Revel Casino’s Sale Price Is $82 Million, But Straub Also Paid a $10 Million Deposit
Glenn Straub and Revel AC recently announced an $82 million deal for Straub to buy the Revel Casino. The bargain came after months of negotiations and lawsuits, in which both parties complained of the other side’s tactics.
After a deal fell through a few weeks ago that would have allowed Straub to purchase the casino resort for $94.5 million, Straub’s lawyer even claimed the property might be worth only $40 million in a subsequent auction. Now Straub and Polo North are set to buy the Revel Casino on March 31, with a couple of million dollars discount for his troubles (Revel AC pocketed a $10 million deposit when it canceled the original contract).
In an interview with Bloomberg this week, the elusive Glenn Straub gave clues about the future of Revel Casino. The property is going to be in a much different field than the gambling industry.
Life-Extension Science and Eduction
According to Bloomberg, the Revel building will reopen with a focus on “life-extension science and education”. Straub told Christopher Palmeri and Dawn McCarty in a phone interview that he takes vitamins daily and uses periodic anti-aging treatments to maintain his health. The 68-year old Florida developer also plays polo, the sport of kings, each week. Presumably, he plays at the Polo Golf & Country Club.
Glenn Straub says he wants to reopen the casino, but he wants to use extra space at the Revel Casino to open a wellness spa. Straub says he got the idea while bidding on the Canyon Ranch spa in Miami Beach last year. Though he did not win the auction, he decided early on that a spa and treatment center would transfer well to the Revel Casino property.
Straub’s Plans Finally Revealed
Over the months, Glenn Straub was canny about his intentions. Early on, he suggested he would use the casino as a rail link terminal. Later, he told reporters he would build a 35-story additional tower and house a “school for geniuses” in it. That school would have a think tank that would contemplate social issues, such as the proliferation of nuclear weapons. It’s still uncertain if those were legitimate ideas that were discarded at a point, or whether Straub made those suggestions to throw rivals off the trail of his current plans.
Either way, Revel Casino is now owned by Polo North, opening the latest phase in the troubled casino’s history. Revel Casino was built for $2.4 billion. When it opened in April 2012, the resort was expected to be a Vegas-style integrated gaming center. Instead, it went through two bankruptcies in a 29-month period and eventually closed in Septemeber 2014. The biggest event which took place there was the night Ray Rice and his then-fiance, Janay Palmer, got into an altercation on the Revel elevator.
Revel Casino’s Torturous Bankruptcy
It sometimes has been a torturous struggle for Glenn Straub to end up owning the Revel Casino. The Revel Building was built at a cost of $2.4 billion, but the JP Morgan company walked away after spending over $900 million on the project. When the casino opened, it struggled from Day 1. Revel AC spent too much on energy costs ($3 million a month) and had trouble drawing working-class gamblers to the Las Vegas-style opulence of the resort. Over 29 months of operation, the casino went through 2 bankruptcies. The second bankruptcy forced Revel Casino to close in September 2014.
In October 2014, bidding opened on Revel Casino through a bankruptcy court. Glenn Straub made a $90 million bid on the casino and, for a time, he appeared to be the only interested buyer. When it came time for a bankruptcy auction, Brookfield Asset Management out of Toronto entered the bidding. Brookfield won the bidding with a $110 million bid, while Straub’s Polo North upped its bid to $94.5 million. When Brookfield won the bidding, Straub walked off with $3 million as the disappointed stalking horse bidder.
In November 2014, Brookfield faced the same troubles Revel AC did: it could not renegotiate the energy costs for the casino. Faces an obstinate refusal by AC Energy Partners to come down from its $3 million asking price, Brookfield voided its purchase of the Revel Casino and paid the $11 million deposit to end the process. Glenn Straub was suddenly the only interested buyer once more.
Polo North vs Revel AC
Straub was not happy, though, because he said that Brookfield Asset Management’s interference had forced him to bid several million dollars higher. Since they pulled out of the process, he sued to have the judge lower the purchase price of the casino, down to $87 million–the original $90 million price minus the $3 million he pocketed after the lost auction.
The judge refused that request, so Straub appealed the decision. Meanwhile, he had trouble renegotiating the energy costs with AC Energy Partners, while he also sued to have the contracts with tenants torn up. In frustration at the delays, Revel AC (owners of the casino) voided the second purchase and collected Straub’s $10 million deposit.
Just as the casino appeared to have no potential owner in sight, though, Straub and Revel AC finally came to an accommodation today. In the end, Revel Casino sold for $82 million.
