The sale of the Revel will continue without delay. According to a report from the Press of Atlantic City, a federal judged has denied requests from former tenants and the casino’s former power provider to halt the sale of the casino.
Chief U.S. District Judge Jerome Simandle issued a 50-page opinion on Wednesday that put an end to an attempt to block the $95.4 million sale of the Revel to Florida real estate developer Glenn Straub. Straub was the backup bidder in the initial Revel auction and was awarded the backup bid after Brookfield Holdings failed to close on their deal.
Judge Rules City Could Be Irreparably Harmed if Straub Walks Away
The key to the judge’s ruling on Wednesday was two-fold. First, Straub made it clear that he would walk away from the deal if he did not have clear title to the property. Second, Straub was the only remaining bidder and there are no parties currently waiting in the wings to take a gamble on the casino.
Without another buyer ready to purchase the property, Judge Simandle said that the Revel would be “empty and commercially unproductive.” The risk of losing Straub as a buyer proved too great for the judge to take.
Further explaining his ruling, Judge Simandle stated, “The debtors make palpable claims that ‘a failed sale process … and subsequent liquidation of the debtors’ assets would likely leave the Revel Casino Resort vacant and unused for the foreseeable future’ —clearly frustrating the bankruptcy proceeding, particularly given the absence of any alternate purchaser waiting in the wings. The debtors further represent that (a failed sale) would result in ‘the permanent loss of approximately 4,000 jobs’ and cause ‘substantial detriment to the City of Atlantic City and the surrounding areas.'”
Ruling Gives Straub Free Title to Revive Revel
With Judge Simandle’s ruling, Straub can move forward unencumbered in his quest to revitalize the Revel. That is the primary problem that former tenants had with the sale. Several tenants fear that Straub will effectively kick them out without any recourse. IDEA Boardwalk could lose $16 million in investments in the property if their lease is terminated. They own the HQ Club and many of the property’s restaurants.
Another potential evictee would be ADR Energy Partners, Revel’s power provider. The company currently leases the land they house their power station on. Of course, the plant currently provides power to the Revel and even Simandle commented that he did not see Straub delivering an eviction notice to them. It is likely that many of the tenants affected by this decision will appeal the ruling.
Straub to Move Forward to a February 7th Closing Date
With Simandle’s ruling, Straub can now move forward toward a February 7th closing date. If he does indeed close on the property, then we get to begin the circus that is certainly to be Revel’s future. Right now, your guess is as good as ours.
Straub has already committed that he will not reopen the property as a “casino-only” resort. Instead, he has thrown out several ideas in the past that have included condominiums, a genius university, and even a massive water park.
At this point, it appears that Revel officials and the bankruptcy court will do anything they can within the law to get rid of the property. The $2 billion project never turned a profit and will ultimately go for less than 5 percent of its original cost.
A reopened Revel would employ up to 4,000 full and part-time employees, jobs that are sorely neededfollowing closures of four casinos in 2014. The only thing we can do now is sit back, hope for a quick closure, and enjoy what follows.