Oh good grief. Another issue for Revel hits the courts
5/1/2015 | Real Estate Blog
It really doesn’t end. The continuing saga of Revel, the bankrupt casino complex in Atlantic City, has taken another, somewhat unexpected turn. Developer Glenn Straub may own the property, but the state of New Jersey has pointed out that he is not automatically entitled to the casino license granted to the original owners.
When Revel finally sold, it looked as if just a few minor hurdles remained in the property’s redevelopment. First, Straub’s Polo North Country Club would have to figure out how to work with the existing tenants. As we said in our April 6 post, the bankruptcy court allowed the sale to go through without addressing the tenants’ concerns.
Second, of course, was the issue with the power plant. ACR Energy Partners was also arguing with Straub at the time of the sale; in fact, ACR shut off the power — pulled the wall from the plug — a couple of days after the sale went through. The Press of Atlantic City reported this week that the power is now back on while ACR and Straub negotiate a new deal; ACR, however, has promised just two weeks of service for the time being.
Even if all of this and the renovation were complete, Straub cannot operate a casino until he has his own license, according to court documents filed by the state’s Division of Gaming Enforcement. In fact, the mere presence of the old casino’s slot machines in the building is a violation of state gaming law. Now that the power is back on, someone licensed by the state must take responsibility for them.
The beleaguered bankruptcy court may have hoped that the whole kit and caboodle that was Revel would transfer to the new owner. The casino license, however, depends on the owner successfully passing extensive background checks. Even then, the Casino Control Commission must approve the application.
Perhaps Straub himself hoped to avoid the paperwork involved. A commission spokesperson confirmed with the Press that he has started the application but has yet to complete it.
The lesson? There are important differences between buying commercial property and buying the business or businesses that occupy the property.
Source: Philly.com, “NJ: Court can’t transfer casino license to new Revel owner,” Wayne Parry, April 27, 2015