Revel Casino Hotel has made it official: the struggling resort property will close Sept. 10 unless a buyer is found.In a statement Tuesday, Revel’s owner said it will “wind down” its operations even as it continues efforts to sell the $2.4 billion megaresort.
“We regret the impact this decision has on our Revel employees who have worked so hard to maximize the potential of the property,” the casino’s parent company, Revel AC Inc., said in a prepared statement. “We thank them for their professionalism and dedication; however we are faced with several unavoidable circumstances.
“Despite the effort to improve the financial performance of Revel, it has not proven to be enough to put the property on a stable financial footing. This situation is compounded by the considerable non-controllable expense structure that has financially burdened the property.”
Revel has more than 3,200 employees, according to the state Department of Labor and Workforce Development.
The operating group, which was reviewing prospective bids ahead of a bankruptcy auction later this week, also cited the challenges that “have arisen in our attempts to sell Revel,” which has fallen flat since opening in 2012.
“While we continue to hope for a sale of Revel, in some form, through the pending bankruptcy process, Revel cannot avoid an orderly wind down of the business at this time.”
The planned Sept. 10 closure is subject to receipt of regulatory approvals, the news release said.
The announcement comes a day after news that the bankruptcy auction failed to attract any qualified bids, although three submissions from prospective buyers were being reviewed for financial viability as of Monday afternoon.
A source told NJBIZ that the bidders needed to “show the lender that they’re qualified” and have the financial means to support their offer.
“Thoughtful consideration was given to the impact on our guests, our employees and the employees of our associated tenants,” the news release said. “We hope that Revel can be a successful and vital component of Atlantic City under a proper ownership and reorganized expense structure. We will continue to endeavor toward a placement with such an owner, but there can be no assurance as to the outcome of the pending bankruptcy process.”
The news release said Revel will honor reservations and deposits while it remains open.
The casino is in bankruptcy court for the second time. As it prepared to enter this latest set of proceedings in June, ownership told employees they could be terminated as soon as Aug. 18.
The property has only lost money since opening, falling far short of expectations of attracting a new clientele to Atlantic City and spurring a renaissance of the ailing resort town.
It’s one of three casinos in danger of closing. The others are Showboat and Trump Plaza, which could close by Labor Day if buyers are not found, leaving the city with four shuttered gaming halls after the Atlantic Club closed in January.
Revel first filed for bankruptcy in March 2013, resulting in a process that cut its $1.5 billion in debt more than 80 percent. It also resulted in investors exchanging debt for equity in the property.
In the most recent proceedings, a judge last month said she would approve bonuses worth a total of $1.75 million for executives at the casino if they manage to find a buyer, the AP reported.
ALSO ON NJ BIZ:
No qualified bids in Revel bankruptcy auction, but three offers are under review
Revel bankruptcy auction postponed until next week
Special Report: Experts now say Revel may go for pennies on the dollar