Cordish, the Last of the Big Failed Real Estate Projects

07 August 2017

Eurovegas, Operation Campamento, the Four Seasons of Barcelona and the Hyatt hotel project in the Torre Agbar are some of the most famous unsuccessful investments in Spain.

They were destined to occupy prominent positions in the ranking of mega real estate projects but were doomed to failure, even before starting out. Failure to comply with regulatory requirements, bureaucratic obstacles and clashes with the relevant authorities have been some of the factors that have caused the failure of multi-million-dollar investments planned by, among others, the North American group Cordish, the Chinese giant Wanda, the American magnate Sheldon Adelson and projects by the multinationals Four Seasons and Grand Hyatt in Barcelona.

The last project to flounder has been Cordish’s. The Baltimore-based group wanted to build a leisure and gambling complex in the Madrid municipality of Torres de la Alameda. But the Madrid Autonomous Community has rejected the proposal under the Integrated Development Center (CID) not once, but twice, considering that the project will not impact the economy, employments levels and culture sufficiently, while also questioning the project’s feasibility.

Cordish’s truncated plan joins Eurovegas, the ill-fated gambling complex that American Sheldon Adelson intended to build in Alcorcón, the Gran Scala fiasco in the Los Monegros desert and the mirage of The Kingdom of Don Quixote in Ciudad Real.

Another of investor that has accumulated bad experiences in Madrid is the Chinese giant Wanda, which owns 20% of Atletico Madrid. The conglomerate, led by the tycoon Wang Jianlin, announced three years ago its intention to invest at least 3 billion euros in a high-end complex with up to 15,000 luxury dwellings in the former Campamento barracks in Madrid owned by the Ministry of Defence. In addition, the urbanization plan included a commercial complex, theme parks and casinos. The Chinese group, however, gave up its plans when faced with land prices it considered exorbitant. Months later, another of Wanda’s star projects in Madrid went up in smoke. The group, which had bought the Edificio España from Santander for 265 million in 2014, decided to put it on sale after disagreements with the Madrid City Council, which required the conservation of the front and side facades, as established by the law on protection of historic buildings.

Vetoes

Hotel investments have suffered a setback in Barcelona as well. Suspended licenses have caused large international chains to withdraw from their projects in the City of Barcelona.

In particular, the arrival of the hotel brand Four Seasons in Barcelona was truncated by a municipal veto. KKH Property Investors paid 90 million euros for the Deutsche Bank building, located at the intersection of Barcelona’s Avenida Diagonal and the Paseo de Gracia. KKH was seeking the demolition of the building, to subsequently build a larger building, to be run by Four Seasons. But the project collided with the then activist Ada Colau, who turned the rejection of the project into one of her electoral promises. Her election to the Barcelona City Council in the summer of 2015 cut short KKH’s plans, which has chosen instead to rehabilitate the old office building and convert it into high-end residential housing. Four Seasons, which will land in Madrid in early 2019 at the Canalejas complex, is still looking for locations in the city.

Another of the big international hotel chains that could have come to Barcelona was Hyatt. In 2013, fund manager Emin Capital, led by Andorran Jordi Badia, announced that it had bought the Agbar Tower for 150 million euros and was preparing to convert it into a luxury hotel that would be managed by the US hotel chain. Three years later, the project had still not been approved and the asset was finally sold to Merlin Properties, which will maintain it as an office building and hope that it will become the headquarters of the European Medicines Agency (EMA).

Original Story: ProOrbyt Expansion – Rebeca Arroyo/Marisa Anglés

Translation: Richard Turner

US Investor Cordish Presents New Leisure Mega-Complex For Madrid

2 December 2016 – Expansión

After the fever of Eurovegas in Madrid, the fiasco of the Gran Scala macro-complex in the Los Monegros desert, the mirage of El Reino de Don Quijote in Ciudad Real, another mega leisure complex project is now being planned for Spain, in the form of Live! Resorts Madrid. The proposal has been presented by the US property developer Cordish Companies, and according to comments made by the group’s representatives yesterday, it is backed by the group’s extensive 100-year history and the rigourousness of its modus operandi. “This is a completely private initiative. We are not asking for any subsidies or regulatory changes. The regulatory framework is perfectly adequate for the project”, said Joseph Weinberg, one of the group’s partners.

Cordish plans to invest €2,200 million initially to launch this leisure and entertainment giant, although the total spend may exceed €3,000 million in subsequent phases if the plans are extended beyond the original project. According to the property developer, this initiative would create 56,433 new jobs.

The family group, founded by Louis Cordish in 1910, has four generations under its belt. It has chosen the Madrilenian municipality of Torres de Alameda, in the Corredor de Henares, as the stage for the development of the “largest integrated entertainment centre in Europe”. “We think that Madrid is the ideal location in Europe for the complex”.

