An appraisal report for three casinos on Spain‘s Canary Island of Tenerife has been received by the President of the Council of Tenerife, Carlos Alonso who said that the report will soon be made public and available to investors so that the properties can begin accepting bids.
According to a report on G3Newswire, the council president has said that the report would become available before the start of 2017 and that he wishes to make the properties available for bidding as soon as possible: “The sale of the casinos will serve to increase the competitiveness of tourist activity on the island.”
According to the report, Mr. Alonso said that the casinos had been meant to be competitive since their creation some 30 years ago. In 2004 the Playa de Las Americas casino came up for tender but no bids were made despite the fact that three operators had expressed some interest in the property. At that time, Playa de Las Americas was the only profitable casino on the island.
“The value of the sale was related to the income stream for the whole life of the casino beyond the licence, so that investors said that there was uncertainty because the value was great due to the income received for so long and the casino [licence] had to be renewed every ten or twenty years and this made for uncertainty when it came to revenues. This is the the kind of problem which we have to resolve and I don’t think we will have any problem because we have enough [parties] interested in the sale,” he said.
In 2014 Alonso made a pitch for the tender process in a meeting held at the Urban Hotel in Madrid, he was accompanied by the general coordinator of Hacienda del Cabildo, Juan Carlos Pérez Frías, Tenerife’s CEO, Miguel Ángel Santos and the manager of the company of the Casinos of Tenerife, Gildo Hernández. Mr. Alonso stated then that, “This meeting aims to make known to potential investors and directors of consulting firms specializing in this activity, the characteristics and specifications that will govern this sale through a public tender made with total transparency.”
Hopes then as today, were to privatize and liberalize the market in order to bring new investments in and create more attractions on the island in order to attract more tourism dollars. Not everyone on the island is in favor of privatizing the properties, however, with some government and union officials speaking out against it as well as initiating court actions to scuttle or delay previous privatization attempts.
Casino Las Américas was offered for 20.8 million euros in the last tender process, however, certain conditions were set that will likely be included in some form with the new offering. In exchange for some of the best tax incentives in Europe, the bid winner will likely need to perform work to recondition existing buildings, create activities beyond gambling, assure certain levels of continued and new employment, offer enhancements related to artistic, cultural and entertainment activities, and offer other tourism incentives with their project.