Legal Obstacles Loom for Star Entertainment's Queen's Wharf Development Project Due to Delays
The Queen's Wharf Brisbane project, a billions of dollars development in gaming and hospitality led by Star Entertainment Group in Queensland, Australia, is facing a minor setback. The completion has been postponed for four months. This minor hiccup has led to a legal dispute between two of the project's partners.
Multiplex Constructions Qld Ltd., a real estate development company, is suing Destination Brisbane Consortium, a company formed by Star Entertainment, Chow Tai Fook and Far East Consortium Hong Kong, for the Queen's Wharf integrated resort. Star owns 50% of the company, while the other two partners each have a 25% share.
The issue, according to an announcement by Star, is a disagreement over costs. With the Queen's Wharf project now delayed until April 2024, there have been rows over the additional expenses.
Served and Sued
In June, Star announced that it had to push back the launch date as Multiplex was facing challenges with the project. Construction delays, along with the impact of COVID-19, led to the change in the opening date.
Multiplex demanded additional funds to cover the delays and damages. However, Destination Brisbane countered that the construction company hadn't met project milestones on time. They also claimed that Multiplex owed them money for not meeting deadlines.
The legal tussle came to light when Star revealed on Monday that it had received a formal notice of legal action. Star disclosed this in a filing with the Australian Securities Exchange (ASX). The suit seeks a Queensland court's intervention in the dispute. The claim mentions the delays, missed milestones, certain liquidated damages payments, and "other matters, including potential sums payable."
Star hasn't mentioned how much money is at the heart of the legal dispute. They are now preparing a response to the claims, which will likely go before the courts in the coming days.
Other Delays
The Queen's Wharf project isn't the only delayed task on Star's plate. The company has also delayed its financial update by five days. It was originally slated for August 24, but will now be released on August 29.
The change in the timeline stems from negotiations with New South Wales (NSW) and the NSW government's desire to increase taxes. Star needed a few extra days to finalize its accounts in view of the potential tax hike.
The company stated in a separate ASX filing that it was working with NSW officials to amend its tax obligations and that this could also affect its outstanding debt. This led to a deal where Star and its investors were pleased. Instead of a tax rate ranging from 46.7% to 60.67%, Star will now pay a tax rate of just 22.91%.
The new tax rate takes effect in 2027 and can't change until the mid-2030s. While it bought Star more time, it will pay around AU$500 million (US$320 million) in additional taxes over the next seven years.
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Source: www.casino.org
