Montecasino to put R335m into building
March 30, 2006
 By Quentin Wray
Johannesburg - Montecasino, the casino complex north of Johannesburg, would have spent R335 million by next March building a new theatre, hotel, restaurants and open square that would increase Tsogo Sun Gaming's total investment in Gauteng to more than R2 billion, the company said yesterday.
Tsogo Sun Gaming is 51 percent owned by Tsogo Investment Holdings (TIH) and 49 percent by SAB. Hosken Consolidated Investments (HCI) wrested control of TIH, which also has empowerment and labour shareholders, from Johnnic in an acrimonious battle last year.
Steve Howell, Montecasino's general manager, said the battle between Johnnic and HCI would not affect the development at all as it was being funded on the strength of Tsogo Sun's balance sheet and without surety from the controlling shareholders.
Tsogo Sun's other assets include Suncoast Casino and Entertainment World in KwaZulu-Natal and the Southern Sun hotel chain.
Howell said the expansion would increase the number of visitors from 8 million a year to 12 million. However, the gaming authorities would not allow Montecasino to increase the number of slot machines or tables despite the increased demand.
He said that as with any casino, there was a problem with "peaks and valleys". On Saturday nights as many as 500 additional slot machines and 20 tables would be welcomed, but come Monday morning, usage was very low.
Construction would be completed by March 2007 and there were 800 workers on site already, Howell said. This number would increase to between 1 700 and 2 000 as the finishes were put in.
Don King of Mirage Leisure & Development, who is the development manager for the project and not the world-famous big-haired boxing promoter, said participation by black economic empowerment firms in the project was at least 30 percent, meaning that at least R100 million of the construction work had been awarded to empowerment companies.
Philip Kruger of Periscopic Property Management, Montecasino's tenant manager, said tenants for the five restaurants would also have to be 30 percent black-owned.
A key aspect of the development is the 1 900-seat lyric theatre specifically designed for large-scale West End-style musicals. This will be one of the world's eight largest lyric theatres.
The worst seat in the house will not be more than 30m from the stage.
King said the theatre would not threaten Johannesburg's Civic Theatre or Pretoria's State Theatre as it would target different productions.
"The others cannot get the big economies of scale needed for the really big shows that we can," King said, adding that the development would help Gauteng's theatre industry to grow.
The hotel, which will have 179 rooms, will target the upper end of the tourist and business markets. The conference and banqueting facilities will be able to host between 440 and 682 guests.
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