A long battle between developer Glenn Straub and ACR Energy over the fate of Atlantic City’s closed Revel casino may have been settled under a deal where Straub would assume ownership of site’s power plant.
Straub and ACR—owners of the plant—have been fighting over power at the site since Straub bought the Revel site in April.
The deal was worked out with the help of U.S. District Court Judge Jerome Simandle in a closed-door session and allowed Straub’s Polo North Country Club, ACR Energy Partners and Bank of New York Mellon—which financed the Revel bankruptcy—to come to a settlement.
According to the Associated Press, the deal—which needs to be signed by all parties by December 2—would have Straub pay $30 million and ACR pay $15 million into an escrow account to pay off power plant bondholders. Straub will assume ownership of the utility plant, while a corporate affiliate of ACR will retain ownership of a cogeneration plant located inside the central utility plant. That company will disconnect and remove the equipment.
Straub told the AP, that he will now solicit casino operators interested in a 30-year lease to run gambling operations at the site, but on a smaller basis than what was there before.
“It’s not going to be the old Revel,” Straub said. “But now we can talk to casino operators and tell them we’re interested in a 30-year lease. No one would want to sign a lease under the old circumstances when the future of the property was so uncertain.”
According to the AP, a company named DCO will start boilers at the site—returning heat to the site—and operate the power plant. Straub will also set up accounts with southern New Jersey utilities for future service.
The deal also clears out the litigation that has surrounded Straub’s purchase of Revel since April and has kept him from re-opening the site. The deal also saves ACR from a possible foreclosure.
Since Straub bought Revel, he has refused to pay for power from ACR’s plant, even though that plant is the site’s sole source of electricity. ACR had sued for back power payments and to protect its equipment in the building.
The battle left Revel in the dark for several days until the state mandated that Straub purchase enough electricity to keep fire suppression systems operating.
The deal does not address other litigation from Revel’s former business tenants that are seeking to remain at the property.
Meanwhile, Atlantic City’s council has begun a move to name a developer for the area around the Revel, which could lead to the site being condemned unless Polo North moves quickly to re-open it. Straub said he expects the property to reopen in some capacity in 2016.
