Revel Casino Sale
Revel Casino's hard luck continues after a U.S. Bankruptcy Court judge rejected its agreement for a sale to a Florida developer for $82 million, marking the third failed deal for the shuttered. The planned sale of the shuttered Revel Casino in Atlantic City, New Jersey, to a Florida developer has been thrown into jeopardy following a decision by a U.S. Federal appeals court that would change the terms of the transaction, according to court documents. New Sale Rumors Surrounding Atlantic City Revel Resort. Published by Dave November 9, 2017 Categorie(s): Casino News, Financial. There are new rumors about the sale of Revel Atlantic City. This casino resort, which cost $2.4 billion to build, has sat empty for the last three years. When Glenn Straub bought the shuttered $2.4 billion Revel Casino in Atlantic City for just $82 million in a bankruptcy court, the Florida based real estate developer had huge plans to revamp the property which had a casino, 55,000 sq ft of retail space, a 32,000 sq foot spa, 13 restaurants and close to 7,000 parking spaces.
The sale of the closed Revel casino in the resort—which is also in bankruptcy—has also been threatened by an appeals court after the company that runs a popular nightclub and beach bar at the property challenged the sale. Late last week, the three-member 3rd U.S. Circuit Court of Appeals court ruled that the owners of the HQ nightclub could not be stripped of its rights to appeal and allowed them to halt this week’s closing.
The appeal was made by IDEA Boardwalk, which has invested $16 million in the HQ nightclub and two bars at the casino—which were profitable even if the casino was not—after a federal court ruled against their challenge of the sale last month. The company maintains the current plan to sell the casino to Florida-based developer Glenn Straub for $95.4 million will shut them out of the property, losing their investment.
The appeals court had issued a temporary stay of the sale.
Last week Revel’s attorneys appeared before the appeals court saying the sale could be in jeopardy if delayed past a set February 9 closing date. Straub’s attorney has said the developer may walk away from the deal if it is delayed past the scheduled closing date.
“There is no overt threat, but it remains a possibility,” Straub’s lawyer Stuart Moskovitz told the Associated Press. “We will have to weigh all the factors at that time.”
IDEA Boardwalk’s attorney Jeffery Cooper said the club was profitable and wanted to be part of any new development at the property.
“If the new owner flips the place to a Hard Rock (Cafe) and they make money, we are harmed,” he said.
Revel also says the restaurants should have to post a $120 million bond to compensate it in case the Straub deal falls through.
In addition, Revel is also facing a threat from its utility supplier to cut off its electricity, heat and water. ACR Energy Partners says it has no other way to ensure Revel will pay its bills.
Revel Casino Auction
The bankruptcy court in the case has ruled that Wells Fargo—the casino’s main bankruptcy lender—can claim much of the proceeds of the sale leaving little for ACR, the company argued.
Revel, however, says ACR is violating a court order and asked the court to fine ACR $10 million, plus $1 million for each day it does not provide utility service to the building.
The two sides met again before the bankruptcy court late last week and ACR said it will not turn off the power for now. Attorneys for ACR said the company will wait until the end of another hearing scheduled for February 11 to decide whether to shut the power plant.
The move is the latest in a series of fights between the casino and the energy provider. Revel officials have partially blamed the expensive deal between ACR and Revel for its bankruptcy. ACR’s power plant was built exclusively for the casino and the original deal has the casino paying for the plant’s construction, as well as energy rates.
ACR helped construct the plant $118.6 million in municipal bonds and an approximately $40 million equity investment. The financing was passed on to Revel, with interest, in the form of more than $1.5 million in monthly financing fees.
Straub has said he plans to cancel that contract if the purchase goes through.
The threat to turn off the power brought a warning from the Atlantic City Fire Department that without operating fire suppression and ventilation systems at the property—which cannot function without power—it would be impossible for the department to contain a fire at the hotel tower.
Taj Tussle
Meanwhile, nothing is coming easy for Atlantic City’s embattled Taj Mahal casino—which is trying to stay open—and the closed Revel casino as both try to wend their way through bankruptcy proceedings.
The fight between the Taj Mahal and its union workers heated up as the city’s main casino union—Local 54 of Unite HERE—filed 27 charges of unfair labor practice against Trump Entertainment Resorts with the National Labor Relations Board.
The union charges that Trump Entertainment threatened workers and unilaterally changed worker’s schedules and workplace rules. The changes hurt workers financially, the union says.
