A Canadian asset management company has won a bankruptcy court auction for Atlantic City’s Revel casino hotel, bidding US$110 million for a resort that cost $2.4 billion to build and confirming plans to reopen it as a casino.
Toronto-based Brookfield US Holdings, owners of the Hard Rock casino in Las Vegas and the Bahamas’ Atlantis Paradise Island, beat out Florida developer Glenn Straub’s $95 million bid and is waiting for approval from the federal judge overseeing Revel’s reorganization. The judge’s decision is expected next week.
“These are the first people that realized what I’ve been saying about Atlantic City turning the corner and being a great investment due to the low prices,” Mayor Don Guardian told The Associated Press. “We’ve had a lot of bad news. This is certainly some good news.”
Revel, which has been in two court-supervised reorganizations since opening in April 2012, was one of four Atlantic City casinos to go out of business this year as the troubled seaside gambling hub reels from regional competition and the lingering effects of the recession. A fifth casino, Trump Taj Mahal, looks headed for closure in November, and it’s reported that Bally’s Atlantic City and Caesars Atlantic City face an uncertain future amid the complicated asset shifts and negotiations with bondholders accompanying debt-laden owner Caesars Entertainment’s attempt to avoid entering the protection of US Bankruptcy Court. To cut costs and try to thin the competition, Caesars shuttered a profitable Atlantic City casino, the Showboat, in August.
However, there are questions surrounding Brookfield’s financial status as well after the company told securities regulators in August that it was unable to make an interest payment due that month on the Hard Rock’s nearly $1 billion of debt. A spokesman said ongoing negotiations with the Hard Rock’s lenders would not affect its ability to complete the Revel purchase.
Mr Straub and his company, North Polo Country Club, are waiting in the wings in case the deal falls through. The designated backup bidder, he has challenged Brookfield’s winning bid, claiming the process was conducted in secret and lacked transparency. “We have to decide whether we’re going to fight it in court, whether to try to top [Brookfield’s bid], or something else,” an attorney representing him said.
Mr Straub has spoken of plans to convert the property into a think tank dedicated to tackling global problems. He has said retaining a casino also is an option.
