The company that won a bankruptcy auction to buy the shuttered Revel Resort in Atlantic City, New Jersey has terminated the deal, NBC10 has confirmed.
Brookfield US Holdings, LLC. spokesman Andrew Willis said Wednesday that the $110 million purchase is no longer moving forward.
The Toronto-based company, which operates the Hard Rock Casino & Hotel in Las Vegas and Atlantis Paradise Island in the Bahamas, had planned to reopen Revel as a casino.
Sources close to the situation tell NBC10's Ted Greenberg that the deal fell apart after ACR bondholders and South Jersey Industries refused to alter Revel's utility bill payment structure.
The resort gets its power from a power plant, which is built adjacent to the casino and chills and heats water and provides electricity, that was built specifically for Revel's use. The power bill is $3 million a month or $36 million a year. The new owners wanted to change that price but the utility refused to, sources said.
Brookfield won the right to buy the $2 billion resort during a bankruptcy auction in October. The company outbid Florida-based real estate developer Glenn Straub who offered $95.4 million for the troubled casino.
Revel selected Straub's company, Polo North Country Club Inc. as the backup buyer.
Straub told NBC10 that he learned the deal had gone south a day and a half ago. The developer said he's willing to buy the resort so long as the price doesn't get too high and that the court proceedings are fair.
“We’re obviously interested," Straub said. “We just want to get the damn town in a position where it can recover.”
As for what might become of property, Straub had previously floated a plan to turn the 47 story hotel and casino complex into a university that would ideally serve "white and over 21" students. Straub had said his comments were meant to reflect someone who does not have financial obligations.
On Wednesday, Straub said his team had several ideas for what to do with Revel, but would not elaborate further. He did say that the city, like many others relies too much on gambling, and that he is interested in helping those who lost their jobs get back to work.
“That place is not only made for gambling. It’s made for much else," he said.
Brookfield is required to file court statements explaining why the deal had been terminated. That should come within the next week or so.
Atlantic City Mayor Don Guardian released a statement Wednesday night on the terminated deal:
“I am sorry to hear that the Brookfield transaction was not completed. Although Brookfield would have been a good fit for Atlantic City, we will continue to attract new investors. Atlantic City is a resilient city, and better days are still ahead of us. In fact, every investor should know that in just the past two days, we welcomed over 17,000 people for the 99th Annual New Jersey State League of Municipalities Conference. Everyone that I talked to had a great time, and reaffirmed to me just how much they love coming to Atlantic City every year. Without a doubt, Atlantic City is still the place to be in New Jersey.”