Kevin DeSanctis, the man who guided Atlantic City's Revel casino-hotel through its tortuous development, only to see it struggle in the cutthroat East Coast gambling market, is stepping down as head of the $2.4 billion resort.
The company announced Wednesday that DeSanctis and chief investment officer Michael Garrity will resign from their positions with Revel Atlantic City but retain their jobs with Revel Group, the holding company that developed the resort and licenses its brand. There, they will work on developing amenity projects for Revel.
Taking over the resort's day-to-day operations is Jeffrey Hartmann, a 20-year veteran of the casino, hospitality and leisure industry. His duties will begin once he is approved by New Jersey casino regulators.
The moves come less than two weeks before Revel is expected to file a pre-packaged Chapter 11 bankruptcy filing that will wipe out about two-thirds of its debt and give lenders a greater equity stake in the resort in return.
“Having worked with Jeff for many years, I have no doubt he is the right person to lead Revel AC through the restructuring process and oversee day-to-day operations,” DeSanctis said in a statement. “Revel's resort is the marquee asset in the Northeast and with a right-sized balance sheet and under Jeff's stewardship, I am confident that revel is poised for success.”
The company's board of directors said in a statement that Hartmann is “a natural choice for the role.”
Hartmann said he is ``deeply committed to ensuring that we operate our business as usual, and emerge from this process positioned for long-term success.''
He most recently was president of the Hartmann Group LLP, offering specialized experience in the casino, hospitality and leisure industries. Before that he was president and CEO of Mohegan Sun in Connecticut from January 2011 until October 2012.
Earlier in his tenure at Mohegan Sun, he served as chief operating officer for the Mohegan Tribal Gaming Authority from 2004 to 2010, and as its chief financial officer from 1996 to 2004.
Hartmann also served as chief financial officer for the Connecticut Sun of the Women's National Basketball Association, and also worked as vice president of finance for the Foxwoods casino resort, also in Connecticut.
Revel opened last April but has languished near the bottom of Atlantic City's 12 casinos in terms of gambling revenue. Many hoped that Revel would be the kind of game-changer that Atlantic City desperately needs to shake off a six-plus year stretch of plunging casino revenues and declining market share.
But it never really caught on. After reaching a high point of $20 million in revenue last August, Revel's take from gamblers sank, reaching just $6.2 million in November, a month in which all 12 casinos were affected by the aftermath of Superstorm Sandy. Its revenues have since rebounded somewhat to $9 million last month.
Bob McDevitt, president of Local 54 of the Unite-HERE union, has been one of Revel's most vocal critics. The casino is largely non-union, and has the only policy of its type in Atlantic City, under which most employees involved in customer service have to reapply for their jobs every four to six years.
“We believed the project was going to struggle from the beginning, and it did,” McDevitt said. He said DeSanctis' biggest mistake was “overestimating the market.”
He said the union plans to reach out to Hartmann to see if a better relationship can be forged.
McDevitt also said Revel's timing was particularly bad, getting under way just before the national economy cratered in 2007, when it was too far along to abandon. Initial investor Morgan Stanley pulled out and took a $1 billion loss on the project rather than see it through.
“At a time when other projects around the gambling industry were stalled, they marched forward,” McDevitt said. “They took a risk and they got burned by it.”