Above is a state photo of the Revel casino and hotel just as construction was being finished on the project in late 2011 or 2012.
As you can see, it is huge, 47 stories, the second tallest building in the New Jersey and by far the tallest in Atlantic City, the first East Coast location to open to gambling in the late 1970s.
Revel is a beautiful building, but it was not like other casinos in Atlantic City. Its gaming area had full windows, not the 24-hour artificial light typically associated with gambling venues. Smoking was not allowed. There were fewer slot machine areas and $5 blackjack tables than at other casinos. Drinks were not comped as often, and restaurants were pricier than those at other hotels. Its check-in lobby, accessed by escalator, was on the 11th floor. Its amenities included a 5,500-seat arena, a 700-seat theater, 10 swimming pools, a fancy spa and lovely rooms priced at $400 a night.
In short, Revel was designed to expand the Atlantic city clientele by attracting a new class of wealthier customers in what traditionally had been a downscale gambling market.
Revel was supposed to be a game-changer. Instead, it seems to have burned just about everybody who had anything to do with it.
Morgan Stanley
Morgan Stanley, the enormous financial firm, bought the Revel property parcel in 2006 (the peak year for Atlantic City gambling, when $6 billion was spent in the city's casinos.) The firm commissioned Revel Entertainment Group to develop a casino and hotel on the site.
Plans were made for a $2 billion casino and hotel with two 700-foot towers, 4,000 guest rooms and 7,000 parking spaces.
By 2008, Atlantic City gaming revenues had begun their decline, and plans for one of the two hotel towers were deferred. Morgan Stanley took out a loan to keep construction going.
In 2009, the project was in trouble. There was talk of $300 million in New Jersey tax breaks to complete Revel.
The tax breaks were not approved. In spring, 2010, Morgan Stanley stopped construction on Revel.
New Jersey Steps Up
In 2011, Morgan Stanley sold its Revel stake for $30 million, taking a loss of $1.2 billion. Revel arranged a $1.15 billion financing package to complete the project, largely with 12-percent loans from hedge-funds that could be converted into 90 percent ownership of Revel after several years.
New Jersey promised $260 million in future tax breaks from Revel profits.
Revel opened in April 2012. Gambling revenues were well below expectations.
Four months later, Revel was operating in the red and its debt was downgraded.
In December, Revel lined up new financing for the hotel-casino.
Bankruptcy No. 1
Three months later, in March 2013, less than a year after its opening, Revel filed for bankruptcy, exiting two months later after giving 82 percent of its equity to its lenders.
Gambling revenues continue to drop in Atlantic City. Total 2013 revenues in the city were $2.8 billion, down more than half from the peak year of 2006. The opening of casinos in other states -- Delaware, Pennsylvania and New York -- had drained customers from Atlantic City, and the market for casinos was saturated.
Revel's revenues were among Atlantic City's lowest.
Bankruptcy No. 2
In January 2014, the Atlantic Club casino closed, leaving 11 casinos, most of them unhealthy, struggling to survive in Atlantic City.
In June, 13 months after its last bankruptcy was resolved, Revel filed for bankruptcy again and said it would close if a buyer could not be found at auction.
Two other Atlantic City casinos, the Showboat and the Trump Plaza, closed at the end of the summer season.
Revel closed the day after Labor Day, putting 3,100 employees out of work, as well as several hundred other workers who had jobs at restaurants in Revel.
Another casino, the Trump Tax Mahal, has announced it may close in November.
Sold Again
An auction was arranged. The first bidder, a Miami real estate tycoon with an appetite for bankrupt properties, bid $90 million for Revel, which had cost $2.4 billion to complete and burned through hundreds of millions more in its short two years of operation.
A second bidder appeared and won Revel for $110 million cash. The group has two casino/hotels in Las Vegas and the Bahamas.
The buyer has announced plans to re-open the casino and hotel, perhaps under a new name. Operating a property the size of Revel, with 1,400 hotel rooms and many amenities, is an expensive proposition. Generating enough revenue to keep the facility going, let alone to make a profit in a declining gambling market, already has been proved twice to be unworkable.
It is hard to see how this can end well.
Meanwhile, the biggest economic news in Atlantic City is the anticipated opening of an 86,000 square-foot Bass Pro Shops outdoor center on the road into town.
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