Only two days after Atlantic City’s Revel Casino was officially sold to real estate mogul Glenn Straub for $82 million, a new misfortune hit the struggling casino. After a formal warning on Wednesday from ACR Energy Partners L.L.C., the plant in charge of providing electricity and air conditioning to the building, the power has been cut off on Thursday. This was only the first blow to the new owner as the city threatened to fine him for each day that fire suppression systems are unable to operate.
Tuesday saw the closing of the sales of bankrupt Revel Casino which was expected to be the savior of Atlantic City and whose construction cost $2.4 billion. High hopes went tumbling down as the casino struggled from the very start until it was finally closed after only two years of operation. The multi-million enterprise ended up sold out of fifth attempt for $82 million to Florida developer Glenn Straub's Polo North Country Club. This was Mr. Straub’s second attempt to purchase and salvage Revel. In the prior attempt he was outbid by a Canadian bidder, Brookfield Asset Management at $110 million but eventually they gave up their plans to buy the Revel due to failure to reach agreements with the power supplier. They were unwilling to settle the debt and as it appears, so is Straub.
What Happens When the Lights Go Out
The issue of settling the utility debts has been discussed earlier and Straub had no intention of paying them in the first place. According to his representatives he considers the threats from ACR blackmail and he will not respond to it. But ACR proved that their warnings were no bluff when they cut off the power on Thursday afternoon. Their lawyer stated that they are more than willing to reach an agreement by lowering the price of electricity, but they will not give the power for free. Mr. Straub replied that he will not be forced into an agreement and that he has already considered a couple of options for solving this problem. The first one is to use backup generators and the second one is to connect to another casino he bought next door, the Showboat, which is supplied by its own plant. The trouble is that both of these options would take at least two weeks to realize and the city has already said that the fire suppression systems may not go one day without operation. In case they do the owner will be fined for each day without electricity. Straub was disappointed by this action of the city authorities as he had big plans for it: “If they turn us away, we'll go spend our money someplace else. I can very easily go back to Miami and be busy down there. They ought to be fining the people that caused this, not the person who just walked through the door.”