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After a construction bust, Spain may gamble on more: a EuroVegas

Madrid and Barcelona are competing for U.S. billionaire Sheldon Adelson's EuroVegas project. Economists and environmentalists are worried about the proposal.

June 22, 2012|By Lauren Frayer, Los Angeles Times
  • U.S. billionaire Sheldon Adelson, center, visits a site near Alcorcon, Spain, where he is considering building a massive casino project called EuroVegas.
U.S. billionaire Sheldon Adelson, center, visits a site near Alcorcon,… (Madrid Regional Presidency )

ALCORCON, Spain — On a dusty plateau dotted with half-built condos, unemployed Spaniards hope a proposed development will amount to more than a mirage in the desert: a glittering gambling city to rival Las Vegas, and the quarter-million jobs it's expected to bring.

American billionaire Sheldon Adelson, owner ofLas Vegas Sands Corp., wants to build a casino complex dubbed EuroVegas, complete with 36,000 hotel rooms, 18,000 slot machines and three golf courses, and this Madrid suburb is vying for the jackpot.

It's a rare investment at a time when Spain needs it most, having just become the fourth and largest Eurozone country to request a European Union bailout to survive the continent's debt crisis.

The casino project has local politicians salivating, but Spaniards are divided over whether they want giant casinos in their backyards. And many question the wisdom of gambling on yet more construction, the culprit that, coupled with cheap credit, fueledSpain'sboom and bust.

Spain's two largest cities, Madrid and Barcelona, are in the running, and the winner will be announced any day now. Madrid is thought to have an edge: Last month, Adelson's private jet landed unannounced near Alcorcon and the tycoon and his wife made a discreet, hourlong inspection of a possible construction site.

Madrid officials sweetened their bid this week by also offering Adelson the choice of yet another site, a tract of abandoned farmland east of the capital. But Alcorcon is considered the favorite.

About eight miles southwest of Madrid, Alcorcon's modern low-rise center is home to many Latin American immigrants, among whom the unemployment rate is even higher than the stunning 25% national average. The town already has two hulking shopping centers no one wants to rent or buy.

"God willing, the casinos will come," said Alfonso Perez, a 32-year-old resident. "To me it seems amazing — all those jobs it would bring — because we're really suffering."

Perez has been out of work for nearly two years and hopes to apply for a construction job if the project goes forward. But not all of the casino complex's prospective neighbors are so enthused.

"We're opposed to the EuroVegas model of development and growth, but we're especially worried about the natural space that could be destroyed by such a colossal building project," said Jose Garcia Moreno, one of the leaders of Stop EuroVegas, a Barcelona-based advocacy group that gives bicycle tours of the Llobregat Delta, a wetland area popular with bird-watchers near that city's airport, where the casinos could also be built.

Spanish officials say development would not violate zoning laws at either the Madrid or Barcelona sites, and that building would take place outside EU-protected nature zones. But Moreno said even nearby construction could disturb bird migration patterns and possibly contaminate underground waterways at the Barcelona site.

"We dare to presume Catalan government officials have not informed you adequately and clearly" about the environmental risks, he wrote in a letter to Adelson last month, referring to leaders of the Catalonia region.

Adelson has not yet responded, and his office did not return calls for comment. But he has been quoted as saying that Spain's high jobless rate "assures us the support of the government." Adelson has also reportedly secured promises from Spanish officials to waive labor laws that limit foreign workers, and possibly even allow smoking in the casinos despite a nationwide ban on smoking in restaurants, bars and other establishments.

Las Vegas Sands' president and chief operating officer, Mike Leven, said at a recent industry conference in New York that he thinks "Europe is undervalued today," despite its debt crisis.

"Sheldon calls it EuroVegas, but maybe the euro won't be around when we go to build it," Leven joked. Construction would begin in mid-2013 and take five to 10 years, he said.

Construction and tourism have been the main engines of Spanish growth for 20 years, but economists warn that continued reliance on such industries could be shortsighted.

"EuroVegas is a tourism and construction combo, something like Disneyland, which went to Paris and had some economic impact," said economist Gonzalo Garland of Madrid's IE Business School, referring to Disneyland Paris, Europe's most visited theme park. "But I think it would be a big mistake for Spain to again try to rely on construction as an engine of growth. Spain needs to look for other sources after what's happened here."

At the height of Spain's construction boom in 2007, the country was building more homes than Germany, France and Italy combined, Garland said. Hundreds of thousands of those remain unsold and empty.

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