New $3 Billion Downtown Miami Resort Announced by Malaysia Casino Developer
Genting Group, one of the world's largest international casino developers, has signed a contract with Miami-based Arquitectonica to design a $3 billion Downtown Miami resort.
The Florida Legislature has still not approved the operation of full-based casinos in the state despite millions of dollars spent by casino-hired lobbyists to change the law over the last 10 years.
Gov. Rick Scott vetoed any casino operations in the state last Thursday. The Seminole Tribe's casino operations have always been the exception, especially when the casinos are built and operated on Indian-owned land.
The Herald reports, "This year, Genting, Wynn Resorts and the Las Vegas Sands Corp. hired a stable of lobbyists to push a bill to create a casino selection process that would allow them each a chance to bid on a license to operate an exclusive resort casino in any of five regions of the state.
"The Senate moved the bill through one committee but it failed to pass. Legislators did approve a $400,000 study to look at the economic impact of bringing resort casinos to Florida but Gov. Rick Scott vetoed that" on Thursday, June 16.
Nick Larossi, lobbyist for Las Vegas Sands Corp. in Las Vegas, told The Herald, "Miami's the crown jewel for this market -- everybody knows that.
"Everybody is posturing and planning and hoping the Legislature will make a decision to make destination resorts a reality" and Genting's deal just "upped the ante,'' he said.
For the past two years, since the Seminole Tribe won its right to offer not only slot machines but blackjack, baccarat and chemin de fer, the world's casino giants have set their sights on expanding to their posh resorts to Miami.
Unlike previous casino campaigns, the new resorts feature both full-fledged casinos, opulent hotels and convention space as well as family-focused entertainment centers.
Genting, the Malaysian developer bought 140 acres of Biscayne Bay-fronting land on May 27 from The McClatchy Co. (NYSE: MNI) for $236 million or about $1.69 million per acre.
The Miami site has 800 feet of waterfront along Biscayne Bay.
That was one of the highest prices for commercial dirt in South Florida in the last decade, according to brokers who track land transactions.
The deal took two months to put together.
The Miami Herald Media Co.'s newspaper, The Miami Herald, sits on 14 acres of the acquired 140-acre site. The Herald has two years to find another publishing venue, according to a May 27 news release from McClatchy.
The land's owner of record is a Genting subsidiary, Bayfront 2011 Property LLC. The Herald's building is part of the sale.
Genting and its affiliates are leading developers and operators of destination resorts around the world, including the United States, Malaysia, Manila, Singapore and the United Kingdom.
In his prepared statement, Gary Pruitt, McClatchy's chairman and chief executive, said, "This property, located on Biscayne Bay, has been home to The Miami Herald for many years. While locating newspaper operations on the bay may have made sense in the past, it no longer is the best fit.
"Importantly, the sale of this real estate has no impact on the mission of The Miami Herald and El Nuevo Herald," Pruitt said.
"The Miami Herald and El Nuevo Herald's commitments to providing high quality, public service journalism on multiple platforms and to providing the broadest, most effective reach for their advertisers have never been stronger," Pruitt said.
Pruitt said McClatchy will use $236 million of the proceeds as follows:
- $163 million will be contributed to the company's pension plan.
- $65 million will be offered (the Offer) to the holders of the company's 2017 senior secured notes (Noteholders) at par as required by the note indenture.
- $2 million will be used to pay for transfer taxes associated with the sale.
The remaining $6 million will be held in an escrow account payable to McClatchy upon relocation of its Miami operations.
Pat Talamantes, McClatchy vice president and chief financial officer, said: "Making this significant, tax-deductible contribution to our pension plan strengthens our financial position. We reduce the company's unfunded pension liability and substantially alleviate required future pension contributions, which will increase the amount of cash available for debt repayment."
McClatchy's unfunded pension liability at the end of April, after taking into account the $163 million contribution and other 2011 activity, was estimated to be approximately $267 million, down from $479 million at the end of 2010.
The McClatchy Co., based in San Diego, CA, is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations.
McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services.
Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer and The News & Observer (Raleigh).
McClatchy also owns a portfolio of premium digital assets, including 15.0% of CareerBuilder, the nation's largest online job site, 25.6% of Classified Ventures, a newspaper industry partnership that offers two of the nation's premier classified websites: the auto website Cars.com and the rental site Apartments.com and 33.3% of HomeFinder, which operates the real estate website HomeFinder.com. McClatchy is listed on the New York Stock Exchange under the symbol MNI.
Genting Malaysia Berhad, the company named in the purchase of the 14-acre Herald site, is part of the Genting Group, which has five public companies based in Asia, with $45 billion in stock market capitalization and more than 50,000 employees.
In February 2010, Genting opened Resorts World Sentosa in Singapore, a $5.5 billion project with Universal Studios Universal Studios.
In the fourth quarter of this year, Genting expects to open the Genting New York Casino with 2,500 slot machines at the Aqueduct Racetrack Aqueduct Racetrack.See related news stories on World Property Channel: