Judge OKs sale of Revel casino to Florida developer for $82M
04/03/2015
CAMDEN, N.J.
CAMDEN, N.J.
Three years to the day after Atlantic City's $2.4 billion Revel casino opened — and seven months to the day after it closed — a bankruptcy court judge approved its sale to a Florida developer for about 4 cents on the dollar.
Judge Gloria Burns approved the $82 million deal, which did not address the rights of former business tenants at the casino to operate there when it reopens. The approval Thursday came after Glenn Straub's Polo North Country Club agreed to drop its demand that the sale go through "free and clear of encumbrances" like the tenants' leases — an issue that had helped scuttle several prior attempts to sell the casino. Burns said the issue of whether tenants can remain there should be worked out with Straub outside of bankruptcy court.
"We have to get started," Straub said. "This is less than a month and a half from now."
Referring to an estimated investment in reconfiguring the building, Straub said, "I can't afford to sit on $150 million."
Straub said after the hearing he has reached a deal to buy several casinos or former casinos in Atlantic City as part of a $500 million, multi-faceted deal. He said details would be revealed on Saturday, but added, "I've already bought them."
Attorneys for Revel and Straub said they planned to close the Revel sale on Friday, but Burns said they'd have to wait until Monday after late arguments prevented her from signing and entering an official order.
Burns' approval was the second she made this year for Straub. An earlier $95.4 million sale she approved in January fell apart after an appeals court blocked part of it.
Thursday's approval came on the fifth attempt to sell Revel, and it occurred despite last-minute entreaties from would-be bidders for more time to put together a better deal than Straub's. They included a group led by Howard Milstein of New York and Carl Goldberg of New Jersey that offered $88 million but acknowledged it was unable to reach a deal for energy services with the power plant that is Revel's sole source of heat, air conditioning, water and electricity. The judge and attorneys for Straub, Revel and lender Wells Fargo had little patience for such requests.
"We've spent six months where we could have been building Atlantic City," said Straub's attorney, Stuart Moskovitz. "We've been waiting for Godot instead of building Atlantic City, and Godot isn't showing up, with all due respect to any attorneys representing Godot."
Wells Fargo has spent more than $64 million on Revel's bankruptcy case and says it is done writing checks. Attorney Thomas Kreller told the judge the case has been beset by "empty, false promises to persuade your honor there's light at the end of the tunnel. Your honor: There isn't a tunnel. It's a hole. It gets deeper, and there is no light."
Straub has proposed a vast array of uses for the property, including a scaled-down casino, hotel, condos, a water park and a "genius academy" where the world's top minds would tackle society's biggest problems.
Revel opened on April 2, 2012, and was seen by many in Atlantic City as a game-changer, a catalyst to reverse years of declining casino revenue and decreasing jobs. But its focus on high-income luxury guests and leisure travelers never caught on sufficiently, and mom-and-pop gamblers felt unwelcome there. It filed for bankruptcy twice and shut down on Sept. 2, never turning a profit.
http://www.thestate.com/news/business/national-business/article17204621.html
Judge Gloria Burns approved the $82 million deal, which did not address the rights of former business tenants at the casino to operate there when it reopens. The approval Thursday came after Glenn Straub's Polo North Country Club agreed to drop its demand that the sale go through "free and clear of encumbrances" like the tenants' leases — an issue that had helped scuttle several prior attempts to sell the casino. Burns said the issue of whether tenants can remain there should be worked out with Straub outside of bankruptcy court.
"We have to get started," Straub said. "This is less than a month and a half from now."
Referring to an estimated investment in reconfiguring the building, Straub said, "I can't afford to sit on $150 million."
Attorneys for Revel and Straub said they planned to close the Revel sale on Friday, but Burns said they'd have to wait until Monday after late arguments prevented her from signing and entering an official order.
Burns' approval was the second she made this year for Straub. An earlier $95.4 million sale she approved in January fell apart after an appeals court blocked part of it.
Thursday's approval came on the fifth attempt to sell Revel, and it occurred despite last-minute entreaties from would-be bidders for more time to put together a better deal than Straub's. They included a group led by Howard Milstein of New York and Carl Goldberg of New Jersey that offered $88 million but acknowledged it was unable to reach a deal for energy services with the power plant that is Revel's sole source of heat, air conditioning, water and electricity. The judge and attorneys for Straub, Revel and lender Wells Fargo had little patience for such requests.
"We've spent six months where we could have been building Atlantic City," said Straub's attorney, Stuart Moskovitz. "We've been waiting for Godot instead of building Atlantic City, and Godot isn't showing up, with all due respect to any attorneys representing Godot."
Straub has proposed a vast array of uses for the property, including a scaled-down casino, hotel, condos, a water park and a "genius academy" where the world's top minds would tackle society's biggest problems.
Revel opened on April 2, 2012, and was seen by many in Atlantic City as a game-changer, a catalyst to reverse years of declining casino revenue and decreasing jobs. But its focus on high-income luxury guests and leisure travelers never caught on sufficiently, and mom-and-pop gamblers felt unwelcome there. It filed for bankruptcy twice and shut down on Sept. 2, never turning a profit.
http://www.thestate.com/news/business/national-business/article17204621.html
Casino workers, students blast Icahn
He has cut worker benefits. Showboat plan in doubt.
