ECHO Entertainment Group (ASX: EGP) has proposed a $1 billion redevelopment of The Star in Sydney, but says it won’t come at the expense of its plans for Brisbane.
The plans for Stage 2 of its 15-year proposal for investment in Sydney’s tourist venue released last night include $130 million for transport infrastructure to be delivered by FY19. It is a shot across the bow of the plans casino rival Crown (ASX: CWN) holds for a high rise development at Barangaroo on the banks of Sydney Harbour.
EGP has also unveiled a $1 billion Brisbane proposal this year to redevelop the government buildings on the corner of George and William Streets into a casino, which is subject to a counter offer from Crown.
Non-executive Chairman, John O’Neill says The Star redevelopment will secure Sydney an increased share of the business from Asia’s growing middle-class.
“We have the opportunity to further develop into a globally recognised integrated resort that competes with the best in Macau, Singapore and other destinations,” says O’Neill.
The project aims to increase connectivity between adjacent sites such as the International Convention Centre Sydney, Darling Harbour and Barangaroo.
There is the potential for over 2,000 new construction jobs for the Sydney region.
“We have put our best foot forward with a comprehensive proposition. The economic and other benefits of delivering on this vision for NSW will be substantial.”
EGP managing director and CEO, John Redmond (pictured) says despite the proposal for Sydney, Echo has not lost sight of its Queensland commitment.
“We are excited by the opportunity there and continue to hold discussions with the Queensland Government in relation to potential redevelopment of the Treasury Brisbane Casino on a new site,” he says.
“While the timing of any investment is expected to be some years away, Echo remains confident of its ability to deliver any potential redevelopment in Brisbane in addition to this proposal for Sydney.
“The Star is Echo’s flagship property and we are here for 80 more years.”
Under the NSW Government’s Unsolicited Proposal process, EGP may need to offer a Stage 3 proposal for further negotiations. If approved, EGP hopes for construction to commence immediately.
Echo’s share price dropped 0.82 per cent to $3.025 in early trade this morning, while Crown dropped 1.17 per cent to $11.88 per unit.
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