The New York investment group offered Straub $225 million for the shuttered TEN Casino (formerly Revel). Rather, it said it did. Straub denies any knowledge of the group attempting to buy the New Jersey casino.
Now a new report from Press of Atlantic City suggests the firm is looking elsewhere. Not too far elsewhere, though. The new lot the group is eyeing is TEN’s next-door neighbor.
Keating has development rights for beachfront plot
Per Press of Atlantic City, the group obtained the development rights for Metropolitan at Revel Beach. Back before Revel closed its doors, the area was zoned for a 30-story condominium complex. The plan was to build a tower with 124 condo units adjacent to what was supposed to be the town’s hot new casino.
In addition to condominiums, the plot can also be used for retail spaces. It has the potential for both beach and Boardwalk access. The valuation of the plot is $8 million.
As part of the deal, Keating now has the exclusive right to buy the property in full from the current land owner, Lazocean LP.
“We see such a bright future for this end of the Boardwalk,”said Jeffery Keating, co-chairman of Keating and Associates. “There are some really exciting days ahead, and we feel really blessed to be a part of the future of Atlantic City.”
The group already hopes to change the original plans for the lot. It hopes to meet with city officials soon and obtain permission to expand the project to a 40- or 50-story tower.
Firm seemed dead set on buying a casino in New Jersey
Before news of this deal broke, Keating’s name popped up in a neighboring state. Just last month the firm issued a statement claiming it was evaluating Sands Bethlehem Casino in Pennsylvania for purchase. Sands representatives denied any sale. The property was in the news earlier this year when a potential sale to MGM Resorts fell apart.
The question for Keating now is whether this tower is going to become another casino or if the firm still aims to acquire TEN.
The market in Atlantic City is very different than when Revel closed. Several struggling casinos closed their doors, resulting in a bounce back for the city. However, many in the business fear the new projects on the docket like Hard Rock, TEN, and a project from Borgata and Caesars would oversaturate the market.
Should Keating throw their casino in the ring, that makes four new casinos after five shuttered over the past four years.
And where is Glenn Straub in all of this?
Meanwhile, Straub continues to deny anything is going on at or around his property. Last week he dismissed a story claiming a Colorado firm filed paperwork to purchase the property. Once again, he even denied knowing who they were.
Straub is an outspoken character who does not seem to take much care with his words. However, given these latest developments, it is worth thinking about why he would continue to deny any sort of sale rumors.
Given Straub’s refusal to obtain a gambling license and limited casino experience, it certainly seems like this is the casino version of real estate flipping. Buy a property at rock-bottom price, wait for the Atlantic City economy to turn around, then sell for a profit.
As of now, Straub spends seven figures a month on upkeep of the closed property. The $225 million offer from Keating might not be rich enough of a profit for him, however.
Straub purchased Revel in 2015 for $85 million. The cost of building the casino came in at $2.4 billion. That is a steep discount, but factoring in nearly three years of upkeep cost, the profit margin is rather thin, especially compared to the casinos initial value.
He could be waiting for a better offer, but he better take care. The window for people wanting to get back in to Atlantic City might start closing once this competing casinos open their doors back up. And if he intends to open a casino after all? Well, he is about to get some new competition next door.
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