billionaire James Packer is getting ready for a high stakes legal war as the expanded Barangaroo Central project threatens to cost Crown’s new Sydney casino resort $2 billion by blocking its sweeping Sydney Harbour views.
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GAMING billionaire James Packer is getting ready for a high stakes legal war as the expanded Barangaroo Central project threatens to cost Crown’s new Sydney casino resort $2 billion by blocking its sweeping Sydney Harbour views.
It’s understood Crown, in which Mr Packer still retains a major stake, believed it had secured clear sightlines to the Opera House and Harbour Bridge from each of the casino resort’s north-east-facing hotel rooms.
But the State Government then dramatically increased the scale of Barangaroo Central — from its original size of 59,000sqm to 150,000sqm — to help offset the cost of adding a Metro train station at the site.
During 18 months of negotiations since that decision the state agency in charge of the whole area, the Barangaroo Delivery Authority (BDA), has been unable to strike a compromise with Crown and also Lend Lease, whose neighbouring apartment towers would also be affected.
Barangaroo Central was originally designed as a residential and commercial link between the 22ha Barangaroo precinct’s headland park in the north and its southern shopping section.
An industry source, who declined to be named, said Crown and Lend Lease “could lose precious views of the Opera House and Harbour which would have a big impact on their investments and returns”.
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The legal action would delay the completion of Barangaroo and the Metro train line — a situation Premier Gladys Berejiklian can ill afford as she heads to a state election already enduring criticism over the ongoing light rail debacle.
Crown had been budgeting on charging $800 a night for rooms with views of the Bridge and Opera House.
Existing hotels that have some rooms with vistas of the harbour landmarks ask 35 per cent less for their rooms that don’t.
This implies a hit of $280 per night per room at Crown. Views could be lost in as many as 285 rooms on levels six to 24 of the 71-storey tower. Assuming the average 70 per cent occupancy, the daily revenue hit would be about $56,000 — or more than $20 million a year.
Crown has a 99-year lease at Barangaroo, leading to total potential shortfall of $2 billion.
It would also be a disaster for Lend Lease which is building 72-storey and 60-storey residential towers next door, containing 624 apartments at a cost of $751 million.
It’s understood the sightlines dispute will head to the courts within weeks if there is no resolution.
The unnamed industry source said “the last thing anyone needs is a protracted legal case over the future of Barangaroo. The BDA and the Premier need to reach a settlement as quickly as possible to allow construction to ramp up”.
One alternative being canvassed is for Ms Berejiklian to take the matter out of BDA’s hands and appoint a mediator.
Her office would not comment and yesterday referred enquiries to the BDA, whose CEO is Craig van der Laan, a project adviser who previously worked for companies including Westfield, Leightons and Brambles.
Its chairman is Terry Moran, who ran the Department of Prime Minister and Cabinet during Kevin Rudd and Julia Gillard’s federal Labor governments.
The BDA reports to the Premier.
The worsening of the dispute at Barangaroo also comes at a bad time for Mr Packer, who stepped down from Crown’s board as director in March to seek treatment for what the company has called “mental health issues”.
“At this time he intends to step back from all commitments,” a spokesman for his private business said at the time.
That private company, Consolidated Press Holdings, owns 46 per cent of Crown — a stake worth $4.2 billion.
The project is particularly personal for Mr Packer, who considers it a tribute to his late father Kerry.
The building has begun to rise from the ground, with work well-progressed on the casino section, which is beneath the hotel rooms.
Directly above the rooms is the VIP gaming suites and further above are apartments, some of which have asking prices of $20 million-plus.
The resort is due to be finished in 2021, nine years after it was first proposed by 50-year-old Mr Packer, who has been spotted holidaying in St Tropez in recent weeks with rumoured girlfriend Kylie Lim.
The target time frame for finishing Barangaroo Central and its Metro station is 2024.
The site is being developed by a consortium led by Grocon, which would not comment publicly for this story.
Nor would Lend Lease, Crown or the BDA.
