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Special Report Experts now say Revel may go for pennies on the dollar

Revel, which cost over $2 billion to build, could go for as low as $30 to $40 million.-(PHOTO BY AARON HOUSTON)

It’s still shiny and new, and by all accounts, it should be. Just 2 years old, Revel Casino Hotel cost a hefty $2.4 billion to build. But come next week, the troubled casino resort goes up for auction after declaring bankruptcy for a second time in 15 months.

And here’s the sad truth: The oceanfront property is likely worth just pennies on the dollar of its original price tag — even if there are reportedly a half-dozen prospective buyers in the market.

Alan Woinski, president of Paramus-based Gaming USA Corp., said he wouldn’t be surprised if the top bid comes in at somewhere around $30 million or $40 million.

That’s because Revel sports a number of major design flaws, Woinski said, from poor access to the casino floor from the street and the boardwalk to an overly complicated layout of dining and shopping options. To fix all of that, he says, could cost a prospective buyer as much as $200 million.

“That’s all it’s worth because of the amount of money you have to put into it,” Woinski said.

According to Michael Busler, a public policy analyst and finance professor at Richard Stockton College in Galloway, property values don’t bode well for Revel’s potential price tag, either.

As a property designed to produce income, Revel’s inability to ever turn a profit has likely knocked its estimated value down to the $200 million to $250 million range, Busler said.

“Based on what it has generated so far, the value of Revel is probably about 10 percent of what it cost to build it,” he said.

Couple that with the renovations Woinski mentioned and it’s easy to see why Busler said that by the time Revel hits the auction block, a buyer “can’t afford to pay more than $100 million for it.”

“It’s hard to imagine something that cost over $2 billion being sold for that low,” Busler said.

So who might make a play at Revel?

Andrew George

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