Revel Sold to Backup Bidder, Who Plans to Appeal Ruling
Update, 1:45 p.m.: A judge awarded Revel to Glenn Straub‘s company. Straub did not get a discount he’d requested, and has been ordered to pay the entire $95.4 million he bid for the casino.
Straub’s lawyer said he will appeal for a stay of the sale.
Earlier: A federal judge is set to hear arguments today regarding the sale of Revel to Glenn Straub, the man who last year floated plans to buy the casino and turn it into a “university for geniuses.”
Revel, which cost $2.4 billion to construct, has been closed since 6 a.m. September 2nd. But there’s been a lot of news in the past few weeks! Late last year, ACR Energy Partners missed a bond payment and asked a judge if it could cut power to Revel. ACR was created to power the now-shuttered casino, Revel is its only customer.
It’s not clear if Revel can get power from another source; shutting down power to the building could cause it to be ravaged by fungus. “You’ve got a very high humidity environment,” Drexel construction management professor Douglas Carne told the Press of Atlantic City. “That will be almost impossible to control without air handlers operating.” Tenants that operated businesses at the Revel remain locked out and are fearful of ACR cutting power.
Also last year, a federal judge approved a $26 million tax settlement between the casino and Atlantic City. The $33 million tax debt owed by Revel didn’t get any bids at an auction previously. Moody’s reports tax revenues from casinos make up 70 percent of Atlantic City’s municipal budget.
Straub, who first announced his intention to buy Revel about a week after it closed, also floated the idea of blowing up the casino if his plan for it didn’t work. (Perhaps he would be imploding a fungus-covered building.)
He lost the bidding to Brookfield, a Canadian asset-management company that bid $110 million for the property to his $95.4 million. But that deal fell apart over payments the new owners would have to make to ACR. Straub has said he also wouldn’t accept the current set-up with ACR. He also wants his price cut by $8.4 million. Bloomberg speculates if he doesn’t get the casino for the $87 million he’s asking for — his original $90 million bid, minus the $3 million breakup fee he would’ve received had Brookfield completed its purchase — he wants the judge to hold another auction for the property.
Revel employed more than 3,000 people in the 2 years, 5 months it was open. Four casinos in Atlantic City closed last year. Atlantic City mayor Don Guardian predicted recently another casino will close by the end of the year — Bally’s, he hinted. Caesars Entertainment owns Bally’s, Bally’s Wild West and Caesars on the boardwalk, as well as Harrah’s at the Marina. Caesars closed Showboat in August, and sold that building to Stockton College last year.