Genting’s Plan Under Fire MH Jan 10, 2014

Genting’s plans under fire

The casino giant that promised a major boost to Miami’s economy now sees its business plans coming under fire on multiple fronts.

Genting, which three years ago proposed bringing a massive casino resort to the Miami waterfront, recently acquired a racetrack license it says allows for a modest 2,000-machine slot parlor on its land holdings. Its plans to start construction on a new hotel and condo complex at the old Miami Herald headquarters are now at least a year

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behind schedule. As Genting continues to tout gambling’s potential in Florida, it is making headlines for laying off 175 restaurant workers at its casino in New York.

The Malaysian-based company sued the federal government this fall in an effort to continue using foreign labor for a Miami-based casino ship offering overnight gambling cruises in international waters. On Friday, a federal judge ruled against Genting‘s request to overturn orders by immigration officials to either stop the cruises or hire U.S. workers as crew.

“The same company that promised to create 100,000 jobs is now suing the federal government to try and exploit foreign workers at subpar wages rather than hire Floridians,’’ said John Sowinski, the Orlando-based campaign consultant who heads up the No Casinos advocacy group. “It shows how big a lie the jobs argument is.”

Genting’s Miami-based executives rarely give interviews, and also declined to comment for this story. Through its public relations firm, Schwartz Media Strategies, the company issued a statement that said in part: “We are evaluating and pursuing all opportunities that arise. Our immediate focus is on developing a world-class, mixed-use project with residential, hotel and retail uses that will serve as a waterfront anchor in downtown Miami.”

In 2011, Genting paid about $400 million for the old waterfront Miami Herald site and the nearby Omni commercial complex. With South Florida still reeling from the recession and an idled construction industry, Genting pledged 100,000 jobs at a new $3 billion Resorts World Miami, with 50 restaurants, 5,200 hotel rooms and some 8,000 slot machines.

When lawmakers balked at changing state gambling laws to allow the project and a similar Miami casino sought by Las Vegas Sands, Genting began pursuing other options. Last spring, Genting said it would move forward with a large hotel and condo towers on the 14-acre Herald site. Demolition of the newspaper’s former building was slated for the end of 2013.

On Friday, Genting said the new schedule doesn’t anticipate demolition until the fall. The company said it faced more environmental issues than it anticipated on the Herald site, which the media company occupied until its May 2013 move to Doral. Genting has not submitted the zoning proposals required to start development, or released the renderings and floor plans needed to launch condo sales. “We are still refining the design and expect to submit our plans later this year,” Genting said.

With the resort plans stalled, Genting this week revealed an effort to bring 2,000 slot machines to the waterfront. The company announced a partnership with the Gulfstream racetrack in Hallandale Beach to use one of its two permits to authorize slots and off-track-betting at Genting’s property 17 miles away.

The plan quickly drew fire from Genting foes. “Slot machines are not compatible with the cultural climate of the area,’’ Miami Sen. Gwen Margolis, a Miami Democrat, wrote in a letter Thursday to Senate President Don Gaetz. The News Service of Florida first reported on the letter.

A Genting lobbyist described the slots parlor as “a less lucrative” option than the resort the company originally proposed. It would have none of the table games favored by the wealthy Asian gamblers it promised to deliver. That left Genting’s allies to grapple with a scaled-back version of the economic windfall the company said it could deliver if Florida approved its original plan.

“The large-scale resort they’re contemplating will attract visitors,’’ said Rep. Erik Fresen, the Miami Republican who sponsored Genting’s original gambling bill in 2012. “But I don’t think it’s going to redirect the gaming tourists from South America.”

Genting said it hasn’t given up on building a large “destination” resort with the kind of casino it originally proposed. But its more modest entry into South Florida’s gaming industry has also brought problems.

Last summer, Genting launched a 1,500-passenger casino ship to run passengers daily from Port Miami to the Bimini Bay casino and resort, which it began managing in 2012. Like major cruise lines, Genting took advantage of federal law allowing it to employ foreign workers for trips to foreign ports.

But when Genting began running overnight “cruises to nowhere” that didn’t require stops at Bimini, immigration officials ruled the trips required U.S. crews. Genting said it employs 250 foreign visa holders on the Bimini SuperFast, and that they live onboard the vessel. Replacing them with U.S. workers would require hefty termination fees, and Genting said the ban on gambling cruises endangered its entire SuperFast venture.

On Friday, U.S. District Court Judge Colleen Kollar-Kotelly ruled against Genting’s suit, writing that the company’s argument would let ships that occasionally headed to foreign ports to be “effectively skirting immigration employment laws.”

In a statement issued late Friday, Genting said the ruling would not impact its day cruises to Bimini, “which will continue without interruption.”

As Genting awaited its Bimini SuperFast ruling after a three-month court fight, the company also faced political push-back in New York over casino employees. On Monday, Genting laid off 175 employees at the buffet restaurant at its Resorts World slots casino in Queens. The dismissals came after Genting and the casino’s union negotiated a new labor deal in October that had some workers making $60,000 a year, and the buffet employees earning $12 an hour instead of $5, according to a New York Times report.

“We made the difficult decision to close the Aqueduct Buffet because it never caught on with our customers and was no longer economically viable,” Genting said in its statement. “We sincerely regret the impact this closure has on the buffet’s employees and are working closely with the Hotel Trades Council to ease this transition.”

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