To this end, Cordish has purchased a plot of land measuring 134 hectares and has registered information about the project with the Ministry of Economy, Employment and Finance. It is waiting for the Community of Madrid to study the feasibility of the plans and to open a public competition inviting other investors to submit their proposals. This process, which may take around six months, needs to happen before the first phases of the project can start, which are expected to take between “18 and 24 months”.

Weinberg wanted to differentiate his Live! Resorts from the frustrated initiative of the magnate Sheldon Adelson, who also planned to build a Eurovegas in Madrid, and he emphasised the “family nature” of the proposal. “The gambling area will only account for between 5% and 10% of the project”.

Weinberg said that the plan includes more than 100,000 m2 of space allocated to shops and leisure; four and five-star hotels, with 2,700 rooms; 275,000 m2 of space for three conference centres; and 45,000 m2 of space for offices.

Weinberg said that the group has own funds as well as experience raising financing. In addition, he appeared open to the idea of forming a joint venture with large local and international hotel chains for the management of the hotels.

The President of the Community of Madrid, Cristina Cifuentes, acknowledged yesterday that the regional government has held “some conversations” with the company and added that it is a “solvent, trustworthy and powerful group”.

According to Cifuentes, this project does not bear “any resemblance” to Eurovegas and she highlighted that, in contrast to Adelson’s project, Cordish has already officially registered the proposal and is not demanding any regulatory changes. She also said that whilst Eurovegas involved the construction of casinos, 80% of this proposal is dedicated to leisure and “only a small portion” to gambling.

Nevertheless, the Chairman of the Community of Madrid appeared “cautious” and warned that the initiative will be analysed “with the greatest care”. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

MoD Opens The Bidding For ‘Campamento’ Land

27 April 2015 – Expansión

Auction worth more than €200 million / The Government is launching an auction process to sell a plot of land measuring 1.5 million square metres in Madrid, where the Chinese millionaire Wang Jianlin wants to construct luxury homes, hotels and casinos.

The Spanish Government has decided to refloat the so-called Operación Campamento just seven months before the general election. Today, the Ministry of Defence, the main owner of the land in the area measuring more than 1.5 million square metres, has officially put the plot, measuring 1,550,576 square metres, up for sale on the real estate portal Admeet.

The land, located in the south-east of Madrid, is the preferred location of the Chinese tycoon Wang Jianlin, owner of the business conglomerate the Wanda Group, to construct a mega-project containing thousands of homes, a retail complex, theme parks and casinos.

Negotiations

Jianlin, who officially closed the purchase of 20% of Atlético de Madrid’s share capital in January, has been negotiating with the Town Hall and Community of Madrid for months, to identify a location for his residential and leisure complex in the capital. Previously, in June 2014, he bought Edificio España from Banco Santander for €265 million, which was his first transaction in the Spanish market.

In January, when he signed the deal to acquire a stake in the Madrid football club, Jianlin took the opportunity to reiterate his interest in acquiring the land that is now up for sale. The plot housed the Ministry of Defence’s barracks in Madrid for many years.

Wang Jianlin is willing to invest €3,000 million in this project. To do that, the first step will be to acquire the land. By law, this purchase must be made through a competitive process since it involves a public asset.

“The interested parties must participate in a transparent and competitive auction process, in accordance with state legislation for the sale of property”, says the advert.

Auction

The auction of the land by the Ministry of Defence will be led by Pedro Morenés. The plot measures around 1.132 million buildable square metres and the vast majority has been marked for residential use (986,710 square metres). Subsidised and non-subsidised housing may be built on the site.

Wanda’s goal is to construct up to 15,000 high-end homes, with prices of around €4,000 per square metre. Moreover, offices, retail spaces and leisure complexes may also be built on the site. Wang Jianlin wants to use this land to create a leisure complex, similar to the ones he has constructed in Asia. For the time being, the Ministry of Defence has only released information about the land, and has not set a date for the auction or specified a minimum price.

Minimum price

However, sources in the sector estimate that the Government may set the minimum price at just over €200 million, an amount that is expected to be surpassed both by Wang Jianlin’s bid, as well as by the bids made by other interested parties.

The seller has not revealed the auction date, which may be determined by the timings of the local and general elections due to be held in May and November, respectively. To date, the current President of the Community of Madrid, Ignacio González, has shown his willingness to collaborate with the Chinese businessman, following the decision by the US billionaire Sheldon Adelson to abandon the Eurovegas project in Alcorcón.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Wang Jianlin Plans To Invest €3,000m In Macro-Complex In Madrid

22 January 2015 – Expansión

Following his investment in Atlético de Madrid, the Chinese tycoon, owner of the Edificio España, is studying the possibility of building a residential and tourist complex that would also include casinos. He is considering two locations: Campamento and Venta de la Rubia.

