Casino Union Runs the Numbers on Revel

Fear of another bankruptcy for Atlantic City, N.J.’s Revel casino prompted a local casino workers’ union to do its own calculation of what a prospective buyer should be expected to pay for the glitzy tower.

The estimated price tag Unite Here’s Ben Begleiter came up with, from $25 million to $73 million, is a fraction of the $383 million he estimates Revel owes after its debt load was chopped down in a pass through Chapter 11 that ended in May 2013.

“Bankruptcy is designed to deal with the problem of having too much debt. What it doesn’t do is solve the problem of too little revenue,” Mr. Begleiter said Thursday.

A lack of high rollers has been the problem for Revel and other Atlantic City casinos, which have seen their business drained away by competition in neighboring states.

Revel, through a spokeswoman, declined comment on the analysis released this week by Unite. About six months after emerging from Chapter 11 protection, the casino said it was looking for a buyer or another restructuring to bail it out of continuing financial trouble. Rumors are all that have emerged so far from sale efforts.

“It’s pretty clear that Revel is up for sale. There’s no secret about that,” Mr. Begleiter said. “The thing that we don’t want to see happen is we don’t want to see anyone overpay for this property because that’s not good for the workers in the long run, it’s not good for the city, it’s not good for the industry in Atlantic City, and it could mean another bankruptcy which would be even more painful.”

None of the thousands employed by Revel are represented by Unite. But the union has said repeatedly it wants Revel to succeed, so it has a shot at organizing workers. Revel has said repeatedly it’s not stopping unions from organizing its workers if they can.

Built at a cost of $2.4 billion, Revel admitted at the time it filed bankruptcy that it was already worth less than what it cost to construction. According to Mr. Begleiter, the numbers the casino has turned in since exiting are far off the projections behind the case for restructuring.

“The financial projections that Revel has put out have been consistently overly-optimistic and any valuation that comes as a result of those overly optimistic projections is necessarily too high,” Mr. Begleiter said. “That’s how we got into this mess, with overenthusiastic projections.”

Write to Peg Brickley at [email protected].