ATLANTIC CITY - Carl Icahn has done battle with corporate boards, company executives, and rival investors, yet some of the most intense flak he has ever received is coming from casino workers and college students who see him as the hand holding back this struggling seaside gambling resort.
Icahn is taking over Trump Entertainment Resorts, and with it the struggling Trump Taj Mahal Casino Resort. Even before the deal closes, it has brought numerous headaches as well as public protests over the company's elimination of health insurance and pensions for workers.
College students and union members protested Thursday over Trump Entertainment's move to block the former Showboat Casino Hotel - its next-door neighbor - from being converted into a campus for Stockton University. The proposed reuse of a shuttered casino represented one of the only bits of good news Atlantic City has had in the last year or so, during which four of its 12 casinos, including the still-profitable Showboat, were shut down.
Trump Entertainment has said it does not want a college campus next to the Taj Mahal, fearing students under the legal age of 21 would sneak in to gamble and drink, exposing the casino to costly fines. But many students questioned that assertion.
"I want Carl Icahn to know what he's doing is wrong," said Shannon Herbst, a senior. "He thinks this is a game, and it's not. It's my education, and my future."
After a meeting with school trustees Wednesday night, university president Herman Saatkamp said the prospects of converting the Showboat into a campus were "looking positive." He would not elaborate. Icahn, who also owns Atlantic City's Tropicana Casino and Resort, has been locked in a fight with the main casino workers' union, Unite Here Local 54, over benefit cuts and work-rule changes at the bankrupt Taj Mahal. Though he does not yet own it, he has been lending it money to keep it open. He said this week he is not involved in Trump Entertainment's decisions. Local 54 derided that assertion. At issue is a 1988 legal covenant among the Taj Mahal, Showboat, and Resorts casinos requiring that the Showboat never be used as anything other than "a first-class casino resort." Caesars Entertainment closed the Showboat on Aug. 31, and Stockton bought it in December, announcing plans to convert it into a long-sought Atlantic City satellite campus. Trump Entertainment has said Stockton knew of the covenant when it bought the building. Saatkamp acknowledged there was a covenant but said the university was "led to believe" the matter had been resolved between Trump Entertainment and Caesars. Stockton officials said last month that if the impasse cannot be resolved soon, they will move to quickly sell the property. Florida developer Glenn Straub, whose purchase of the Revel Hotel Casino was approved in bankruptcy court Thursday, said he is acquiring several casinos or former casinos in Atlantic City as part of a $500 million multifaceted development. His attorney, Stuart Moskovitz, said the Showboat is part of that purchase deal. Straub's plan for it, including whether he would allow it to be used as a college campus, remained unknown. "I've never had someone try to stop me from pursuing an education," said sophomore Kendal Lambert. "For a billionaire to say no to this is totally unacceptable." "I feel robbed," added Brian Moore, a freshman studying hospitality and tourism management, who hoped to attend specialized classes in the former casino.
Read more at http://www.philly.com/philly/business/20150403_Casino_workers__students_blast_Icahn.html#VSWA4HH3oGzodITy.99
After a meeting with school trustees Wednesday night, university president Herman Saatkamp said the prospects of converting the Showboat into a campus were "looking positive." He would not elaborate. Icahn, who also owns Atlantic City's Tropicana Casino and Resort, has been locked in a fight with the main casino workers' union, Unite Here Local 54, over benefit cuts and work-rule changes at the bankrupt Taj Mahal. Though he does not yet own it, he has been lending it money to keep it open. He said this week he is not involved in Trump Entertainment's decisions. Local 54 derided that assertion. At issue is a 1988 legal covenant among the Taj Mahal, Showboat, and Resorts casinos requiring that the Showboat never be used as anything other than "a first-class casino resort." Caesars Entertainment closed the Showboat on Aug. 31, and Stockton bought it in December, announcing plans to convert it into a long-sought Atlantic City satellite campus. Trump Entertainment has said Stockton knew of the covenant when it bought the building. Saatkamp acknowledged there was a covenant but said the university was "led to believe" the matter had been resolved between Trump Entertainment and Caesars. Stockton officials said last month that if the impasse cannot be resolved soon, they will move to quickly sell the property. Florida developer Glenn Straub, whose purchase of the Revel Hotel Casino was approved in bankruptcy court Thursday, said he is acquiring several casinos or former casinos in Atlantic City as part of a $500 million multifaceted development. His attorney, Stuart Moskovitz, said the Showboat is part of that purchase deal. Straub's plan for it, including whether he would allow it to be used as a college campus, remained unknown. "I've never had someone try to stop me from pursuing an education," said sophomore Kendal Lambert. "For a billionaire to say no to this is totally unacceptable." "I feel robbed," added Brian Moore, a freshman studying hospitality and tourism management, who hoped to attend specialized classes in the former casino.
Read more at http://www.philly.com/philly/business/20150403_Casino_workers__students_blast_Icahn.html#VSWA4HH3oGzodITy.99
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