Glenn Straub has become the man about town in Atlantic City, in part because he owns the tallest hotel in town and in part because he has the most unusual imagination in the boardwalk city. He bought the Revel casino in Atlantic City in April 2015. It was not an easy deal to get done, but in the end his $84 million bid was accepted by the bankruptcy judge. The “off again, on again” sale was typical of the checkered past of the $4.2 billion casino.
Atlantic City casinos have had some rough years, but probably no casino has suffered more than Revel. Revel was a pre-recession and pre-Pennsylvania casino dream intended to be the grandest of them all – but things did not work out according to plan. The slot machines in Pennsylvania and the Great Recession came seemingly out of nowhere to attack Revel in the midst of construction. The combination of these factors forced the developers to build one tower instead of two as originally planned, crippled efforts to obtain financing and stopped construction completely. When Chris Christie was elected governor of New Jersey, he made it his mission in life to get Revel back on track. After four years of starts and stops it finally opened in April of 2012 and after two bankruptcies it closed in September of 2014.
Enter Glenn Straub, a real estate investor who specializes in buying distressed properties for pennies on a dollar. He has had a varied career from car dealerships to owning construction companies, but investments are the core of his wealth and reputation. By most accounts Straub has been successful. But, as an unknown in gaming, his first bid for Revel was not taken seriously by most observers. The bankruptcy court initially gave the nod to another bidder, but that deal fell through. Straub came back with another bid and eventually a third bid; each time he rebid, he dropped his price. Still in the end, no one else wanted to tackle the white elephant and Straub was the only one left in the game. Experienced casino operators and investors shied away because the property was too large for the market and the market was shrinking.
Neither of those factors bothered Straub; he approached the property as he had with other investments; it was cheap and surely something could be made of an empty $2 billion building. In the last two years he has had lots of ideas. His first was unusual to say the least; Straub wanted to create a university for the intelligentsia, devoted to solving the world’s problems. Straub told Reuters that he wanted to attract the brightest minds in the world to spend their days ruminating on global issues.
Glenn Straub said he’s planning on building a tower more than 30 stories tall at the Revel property that will host to “some of the smartest people in the world,” according to the Press of Atlantic City. “The university’s going to go in,” Straub told the paper. “It’s going to be for geniuses.” Kenneth Hilario, Philadelphia Business Journal, 9-19-14
However, that was only Straub’s first “off the cuff” idea, he has had many others, many as bizarre as the first. His later visions for Revel included a second tower, helping Atlantic City develop high-speed rail and ferry links to New York City and improving the airport. He made some big promises and he promised to act quickly. In the fall of 2014, he said within six months of taking over the property he would have some parts of it open and after two years it would be fully operational, whatever that might mean.
It took longer than the six months, but by mid-2016, Straub was ready to live up to some of his promises. With very little advance warning, he announced a June 15th opening of 500 rooms and a small casino. According to a recent press release the property was now being reconfigured to offer: “A 32-room spa where guests can have medical beauty treatments performed, a white-sand beach area with pools and volleyball courts, a burlesque show and comedy club, ten restaurants, a rock-climbing wall, three 75-seat movie theaters, a skydiving course, a heliport for high rollers and an adventure family-friendly ropes course.” Who could ask for anything more?
Well, actually the city and the state could; they wanted Straub to get licenses and permits. A week before his scheduled opening Straub did not have a gaming or liquor license or an occupancy permit. He was denied permission to open.
While Straub claimed the former megaresort was ready to open June 15, the company lacked several key permits. Those permits included a liquor license from state gaming regulators, a temporary certificate of occupancy from the city and a permit from the Casino Reinvestment Development Authority. Nicholas Huba & Christian Hetrick, Press of Atlantic City, 6-21-16
City officials were unable to inspect the shuttered Revel casino Tuesday, after the company owned by Glenn Straub, did not have the proper paperwork required for a temporary certificate of occupancy. Dale Finch, inspection and licensing director for the city, said Straub’s company lacked its alarm system reports and sprinkler system certification. Nicholas Huba, Press of Atlantic City, 6-22-16
Glenn Straub was not prepared for a denial and it enraged him. He did not accept any responsibility; instead he blamed the officials and even the state of New Jersey. “This is exactly what New Jersey is known for,” Straub said. “This is just one more example of New Jersey’s anti-business attitude.” He thought he did not need a gaming license because he was going to lease the casino. Liquor licenses ought to be automatic and what is an occupancy permit anyway and who cares if the sewer system was not completely functional? It all bothered him, but the gaming license really stuck in his craw.
“Polo North’s application has been pending for months; it has paid over $100,000.00 for New Jersey’s licensing investigation; and some of the largest and most experienced casino law firms in New Jersey contend that the extensive licensing standard is not appropriate nor warranted. Despite the foregoing, New Jersey is pressing ahead to impose its costly, time consuming, and unnecessarily stringent licensing requirement on Polo North, even though it is only a landlord.” Polo North Press Release, 6-21-16
Well, Mr. Straub welcome to gaming. One of those high-priced, gaming law firms should have told you that casinos require licenses, licenses are expensive and the process is lengthy and occasionally arduous, especially for people with complex financial backgrounds, no history in the industry and a propensity for changing their minds frequently. However, Glenn Straub prides himself in always having a backup plan when things don’t work out. I wonder if he will consider tearing Revel down as he did the Miami Arena in 2008. Today the Miami Arena site is a park called “Grand Central Park”. As a plan B, a park would not be as exciting as his A plans, but what are the alternatives for a guy with a vivid imagination, but no license?
