alexrpt
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.
Via Zerohedge…
Recall that back in April 2012, an ecstatic Atlantic City basked in the neon blue glow of its most recent, “category-killer” casino-hotel, the Revel.
The taxpayer-backed casino was supposed to provide thousands of jobs and millions in much needed tax revenue for both the city and the state for years to come. It did none of that because less than 10 months later, it filed for its first bankruptcy. 16 months later it filed its second bankruptcy as the Atlantic City hotel/casino business model was officially pronounced dead.
Revel’s problems did not end there.
Two days after the current owner of the former casino, Florida developer Glenn Straub who bought the building (unwillingly: in November 2014 Canada’s Brookfield ended up winning the liquidation auction with a $110 million bid but it subsequently backed out, leaving “back up” Straub as the owner in February 2015) its sole source of electricity, heat and water cut off utility service after it could not agree with Straub on a contract. New Jersey’s Department of Community Affairs ordered the power plant to provide limited electricity to keep fire and safety systems powered, but the situation is beset by litigation on all sides.
On Monday, a judge delayed a request by a sewer utility to cut off service to Revel when the utility claimed it hadn’t been paid. Straub must put $140,000 into an escrow account pending a January hearing. In other words, what seemed like a slam dunk deal just 9 months ago has once again turned into a money pit.
And all this without any real vision of how to convert the building into anything that can generate revenue. In fact, even Straub has given up. Which is why, according to AP, he has proposed using it as an indoor water park, a medical tourism resort, an equestrian facility, and a so-called “genius academy” where the world’s top minds would tackle society’s problems.
Which brings us to Straub’s latest proposal how to use the vacant, money-losing building: use it as shelter for Syrian refugees.
Straub told The Associated Press on Tuesday that he’s willing to let people displaced by the civil war in Syria stay at the 47-story Revel resort as he fights in court over its future.
“We treat our dogs better than we treat the Syrians right now,” he said. “If the government wanted to house Syrian refugees, I’d give them use of the building and let them put those people there.”
Which is great news for Obama: recall that recently the White House announced it would accept 100,000 refugees in the US starting in 2017. Surely a few thousand of them wouldn’t mind staying in the luxury building.
Straub added the building is likely to remain vacant for the foreseeable future while he hashes out a half-dozen lawsuits or regulator battles involving its utilities, taxes and former business tenants.
Is Straub doing this out of the goodnews of his own heart? Hardly: he told AP that his “only request would be to be reimbursed for the cost of operating the building while refugees were staying there.”
In other words, the Florida developer made a terrible deal, found himself stuck with a terrible “asset” which he can’t refund or resell, and on top of that, he now has to pay hundreds of thousands of dollars in municipal fees even if the building remains vacant forever. His solution:unleash a few thousand Syrian refugees in New Jersey because, drumroll, he is such a noble guy.
Somehow we doubt a few millions New Jerseyans would share the “kindness” of his heart if asked whether they are willing to cohabitate with a few thousand Syrian refugees living in the taxpayer-funded luxury of a recently bankrupt casino.
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The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.
