Developer Likely to Commence Work on €8-Billion Resort Near Athens in Late 2019

The casino portion of the €8-billion integrated resort reportedly among the main reasons for the latest delays in the start of the project

Groundbreaking of the €8-billion integrated resort at the former Ellinikon International Airport near Athens, Greece could be postponed to the end of 2019, according to Greek news outlets. It is believed that obstacles and hurdles of different nature, including ongoing negotiations over the casino portion of the property, are delaying the start of the ambitious project.

Recent reports from local media suggested that developer Lamda Development was ready to commence construction work immediately. In response to those, the company issued a statement on Monday, saying that:

These statements do not take into consideration neither the general legislation nor the contractual preconditions, as they arise from the contracts between the Company and the State. The development of the Hellinikon project will commence with the fulfillment of all contractual pending terms, which are a prerequisite for the transfer of the “Hellinikon S.A.” shares from the State to the Company.

Lamda was selected as the preferred developer of the multi-billion integrated resort. As mentioned in its statement, the company is yet to assume ownership of the portion of land where the complex will be located. The transfer of shares from the state to the development company is part of Greece’s privatization program, which the country signed back in 2010 under its bailout arrangements.

As per the above statement, Lamda can only proceed with the project when all contractual terms are fulfilled. It is believed that the casino portion of the integrated resort might be among the reasons causing the delay.

The transfer of Hellinikon shares was expected to be completed by the end of next year’s first quarter. However, with multiple terms yet to be fulfilled and negotiations yet to be finalized, the process could be delayed.

Casino Delays Construction Commencement

The Hellinikon integrated resort is set to feature a €1-billion casino, among other facilities. A number of international companies have so far expressed interest in building and managing the gaming portion of the resort, but according to latest reports, American gaming and hospitality giants Caesars Entertainment Corp., Hard Rock International, and Mohegan Sun are considered the favorites for the gaming license.

The Hellenic Gaming Commission is yet to launch the official bidding process for the casino licenses. It is understood that the regulator is currently discussing the terms of the license and other important matters in relation to the operation of the future gambling venue.

The amount of money Lamda will be paid by the casino operator for being allowed to run the casino at the larger integrated resort is reportedly one of the main topics currently under discussion among interested companies and the Greek gaming regulator.

According to previous reports from international media outlets, Lamda is asking for €20 million a year. However, other sources claim that the developer would actually try to negotiate a portion of the annual gross gaming revenue generated by the casino. According to estimates, the Hellinikon casino could annually generate between €200 million and €300 million. Based on that, the annual rent could go up to €30 million. Some sources believe that the annual rent rate could be among the main hurdles delaying the start of the bidding process.

Involved parties are also yet to determine the price of the gaming license that will be granted to the preferred bidder. Analysts have pointed out that if a casino operator agrees to higher rent and to €1-billion investment into the gambling venue, it would actually may not be required to pay a license fee.

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