The lawyer of Revel Casino Hotel announced that managers are currently reviewing the alternative for reviving the property sale. Yesterday, the attorney threw a curve ball by announcing that “neither side has terminated the agreement”.
Those who are familiar with the matter know that last month the company that won the auction declared that it gave up on the idea of becoming the new owner of Revel.
It seems like the deal is back on the agenda. John Cunningham, Revel’s attorney, said that there is a possibility for the Canadian giant Brookfield Asset Management to acquire Revel regardless of the announcement that the deal is terminated.
What made Brookfield terminate the deal was the disagreement, concerning the expensive maintenance of resort’s power plant.
The spokesperson of the Canadian company was reluctant to make an announcement and inform the communities about Brookfield’s attitude towards the Revel deal.
Revel Casino Hotel was opened two years ago with the aim of boosting New Jersey economy. However, the desired result was not achieved. Actually Revel never made a profit, which resulted in its closure at the beginning of September this year.
Brookfield was the company supposed to take the reigns of the property and re-open it as a casino venue. However, on Nov.19th company’s spokesperson announced that the deal will not be inked.
The power supplier of Revel was ACR Energy Partners. The joint venture of the companies made the establishment of the power plant possible. The sum of $118 million was invested in the project and a contract, valid for 20 years, was signed.
Now, when Revel is no longer available on the gambling market, owners are supposed to repay the debt as well as the interest, equal to 11.6%.
There is a chance Brookfield to drop the contract, though. However, if managers do that, they will have another challenge to deal with. They will need to find another energy supplier.
There is no guarantee that they will manage to find a supplier that has the infrastructure required for meeting the needs of Revel.
Failing to ensure energy for the climate-control systems would have a devastating effect on the property.
It is a well known fact that the expensive maintenance of the plant was among the main reasons why Revel never made a profit.
Actually, Revel’s managers were intending to attract other venues and provide them with power, which could eventually compensate for the losses but unfortunately, they did not succeeded in signing such a contract.
