On the third anniversary of Revel Casino's grand opening in Atlantic City, Judge Gloria Burns approved the sell of the bankrupt casino to a Florida developer for $82 million. This was the fifth attempt by an interested buyer to purchase the casino, including the third attempt by Glenn Straub, the Florida developer and new owner of the Boardwalk property.
Revel Casino sold for $82 million, which is about 4-cents on the dollar of what it cost to build the casino ($2.4 billion). The bankruptcy judge had not approved a similar deal in March 2015, because she said she thought Revel AC could find a better deal if given more time to find a buyer.
Izek Schomof, Howard Milstein, and Carl Goldberg
At the time, Judge Burns gave Revel AC, the original owners of the casino, one week to find a buyer. At first, it appeared that Izek Schomof and a group of Los Angeles developers would become a player in the Revel Casino's drama. Later, it appeared that a group led by Howard Milstein of New York and Carl Goldberg of New Jersey would buy the casino for $88 million.
AC Energy Partners Cost Demands
The potential deal involving Milstein and Goldberg foundered on the same problem which troubled other potential deals: the energy costs from Revel Casino's sole energy provider, AC Energy Partners. AC Energy has a deal in place to be paid $3 million a month by Revel Casino's owners. That deal was too much for Brookfield Asset Management out of Toronto, which first held the right to buy Revel Casino.
The $3 million energy payments also troubled Glenn Straub and his Polo North development company. Every potential buyer argued those costs would make it hard for the eventual owner to make a profit on Revel Casino, while AC Energy said it needed the money to pay for the costs of heating and powering the massive Revel Building, considered by some to be the most impressive skyscraper on the American East Coast. When the Milstein/Goldberg group complained about the payments, though, Judge Burns showed no patience for the issue and decided to approve the sale to Glenn Straub, who had hovered at the periphery throughout the process.
Moskovitz: "Waiting for Godot"
Stuart Moskovitz, Glenn Straub's attorney, made a comical dig at the bankruptcy process, Judge Burns' hesitations to approve Polo North's ownership, and the seemingly endless stream of potential buyers (and their laws).
When asked about his group's approval to buy the casino, Moskovitz implied the process had been botched. He said, "We've spent six months where we could have been building Atlantic City. We've been waiting for Godot instead of building Atlantic City, and Godot isn't showing up, with all due respect to any attorneys representing Godot."
Wells Fargo Lost Patience
One reason for the lack of patience by Judge Gloria burns is the impatience of the financial institution bankrolling the bankruptcy process. Wells Fargo, which has spent $64 million on the bankruptcy process, had indicated it was about to stop financing the proceedings. Wells Fargo's attorney, Thomas Kreller, spoke at the latest bankruptcy proceedings about the many attempts to buy Revel Casino out from under Glenn Straub.
Kreller told the judge the bankruptcy process has been plagued by "empty, false promises to persuade your honor there's light at the end of the tunnel. Your honor: There isn't a tunnel. It's a hole. It gets deeper, and there is no light."
Revel Casino's Future
Despite Glenn Straub's six months in the spotlight, no one outside of Polo North is certain what the future of the Revel Casino holds. Straub has given a number of indications what he would like the property to be: a rail link, a stripped-down casino operation, condominiums, a hotel, and even a "genius academy" tasked with solving the world's problems.
The deal finally got done when Straub dropped his demand that the casino be sold to him "free and clear of encumbrances"--a reference to the tenant contracts which wrecked one of the potential sales. Now that the deal is complete, Straub has hinted that the Revel Casino is part of a half-billion dollar plan to revitalize Atlantic City's casino industry. When asked about his next move, Glenn Straub said, We have to get started. This is less than a month and a half from now. I can't afford to sit on $150 million."
$500 Million Casino Deal
The $150 million is in reference reconfiguring the building. According to Straub's quotes after Judge Burns' decision, Straub has a deal in place to buy several casinos or former casinos in the Atlantic City area. When completed, the deal is expected to be worth $500 million, multi-faceted deal. Suggesting he might spend as much as $800 million in Atlantic City, Straub told reporters about those casinos, "I've already bought them."
Straub also suggested that his plans for the future would be revealed this Saturday.
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