With the Revel’s scheduled bankruptcy auction delayed, and a source telling NBC10 in Philadelphia that no qualifying offers have been received for the struggling property, we may now have our answer to my question from a column back in July: Is the Revel Casino in Atlantic City too big to fail?
And the answer could be a very costly one for The Revel, for Atlantic City, and for New Jersey.
According to a press release issued by The Revel Casino, unless a last minute buyer can be found the casino will be closing on September 10.
The press release reads in part:
“… Revel Casino and Hotel will cease operations no later than September 10, 2014, subject to receipt of regulatory approvals.
“… While we continue to hope for a sale of Revel, in some form, through the pending bankruptcy process, Revel cannot avoid an orderly wind down of the business at this time.”
Atlantic City Mayor Don Guardian has been busy telling everyone with a microphone how many potential buyers the casino has hosted, how much interest there is in the property, and how he thinks a bid will be awarded, but the people of Atlantic City have been apprehensive about the fate of the Revel, and the sincerity of these potential suitors.
This apprehension probably turned into all out terror when at the last minute the auction was “delayed” until August 14, ostensibly to allow some vetting of new bidders.
According to the Press of Atlantic City, the Revel made U.S. Bankruptcy Judge Gloria Burns aware of the delay the night before the auction was set to take place, citing the need for “additional time to fully analyze and evaluate the bids received and … (is) not prepared to go forward”
Will the Revel close?
It seems almost blasphemous to close a brand new, state-of-the-art casino just a few years after it opens, especially while decades-old structures are turning profits just down the road.
Unfortunately it may have to close, because it doesn’t appear that any amount of restructuring is going to bail the casino out.
The monthly operating cost of the casino is simply too high, and a flawed design plan is going to cost tens of millions of dollars in renovation costs to fix — perhaps more.
The reason a sale is needed is the Revel has already gone through one Chapter 11 restructuring, and while it has drastically cut down on its quarterly deficits, they are still very pronounced and have remained stagnant since the initial restructuring halfway through 2013.
Since that time the casino has still been losing between $21.75 million and $23.5 million each quarter and there are no signs of help or a turnaround on the horizon under the current ownership.
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