Paramount Murcia, will it be happy ever after in 2011?

Paramount Murcia theme park, or is it neverneverland?

2011-01-01

Will Paramount happen?

That´s the question every estate agent and business owner in the Region of Murcia wants to know the answer to, as well as most of our readers judging from the number of emails we still get from people desperate to know if there´s any further news.

The truth is, there isn´t.

Since the visit from the Paramount licensing executives there´s been silence and speculation, but nothing concrete, the ever cautious Salvador Marin reiterating the same point every time he´s pressed by expectant journalists, that it all depends on the success of attracting investors.

The spanish publication, La Verdad, has kept the name Paramount in the news with two articles claiming that a deal on the location of the development was imminent, their sources indicating that a deal before the end of the year would be confirmed, but the remainder of the press have kept well away from making any such claims, and indeed , 2011 has begun without the final location of the new park, or indeed any confirmed deal being announced.

It has been confirmed that Alhama de Murcia is the "preferred" location, but with no paperwork signed, and the possibility of two alternative plots of land still on the table, nobody knows where the final location will actually be.

Which is how Paramount wanted it to be, and how it rightly should be, greedy speculators scuppering many a deal before paperwork is signed and sealed, and who knows, we may all be in for a surprise yet; decoy ducks have been an astonishingly effective weapon used to great effect for thousands of years, and in the dog eat dog world of modern business they´re still devastatingly effective in the hunt for ever greater profits.

Three interesting pieces appeared in the pre-christmas run-up which the investor should heed.

One was about the intention of the Region to sell it´s "star" product at the Fitur tourism fair in Madrid, the focal point for international businesses looking at the opportunities in an ever changing world of tourism. This is where the initial contacts were made between the region and Marta holdings who have earnt a very nice commission thank you very much for their work in bringing the project to its´current status.

Fitur attracts tour operators, business owners, investors, speculators, travel professionals, and is just one of a rash of travel and tourism fairs which showcase the opportunities on offer for those in the travel industry, part of the background work which dictates where our tour operators and flight operators send us for our annual breaks.

Murcia last year put together a vibrant, colourful stand which proudly proclaimed that Murcia was " No-typical" a statement which those of us coming from a "more typical" business background would certainly confirm to be the truth, the whole truth and nothing but the truth.

But it stood out and following the fair the ground work began to bring the Paramount project to fruition.

This year, the region will be hunting investors, highlighting the opportunities for investment in a region which still has a large amount of land as yet unblighted by the scab of overconstruction, with plenty of space still available to those looking for opportunity.

The second piece, again La verdad, and again, only in la Verdad, announced that " Ejecutivos de bancos y altos representantes de gobiernos y casas reales se interesan por Murcia

Los sectores atractivos para los inversores son las energías, industrias y complejos turísticos

"Bank Executives and high ranking government and royal representatives are interested in Murcia. The sectors which are attractive to them are energy, industry and tourism complexes."

The piece went on to say that the arab-spanish investment forum would bring 50 top investment executives from the Arab petrol exporting nations, namely Bahrain, Kuwait, Oman, Qatar , Saudi Arabia and Arab Emirtaes to a yet unconfirmed location, to enable them to view investment opportunities not only in Murcia, but across Spain.

The hosting of the event in Murcia had been the fruit of work carried out by the Plan de Promoción Exterior de Murcia, the plan for external promotion of Murcia, carried out by the Institute for development, who are pulling together the Paramount project.

Although no details have as yet been confirmed, the event is likely to take place in the spring, probably at the La Manga Club resort.

The paper went on to say that the paramount project would be the major offering of the murcian regional government, and according to their sources, would have the overall design , the Plan Maestro ready in time for the summit.

The next day, the third piece came out, again in la verdad, (only) saying that President Valcárcel had "confirmed that the region were in negotiations with the Arab Investment Forum to host a gathering of the forum, " and said that the project was in its " embryonic stage."

Salvador Marin, ever cautious would only say that the event " would be coming to europe for the first time," and confirmed that due to economical liquidity reasons that overseas investors were indeed being sought.

