Revel Casino Cost $2.4 Billion to Build, But Will Be Sold at Auction for a Fraction of That Price
Revel Casino has six potential buyers, according to Mayor Don Guardian of Atlantic City. The casino goes up for sale at a bankruptcy auction next month. Previously, the owners of Revel Casino had said they would close the doors of the casino on August 18, if no buyer was found by that date.
Showboat and Trump Plaza Closing
Recently, Caesars Entertainment announced it would close the doors of the Showboat, which brings the number of active casinos in the city to 10. Trump Plaza also announced recently that it would close on or around September 1, which would reduce the number to 9. If Revel Casino closed, the number of closings would be half-as-many as the gaming establishments remaining at all.
Because such a rash of closings would be a disaster for the city, New Jersey state legislators have discussed legislation which would force the casinos to stay open another four months. If such a new law was passed, the window of time would give those establishments a chance to find new ownership.
Mayor Guardian said that the city is going through difficult times at the moment, but he is confident that the casino industry is still feasible and potential investors will see the same thing. Guardian said, “No, I’m not happy that three casinos are closing, but I know that behind closed doors there are a half-dozen companies looking at the opportunity to purchase Revel.”
Revel Casino Has Buyer Interest
Revel Casino is the newest casino in Atlantic City, having only been opened in 2012. The development cost $2.4 billion to build, so it is the most lavish casino operation in town. Any purchaser is likely to buy the Revel Casino at a “buy low” price, so demand for the gaming property remains high.
Guardian stated that the Showboat has potential buyers, though he conceded he knew of no one interested in buying Trump Plaza. It is possible both casinos might be required to entertain offers for longer than they had hoped, if state lawmakers have their way.
Guardian Meets with Sweeney and Whelan
Don Guardian met this week with New Jersey Senate President Steve Sweeney and State Senator James Whelan. Both men are vocal supporters of a proposed amendment that would allow developers to build a casino in North Jersey. The senators were in the city to seek Atlantic City’s support for such a proposal.
Normally, Atlantic City would be dead-set against such a development, as the casino would tend to cannibalize customers from New York City and Philadelphia (and North Jersey). Studies show that the much of the problem with Atlantic City’s revenue drop-off comes from the decline in visitors from those areas. Under the circumstances, having a casino in that part of the state might make sense for New Jersey.
The idea might make sense for Atlantic City, too, if Steve Sweeney has his way. Sweeney is proposing a tax plan that would take the north Jersey casino at a higher rate than the Atlantic City resorts. Over a ten year period, over $1 billion of that tax revenue would be earmarked for development in Atlantic City. The new casino would help pay for a transition of New Jersey’s traditional casino capital into a non-gambling tourist destination.
Atlantic Club’s Deed
Also, Don Guardian announced that members of his administration had been in discussions with the current owners (TJM Properties) of the Atlantic Club about selling to a new buyer. The Atlantic Club was closed by co-owners Caesars Entertainment and Tropicana in January 2014. Caesars sold the building to TJM Properties, a Florida company, which has plans to open it as a non-casino hotel.
The deed states that a new casino cannot be placed on the grounds of the Atlantic Club. New Jersey politicians have challenged that decision, while saying they might block any new purchases by Caesars, if they became interested in a new casino property.
Don Guardian said, “We’re meeting with TJM about a potential new buyer for that property.”
Speculation has swirled around the idea Richard Stockton College of New Jersey might buy the property. Richard Stockton College is seeking a location in Atlantic City for a new campus, but the college released a statement saying that a location has not been decided upon.
