New Revel bidders arrive to take a look around

ATLANTIC CITY - Last-ditch Revel bidder Izek Shomof of Los Angeles arrived in Atlantic City on Tuesday with four developer friends to check out the beleaguered and twice-bankrupt closed casino and its power plant.

"We are ready to count the money," Shomof quipped from the driver's seat of his rental car outside the Inlet District Energy Center. "We don't know who to give it to."

He said he had just driven from Philadelphia International Airport and was looking to find the attorney for ACR Energy Partners L.L.C., which last week asked the judge in the case to take the sale of the property out of Revel's hands. The power company's contract with Revel has proven a sticking point in the aborted sales.

Shomof and partner Danny Lahov - who arrived Monday night from Los Angeles and stayed at the struggling Trump Taj Mahal, an experience he called disappointing, due to some concern over maintenance problems - are newcomers to Atlantic City. (Lahov said he was expecting something more like Trump Tower in New York City.)

Still, they said they see potential in the oceanfront location of Revel and the stark downturn of the real estate market. Revel, built for $2.5 billion, has a tentative agreement of sale to Florida developer Glenn Straub for $82 million. Shomof has offered $80 million, but argued that Revel would also keep a $10 million deposit from Straub from an earlier failed agreement.

"It's a slump," Lahov said, remarking on the asking prices for condos at the nearby Bella ($150,000 for a one-bedroom, $800,000 for a penthouse with wraparound balconies). "It's a good time for us to get in."

The group had a lunchtime meeting scheduled with the energy attorneys and met with Mayor Don Guardian later in the day. Inside the power plant, a table of yellow hard hats awaited them for a planned tour. They also said they planned to send an attorney to a hearing Wednesday in U.S. Bankruptcy Court in Camden to try to halt to Revel's acceptance of Straub's latest offer so their new offer can be considered.

That would put them in the camp of attorneys for tenants of Revel, including owners of HQ Nightclub and the casino's well-regarded restaurants, who have been fighting for the right to remain under a new owner. Shomof partner Leo Pustilnikov said Monday they would be open to those tenants remaining.

In related news, under a new agreement, Wells Fargo, which is bankrolling Revel's bankruptcy, has agreed to let unsecured creditors have $1.6 million from whatever sale happens, up from $1.35 million. The creditors have criticized the sale process, with millions spent on fees.

What else would Shomof and his team do with Revel?

"We would like to reopen it as soon as possible and look to possibly do some housing on unbuilt floors," Pustilnikov said Monday.

"We just want to reactivate the property and figure it out piece by piece. We've had reasonable success in acquiring properties in similar situations in Los Angeles, taking properties that were hemorrhaging cash and stabilizing them and turning them around. We would like to do nothing different here."

They would not run a casino themselves, he said, but would look to find an operator.

Pustilnikov said one of the keys to success would be property-tax certainty.

"We would like at the very least an agreement to fix property taxes on a going-forward basis for a number of years, so there is a certainty of cash flow that we could project and use toward investing in the property," he said.

The future of property taxes in Atlantic City is up in the air as the New Jersey Legislature considers whether to introduce payments in lieu of taxes for casinos and a Christie-appointed emergency manager examines ways to stabilize the city's finances.

In the end, their first impressions of Atlantic City were a little muted. "It's a shame. It's quiet around here," Shomof said, staring at the bleak area around Revel. "We're used to Vegas."