Yesterday, for the first time, the Chinese businessman, Wang Jianlin (pictured), owner of the conglomerate Wanda Group, confirmed his plans for the creation of a residential and leisure macro-complex in Madrid. “We have already had a meeting with the Spanish President and it is now up to Spain to take a decision”, said Wang in China, after signing an agreement to acquire 20% of the Atlético de Madrid football club.

The objective of Wang Jianlin, who has assets of more than $13,200 million, according to the most recent Forbes ranking, is to invest at least €3,000 million in the creation of an upmarket complex that would include up to 15,000 luxury homes. The development would also house leisure areas, such as a retail complex, theme parks and casinos. In fact, Jianlin has already hired the project’s creator from the gaming magnate Sheldon Adelson in Macau, say sources close to the entrepreneur.

Location

In terms of the location of the macro-complex, Wang Jianlin and his team have two options. On the one hand, the site in Venta de la Rubia, in Alcorcón, where Sheldon Adelson was going to build the failed Eurovegas project. On the other hand, an old barracks site in Campamento, in Madrid, which is currently owned by the Ministry of Defence.

In favour of the former are its location, close to Madrid’s tourist attractions, such as the Royal Palace, and crucially, the fact that it has a single owner, the central Government, which would massively simplify future negotiations regarding construction. Against, is the price that Jianlin would have to pay for the site, which covers almost 9 million square metres, and the fact that a development plan already exists and modifications to it may delay construction.

The second option, in Venta de la Rubia, is close to Santander’s business park, as well as to the land where Atlético de Madrid plans to build its new sports facilities; in addition, Wang would be allowed to create a tailor-made development plan for the site. Furthermore, the owners of the land, who are united through a Compensation Board and which include companies such as Metrovacesa and the Urtinsa group, would be willing to hand over some of the land for free – something they already offered to Adelson, according to real estate sources – since the rest would be re-valued.

Regardless of the location that Wang Jianlin and his team finally choose, the construction of this macro-complex would revitalise this area to the south-west of the capital. “The goal is to convert the Paseo de Extremadura into the new Castellana, and develop the whole of the surrounding area through the Jianlin complex”, explain sources close to the businessman.

“He is keen to start very soon”, said Enrique Cerezo, President of Atlético de Madrid, yesterday. Mr Cerezo has acted as a guide to Jianlin during his visits to Madrid. Yesterday, the President of the Community of Madrid, Ignacio González said that  “The regional government is “fully” committed”.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Alcorcon Exchanges Eurovegas For an Ikea Mega-Store

17/07/2014 – Cinco Dias

Alcorcon City Council (controlled by PP conservatives) is negotiating with Ikea on sale of two plots, one of 5.000 and the other of 18.000 square meters, situated in the El Lucero industrial area (to be built) for joint €9.75 million. The Swedish chain would raise on them one of its biggest shops in Spain.

Sources close to the negotiations said Ikea has already bought a 42.000 square meter plot in the area for €26 million from the local government of Alcorcon (run by the socialist party). Now, it is bound to ask for a building permit.

The Swedish group has got another, 7.000 square meter store in Alcorcon located just in front of the land linked to the talks (separated by the A-5 highway). In case of a successful purchase, Ikea would construct a 30.000-40.000 square meter shop, next to other known builder´s stores that wish to settle in the new industrial zone, such as Bricomart (branch of Leroy Merlin) and at least one more known European chain.

Currently, the largest (40.000 square meter) Ikea store in Spain is found in the city of Sabadell. Last month, the group opened Ikea Valencia Alfafar with a 37.300 square meter area, 2.200 parking spaces and a 400-person staff.

In total, Ikea has got 15 stores in Spain: in Alcorcon, San Sebastian de los Reyes, Ensanche de Vallecas (Madrid), Badalona, L’Hospitalet de Llobregat and Sabadell (Barcelona), Castilleja de la Cuesta (Seville), Malaga, Jerez (Cadiz), Barakaldo (Biscay), Pola de Siero (Asturias), Murcia, Zaragoza, A Coruña and Arroyo de la Encomienda (Valladolid). Moreover, it disposes of two distribution centers in Valls (Tarragona).

The Swedish firm´s expansion presently reaches 26 countries and 303 shops. Founded in 1943, Ikea employs 135.000 people.

American casino and resort company Las Vegas Sands has kept Alcorcon on tenterhooks for over a year. In September 2012, the firm chaired by Sheldon Adelson announced its plans to construct a casino and entertainment makro-complex worth of an investment of €18 billion with thousands of jobs to offer. However, in December 2013 the group said it would waive the project in favour of opportunities in Asia.

 

Original article: Cinco Días (by Alberto Ortín Ramón)

Translation: AURA REE