Atlantic City: Revel Casino sold at last
It looks as if the long running saga of the sale of Atlantic City’s Revel casino may finally be coming to an end. The casino complex which includes Atlantic City’s tallest hotel tower with a total of 1399 rooms cost 2.4 billion dollars to build in 2012. The huge casino complex never managed to make a profit in its three years of operation and is to be sold for 82 million dollars. The final details are to be settled this week in the sale to the Florida developer Glenn Straub.
Troubles from the outset
The Revel Casino complex faced financial difficulties from the beginning. In the early stages plans for the casino complex had to be redrawn to reduce the number of hotel towers to just one because of a problem with finance. Things got worse in 2009 when construction had to be stopped as the financial problems continued. The year after that the major shareholder in the project, the financial group, Morgan Stanley sold its 90 per cent part of the complex and construction stopped again.
To try to restart building work the State of Nevada made an investment of 260 million dollars under an agreement that the state would be entitled to a fifth of the casino complex income. This state involvement along with loans secured by the company that owned Revel, The Revel Entertainment group meant that the work was completed and the Revel casino finally opened in April 2012.
Bankruptcies and failed sales
Revel opened to great fanfare and was to lead the revival of Atlantic City’s downward spiralling casino industry. However the reality was that Revel made losses from the outset. The 12 000 square metre casino with 120 gaming tables and more than 2500 slot machines never brought in the hoped for revenue. Just a year after opening Revel declared itself bankrupt for the first time. Then in 2014 the company had to file for bankruptcy for the second time. Since there was no buyer for the casino complex, Revel closed down in September 2014.
Selling the casino was full of twists and turns. A Canadian group, Brookfield Holdings put in an offer of 110 million dollars but a month later the company pulled out of the sale. The Florida based developer Glenn Straub’s company Polo North Country Club was the other main bidder and actually had the sale agreed in the bankruptcy court in January 2013 only to be cancelled by Revel’s owners a month later. There have been ongoing disagreements concerning the rights of tenants who operated their businesses in the old Revel and also problems with the electricity supply company. These are problems that Straub as the new owner will have to sort out just as he has to decide on the future use of Revel.