Revel Casino was supposed to be a game-changer for
Atlantic City.
The high-end mega-property with $2.4 billion price tag aimed to change the way Atlantic City did business by cultivating an elite clientele, offering top-of-the-line entertainment and amenities, and employing a business plan not unlike the boutique casinos of Las Vegas.
Before the project even opened, it was plagued with problems. The casino economy in New Jersey tanked, the construction was rife with injuries and lawsuits, and the state had to intervene financially to the tune of $261 million just to get Revel in operating shape.
From there, things only seemed to get worse. After three quarters of eight-figure losses, the property filed for bankruptcy, then filed again before closing in September of 2014.
The story of Revel did not end there. After a complicated legal battle, Glenn Straub purchased the property for pennies on the dollar and proclaimed lofty plans for the premises. Legal red tape and political and business in-fighting kept those plans sidelined for over a year.
In 2017, the red tape continued to pile up. As Straub tells it, this is all the fault of Atlantic City bureaucracy, but by year’s end, Straub’s word would come to mean very little. With expenses and sale rumors piling up, Straub denied the property would change hands, but in January of 2018 he finally let go of his many dreams for what Revel could have been.
Instead, another group will reopen Revel, not as TEN, but as the much-less-memorable Ocean Resort Casino. There is a chance the casino’s future will be much brighter than the dull new name. However, it will be tough to overcome this building’s troubled past.
With that in mind, it is a good time to take a look back from the very beginning to now to see how this billion-dollar dream turned into a nightmare for the Garden State (to start from the very beginning, scroll to the bottom and read up):
January 2018: TEN is dead, long live Ocean Resort Casino
After weeks of denials and inconclusive evidence, finally a release came out announcing a changing of the guard in early January. Of course, it was not Straub who authored the release. Instead, it was the new ownership, which goes by AC Ocean Walk.
It is unclear exactly who is part of the company. The public face of the company is Bruce Deifik, its chairman. While Deifik was happy to chat about the new venture, Straub remained atypically silent.
Deifik announced via release that the company plans to spend $175 million in remodeling and repairs on the property. Then it will ideally open this summer, right around the time the Hard Rock AC opens its doors.
Unlike Straub, AC Ocean Walk is keen to launch gambling at the grand opening. It is even already in the process of obtaining a gaming license. Once open, Ocean Resort will feature 138,000 square feet of gaming space. In anticipation of a favorable US Supreme Court decision in the NJ sports betting case, there are also plans for a brick-and-mortar sports book on property.
Additionally, GAN, the company behind TEN’s social casino, will be powering a real-money online casino offering bearing the Ocean Resort name. GAN currently operates Betfair’s real money software, so it will ideally be easily vetted by gaming officials.
The aim is to launch sometime in H1 of 2018. If they succeed, they may not beat Hard Rock to the Atlantic City opening day, but it will certainly beat the other new kid on the Boardwalk to the online punch.
Late 2017: The sale rumors start
As the year went on, the promise of more opening day deadlines stopped. In their place were rumor after rumor about who was going to buy the former Revel casino.
The first rumor came in July, when a New York-based firm claimed it made a $220 million offer to buy the property. Straub once again claimed there was no such offer on the table.
In September the firm, called Keating and Associates, resurfaced in the news, sweetening the pot by offering $225 million. Now, while the casino cost over $1 billion to build, Straub only paid $85 million to buy it. So, while the number may seem like a pittance, it was actually a pretty reasonable offer considering how little Straub comparatively put into the operation.
Straub denied again, so Keating took its money elsewhere. Not too far elsewhere though. The group elected to purchase the property next door. The lot was originally designed to be a complementary high rise complex to go with Revel, called Revel Beach. In November, Keating bought the development rights, and plan to build a high rise with condos and retail.
Meanwhile, the sales rumors for Revel continued, except they started to hold a little more weight. Thanks to a paper trail, the Press of Atlantic City uncovered a sale agreement from a Denver-based firm in early October. Despite the paperwork, Straub still insisted he had not sold the property. However, he started to indicate he could be bought for the right price, which is a definite change of heart from his previous tunes.
In November, more paperwork surfaced, making a sale to the Denver company seem all the more certain. Still Straub said no. While he opened the door for anyone who wanted to show up with a checkbook to make an offer, he insisted he had not accepted any offer as of yet.
Which brings us to year’s end. It seems the sale is all but a done deal. If true, the casino could open for the first time in nearly four years this summer. What remains to be seen is if and when Glenn Straub will acknowledge his tumultuous relationship with TEN is finally over.
