How Much Did The Revel Casino Cost To Build
- Revel opened in April 2012, intended to be a game-changer for Atlantic City’s casino market by focusing on high-end leisure travelers. It was the only casino in town to ban smoking, eschewed bus.
- Straub has made a so-called stalking horse bid of $90 million for the casino, which cost $2.4 billion to build. Other bidders are free to exceed that level at auction.
- Atlantic City's Revel casino-hotel, which closed earlier this month after filing for bankruptcy. Revel cost $2.4 billion to build when it opened in 2012.
But as Morgan Stanley was investing $1.25 billion to build Revel, hard times hit the Jersey Shore and Atlantic City gaming revenues cratered, from $5.1 billion in 2006 to $3.1 billion three years. It ranked ninth out of 11 casinos in revenue last month, and is expected to be sold sometime this year for as little as $200 million to $300 million, a far cry from the $2.4 billion it cost to build.
Revel Casino Tenant Entitled to Enforce Lease Rights Following Bankruptcy Sale
In April 2012, at a cost to build of $2.4 billion, the 1,399 room Revel Casino Hotel in Atlantic City opened with much fanfare. Despite the acclaim, two years and two Chapter 11 filings later, the hotel closed its doors and was sold in a bankruptcy court sale for only $82 million. The property was then resold and just recently reopened under a new name. Although the hotel has reopened, claims and issues raised during the Chapter 11 case of the original owner are still being litigated.
In IDEA Boardwalk, LLC v. Revel Entertainment Group, LLC (In re Revel AC Inc.), 909 F.3d 597 (3rd Cir. 2018), the United States Court of Appeals for the Third Circuit decided an appeal of lower court decisions in favor of a tenant of the Chapter 11 debtor (the original owner). The tenant was the operator of two nightclubs and a beach club on the hotel premises. Its lease, described by the bankruptcy court as a “bloated morass” of words, essentially allowed it to operate in the three venues rent free unless the operation was profitable (described by the lease as “recoupment”). The lease was rejected during the bankruptcy case. When the hotel was sold at the bankruptcy auction, the court entered a sale “free and clear” order which provided that the tenant would retain its rights under its lease to the extent allowed by Bankruptcy Code §365(h). Under that section a tenant whose lease is rejected is given the option of remaining on the premises for the balance of the term and retains its rights under the lease.
The Third Circuit held that among the rights that the tenant retained under the sale order and §365(h) was its right to “recoup” under the lease. Alternatively, the court also held that the tenant was entitled to the benefit of the doctrine of equitable recoupment because the landlord’s right to rent and the tenant’s right to recoup arose from the same transaction. As a result, during the period the hotel was closed, the tenant had no obligation to pay rent.
How Much Did The Revel Casino Cost To Build A
While the facts of the case are unique, the Third Circuit’s ruling, read more broadly, should provide comfort to any tenant that elects to remain on the premises after its lease is rejected in its landlord’s bankruptcy. While bankruptcy has its advantages, landlords must carefully evaluate the protections provided to their tenants under §365(h) before acting to assume or reject leases.
For questions, contact Larry Coppel (410) 576-4238.
Wellington real estate developer Glenn Straub says he may quit trying to reopen a shuttered casino in Atlantic City, New Jersey, that he bought last year.
Straub paid $82 million for the Revel casino in Atlantic City, which cost $2.4 billion to build. Revel opened in 2012, then descended into bankruptcy twice and closed in 2014.
Straub blames the state of New Jersey for his failure, so far, to reopen Revel. In an interview, he told the Star-Ledger, “This state stinks. It just stinks. … I worked in five states. This is 10 times worse than what it would be anyplace else.”
Asked if he still would try to reopen the casino, Straub told the newspaper, “To hell with that. I’ve got other things to do. I don’t have time to be screwing around with this stuff.”
Straub earlier had pledged that at least part of the 6.2 million-square-foot Revel casino would be in operation by the middle of June.
But his company, Polo North Country Club, is still seeking city and state permits to reopen Revel, where fencing blocks entrances to the casino from Atlantic City’s oceanfront boardwalk.
How Much Did It Cost To Build Revel Casino
Straub’s company needs site-plan approval from the Casino Reinvestment Development Authority to do construction work at Revel before reopening it.
The authority decided in an August 18 public hearing to continue the hearing to September 8, allowing Polo North more time to address potential street-traffic issues at the casino.
The authority’s decision to extend the public hearing is “unnecessary and unwarranted,” said Nick Talvacchia, an attorney representing Straub’s company.
The extension of the public hearing led Straub to tell the Star-Ledger that he may end his efforts to reopen Revel: “I’m pretty much there now.” [Star-Ledger] — Mike Seemuth