New Zealand-based casino operator SkyCity Entertainment will soon put one of its legal battles behind it. It has reached a deal with Australia’s Macquarie Group over a failed agreement for the management of the New Zealand International Convention Centre parking garage.
In a resolution that marks the end of one of several legal sagas, SkyCity and Macquarie have settled their differences. The casino operator announced on Monday that it will still pay more to Macquarie than it had hoped, but not as much as it could have paid.
The two parties have found agreeable compensation, bringing an end to the protracted legal battle. The agreed-upon amount of $204 million (US$125.42 million) serves as a compromise between Macquarie’s initial demand and SkyCity’s contested liability.
The Smoldering Legal Battle
The dispute originated in early 2019 when SkyCity initially agreed to hand control of the parking facilities to Macquarie. However, an unforeseen setback occurred later that year when a massive fire engulfed the property, significantly impacting the Convention Centre’s trajectory.
Given the altered circumstances, it became evident that SkyCity would be unable to fulfill its end of the agreement. In response, Macquarie invoked the contract’s language, seeking an exit from the deal and requesting a payment of NZD240 million (US$147.55 million) for what it deemed a breach of contract.
SkyCity, on the other hand, contested Macquarie’s claim, arguing that its liability was limited to $188 million (US$115.58 million). Unwilling to concede, the casino operator took the matter to court, presenting its case to the High Court of New Zealand. Last week, the court issued a ruling that partially favored SkyCity’s position, setting the stage for further negotiations.
Horizon Hotel Closer to Reality
Four years after the fire, SkyCity remains focused on repairing the damage caused by the 2019 fire, which started after a construction worker’s blow torch ignited roofing material. Plans are underway to open a hotel, the Horizon Hotel, on the Convention Centre property next year, signaling the company’s commitment to moving forward.
SkyCity had initially planned on inaugurating the hotel in 2021, but the extent of the damage from the fire forced multiple delays. It should now open in March of next year, according to its website.
That coincides with the departure of CEO Michael Ahearne. He announced his resignation in October and leaves after three and a half years in the top spot. A search for a replacement is still underway.
The exit also coincides with several issues SkyCity is facing. In New Zealand, it’s at risk of temporarily losing its gaming license amid allegations that it has violated responsible gambling regulations. That investigation is ongoing.
It may also face additional problems in Australia, where it operates the SkyCity Adelaide property. There, it is under investigation for possible violations of anti-money laundering regulations. That investigation might cost the company as much as AUD45 million (US$29.87 million).
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