The on/off relationship between Revel Casino AC and Polo North owner Glenn Straub appears to be back on. Following a final meeting to try and salvage a deal that was all but dead this time last week, the two parties have now agreed a deal which will see Straub assume control of the shuttered casino for $82 million.
Although the exact nature of the deal hasn’t been revealed, the completion date for the deal has been set at March 31 after which time Straub will be the official owner of the Atlantic City casino.
All Hope Was Lost
At the start of February it looked as though the Florida real estate developer’s bid to purchase Revel had fallen through. Disputes over insurance policies, working hours and independent contractors. As arguments from both sides clouded the issue, a federal judge was eventually forced to bring a halt to proceedings. With Straub unable to meet the takeover deadline, Revel was left without a buyer, but with the $10 million deposit the business tycoon had paid to secure a future transaction.
When news of the breakdown filtered through the gaming industry it was seen as the death knell for the beleaguered casino and hotel. Since opening two years ago the $2.4 billion property has failed to translate its wealth of facilities into a profitable enterprise. Bankruptcy soon followed and that led to a bidding war between Straub and Brookfield Holdings US.
Although the latter eventually won that battle with a bid of $110 million, it was Straub who eventually won the war after Brookfield backed out of the deal at the last minute. This turn of events allowed Straub’s Polo North back into the frame and that’s when the fun began. Willing to pay $96 million for the venue, Straub was set to shake things up with a host of changes. However, backlash for Revel’s workers’ union, coupled with resistance from the existing owners lead to a drawn out takeover process.
New Lease of Life for Atlantic City
Things looked to be in jeopardy when the deal was declared dead last week; however, it now looks as though things have been saved. A boardroom deal has not only given Straub the green light to take charge of the casino, but get it for a reduced price. Quite why the price tag has been reduced is unclear. Although it may take into account the deposit already paid by Straub, it could also indicate that real estate investor has promised to invest heavily into the venue make it the premier entertainment in Atlantic City.
“Clearly, with two bankruptcy filings in less than two years, the Revel Hotel & Casino is in need of innovative management,” Straub said in a statement.
In addition to switching up the structure of the business, Straub’s first mission will be to improve Revel’s look. With $50 million initially set aside for improvements, Straub’s team will begin work on the hotel’s lobby, exterior and health spa in the coming months. Beyond this, Straub has stated that he’s interested in developing the venue’s conference facilities and may even build a third tower that will be used as a think tank and research facility.
This news came as a huge blow not only for Revel and Straub but Atlantic City as a whole. At the close of 2014, Straub had pledged revive Revel with a series of ambitious plans which included the construction of a new conference facility and international think-tank.
“Polo North and its affiliates, all debt-free for more than 20 years, will not be stopped in its goal of helping to turn around Atlantic City by the associated delays when dealing with lenders or government bonds. The three-year plan for vertical integration of quality of life and sports will help change the image of Atlantic City from a predominately gaming destination back to a world renowned resort town,” Straub explained.
Future Plans for New Jersey Gaming Economy
Beyond his desire to turn Revel into a profitable business, Straub has indicated that he’s willing to invest up to $500 million into Atlantic City as a whole. Harking back to his childhood memories of the coastal destination, Straub was to upgrade various areas of the city and transform it into the family entertainment hub of America.
Naturally, this is a long term vision for AC, but it will certainly inspire confidence from the city’s officials and residents. Coming off the back of a tough 2014, Atlantic City is looking to bounce back in 2015 and the investment of Straub could be just what it needs to succeed.
Although the online casino industry has posted positive results since December thanks to sites such as CaesarsCasino raking in a few million dollars, more is needed to really help the city’s economy. The investment of Straub will certainly come at a good time for AC and may well be seen as a major turning point in its history in the next few years.