Bid fails to broker truce at Revel

On the seventh day of a powerless Revel, a judge tried valiantly to broker a peace to bring light to the 6.2 million-square-foot failed casino hotel near the end of the Atlantic City Boardwalk.

"We're talking here about what I think is a very humble objective - getting the lights on," U.S. District Judge Jerome Simandle said as the recalcitrant parties - new Revel owner Glenn Straub and energy supplier ACR Energy - and their attorneys gathered once again in a federal courtroom in Camden.

But it could not be done, at least not after three hours in chambers.

And so, with Straub's diesel generators - which the state said Wednesday likely would violate federal clean-air standards - sitting idle outside Revel, Simandle ordered the parties to keep talking and report back by phone at 9 a.m. Thursday. They were, for now, negotiating only a short-term deal to return power to the structure.

Since buying Revel for a steeply discounted $82 million on April 7, Straub has been under siege. Power was shut off by ACR two days later, and fines are being levied against him by the City of Atlantic City, which has declared the building a fire hazard.

On Wednesday, with the fines now totaling $40,000, and seven days of possible mold and humidity infiltrating the building, a third front opened up in the Battle of Straub: the State of New Jersey.

A compliance team of a half-dozen people from the Department of Environmental Protection visited the site Wednesday afternoon and said the two diesel-powered generators parked on South Metropolitan Avenue outside the profitless and powerless property likely violated emissions standards, said Larry Hajna, a state DEP spokesman.

Straub, however, thumbed his nose at the state's thumbs down, saying he'd be willing to take the penalty for the polluting generators, which he said would be $3,000 a day. That would be less than the $5,000 a day the city is imposing.

Hajna said the DEP team was attempting to suggest alternate energy sources for Straub, including smaller and newer diesel-powered generators that would not spew toxic emissions, or an alternate way to tap into the city's energy grid.

"At least the main one is a really big one," Hajna said. "We're evaluating it."

He quipped, "I don't know where he got them, yard sale? But they are older units that probably would not meet federal standards. You can't violate federal clean air standards." He said newer generators might be more costly.

Straub said he could run the violating generators for 30 days, then switch to the closed Showboat as a source - running wires on telephone poles for a couple of months - and then move onto the city's grid, with transformers supplied by Atlantic City Electric.

But whether Straub can even hook into the energy distribution system inside Revel is under dispute. ACR contends that it still owns that equipment, not Straub.

ACR was asking the judge to bar Straub from using its equipment. Straub is trying to evict the energy supplier, whose only customer was Revel.

The judge said the parties had a "real opportunity" to come to some agreement. By late afternoon, he had gathered them into his chambers.

Straub had also not applied for a city permit to run the generators. Dale Finch, Atlantic City's director of licenses and inspections, said Straub's Polo North Country Club company submitted plans for hooking up the generators to the construction office, which were under review.

Straub said that in Florida, the procedure is to apply for the permit after hooking up generators in emergency cases. "Here they'll let the emergency go on 30 days," he said.

ACR owns the power plant, built with $40 million of the company's money and $116 million in municipal bonds, but leases the land, which now belongs to Straub.

The impasse has left the Revel, after two profitless years, two bankruptcies, and its closure last September, with a new indignity: sitting literally dark and without power.

Straub was at the property briefly Wednesday with the DEP compliance team, which he said offered alternative ideas for power. "I was impressed by the people they sent over," he said. He then grabbed his cellphone charger and got into a car driven by his building engineer - hired from Revel, where he worked first day to last - and headed to court.

Straub is staying on his yacht, Triumphant Lady, in Atlantic City's Farley State Marina. He called it the company's "control center."

"We run it every time we take over a toxic asset," he said.