Revel Casino Project Back From Dead
The Wall Street Journal reported that the Revel casino project in Atlantic City, New Jersey, is close to raising $1.15 billion to help complete construction, putting it on track to open in 2012, citing unidentified people familiar with the matter.
The Journal said that Revel would get $850 million from a private placement that gives lenders a first-lien claim on the 1,100-room resort. According to the newspaper, in mezzanine financing, it would also obtain $300 million.
Revel is projected to contain 1,900 to 3,800 hotel rooms, 150,000 sq ft. of gaming space, 500,000 sq ft. of entertainment space. At 47 stories (710 ft), the hotel tower is the tallest structure in Atlantic City and the second tallest in the state of New Jersey. The property will house a 5,000-seat arena, 40 "upscale" retail shops and 20 restaurants. In the United States, the tower is also the second tallest casino tower.
Mr. Christie, a Republican who built a reputation on spending cuts, hopes to revitalize the economy by slashing the regulation. Christie also signed bills, which should result in a much larger sports betting industry that could rival that of Las Vegas and allow exchange betting in the state. An Atlantic City tourism district is being created by Christie, which is aimed at making the area more appealing to visitors.
The unfinished Revel Casino project is one of the casinos that will benefit the most from Christie’s actions. The credit markets dried up and Revel Entertainment Group ran out of funding for the project, in the height of the recession, which resulted in stalling the construction in January of 2009. In 2012, the casino resort was slated to open, but without the funding, completion of the casino no longer seemed a certainty.
Political leaders, who have anguished about Atlantic City's loss of its monopoly on East Coast gambling, get fresh hope after the project's resurrection since December. However, some analysts and operators fear that an already depressed gambling market will be cannibalized by resuming construction on Revel.
The outcome for Morgan Stanley will not change the outcome by infusion. The project was spear headed by Morgan Stanley and it wrote down nearly its entire $1.2 billion investment. The New York firm will cash out with a mere $30 million, as a part of the restructuring.