Federal shelves Port Arthur development
Federal Hotels and Resorts managing director Greg Farrell said the commercial risk to build the $30 million Port Arthur hotel is too high and has vowed Federal would not build any substantial new projects until the outcome of gambling legislation is known.
“Until the regulatory landscape becomes clearer and the full impacts can be understood, the company will not be progressing with any new substantial projects,” he said.
In the 2010-11 financial year, Federal Hotels’ parent company Mulawa Holdings recorded a drop in after-tax profit from $27.1 million to $21.2 million. The drop came despite an increase in revenue from $478 million to $516 million.
Mr Farrell, whose companies employ 2016 people, said the mandatory betting pre-commitment could have a potentially significant impact on revenue.
Federal Hotels operates 2380 poker machines in the Wrest Point and Launceston casinos and has 11 hotels in the Vantage Group with about 330 poker machines. The state government receives gambling taxes and licence fees of about $86 million.
Federal Hotels and Resorts last year unveiled plans for a $30 million luxury accommodation project that will complement in impressive detail nearby heritage buildings at the Port Arthur Historic Site. Up to 60 five-star villas will have dry-stone walls and individual gardens with the same vegetables, herbs, shrubs and trees as those planted at the site in the 1830s. Mr Farrell, said at the time, “Our vision is to become Australia’s defining five-star interpretive tourism development on a heritage site.” Hobart architects Morris Nunn & Associates won the project from a field of 30 firms from around Australia. Launceston-based historian Hamish Maxwell-Stewart is working with the architectural team.
The development will replace a 1970s motel that overlooks the historic site. It will consist of a reception area, two restaurants and a spa as well as the individual villas that will each be enclosed in stone walls to create a feeling of exclusivity. The project will target interstate and international visitors who will pay around $600 a night. Trees and shrubs will be planted to ensure the development does not intrude on the historic site itself. The site chief executive, Stephen Large, and the Port Arthur Historic Site Authority board, chaired by Barry Jones, will work with the architects as the final design is developed.
Independent federal MP Andrew Wilkie was unmoved by Mr Farrell’s decision. “Federal Hotels’ threat to stop new investment in the state is just more hysterical scaremongering from an industry obsessed with its profits,” Mr Wilkie said. “It will make no difference to my push for poker machine reform, including mandatory pre-commitment on high-loss machines. The reforms target problem gamblers and the only impact on Federal’s bottom line will be a reduction in the money it harvests from these unfortunate souls.”
It is expected that mandatory pre-commitment legislation will be passed by both houses of federal parliament by the time of the Budget in May.
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