“These charges allege serious violations of federal labor law and demonstrate a disregard for the rule of law and basic fairness at the Taj Mahal,” union president Bob McDevitt said. “They allege that managers threatened and discriminated against workers for union activity.”
The union charges that, among other things, the company fired a union shop steward, attempted to get a union member to spy on the union to management and tore down union literature and threw it on the floor, saying, “It’s the union’s fault that this place is closing,” according to a review by the Associated Press.
Meanwhile, a bankruptcy plan to keep the Taj open continues to hang in the balance. Under the plan, billionaire Carl Icahn—who holds $286 million of debt against Trump Entertainment—would swap the debt for ownership of the casino and the closed Trump Plaza. Icahn would then invest $100 million into the Taj.
The casino is already staying open due to a further $20 million loan from Icahn. The first of that money reached the casino earlier this month and is expected to keep the casino open through 2015.
But Icahn has repeatedly said he wants union peace for a final deal to go through. Icahn has called the current work rules out-of-date for the struggling Atlantic City market.
A bankruptcy court judge ruled in October that the company could end health insurance and pension coverage for its workers. Icahn wants to shift workers insurance coverage to the Affordable Care Act.
The union has appealed the ruling and Icahn has threatened to close the casino if the union wins.
Meanwhile, the federal labor board filed a brief last week in support of the union in that appeal. The brief urges the bankruptcy court judge to reverse his decision, saying it is not supported by federal labor law, according to the AP.
The board said the ruling “displaces the board’s primary authority” to handle the dispute under the National Labor Relations Act.
That prompted a response from Icahn, who issued an open letter to Taj Mahal employees saying the casino would close if the union wins the appeal. The letter said that union leaders “do not seem to care that if they win the appeal it will only mean the loss of the very jobs they are supposed to protect.”
Icahn charged that a union-run health plan for workers was a “lucrative racket” for the union.
Icahn also rejected the idea that he was fighting “against the little guy,” a sentiment expressed in a letter from workers that was hand delivered to his office in New York during a labor rally outside the offices.
“I am fighting for those employees,” Icahn said. “Fighting to save their jobs in the midst of a wholly unstable crisis. And my efforts are being mischaracterized and attacked by a union that exploits those employees for its own gain.
“The only reason the casino is still open, and the only reason you still have jobs, is because, against the advice of almost all of my advisers, I agreed to provide the Taj Mahal with as much as $20 million in additional loans,” he wrote.
When Glenn Straub bought the shuttered $2.4 billion Revel Casino in Atlantic City for just $82 million in a bankruptcy court, the Florida based real estate developer had huge plans to revamp the property which had a casino, 55,000 sq ft of retail space, a 32,000 sq foot spa, 13 restaurants and close to 7,000 parking spaces.
Straub acquired the bankrupt casino back in August 2015 and had plans to open the casino as soon as possible. Now 24 months later, Straub is yet to open the casino as he has faced a number of challenges from vendors and legislators in Atlantic City.
Revel Casino Ac
The real estate developer has expressed his frustration on numerous occasions with the amount of bureaucracy and red tape that he has had to go through along with the lawsuits that have prevented him from opening the Revel casino.
Straub has made more than once announcement confirming a potential opening date, only to have to cancel those plans. He also admitted that had he known it would be this difficult to re-launch operations, he would never have bought the Revel casino in the first place. Recent reports from the Atlantic County Clerk’s Office show that a sale of agreement has taken place between Straub’s company – Polo North Country Club and a Colorado based company known as Mile High Dice.
The filing read
Polo North Country Club Inc., a Florida Corporation, and Ten RE ACNJ, LLC, a New Jersey limited liability company, are parties to a Purchase and Sale Agreement, with respects to the purchase and sale of the real property at 500 and 601 Boardwalk.
The agreement shows that Straub has sold the controversial power plant and the casino property to Mile High. Bruce Deifik has been listed as the manager of Mile High. Deifik is also the founder and president of Integrated Properties Inc which was established in 1990 and engages in acquisition, development, management, disposition and leasing of commercial properties. The deal will be subjected to regulatory approval and a sale price has not yet been listed.
Straub denied entering into any sales agreement with Mile High Dice and said he never heard of such a company. He also said that anyone could make a filing and that it was probably done to cause more delays for his company.
Atlantic City Mayor Don Guardian said whoever bought the Revel Casino must look at opening quickly to create thousands of jobs for Atlantic City locals.
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