Revel owner to buy power plant

The owner of the former Revel casino in Atlantic City has reached a deal that will clear the way to reopening the troubled property.

Florida developer Glenn Straub on Tuesday reached an agreement with ACR Energy Partners and Bank of New York Mellon to purchase the power plant that served as the property's sole source of electricity, according to the Associated Press.

The agreement took place behind closed doors, AP reports:

Straub said after the hearing 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.

Straub said at least part of the property will be open by next summer, which would include the indoor-outdoor water park he proposed back in January this year, AP reports.

Under the deal, which must be signed by Dec. 2, Straub would pay $30 million, while power plant owner ACR pays $15 million into an escrow account to pay off the power plant's bondholders, according to the AP story.

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.

A company called DCO will "fire up boilers at Revel and operate the power plant," AP reports. Straub will set up accounts this week with Atlantic City Electric and South Jersey Gas for utility service in the future, the news outlet reported.

The deal on Tuesday, however, does not solve the litigation over Revel's former tenants, AP reports, which include Philadelphia Chef Jose Garces, who operated four restaurants in the former casino.

"But Straub's lawyer, Stuart Moskovitz, said that is a more easily resolved matter than the protracted utility dispute," according to the AP.

Foreclosure proceedings began earlier this month for ACR Energy to the shuttered casino property. The battle between Straub and ACR began almost immediately after the Florida developer purchased the casino.

Only days after Straub took over in April, Revel's utility provider cut off service after the parties failed to agree on a contract for future service.

Straub faced fines for creating a potential fire hazard at Revel after dismissing workers who oversaw the property's fire-command center.

Attorney Moskovitz, however, claimed earlier that ACR is obstructing the casino owner from securing another power supplier and, in turn, is creating a fire risk at Revel.

Source: Philadelphia Business Journal