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Revel Casino Hotel, Atlantic City’s $2.4 billion toy, is in bankruptcy for a second time since opening in 2012 and its prospects don’t look good.
The property, heavily in debt, will go up for auction in early August and there’s a chance that despite its shiny, still-new feel, it may go unclaimed without a bidder.
And if there is one, a winning bid might come in as low as $50 million, according to a recent Philadelphia Inquirer report.
But how could that really happen?
The Inquirer has reported that design flaws that exist in the casino, despite the property being the newest in the market, would probably cost any bidder around $150 million to correct.
A rebranding might also have to be completed as the Revel name is now synonymous with bankruptcy and failure.
One source says that it would be unthinkable for Revel to go through the auction without a buyer, especially at a time when Atlantic City is taking several punches to the gut at once.
In recent weeks, both Showboat and Trump Plaza have announced that they expect to close within the next few months. The city already lost one casino this year: the Atlantic Club closed its doors in January.
On Revel, the source says he’s heard word that “there are people looking at it,” but how seriously, is anyone’s guess.
“It’s a new facility,” the source said. “Somehow, some way, we’ve got to make it work.”
Incentives watch is on
As stakeholders crafted the Economic Opportunity Act of 2013, the landmark overhaul of the state’s incentive programs, one priority was to create even greater incentives for companies that create new jobs.
That meant, in part, scaling back the amount of tax credits a company can get for simply keeping jobs here — by some 50 percent, in fact. Under the original Grow New Jersey program, new and retained jobs were treated equally when calculating the awards.
Whether the move by lawmakers had the desired effect remains to be seen, but one insider notes that the cap for existing jobs could be lowered even further. That would happen under the Economic Opportunity Act of 2014, a follow-up bill to last year’s overhaul.
There have been many versions of the bill this year, but this one is now on the governor’s desk. And the development community isn’t exactly pleased.
“Commercial real estate interests are lobbying the governor’s office to not approve the bill as signed, because of the cap,” the source said.
The bill passed both houses of the Legislature in late June — the same week cold-cut maker Dietz & Watson said it was leaving New Jersey despite a $3.1 million tax credit offered by the New Jersey Economic Development Authority in February.
After a fire destroyed its Delanco warehouse and distribution center last September, the company said it’s moving those operations to Philadelphia, where it already has its headquarters.
The company will relocate 110 jobs from the former Delanco facility, whose employees had been operating in Philadelphia since the fire, thanks to $2.1 million in grants, plus other incentives.
It was also the same week Bank of New York Mellon Corp. officially passed on New Jersey.
On June 26, the Manhattan-based custody bank said it was moving from its Wall Street headquarters to a new site in Lower Manhattan, rather than a waterfront site it had been considering in Jersey City.
The announcement was big news in the New York media, but received little attention in the Garden State.
Grapevine reports on the behind-the-scenes buzz in the business community. Contact Editor Tom Bergeron at firstname.lastname@example.org