Generators arrive at Revel; power struggle continues in court

ATLANTIC CITY - As he promised, Glenn Straub's rented mobile generators arrived on South Metropolitan Avenue outside the powerless Revel building Tuesday morning, but they were not hooked up by the end of the day.

The city continued levying $5,000 a day in fines against Straub, who bought Revel for $82 million a week ago and saw the power shut off two days later in a dispute with the defunct casino-hotel's energy supplier, ACR Energy.

Dale Finch, the city's director of licenses and inspection, said Tuesday that Straub had not applied for the permit required to operate the generators.

"Two generators and a transformer came on trailers," Finch said. "They began to review what they're trying to accomplish, and everything stopped."

The city is fining Straub because without power to operate fire-suppression systems, the building is considered a fire hazard.

Out on Metropolitan Avenue, meanwhile, a neighbor tried to be a bit more hospitable to the new guy.

"Glenn Straub Welcome to the Neighborhood Free Electricity," read a poster taped onto Bill Terrigino's porch across the street from where the huge generator trucks were parked.

Terrigino, who has had some acclaim as the Hemingway-esque figure living literally in the shadow of the Revel behemoth, draped an orange extension cord over the railing for Straub's use and left it out, like a plate of cookies.

Reached Tuesday, Straub blamed the delay on the rain. He has said the generators would be powering Revel by Thursday. But the distribution equipment he needs to tap into, inside the Revel complex, is owned by ACR Energy, that company asserted in court papers Tuesday.

Straub's Polo North Country Club company is seeking to evict ACR. The energy plant sits on land that Straub also now owns, across from Revel. Straub said Tuesday that as the Revel's owner, he has the right to use the distribution equipment inside the building.

ACR, which supplied power to the Revel when it functioned as a casino and continued to do so by court order during its shuttered bankruptcy stage, filed papers in federal court contending that the distribution system cannot be operated safely by anyone other than "trained ACR Energy" personnel. It claims the plant is the only way to safely power the 6.2 million-square-foot property.

Revel was ACR's only customer.

Straub has said he can get power either from generators or from the former Showboat casino hotel, now owned by Stockton University and which he is also seeking to acquire. A state judge refused his request last week to force ACR to keep the power on.

ACR is contending that Straub is damaging its equipment and potentially creating a public nuisance. ACR contends that Straub's plan to power the building with generators "presents real and material risk," and endangers the lives of workers who would do the connecting or operating of ACR equipment.

The energy company is asking the judge to force Polo North to "purchase at fair market value" the "ACR Energy Distribution System," which cost $160 million to build. ACR contributed $40 million; the rest of the financing was through municipal bonds.

The situation appeared at an impasse late Tuesday, further subjecting the darkened $2.4 billion building to possible damage from humidity and mold.

"Everything came to a screeching halt," said Finch, the city inspector.

Opened in April 2012, Revel twice declared bankruptcy and closed last September. Gov. Christie promised Revel state tax credits if it turned a profit, which it did not.

Its energy costs included annual fixed debt and dividend-like payments of $20.1 million. Total costs were about $36 million a year.

Two partners have $20 million each in equity in ACR Energy. 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.

South Jersey Industries and DCO paid $40 million to take possession of the partly built utility plant from Revel's original backers, who ran out of money in June 2010 and halted construction on the $2.4 billion complex.

ACR borrowed $118.6 million in the municipal bond market to finish building the energy facility. South Jersey Industries and DCO are partners in several energy plants, including at the Borgata.

Finch said the city would work with Straub but cautioned that powering up the massive property was not for amateurs.

"When you're fooling with that much electricity and that much power, you have to be sure of what you're doing or you'll be in good trouble," Finch said.