Last week, when the auction of Atlantic City’s Revel Casino Hotel was pushed back to September 30th, perturbed Florida real estate developer Glenn Straub said that he didn’t “need that monstrosity of a building.” It’s a good thing he feels that way because it doesn’t look like he is going to get it. In an auction yesterday, Brookfield US Holdings LLC, a subsidiary of Brookfield Asset Management, won the bidding war for the luxury casino, offering $110 million.
The auction was supposed to happen last Wednesday, but although all parties were present, it never got off the ground. The Press of Atlantic City reported that Revel executives held closed-door meetings all day to discuss previous offers. Straub’s attorney Stuart Moskovitz said, “There are serious concerns about what’s taking place.”
But delayed the auction was. As it turned out, the $95.4 million bid by Straub’s company, Polo North Country Club, was chosen as the backup bid in the event Brookfield cannot close on the deal. Straub will likely also receive $3 million if the sale goes through to Brookfield for his role in being the stalking horse, the party that makes the initial offer that serves as the floor for all other bids. And Straub is also not happy about being that stalking horse. Upset about how the auction process was run, he said that the $90 million offer he made on September 10th was the only one the Revel accepted before the September 23rd deadline set by the court. As such, he doesn’t think it should have even gone to auction. Straub has threatened to go to appellate court if he is not awarded the property.
According to The Press, Brookfield made its $110 million bid Tuesday night, an offer which was to expire at 6:00am Wednesday. In the meantime Straub’s side was unable to get a hold of his accountant to counter.
Straub had ambitious plans for the Revel, one of which included building a second tower in which to house “geniuses” to solve the world’s toughest problems. He also wanted a fleet of “high-speed catamarans” to shuttle people back and forth to Manhattan, “super jumbo jets” to bring in visitors from Saudi Arabia, and artificial ski mountains. Last week, it did not appear that Straub was going to continue any casino operations at the Revel, but The Press reported today that he would keep gambling as a minor part of the business.
As far as the auction winner is concerned, Brookfield plans on re-opening the Revel as a casino hotel. The company has experience with this, too, as it owns eight other hotel properties including the Atlantis in the Bahamas and the Hard Rock Hotel and Casino in Las Vegas, two major gaming properties. One of the upshots of Brookfield’s purchase is that many jobs could be saved in Atlantic City. 2,800 people lost their jobs when the Revel closed on September 2nd; there is a solid chance most, if not all, could be re-hired when the property reopens.
A hearing is scheduled for October 7th in federal court during which a judge will approve (or deny) the sale.
