Glenn Straub said, “I don’t know any private equity firms.”
A private equity firm has offered $220 million to buy the old Revel Casino building, according to Alex Fredericks of Digital Launch. The firm, which remains anonymous for the time being, made the offer within the past 10 days.
Mr. Fredericks claims Digital Launch represents the private equity firm, which is based in New York City. Despite Fredericks’ claim, the current owner of the Revel Building says he knows nothing of the offer.
“I Don’t Know Any Private Equity Firms”
At the moment, Glenn Straub of the Florida-based Polo North owns Revel Casino, which he renamed TEN Casino. Straub says he has never talked to any equity firms about selling his property.
When asked about the offer, Glenn Straub said, “I don’t know any private equity firms.”
At face value, $220 million sounds like a good offer for Glenn Straub. He bought the Revel Building in a bankruptcy auction for $82 million in the spring of 2015. The building cost $2.4 billion to build and opened as the most opulent casino resort ever seen in Atlantic City history.
Glenn Straub’s Revel Building Costs
After he bought the casino, Glenn Straub might have invested another $40 million in the property. He engaged in lawsuits with the building’s former tenants, the electric cooperative which supplied energy to the building, and New Jersey regulators. He eventually paid $30 million to buy ACR Energy Partners, ending his lawsuit with the electric coop.
Since then, Straub has applied (and been denied) casino gaming and alcohol licenses, while seeing two expected open dates for Revel Hotel pass. He spent at least $1.5 million on yearly property taxes and presumably a bit more on other licensing fees and taxes. Currently, Glenn Straub is refusing to pay assorted fees and taxes, as he complains about regulators dragging their feet. In June 2017, a judge put a $62,000 lien on the building.
In such a situation, one can assume Glenn Straub has spent around $120 million on the Revel Building. He seems to be no closer to obtaining the casino license he needs to reopen, while his lawsuits and public complaints have antagonized New Jersey and Atlantic City officials. He stands to gain roughly $100 million in profits from the sell of Revel/TEN Casino. After taxes and fees from the sell of the property, Glenn Straub likely would have made a hefty profit off three years of aggravation.
Casino Control Commission Lawsuit
Currently, Glenn Straub is suing the New Jersey Casino Control Commission over the licensing issue. The feisty Florida real estate developer seems ready to take his chances in the court system.
Straub said of the lawsuit against the NJCCC, “If they rule in our favor, we will open the casino. If they rule against us, maybe we will have to look for someone else.”
Atlantic City Excited by Prospect
Despite Straub’s persistance, the idea of a resell has local business people excited. Jean Muchanic is the executive director of Absecon Lighthouse, a tourist attraction about 2 blocks from the Revel Building.
Reopening the casino would bring Muchanic’s attraction more drop-in business, which is why Muchanic said, “We saw it from scratch to the place that it is now. It would be amazing if it could go from nothing for the past two years to once again a thriving attraction and a fun place to visit.”
Gov. Chris Christie also said he hoped Glenn Straub would sell the property. During a June broadcast of New Jersey 101.5’s “Ask the Governor” radio show, Chris Christie said he hoped Glenn Straub sold, because he “hasn’t been able to deliver”.
The Rise and Fall of Revel Casino
The Revel Casino was a financial disaster from Day One. Morgan Stanley sold its $900 million share in the development before Revel opened its doors in April 2012. The casino underwent 2 bankruptcies in 29 months of operation and eventually closed on its second bankruptcy. Revel had a $3 million-a-month energy costs and offered a Las Vegas-style resort to working class gamblers. During its operating phase, Revel was best known for the Ray Rice domestic abuse scandal.
Though the old Revel Building seems cursed from a business standpoint, it is an architectural marvel. One architect called it the most beautiful skyscraper on the American east coast. The building stands out on the Atlantic City skyline, so it would be an asset to have the Revel Building lit and operational.
About Digital Launch
Though Glenn Straub disputes claims Alex Fredericks’ claim he represents a firm that made an offer, Digital Launch is a legitimate business. The Press of Atlantic City described Digital Launch as a development and management firm which markets “product and talent through both the hard goods and digital commerce landscape”.
The company website says the New York City-based Digital Launch handles “development strategies, brand equity, event activations, marketing campaigns, visual presence, social media influence and product development.”
Digital Launch’s former clients include Coca-Cola, Pepsi-Cola, and Geico Insurance.
