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Straub says deal forged for sale of Revel power plant

Straub says deal forged for sale of Revel power plant

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Revel Plant

ACR Energy Partners’ power plant is across the street from Revel. It has not been paid since Revel’s second bankruptcy, and bond owners were to be paid out of income from Revel.

ATLANTIC CITY — The owner of the former Revel Casino Hotel on Tuesday announced it was buying a power plant across the street from the disused resort and settling a grinding fee dispute that for months has kept the building — one of New Jersey’s tallest — unheated and barely powered.

The annoucement came hours after the president of City Council publicly broached the idea of condemning the closed casino-hotel, calling it “one of the biggest eyesores and black eyes in the city.”

Heat will return to Revel on Wednesday, said Stuart Moskovitz, an attorney for Revel owner Polo North Country Club Inc. City officials for weeks have voiced concerns that pipes would freeze and cause widespread damage and fire hazards at the 6.2 million-square-foot property.

Under the settlement, investor Glenn Straub’s Polo North, which bought Revel in April, will pay $30 million and the plant’s owner-operator, ACR Energy Partners, will pay $15 million to resolve a three-way dispute among the companies and bondholders who were trying to foreclose on the plant.

The deal calls for Polo North to take over the plant, ACR to keep possession of certain equipment within it and the bondholders to take $45 million as payment for the bonds, at least some of which were bought at a discount, Moskovitz said.

Nearly $119 million in municipal bonds were used to help build the Inlet District Energy Center, Revel’s sole source of power. Straub jettisoned Revel’s long-term energy contract with ACR when his company bought Revel for $82 million. With Revel closed, the bondholders, who were supposed to be repaid by ACR with money from the casino-hotel, were facing a near-total loss of their investment.

Meanwhile, Council President Frank Gilliam Jr. on Tuesday introduced a resolution that would let the city “take a much more aggressive stance” in forcing Polo North to get its building up and running.

The resolution seeks to name M & J at Melrose LLC as the official redeveloper of land in the city’s South Inlet section, including land where Revel sits. The company is connected to Joseph Jingoli Jr., whose construction firm helped build the power plant.

An officially named redeveloper can partner with local officials to push for condemnation of property within a redevelopment zone. The resolution lays the foundation to condemn Revel if necessary, Gilliam said. It “stirs the pot in terms of development going on around him (Straub), and because there’s areas in and around Revel that need attention, that then will allow the city to approach Mr. Straub in a much more meaningful manner,” Gilliam said.

The resolution sparked long discussions on whether it had gone through the proper process before being voted on. Councilman Aaron Randolph, whose 1st Ward covers the South Inlet, said he didn’t know anything about the resolution and did not want to vote on it until he met with the representatives from the development company Monday.

“Why couldn’t you call me?" Randolph asked Gilliam. “I wanted to be at the table.”

Marty Small expressed concern there was no request for proposal for the project, asking, “What’s the rush?”

Gilliam said all planning and development concepts go through a vetting process and said planning and development committee meeting minutes are dispersed to all council members.

“I’m not trying to be a bulldog,” Gilliam said. “I just know I’ve done my due diligence enough to actually ask the council for support to move on something that has been vetted from the administration as well as the Legislature.”

The resolution passed with Randolph and Small voting no. Councilman Rizwan Malik voted present.

Straub was downstairs at City Hall after the meeting, saying he came late. He did not speak during the meeting but said after that council was “trying to put some leverage on us.” He described the move as sneaky, saying “our attorneys didn’t know” about the resolution.

A redevelopment plan for the land at issue requires approval from the Casino Reinvestment Development Authority, which oversees land use and planning in the city’s Tourism District.

Staff Writer Christian Hetrick contributed to this report

Contact: 609-272-7239

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