Buyer threatens to walk away from Revel purchase deal
ATLANTIC CITY (AP) — The Florida developer in line to buy Atlantic City's former Revel casino hotel is threatening to walk away from the deal if a court ruling goes against him.
Glenn Straub is buying the casino for $95.4 million, but tenants at the site are appealing the deal, claiming they stand to lose millions if it goes through. A federal judge is expected to rule on that request Wednesday, following a daylong hearing on the matter Tuesday.
Straub's attorney, Stuart Moskovitz, says the developer may cut his losses at the $10 million deposit and related costs incurred, and abandon the deal, just as a Canadian firm originally tapped to buy the casino did in November. Brookfield Asset Management scrapped its purchase deal and forfeited an $11 million deposit. If the court lets the tenants challenge the terms of the sale and delay it, Straub could lose millions of dollars and be placed in an almost impossible negotiating position, Moskovitz wrote in court papers.
Straub's Polo North Country Club "would seriously have to consider whether to cut its losses at $10 million and simply walk away as the previous successful bidder did," he wrote.
If Straub bails on the deal, it would cause major harm to what is left of Revel's estate, Moskovitz wrote. Straub is the only bidder left for Revel, having been the runner-up in a two-party auction for the property that has failed to draw a qualified bid from anyone else.
"Based on that history, coupled with what will be a well-known fact of two bidders forfeiting $11 million and $10 million respectively, it is not promising that there will be a reasonable bid any time soon," Moskovitz wrote.
Straub also told the court that his termination of the Revel deal would badly hurt an already reeling Atlantic City, which has seen four of its 12 casinos go out of business last year, and two others file for bankruptcy this month.
"It is common knowledge, of which the Court can surely take judicial notice, that Atlantic City is in trouble," Moskovitz wrote. "Whatever form this building takes under the guidance of (Straub), it will create desperately needed jobs. It will generate desperately needed tax revenue. It possibly will kick start a rebirth of a dying city, a dying commercial base. Anything that delays the opening of this property to positive commercial utilization does serious harm to the public, to the city itself, to the people yearning to go back to work, to the small businesses who are on the verge of bankruptcy themselves."
Those appealing the ruling include ACR Energy Partners, the casino's sole energy supplier; IDEA Boardwalk, which owns the popular HQ club, and many of Revel's restaurants. At Tuesday's hearing, an attorney for IDEA Boardwalk said the company could see its entire $16 million investment lost if the sale goes through as planned.
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