SkyCity wins casino parking lot fire lawsuit
Australia's Macquarie Group signed a contract in 2018 to operate a 3,200-space car park for SkyCity Entertainment's Auckland Casino in New Zealand. But when a major fire occurred the following year, a legal battle ignited and was ultimately shelved last week.
SkyCity agreed to pay Macquarie NZ$220 million (then worth $148.4 million) to manage the car park until 2048. The deal will free up financial resources for the casino operator to develop expansion plans.
The amount of the payment is at the center of a legal dispute between SkyCity and Macquarie. Accounting firm Deloitte valued the concession at NZ$187.9 million ($116.02 million) on behalf of SkyCity. KPMG, which works for Macquarie, said the company was valued at NZ$240 million ($148.2 million).
The fire was the main reason why SkyCity was unable to hand over control of the attached car park as agreed in last year's contract. Macquarie decided to withdraw, triggering a payment clause in the agreement.
The difference arises from the parties' interpretation of the contract. SkyCity and Macquarie are now at an impasse and taking the dispute to court.
COURT DECISION
SkyCity said in a filing last week that New Zealand's Supreme Court had agreed with its interpretation of the contract language. This will save tens of millions of dollars, although Macquarie will still have to pay fees for failing to comply with the terms and agreement.
Macquarie may appeal the court's decision, which would expose SkyCity to additional legal issues. New Zealand's Home Affairs Department recently ordered the company's three casinos to be temporarily closed.
SkyCity is also in trouble in Australia. The Transaction Reports and Analysis Center (AUSTRAC) believes its Adelaide property may have breached anti-money laundering regulations. This is likely to cost at least A$45 million ($29.87 million).
There is still controversy over who will compensate for the damage caused by the fire. Fletcher Building, the main contractor on the project, has received some compensation from insurance companies but is seeking more.
MILLION DOLLAR FIRE
On October 22, 2019, Auckland's SkyCity Convention Center suffered flooding. The fire broke out in the final stages of construction, sending thick smoke into the sky and being visible from far away.
Firefighters rushed to the scene to battle the intense blaze that threatened to destroy the building. Emergency services worked tirelessly to contain the blaze, with the scene evacuated and surrounding roads closed.
The construction project, estimated to cost NZ$703 million ($434.17 million), is nearing completion and is expected to become a landmark on Auckland's skyline. Construction costs currently exceed NZ$1 billion (US$617.8 million).
Firefighters were unable to enter the building. Therefore, their main offense comes from the outside. This and strong winds caused the fire to burn for several days before being brought under control.
Fire investigators later determined the fire was an accident caused by a blowtorch igniting roofing material.
No injuries were reported in the fire. The incident caused significant damage to the city, with road closures and diversions affecting local businesses and residents for several days.
Read also:
- Blackjack Casino Advantage: How to Beat the Odds
- Football 101: What is relegation in football?
- Poker pro accused of cheating to win $3 million
- Sydney Star could close next summer as turnaround efforts fail to impress regulators
Source: www.casino.org
