Brookfield Property Drops Plan to Buy New Jersey’s RevelChristopher Palmeri and Michael Bathon
Brookfield Property Partners LP dropped plans to buy the shuttered Revel Casino in Atlantic City, New Jersey, in a new setback for the state’s shrinking gambling industry.
The Toronto-based investment company announced the decision yesterday in an e-mail. Brookfield was unable to win a reduction in electricity payments, according to two people with knowledge of the matter who weren’t authorized to speak publicly and asked not to be identified.
Brookfield, which owns the Atlantis resort in the Bahamas and the Hard Rock Hotel & Casino in Las Vegas, had planned to reopen Revel as a casino. The company outbid Florida developer Glenn Straub who later challenged the auction process. The Toronto-based investment company won bankruptcy-court approval to buy the resort for $110 million last month. The property, built at a cost of $2.4 billion, closed in September.
“I am sorry to hear that the Brookfield transaction was not completed,” Mayor Don Guardian said in a statement. “Although Brookfield would have been a good fit for Atlantic City, we will continue to attract new investors.”
Revel had a contract to purchase power and other utility services for $3 million a month from ACR Energy Partners LLC, a joint venture between South Jersey Industries Inc. and DCO Energy LLC that built a plant at the site.
Don Lockwood, a spokesman for South Jersey Industries, said ACR Energy Partners had no involvement in talks between Brookfield and bondholders of the joint venture.
Stuart Moskovitz, an attorney for Straub, said it was too early to say if his client would maintain his offer for Revel. The developer is continuing with his appeal of the auction.
The real estate company’s departure from the deal was reported earlier by the Press of Atlantic City.
Casinos in Atlantic City have been closing with the decline in gambling in the seaside resort town and competition from neighboring jurisdictions. The win for casinos in Atlantic City fell 4.4 percent in October and is down 3.3 percent for the year to date, the state Division of Gaming Enforcement said on its website on Nov. 13.
This week, Cordish Cos. and Greenwood Gaming & Entertainment Inc., two closely held real estate developers, won a license to open a casino in Philadelphia, within sight of the homes of the city’s professional sports teams.
The award spells more competition for Atlantic City and other casinos in the northeastern U.S. Live! Hotel & Casino will be the fifth in the greater Philadelphia area and the 13th in Pennsylvania, a state, which passed New Jersey in 2012 to become the second-largest U.S. gambling hub after Nevada.
The Trump Taj Mahal has said it will close on Dec. 12 unless union workers drop their appeal of a bankruptcy court ruling that let the casino terminate their contract. It would become the fifth Atlantic City casino to close this year.
Stockton College recently reached an agreement to buy the former Showboat casino, which closed earlier this year, and reopen the property as a satellite campus.
The bankruptcy case is In re Revel AC Inc., 14-bk-22654, U.S. Bankruptcy Court, District of New Jersey (Camden).