UPDATE: Power was restored into the Revel property shortly after 11 a.m., Wednesday but the building engineer said it would be a gradual process to actually turn on power throughout the building.
The 47-story tower that once was the $2.4 billion Revel Casino was powerless for 20 days, in a dispute between new owner Glenn Straub and the energy company built to power the 6.2 million square foot property.
Timothy Lowry, attorney for ACR Energy Partners said Wednesday the company's agreement to turn on the power was the result of a short-term deal orchestrated by U.S. District Judge Jerome Simandle that has Straub paying $262,500 for two weeks of power. It had shut off power April 9, two days after Straub bought the property out of bankruptcy.
Reached Wednesday morning, Straub said the property was ready for ACR to turn on the power in the short term but he doubted he'd be able to reach a long term deal with ACR. "We will not pay more than a rate that is the market rate," he said.
Straub said he was actually working inside the Revel building on power supplied by a small generator. Around 10:30 a.m., he went inside the ACR energy plant itself, where a crew was working on restoring power.
Straub has been fined $5,000 a day by the City of Atlantic City for the unpowered structure, which fire department officials declared a hazard due to non-operational fire supression systems. His certificate of occupancy was also revoked. His engineer said Wednesday that outside of a few leaky pipes, there did not appear to be any damage from the 20-day energy gap.
Straub has a history of run-ins with energy regulators dating back to at least 2003, when the State of Ohio sued him for failure to properly operate his coal ash processing plant, according to a report in the Florida Courant.
The Ohio Attorney General claimed Straub failed to implement required safety procedures, creating a threat to the state’s drinking water, the Courant reported. A court later ruled that his site created a threat to ground water and ordered it closed.
ACR, which financed the construction of the energy plant in part with high interest municipal bonds, had a deal with Revel that cost the casino about $36 million a year, including $20 million in just debt and equity payments. Potential buyers who walked away have said they were unable or unwilling to meet ACR's terms for energy.
ACR, which financed the construction of the energy plant in part with $119 million in high interest municipal bonds, had a deal with Revel that cost the casino $36 million a year, including $20 million in debt and equity payments.
Potential buyers who walked away have said they were unable or unwilling to meet ACR's terms for energy. ACR is a joint venture of two New Jersey companies, each of which put up $20 million in equity. One is a subsidiary of publicly traded South Jersey Industries Inc., an energy company in Folsom with regulated and unregulated arms.
The other is privately held DCO Energy L.L.C., of Mays Landing. Through top management, including Joseph R. Jingoli Jr. and Michael D. Jingoli, DCO is affiliated with Joseph Jingoli & Son Inc., a national commercial builder and construction-management firm based in Lawrenceville, N.J.
Jingoli & Sons was a prime contractor for the still-unfinished Meadowlands Xanadu project.
Since buying the property out of bankruptcy for $82 million, Straub has been enmeshed in various difficulties, including having his plan to power the building with generators nixed by the state Department of Environmental Protection. He has an agreement to purchase the former Showboat from Stockton University, but that deal has been under increasing scrutiny and led to Stockton's embattled president Herman Saatkamp's early retirement this week.
Straub's future plans for the building remain unclear. There was last minute interest from at least two other buyers just before U.S. Bankruptcy Judge Gloria Burns pulled the trigger on Straub's deal, under pressure from Revel A.C., and Wells Fargo, which was financing the bankruptcy and had had enough.
Straub said Wednesday he would not rule out selling the property. "We never turn down offers," he said. "People make us offers every day. Our policy is, we're not in love with anything."
Straub is also facing heat in the city of Wellington, Fla., which is refusing to process his request for a permit to host summer polo matches at this Polo West property because he owes $150,000 in fines and liens from five open code compliance cases, according to the Palm Beach Post.