Hard Rock Megaproject in Catalonia Loses Tax Benefits
Although the new president of the autonomous community of Catalonia, Salvador Illa, has not openly opposed Hard Rock’s megaproject for a hotel and casino, he has placed some challenges in its path. For now, the company will lose the initially planned tax breaks for large casinos.
According to the latest plans presented, the Hard Rock project includes the construction of several hotels, a casino, entertainment and show spaces, as well as a commercial avenue with shops. The project would span the municipalities of Salou and Vila-seca (Tarragona province) and was initially expected to involve an investment of around EUR 700 million, which could reach up to EUR 2 billion.
It should be noted that, in March, the Catalan Parliament debated the Generalitat's budget for 2024. The ERC party had convinced the PSC to approve the budget, but also needed the support of En Comú Podem (the Comunes). This party, however, made its support conditional on the government abandoning the Hard Rock project, while the PSC supported it.
Nevertheless, the Parliament rejected the Generalitat’s budget for 2024, with the Comunes voting against it. Due to this deadlock, combined with the complicated political situation in Catalonia, Pere Aragonés (ERC) called for early elections in May.
The PSC won the elections but secured only 42 seats, and for Salvador Illa to be appointed as the new president of the Generalitat, the votes of ERC and Comunes were necessary during the investiture session. Among the conditions imposed by these two parties to support Illa was to reverse the tax breaks planned for Hard Rock. These benefits (introduced in 2014 by Convergència, with the support of the socialists through the law on Tourist Recreation Centers) would have allowed Hard Rock to pay only 10% of the taxes levied on gambling activities in Catalonia, instead of the usual 55%.
However, according to the mayor of Salou, Pere Granados, the Hard Rock project remains viable. In statements to the local newspaper Diari Mes, the mayor said: «Investors will not question this project due to tax issues, as they have been waiting for this moment for many years».
Project Processing
In 2018, the autonomous community granted the Hard Rock group authorization for the installation and operation of the megacomplex. However, in September 2020, a ruling by the Superior Court of Justice of Catalonia (TSJC) partially annulled the Urban Master Plan (PDU) because some of the open spaces and facilities were located in a chemical risk zone, forcing the government to rewrite the PDU.
After four years with no developments, the new Generalitat’s Minister of Territory, Silvia Paneque, stated that «the processing of the Hard Rock project will continue as planned, but with this new tax policy in place».
According to El País, the Catalan government is unlikely to halt the processing of the PDU, fearing that Hard Rock may respond by taking legal action and seeking compensation from the Generalitat.
