The note released late last week describes loans being made to Ocean Walk, with the purpose of buying and re-opening Revel as a casino.
“Proceeds from the proposed term loans along with $125 million of common equity will finance the acquisition of AC Ocean Walk ($200M) (formerly known as Revel Atlantic City), and provide funds for pre-opening ($56M) and renovations costs (including gaming chips, cage cash, and consumable inventories) ($68M), an interest reserve ($25M), working capital and fees and expenses of the transaction ($26M).”
Ocean Walk is (or was) owned by Glenn Straub who used it as a corporate vehicle to buy the Revel from a bankruptcy court in April 2015. He paid $82 million — a considerable discount on the $2.4 billion that was previously invested in Revel by a consortium of banks and real estate investors.
AC Ocean Walk LLC and Polo North Country Club Inc filed a notice of settlement for the sale of the property in October, but since then Straub has denied that he is selling the property.
As of Monday, Dec. 11, the PressofAtlanticCity.com failed to find any record of a sale transaction at Atlantic County Clerk’s Office.
According to Moody’s, Ocean Walk’s parent is AC Beachfront, LLC, which will be guaranteeing “the term loans and revolver.”
The deal to re-open the Revel Casino looks serious
On Tuesday, Dec. 12, the New Jersey Division of Gaming Enforcement (DGE) revealed that Bruce Deifik, who apparently now controls AC Ocean Walk LLC, as the head of Beachfront, filed for a casino licence in October, paying the non-refundable up-front $100,000 licence fee.
Deifik has so far made no public comments on the matter.
The corporate details are confusing, but the bottom line is that Moody’s has been asked to provide a credit rating for the money being used to buy the Revel, and the DGE has been asked by to provide a NJ casino licence.
That should be enough for New Jersey residents to have hope that the Revel Casino may well be re-opening early next year.
The new Revel Casino faces heavy competition
Moody’s analysis includes the statement that:
“The property is expected to slowly capture its fair share of the market given the quality of the property — (originally opened in 2012), breadth of project offerings and a revamped operating strategy aligned with the demands of patrons in the market.”
Moody’s notes that the Revel won’t be the only casino to open in 2018.
The former Trump Taj Mahal is expected to re-open in summer 2018 as The Hard Rock Casino & Hotel Atlantic City. Following a $375 million overhaul the casino aims to be a family-friendly destination.
Moody’s says that the new owners of the Revel Casino acknowledge the additional competition that will “result in above average promotional and marketing spend and slow the time it takes the property to ramp-up operations and attain its fair share.”
Good news for former casino employees and patrons
The prospect of two new casinos opening in AC in 2018 can be seen as nothing but good news for many of the former employees of the Taj Mahal and Revel who lost their jobs when their employers entered into bankruptcy.
The additional choice available to casino patrons, especially of modern refurbished establishments, will also be welcome.
However, existing casinos cannot be expected to ignore the competition. They, with the support of a public campaign, fought off plans for new casinos to be opened in North Jersey. The November 2016 referendum overwhelmingly opposed the plans, which would have added more pressure to the Atlantic City casino market.
New competition from the Hard Rock and Revel means that AC casino marketing directors have not been given much time to enjoy the victory. Frenzied defence of market share looks to be on the agenda for 2018 — players can expect even more New Jersey casino offers and upgraded facilities.