By Brenda Flanagan
The power plant squats in the shadows directly behind the graceful lines of the bankrupt Revel Casino. It’s allegedly the the deal-buster that’s blocking Revel’s sale to Brookfield Properties, much to the neighborhood’s chagrin.
“I think it puts a lot of stress on the city. Because you have all these buildings and nobody’s doing nothing with them,” said Deborah Fisher.
Brookfield’s bargain-basement bid to buy Revel out of bankruptcy had seemed to be moving smoothly. Two weeks ago, it even announced plans to reopen Revel as a casino next year. Now, this.
Atlantic City’s Mayor Don Guardian said, “I’m sorry to hear that. Although Brookfield would’ve been a good fit for Atlantic City, we will continue to attract new investors.”
“I think that it’s a bit of disappointing news to find that Brookfield is pulling out,” said Weichert Realtor Len Scannapieco.
Scannapieco says negotiators for the virtually new, 6 million square foot Revel could simply be jockeying for better bargaining positions.
“Whether that’s a permanent pullout or you’ll find them coming back in with some new terms, it’s disappointing to a lot of people,” Scannapieco said.
The power plant’s the alleged problem. Revel started building the Inlet District Energy Center to supply its own electricity — plus cold water, air conditioning and heat. But the casino’s original developers ran out of money, and various investors took over.
As Revel sank deeper into debt, it kept refinancing the plant, eventually owing $1.5 million in monthly debt payments, before it paid a dime in actual energy costs. Sources say Brookfield balked at taking on all that debt. The power company had warned a bankruptcy judge it wanted those bills paid.
“The deal hasn’t closed officially yet, but we’ve let Revel know that we’re going to walk away,” a company spokesman said. Requests for comments from the power company went unanswered.
“I think there’s a buyer for Revel. I’m convinced that if it’s not them, there’s another one. Revel’s a beautiful, dynamic establishment,” said Scannapieco.
There is another buyer — Glenn Straub, a multi-millionaire from Florida, who bid even less for Revel and lost — though he’s appealing the bankruptcy court’s decision. Straub told news agencies he’s definitely still interested in Revel despite this latest development, though his attorney says, “There’s no ‘latest development’ until they file court papers. We’re going ahead with the appeal.”
Meanwhile, with casinos closing up and down the boardwalk, local businesses like the Alpha Omega Deli are struggling to stay open.
When asked how many customers he had today, owner Sam Nour said, “Not too many. Maybe 10. … We try to survive.”
As for Revel and its power plant, an industry analyst who didn’t want to be named said during very complex negotiations like this, each side looks for leverage and using the media to apply pressure is one of them.