June 2017: TEN does not open
June 15 was not a day for celebration. There was no new casino on the Boardwalk as promised. Instead, the state put a lien on the property after Straub failed to pay proper taxes. With over $1 million in maintenance going into the property every month and legal fees piling up, it sure seemed like now was the time for Straub to sell.
Spring 2017: Another promise, even more skeptics
Even though Straub claimed the casino was 24 hours from opening, the property sat virtually untouched throughout the spring. With no observable progress, the number of vocal critics of TEN started to grow in number and celebrity.
Gov. Chris Christie went so far as to use his New Jersey radio show to harshly tell Straub to get out of the casino business and sell immediately.
Rather than heed Christie’s advice, Straub elected to announce a new opening date instead. He confidently said TEN would open on June 15.
March 2017: No real TEN, but virtual TEN goes live
The TEN property stayed shuttered while Straub continued to pile up permit problems. In typical Straub fashion, the blame rested entirely with the city, not with the TEN staff.
Interestingly enough, Straub allegedly had the chance at an out. Before Hard Rock elected to buy Taj Mahal, the group allegedly looked at TEN. In a move that become signature Straub by the end of 2017, he denied that there were ever any real discussions about selling the property.
This time around, one thing did seem to back up Straub’s insistance he was moving forward with TEN. The company, despite having no brick and mortar presence in New Jersey, launched an online casino.
Granted, this casino was only a social one, but the framework did seem to indicate TEN was trying to become a player in the real-money online casino space.
Feb. 2017: In a surprise to no one, TEN does not open on schedule
From the beginning, the President’s Day Weekend opening date was a lofty goal. However, Straub and company did not even come close to meeting it. In fact, local officials claimed to send the casino the proper paperwork to get permits in order, but said no one ever sent anything back.
Meanwhile, even though it was obvious the casino would not be opening, the casino did not announce any change in plans. Feb 20 came and went with no fanfare and, more importantly, no new casino.
In the aftermath, Straub told a much different story than the helpful department heads. He claimed bureaucracy in Atlantic City stopped the site’s progress. He went on to say were it not for a lack of liquor licenses, the property would have opened. While he was ready to open without a casino, he decided against opening a casino with no liquor. Straub said once he got the licenses, TEN could open in just 24 hours.
Jan. 2017: Despite delays, Straub announces Feb. 20 opening
Unsurprisingly, the battle between Atlantic City lawmakers and Straub continued into the new year. The latest hearing to discuss opening TEN was delayed after Straub’s legal team filed paperwork hours before the start of a scheduled meeting.
At the meeting, Straub spoke with the press and assured the hotel would be opening without a casino component on Feb. 20, delay be damned.
2016: Out with Revel, in with TEN
In February of 2016, the lights atop the property were on for the first time since closing. Despite being closed for 18 months, the property remained in decent shape. Straub continued to suggest a summer opening was imminent.
The summer came and went with no developments. Feuds over permits continued to delay developments.
In September, Straub revealed a new name for the property: TEN. Straub cited Bo Derek as inspiration for the new moniker. Straub was still lacking the certificate of occupancy necessary to officially open.
TEN earned a temporary certificate in October.
2015: Straub and Revel finally finalize deal
Straub and Revel began court proceedings to finalize the sale at the start of the year. Continued legal disputes and ongoing negotiations about the power plant supporting Revel delayed the official sale several months.
In April, the sale was finalized with a price tag of $82 million. Straub renamed the property Polo North and assured it would reopen by the summer. It was unclear exactly what the property would be, however.
Straub offered several possibilities for the site, including an equestrian center, ropes course, academic institution for geniuses, water park, medical tourism facility and think tank. He and the company claimed local government and bureaucracy were slowing down efforts to reopen the property.
2014: Revel files for bankruptcy again
The changes in day-to-day operations did little to turn things around for Revel. By the second quarter, the casino had lost another $60 million. In June the company filed for a second bankruptcy and warned that closure might be on the horizon.
The company obtained a $125 million loan, but still filed for bankruptcy protection.
“We will work to reach an agreement with a new owner who will help ensure Revel’s long-term financial stability and who shares our commitment to providing Revel’s guests and players an exceptional experience in lodging, gaming, entertainment and recreation,” CEO Scott Kreeger told the New York Times.
Revel repeatedly ran into trouble finalizing a sale for even a fraction of the initial cost of the property. As a result, the property closed on Sep. 2, just one week before video surfaced of NFL running back Ray Rice assaulting his wife in a Revel elevator earlier in the year.
