Revel Casino bets economy ripe for financing

ATLANTIC CITY - To the casual observer, work undertaken on the $2.5 billion Revel Casino rising next to Showboat might seem incremental.

The 53-story concrete structure was topped off just two weeks ago, though ground was broken in November 2007. About 78 feet of structural steel will be positioned in the next couple months.

But by October, said Kevin DeSanctis, president and chief executive officer of Revel Entertainment Group L.L.C. - the company behind the megacasino - he will seek the remaining $1 billion in loans he needs to complete the project.

"We will go back into the lending markets in the fourth quarter," DeSanctis said in an interview last week. "We plan to make a push October to December to get that last piece of financing."

For DeSanctis, it will represent a giant leap of faith that the credit markets have rebounded enough that a billion dollars in financing will no longer be considered untenable, if not impossible to get.

"They've improved a lot. Whenever you deal with something not in your control, it's hard to be confident. But we continue to see improvement, and more and more deals are getting done," he said. "I am more optimistic today than I was six months ago."

In late January, DeSanctis announced that all interior work on the casino's restaurants, retail shops, nightclubs, and a luxury spa - the things that were supposed to help Atlantic City's transition from day-trip customers to an overnight clientele - would come to a halt. Credit had dried up. About 400 construction workers were laid off.

Fast-forward seven months. As DeSanctis gears up his team to start the mountain of paperwork required to get the remaining financing, he said his time frame hasn't changed: Revel Casino will open 16 months from the point when crews begin work on the interiors.

"If we start in January 2010, we can open in May 2011," DeSanctis said. "Everything is relative to financing."

This has been a summer of discontent for the nation's second largest casino mecca. Gambling revenue decreased by double digits in June and July compared to a year ago. August revenue figures come out Thursday, and many are expecting more of the same as the recession and Pennsylvania slots houses continue to batter the resort.

"I don't think the numbers hold a tremendous number of surprises," DeSanctis said. "I tend to look closer to the Borgata, Harrah's Resort, and the Taj. Those are the operations that have spent capital and are closer in nature with what we're opening."

They also have among the lowest year-to-date revenue declines: 5.2 percent at the Borgata; 12.4 percent at Harrah's Resort; 2.5 percent at the Taj.

Much is riding on Revel's completion, both psychologically and financially, gaming analysts and casino operators say. Three other super-casinos planned here were put on indefinite hold last year because of the credit crisis.

"After three years of mostly negative stories about the Atlantic City casino industry, the completion of Revel could give the city a sorely needed positive vibe," said Joe Weinert of Spectrum Gaming Group L.L.C. in Linwood, N.J. "Revel's opening could change that perception of Atlantic City in a hurry."

Mark Juliano, CEO of Trump Entertainment Resorts Inc., which owns the three Trump casinos (including the Taj Mahal, which sits near Revel), said just obtaining the financing needed to complete Revel would be "an enormous boost of confidence for Atlantic City."

"Obviously, a big project like that right next door to us will have a short-term negative impact," Juliano said, "but in the long term, it will really help grow the city and help bring in a higher-end customer to the Taj.

"Right now, it's not doing anybody any good."