A slightly more realistic and less effusive evaluation than that given the day before by La verdad, who whilst undoubtedly exhaustive in their research and presentation of information, have been the main source for "inside information and exclusives " right the way through on the Paramount project, and thus responsible for much of the speculation which has been rioting unchecked through the UK press ( and one or two naughty estate agents who are still claiming this park as a dead cert and marketing buy now or miss out property)as a result.

So where are we realistically.

At the moment, Paramount is a potential project, with nothing confirmed. As of today, the only investor is Jesus Samper, who has stepped back from spearheading the project following his implication in a corruption case implicating employees of Murcia council. Although his lawyers are adamant that as the case proceedings unravel, he will be fully exonerated, the unfortunate timing of the allegations made against him render it diplomatically inappropriate for him to be at the forefront of the search for investment, so the Region of Murcia has put itself at the head of the project, although it will be privately financed.

Although the Region will push hard for this project to happen, in the belief that it will generate employment and improve tourism opportunities for the future, it all boils down to whether the region can attract enough investment or not.

It´s quite astonishing how many people still believe that this park is being built by Paramount studios and in spite of all the copy written about this project, don´t understand that it is being built by a private business under licence to Paramount Licensing, not by them, so depends entirely on the ability of the departemnt for development to find private finance.

At the moment, we still have no idea what the product will be, even the size of it, or the form of it, and what it will comprise. And, as a result, how much it will cost to build, so therefore how much money is being sought.

So is Murcia the right place for a park like this?

Yes. We have the best climate in Spain, suitable land, available workforce and by the time the park is built, should have completed the transport infrastructure which will support the volumes of tourists required to make the project viable from an investor point of view.

No. The volume of tourists aren´t here now to support this park, and part of the investment will have to be a promotional campaign to get them here, and also ensure the infrastructure is here to facilitate their movement and accommodation.

At the moment Murcia attracts 1.5 milion tourists a year and hopes that the new international airport will help to increase traffic to 3 million a year in the future when it opens at the end of 2011, but other areas already attract considerably higher numbers of visitors and have much larger resident populations.

The environmental impact on the region must be carefully assessed. The Mar Menor is a fragile eco system and cannot support more development, and over construction will prejudice the appeal of the region and its other tourism products.

At the end of the day, it will boil down to the ratio required by investors, and whether they genuinely believe they can make enough money out of their investment to make it worth their while.

There are planty of alternatives. Petrol dollars have recently purchased the former GEC plant at Fuente Alamo, now SABIC, a good, practical investment into manufacturing with petro chemical roots, a sensible investment, good for the region, providing jobs, support jobs and export finances for Spain, and a good return for its owners.

If the El Gorguel container port goes ahead, it will open the doors to improved importation, exportation opportunities and the region has a good foundation in petro chemical industries at the Escombreras Plant.

And there are some excellent real estate deals on quality hotels, and existing residential developments for anyone who thinks the region is worth a punt.

Will a leisure park yield enough ratio to make it worth the risk. At the moment, the exisiting leisure parks across spain and much of europe are struggling to survive, and figures of 3 billion euros for the construction of this one have been quoted in the press. Will it pay?

That´s the big unknown.

So at the moment, nothing is confirmed, and whether this happens or not is down to whether the search for investors yields fruit, and whether the region is realistically in a financial position to be able to accede to the demands that will accompany a deal of this magnitude.

Every deal requires carrots, and if Murcia is to get what it wants and what it needs, concessions will have to be made.

The fragile economic situation we are currently facing means that the region has no money of its´own to invest. The spanish cajas and banking system are again, realistically not in a position to do very much, weakened by bad property debts and overexposure to construction investment, and central government has to cut deficits by taking unpopular measures which will not stimulate employment and investment.

We need external investment into industrial activity, and it´s a buyers market.

And contrary to what immoral vendors are telling you at the moment, this is not a done deal and nothing is signed or sealed.

So will it happen?

Who knows.