Revel Casino Cost To Build

7/28/2022 admin

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Revel Casino Sold
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Revel Casino Cost To Build

Wellington real estate developer Glenn Straub says he may quit trying to reopen a shuttered casino in Atlantic City, New Jersey, that he bought last year.

Florida developer Glenn Straub's Polo North Country Club is buying the casino, which cost $2.4 billion to build, for $82 million, or about 4 cents on the dollar. A Florida developer on Tuesday closed on a deal to buy the former Revel Casino Hotel that was built for $2.4 billion for $82 million. In this September 2014 file photo, a security guard riding a.

Straub paid $82 million for the Revel casino in Atlantic City, which cost $2.4 billion to build. Revel opened in 2012, then descended into bankruptcy twice and closed in 2014.

Straub blames the state of New Jersey for his failure, so far, to reopen Revel. In an interview, he told the Star-Ledger, “This state stinks. It just stinks. … I worked in five states. This is 10 times worse than what it would be anyplace else.”

Asked if he still would try to reopen the casino, Straub told the newspaper, “To hell with that. I’ve got other things to do. I don’t have time to be screwing around with this stuff.”

Straub earlier had pledged that at least part of the 6.2 million-square-foot Revel casino would be in operation by the middle of June.

But his company, Polo North Country Club, is still seeking city and state permits to reopen Revel, where fencing blocks entrances to the casino from Atlantic City’s oceanfront boardwalk.

Straub’s company needs site-plan approval from the Casino Reinvestment Development Authority to do construction work at Revel before reopening it.

The authority decided in an August 18 public hearing to continue the hearing to September 8, allowing Polo North more time to address potential street-traffic issues at the casino.

The authority’s decision to extend the public hearing is “unnecessary and unwarranted,” said Nick Talvacchia, an attorney representing Straub’s company.

The extension of the public hearing led Straub to tell the Star-Ledger that he may end his efforts to reopen Revel: “I’m pretty much there now.” [Star-Ledger] — Mike Seemuth

The Revel Casino in Atlantic City is certainly near the top of any list of failed casinos.

Revel Casino Sold

For starters, the $2.4 billion Revel was open for just two years (April 2012-September 2014), and suffered through two bankruptcies in that short time frame. The Revel officially closed its doors on September 2, 2014, and now, over a year later, the doors leading to the lavish property remain shuttered.

This has created yet another problem for the proverbial money pit, as the new owners, Polo North Club Inc., are refusing to pay for the proper safety upkeep of the property, resulting in fines of $1,000 per day by the city for fire code violations.

Why hasn’t the Revel reopened?

After a long court battle and rescinded bids, Revel was sold to developer Glenn Straub for pennies on the dollar, about $82 million in April of 2015, but Straub has been unable to get out of an energy deal brokered under the original ownership, which was forced upon the new owners. Whether he intends to reopen the property as a hotel and casino, or if Straub plans to repurpose the building for other uses is a moot point until he can renegotiate the energy contract — or IF he can renegotiate the contract.

This makes the burdensome energy deal perhaps the biggest misstep the Revel made under the previous owners –- and there are a lot of mistakes to choose from:

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A hotel entrance that doesn’t have direct casino access.
A hotel lobby curiously located on the 11th floor.
Making the property no smoking from the outset.
Erecting a $2.4 billion destination casino in the middle of the Great Recession.
And erecting it in Atlantic City – which is not exactly a hotspot for high rollers.

Just how big of a mistake was the power plant?

That’s quite a list, but the Revel’s decision to build its own power plant, in a somewhat ironic attempt to reduce its energy bill, cost the casino dearly. Unlike the other items listed above, there was no fix for the energy contract, and Revel would be paying it in perpetuity.

After sinking $42 million into the power plant, Revel ran out of money, couldn’t finish the project and had to finance the remainder of the power plant, which totaled another $158 million. That led to a deal with ACR Energy Partners that saw Revel not only beholden to them for the financing with a massive interest rate, but they were also forced to purchase their power from them as well.

According to reports, Revel was responsible for “construction costs with interest — 11.67 percent annually for the bonds, and 15 to 18 percent for ACR’s equity investment.” In the end the Revel was paying more than twice what it would have to power the property if it hadn’t come up with the not-so-bright idea to build its own power plant. Revel’s energy costs went from $1.25 million to just under $3 million.

Revel Casino New Name

If it wasn’t so sad for the many people involved with the project as well as for Atlantic City*, Revel’s half-decade existence of mishap after misstep would be comedy gold. Instead, Revel is a perfect example of how deep a whole you can dig when you throw good money after bad.

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*New Jersey had to bail out Revel during the initial construction phase and was supposed to receive 20% of the casinos profits for their $300 million loan. The property never turned a profit, and New Jersey basically flushed $300 million down the toilet.