Revel Casino to shut by Sept. 10

ATLANTIC CITY - The embattled and forever-troubled Revel Casino Hotel will close by Sept. 10, nearly 2 1/2 years after it opened, its ownership said Tuesday.

Some 3,200 employees will be out of work as a result of the closing, adding to the thousands more who are also slated to lose their jobs at two other Atlantic City casinos by mid-September.

Revel had been aiming for a bankruptcy auction, scheduled for last week. Instead, that auction had been delayed until Thursday.

It was reported on Monday that Revel did not receive a qualifying bid, a factor that almost surely led to the decision to close. Assuring its demise is the struggling Atlantic City gaming market that has lost nearly half its gaming revenue to surrounding states since 2006.

"We regret the impact this decision has on our Revel employees who have worked so hard to maximize the potential of the property," the ownership group, Revel Entertainment Group L.L.C., said in a statement

"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," the statement said.

It said the group still hoped to sell the Revel "in some form, through the pending bankruptcy process," but added it "cannot avoid an orderly wind-down of the business at this time."

The Revel, which cost $2.4 billion to build and had its construction halted during the worst of the recession, is the fourth Atlantic City casino to close or face closure this year.

Revel declared bankruptcy for a second time on June 19, after barely marking its second anniversary.

The casino was never able to generate enough income to maintain its massive operations. This trend continued, despite trimming nearly $1.5 billion from its debtload in a debt-for-equity swap among Revel investors after emerging from its first bankruptcy in early 2013.

Gaming analysts said Revel failed to increase the gambling market in Atlantic City and instead cannibalized the existing market - to the detriment of smaller, weaker performers. Of them, Trump Plaza is scheduled to close Sept. 16 and the Atlantic Club already closed, in January.

Although profitable, the Showboat also has announced its plans to close Aug. 31, if it does not find a buyer by then.

Revel was built with the aid of $265 million in financing from the state, and Gov. Christie declared the casino "a turning point for Atlantic City," shortly before it opened April 2, 2012.

But the casino never gained traction and never found a customer base.

Many said the expansive casino overreached and narrowly targeted an affluent clientele from New York that already belonged to the rival Borgata

Andrew Zarnett, a gaming analyst with Deutsche Bank AG, was one of the few industry experts who forewarned that Revel would feed off the existing Atlantic City gambling market, instead of grow it.

"It should have never been built," he said in a recent interview. "Revel grew (gaming) supply while gambling revenue has been cut nearly in half since 2006."

Some experts said Revel suffered from not having its casino on the ground floor, prohibiting smoking when it first opened, not having a buffet and offering only expensive restaurants.

The collapse of Revel, which stands at 57 floors and is made of steel and blue glass and shaped like a giant wave, has come to symbolize the faded fortunes of Atlantic City, which just two years ago was still the No. 2 gaming market in the country, second only to Las Vegas. That distinction now belongs to Pennsylvania, with its dozen casinos.

The big question now is what happens to all of that space? The casino resort occupies 6.3 million square feet of real estate on the northern end of the Boardwalk. Hospitality and tourism experts, as well as developers such as Carl Dranoff, had suggested the 1,400-room hotel could be converted into luxury condos or apartments, but the massive public spaces and cost to maintain Revel was probably a detriment to potential buyers, say some.

Atlantic City Mayor Don Guardian said in an interview last month that he hoped Revel, because of its sheer size, would remain a casino. He said the city had substantially cut the casino's property taxes for the year to $30 million, in hopes of inducing buyers.

In a statement Tuesday, Guardian said:

"We are disappointed in the decision that the Board of Revel has made as there appeared to be several bidders for the property. While I am not privy to the current facts that lead to this decision, I do know this process is a complex one compounded by an extremely short timeframe and cash-flow challenges. This might be Revel's last chapter, but not the last one for this building. My administration remains committed to the workers, the businesses, and the visitors who are impacted by today's news."

"My heart goes out to the . . . employees of Revel," said first-term Assemblyman Vince Mazzeo (D., Atlantic). "We live in troubling economic times, but as a community, we will endure. Atlantic City is in a transition period. We know it won't happen overnight, but we will get there."

Other Atlantic County lawmakers held out hope that the three impending closures, including Revel's, could be diverted and that the city resort will get to finish out Christie's five-year revitalizaiton plan that was intended to increase tourism and help resuscitate it. The five-year plan expires in February 2016.

"The state needs to bring stability back to the Atlantic City market by re-affirming its commitment to giving Atlantic City the time it needs to transition into a destination resort and reassuring investors there is a profitable future in Atlantic City," said Republican Assemblyman Chris A. Brown. "...We owe it to the thousands of families to do do our best to encourage the sale of Revel, Showboat and Trump Plaza."