Revel’s Faustian pact; Hope fades in Florida

Glenn Straub finally got what he wanted, the right to ixnay the contracts of all the tenants at Revel, aka Polo North. After much hesitation during the constipated bankruptcy sale, Judge Gloria Burns finally ruled against the leaseholders, meaning the brawl will probably spill over into state court, although Straub attorney Stuart Moskowitz says Straub’s object of desire is merely “reasonable lease adjustments.” Besides, what are the chances of Straub getting a whole new set of restaurateurs, nightclub operators, etc., in time for a summer reopening, especially if he wants to take advantage of new amenities and big-name outdoor concerts?

Straub isn’t faring so well on the power-generation front, his much-touted mobile generators having been vetoed over concerns about air pollution. The developer is furthermore barred from switching on any equipment belonging to nearby power plant ACR Energy Partners. Long-suffering lender Wells Fargo has offered to pony up $300,000 to get electricity and water flowing again but, strangely, neither Straub nor ACR has accepted. We seem to have two very stubborn parties who have the bad luck to be at cross-purposes with one another, even when it seems in their mutual interest to take Wells Fargo’s money and turn the lights back on.

At least Straub can lay some of that problem on former Revel CEO Kevin DeSanctis and the sweetheart contract he negotiated with ACR. It gave the latter 20 years of exclusivity as Revel_lobbypatio_PANORevel’s water-and-power provider, as well as lumbering Revel with various obligations, including promising ACR a 15%-18% ROI. Satisfying such demands — on a plant ironically intended to save money — meant that Revel was paying $2 million a month in addition to its energy costs. Stupid much? No wonder so many prospective buyers took a look at that deal, blanched and ran the other way. Straub, by contrast, is simply refusing to honor previous ownership’s contract. Revel wasn’t meant to be ACR’s sole client but the nearby redevelopment that Revel was supposed to inspire hasn’t manifested itself.

Straub’s people can certainly learn a lot of things not to do from the bankruptcy filing, whether it is overpricing the market in food and beverage or letting the general contractor sandbag them with $100 million in cost overruns at the last minute. If Straub gets his promised university up and running, it can teach Revel as a case study in how not to open a casino megaresort.

* Parimutuel barrel racing? That’s an oddball provision that’s helping doom the fast-sinking Dana Youngchances of gambling reform in Florida this year. There’s not much left of Rep. Dana Young‘s omnibus gaming bill. What remains includes a cap-and-freeze policy on parimutuels, racino status for two dog tracks and the creation of a state gambling-regulation agency. The last one seems like a no-brainer but the Florida Lege is never predictable when gaming is the issue. “Our only job is to tax [gambling],” said Rep. Charles Van Zant (R), expressing the legislative zeitgeist. As for Seminole Tribe blackjack, the House, Senate and Gov. Rick Scott (R) all have their discrete versions of extending it, with none seemingly likely to prevail at this juncture.

* Wynn Resorts is expressing what Arnold Schwarzenegger would call “hurty feelings” after Egan-Jones Proxy Services endorsed the candidacy of Elaine Wynn in the upcoming board of directors election. The company keeps promising to prioritize female and minority candidates in future elections — a vow it didn’t make until Ms. Wynn drew attention to the fact that her expulsion would result in a directorate comprised entirely of white men.

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