The next month, Revel declared Toronto-based Brookfield Holdings as the winning bidder at auction with its $110 million offer. Glenn Straub, the second-highest bidder, challenged the sale. Straub declared the auction was unfair and improper.
Straub filed an appeal that ended up not being necessary. A dispute over a power plant led to Revel and Brookfield terminating the sale.
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2013: Revel files for bankruptcy
The new year was the same tune for Revel. In the first quarter, the property lost $40 million. Critics of DeSanctis pointed out the biggest issue was the New Jersey casino was not successful getting people to gamble.
As a result, the casino filed for Chapter 11 in February. The choice was necessary after Standard & Poor’s downgraded Revel’s credit rating to a ‘D’ after the company failed to show signs the casino could ever recoup its substantial costs.
Gov. Christie tried to remain positive about the news. Said Christie, according to Press of Atlantic City:
“They could close Revel down if they wanted to. If they thought that there was no future there, they could close Revel down. Instead, they’re taking debt that they’re owed legally and turning it into ownership. That’s an investment by these folks in that hotel.”
Initial rumors suggested the company was looking for an existing Atlantic City operator to purchase the casino. The problem was the price tag. A similar Vegas property, the Cosmopolitan, was valued at $500 million. Revel was supposedly touting a $700 million price.
As part of the Chapter 11 proceedings, the casino was valued at $450 million. The company’s debt was consolidated to $272 million.
DeSanctis was pushed out and Jeffrey Hartmann took over as interim CEO. Revel slashed hotel room rates, added a smoking section, and took a more welcoming approach to the typical Atlantic City slots-playing clientele.
2012: Revel opens its doors
It was a positive start to the year for Revel. Construction wrapped and goodwill was at an all-time high for the $2.4 billion project. The creation of 10,000 new jobs was a cause to celebrate, especially for Christie.
“The completion of Revel and its opening is a turning point for Atlantic City and a clear sign that people once again have faith in the City’s ability to come back and be successful,” Christie said in an official press release about Revel’s impending opening.
Projections for Revel forecasted $153 million in payroll and $155 million annually in taxes for the Garden State.
The property’s soft open was peppered with extravagant events like a Beyonce concert attended by then-First Lady Michelle Obama. Beyonce returned for the official Memorial Day weekend festivities. The high-end approach of Revel drew the attention of many in the casino industry.
The finished property featured 130,000 square feet of gaming space, 55,000 square feet of retail space, 1,400 hotel rooms (at a base rate of $239/night), high-end restaurants, a private beach, and a schedule of top-tier entertainers frequenting the site’s two night clubs and state-of-the-art performance venue.
Despite the long list of amenities and hopes the high-end feel of Revel would draw customers who were not making the trip to the Jersey Shore, the casino immediately started losing money. In its first quarter, the property lost $37 million while every other casino in town saw profits grow.
2011: Christie rescues, construction wrecks
Early in the year, Gov. Christie incentivized Revel construction with $261 million in state tax dollars. The governmental support for the half-constructed casino drew a fair amount of criticism at the time and even more after the property failed.
The number of accidents and issues during Revel’s construction did not help the project’s cause. There were multiple injuries during construction. When finishing construction was going on in September of 2011, lightning struck three workers, killing one. A couple of weeks later, a worker landed in the hospital after falling off a ladder.
Financial and legal woes continued as well. At least a dozen contractors sued over unpaid work. Jokes and whispers swirled that this troubled property was cursed.
2010: Morgan Stanley pulls the plug
After investing over $1.2 billion in the project, Morgan Stanley pulled the plug after the Atlantic City economy tanked. In 2006, the city was taking in $5.6 billion in revenue. By 2009, that number was down to under $4 billion and revenue was the lowest the city had seen since 1997.
Morgan Stanley decided to end its involvement in the project and cut its losses. In the company’s first quarter earnings report, Morgan Stanley said it was taking a loss of $932 million on the project and divesting.
DeSanctis was not ready to throw in the towel, however. He appealed to a number of investors. Several firms made small investments. The biggest savior, though, would be new New Jersey Gov. Chris Christie.
2006: DeSanctis has a dream
The plans for Revel Atlantic City started to come together over 25 years ago, but really gelled when Morgan Stanley purchased $70 million in Atlantic City property in 2006. The bank then put state trooper turned gambling official turned casino executive Kevin DeSanctis in charge of developing a new casino.
Prior to taking on his role with Revel, DeSanctis was best known for running Trump National and working with Steve Wynn.
Image by anjan58 / CC BY-NC-ND
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