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Company Exits Deal to Build Cotai Strip Resort Site with Sands13 September 2005
By Howard Stutz
Las Vegas Sands Corp. said an international hotel company that pulled out of a deal to jointly develop one of eight resort sites on the Cotai Strip near Macau will need the Chinese government's approval to go off on its own.
Las Vegas Sands Corp., operator of The Venetian, has submitted plans for all eight sites on the Cotai Strip to the Chinese government and planned to develop one of those sites with Regal Hotels, which operates five hotels in Hong Kong and two in mainland China.
Last week Regal said in a statement that it and Las Vegas Sands had failed to agree on final details of a deal signed in March.
Las Vegas Sands has submitted development plans for the eight Cotai Strip sites and wants to jointly develop hotels, entertainment complexes and casinos with several hotel companies including Hilton, Four Seasons, Marriott, Intercontinental and Starwood.
The Cotai Strip is an area of reclaimed land a few miles from the main stretch of Macau, which is between the islands of Taipa and Coloane and bordered by the South China Sea.
On one the Cotai Strip sites, Sands is spending $1.8 billion to build the 3,000-room Venetian Macau. The company operates the Sands Macau in the city's main downtown area.
In a statement, Regal said its agreement with Las Vegas Sands ceased last week.
"By reason of certain material changes in the circumstances affecting some fundamental issues that had remained unresolved, the terms of the definitive agreements could not be agreed or finalized," Regal said without elaborating.
Under the abandoned deal, Regal was to build and then lease to Sands parts of a sprawling project, including a 130,000-square-foot casino and a 1,500-seat theater, the company statement said.
In a company statement Monday, Las Vegas Sands President Bill Weidner said he thought the deal with Regal could be revisited because planning the Cotai Strip development will take several years.
"Given the excitement and tremendous interest in the development of the Cotai Strip there are bound to be periods of posturing, negotiation, and cooperation," Weidner said. "These phases are perfectly natural and our attention remains focused on the big picture and the emergence of the Cotai Strip as Asia's Las Vegas."
Weidner called the Cotai Strip and Macau, "The single largest mixed-use tourism development ever constructed simultaneously. Planning and developing a project of this magnitude requires a measure of flexibility and induces a certain amount of fluidity."
Regal, in its statement, said it "invested a significant amount of time, efforts and resources" in the venture, and that it has applied to the Macau government for approval to develop the project on its own.
Regal said it would press ahead with plans to build three hotels with a total of 3,950 rooms, as well as restaurants, a theater, a convention plaza, shopping and entertainment areas, and a hotel-training school.
The casino it plans to build, which originally Sands would have leased, would now be leased to "an authorized gaming operator in Macau."
Regal's total project, to be built in two phases, is planned for an early 2008 completion, the company said.
The Associated Press contributed to this report.
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