Revel continues to be a lesson in the art of the mixed-up deal
1/19/2015 | Real Estate Blog
We will continue our discussion about artist James Dupree’s fight with the Philadelphia Redevelopment Authority in our next post. First, though, we want to go back a little further to the struggle of Atlantic City’s Revel casino to find a new buyer.
Has there ever been a commercial real estate deal with so many twists and turns? Maybe other deals have been as dramatic, but not quite so public. At the end of December, it looked as if developer Glenn Straub, the runner-up in the bankruptcy auction, could walk away if Revel did not meet his demands for deep discounts on the sale price. Now Straub’s deal faces a challenge from a newcomer to the proceedings.
Since December, Straub has continued, first, to fight for the discount and, second, to discuss his plans for the property with the press. Earlier this month, Straub said he would turn the property into a water park, an investment he expected would run to $108 million.
However, the sale may displace a nightclub that leases space from Revel. Late last week, HQ Nightclub owner IDEA Boardwalk LLC filed an emergency petition to stop the sale to Straub. The sale, the company argues, will infringe on its rights to the property it lawfully leased from Revel. The sale will also send the company’s $16 million investment in the space down the drain.
Meanwhile, ACR Energy Partners, the operator of Revel’s power plant, has also asked the court to stop the sale. ACR’s argument is that the deal with Straub will sell the land out from under the facility. ACR is yet another Revel lessee, and the sale would force the company to “dismantle and remove” the plant from the property. The plant cost $160 million to build.
The court should make a decision on both matters this week. If the requests are denied, the sale will go through in the next month or so.
The Press of Atlantic City, “Judge to hear nightclub’s bid to halt Revel sale,” Reuben Kramer, Jan. 17, 2015
Philadelphia Business Journal, “Revel casino buyer wants to build $108M water park,” Francis Hilario, Jan. 8, 2015