Is Genting Pulling Out of Miami?
In 2011, Genting Group (Resorts World International) purchased the Miami Herald property on Biscayne Bay for $236 million to much fanfare. Genting followed up this purchase by acquiring the Omni Mall and other surrounding property for an aggregate purchase price of $500 million and a total acreage of nearly 30 acres. The company announced grand plans for a mixed use project including a luxury resort, condominiums, high-end shopping and the centerpiece, a major casino. The Malaysian conglomerate operates casinos around the world and expected that with this acquisition and its promise of jobs, tourism and redevelopment coupled with community support that the climate was right for the legislature to allow casino gambling in Miami.
Genting hired renowned architects Arquitectonica to design the project and initial renderings were met with great enthusiasm. Lawyers and lobbyists began to plot strategies to pass the appropriate legislation to allow casino gambling in Miami and Miami-Dade County. But other major properties in Miami Beach expressed reservations. The Fountainbleau, for example, had spent millions of dollars in its recent renovations to prepare for the day that gambling was permitted in Miami-Dade County outside the racetracks and reservations. And, politicians outside South Florida have always been anti-gambling.
Nevertheless, Genting representatives always stressed that the project would proceed with or without gambling. The public posture was always that the company was a “resort” company and Miami was an important part of the company strategy. The property was extremely valuable with or without a casino.
The Florida legislature has repeatedly defeated any proposal to expand gambling anywhere in the state. The 2016 legislative session once again ended with a defeat for gambling proponents, including Genting. Was this the last straw for Genting? Rumors are circulating that the Genting portfolio is for sale. The Miami Herald recently reported on these rumors, suggesting that Genting is privately reaching out to developers. Why is this happening now? Though Genting has said for years that the project would be developed without a casino and one could be added in the future, no plans have been submitted to the city for over 2 years. About one year ago, Genting representatives still publicly talked of a mixed use project and Arquitectonica continued to meet with county officials and make presentations. But there has never been a public release of plans other than initial renderings. Has Genting been pulling the wool over our eyes for 5 years? Has the development of this valuable property been held hostage? Last fall, there was talk that Genting would begin construction on the site “as of right” meaning no zoning or variance would be required. Again, no plans were ever submitted.
In a strange twist, The Miami Herald reported this morning that Genting has filed a lawsuit against Miami-Dade County and against Miami-Dade State Attorney, Katherine Fernandez Rundle to force card games and slots at the property. Genting previously entered into an agreement with Gulfstream Park to move the race track’s pari-mutuel permit to the Herald/Omni site and establish a casino there. Gulfstream would operate the casino. Regulators denied this request in 2014. The lawsuit seeks an order precluding law enforcement from prosecuting casino operators on the property.
For 5 years, Miami and South Florida has waited with baited breath for something to come of this project and it appears what was needed was approval of a casino. Genting’s lawsuit is a Hail Mary and unless Genting can make magic happen, the expansion of gambling is not going to happen in the foreseeable future in Florida. Genting may now be realizing that it has missed the timing to build such an expansive project on this prime place of real estate and is looking to cut its losses. It will be interesting to see who takes an interest and what ultimately goes on this property as the luxury condo market begins to slow.