A glitzy casino once praised as a way to revitalize Atlantic City has filed for bankruptcy. Again.
Currently losing $2 million a week, the Revel Casino Hotel filed for bankruptcy last week. With almost $450 million in debt but only $9 million in cash, Revel said it would shut down if they don’t find a buyer. An auction date for the beleaguered casino is tentatively scheduled for August 6, 2014.
After receiving over $260 million in tax breaks from the state of New Jersey, Revel opened in April 2012. Eleven months later, it filed for bankruptcy. Built at a cost of $2.4 billion, the casino now “could fetch as little as $50 to 60 million at an auction,” one industry expert told the Philadelphia Inquirer. Revel’s own lawyer even compared the casino to “a melting ice cube.”
Despite Revel’s two bankruptcies, New Jersey is still trying to use eminent domain to benefit the casino. Charlie Birnbaum, a piano tuner for casinos in Atlantic City (and who once tuned for Sinatra), is fighting to save his family home from the Casino Reinvestment Development Authority (CRDA). His walk-up apartment near the boardwalk has been in the Birnbaum family since 1969.
But instead of respecting Charlie’s property rights, CRDA wants to take his home and bulldoze it to make way for a “mixed-use development.” According to CRDA documents, that development would “complement the new Revel Casino and assist with the demands created by the resort.” Those demands won’t even exist if Revel shuts its doors. Nor has CRDA actually said what the development plans would be. In May, the Institute for Justice filed a lawsuit challenging CRDA’s unconstitutional abuse of eminent domain.
IJ has stopped casino land grabs before, and in Atlantic City no less. In 1998, IJ thwarted CRDA’s attempts to turn Vera Coking’s home into a limousine parking lot for a casino owned by Donald Trump.
— Nick Sibilla
Nick Sibilla is a writer at the Institute for Justice