A developer from Los Angeles California is interested in buying the closed Revel Casino Hotel located in Atlantic City.
According to Leo Pustilnikov who is a partner with Isek Shomof, another developer, a letter of interest was submitted for the purchase of the closed Revel Casino Hotel. Along with the proposed offer was proof that funds are available to complete the entire purchase.
The Straub Saga
As reported, originally Glenn Straub, a Florida developer had offered to purchase the Revel for $95.4 million. On February 19, a judge with the US Bankruptcy Court allowed Revel to terminate the planned sale. However, the deal with Straub was revived a few weeks ago but this time for a lower price of $82 million, his fourth attempt.
The case was heard before Judge Gloria M. Burns last Friday but again, she declined to give approval. In a Camden courtroom, Judge Burns said that approving an amended sale order was not within her jurisdiction because the approval of the sale to Straub for $95.4 was still under appeal.
Judge Burns added that Revel, which originally cost $2.4 billion to build but closed last September, had two options. One of those involved the property being sold to Straub but having no guarantee he would honor the leases of current tenants.
In the meantime, Pustilnikov has appeared with an offer that in effect, is worth $8 million more than Straub’s. The reason is that of the $82 million Straub put down on the table, $10 million was a deposit he forfeited by failing to complete the deal by the deadline of February 9. Therefore, his current offer is actually only worth $72 million.
Shomof has a solid reputation for being a redeveloper of older buildings located in the downtown area of LA. Currently, he is reviving the old Sears building in downtown LA, as well as the Rialto Theater in South Pasadena. When questioned about the new offer being made for the Revel Casino Hotel, John K. Cunningham, lead bankruptcy attorney had no comment.
Straub will return to court this Wednesday to face opposition from the current tenants of Revel, which includes restaurants, nightclubs, and retailers. He will also face ACR Energy Partners LLC, which recently asked the judge to take the sale out of the hands of Revel.
The Future of Revel
Apparently, Straub is not interested in continuing leases with any of the current leases, citing he wants a property that can be modified without limitations. In comparison, the tenants would remain in place as part of the Pustilnikov and Shomof deal. They acknowledge that a tremendous amount of money and effort has been invested by each of the tenants and all have performed incredibly well so there is no reason for them to leave.
Although no permission to tour Revel has been granted to Pustilnikov and Shomof, they will visit the property to look at the central utility plant along with ACR and their lawyers. They hope during the visit they can conduct some negotiations, specifically in dealing with the issue of power, a primary ongoing issue.