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article imageToronto bidder cancels plans to buy Atlantic City casino

By Nathan Salant     Nov 21, 2014 in Business
Toronto - A Canadian investment firm appears to have has backed away from plans to buy a bankrupt Atlantic City, N.J., casino even though its indecision could cost $10 million.
Brookfield Property Partners LP of Toronto said Wednesday it was no longer interested in buying the now closed Revel Casino on the city's Atlantic Ocean boardwalk, leaving a moribund symbol of the up-and-down fortunes of the gaming industry.
Revel cost more than $2 billion to build after getting millions of dollars in tax incentives in a state-sponsored effort to revive the casino-dependent Atlantic City economy, but the casino-hotel lasted only two years before collapsing into bankruptcy for a second time earlier this year.
Brookfield won a bankruptcy court auction to buy the Revel for $110 million in September, according to the Bloomberg business news service.
Sources with knowledge of the industry said Brookfield called off the deal after recognizing it would be unable to cut millions of dollars from the casino-hotel's annual electric bill to help it move toward profitability, the news service said.
The sources asked not to be named.
Brookfield would presumably forfeit a $10 million deposit it made during the bidding process.
Revel was powered by a $129 million power plant built on the property by a New Jersey consortium and paid more than $2 million a month for electricity and air conditioning, Bloomberg said.
“I am sorry to hear that the Brookfield transaction was not completed,'' Mayor Don Guardian said in a written statement.
"Although Brookfield would have been a good fit for Atlantic City, we will continue to attract new investors,'' Guardian said.
Brookfield also owns Atlantis resort in the Bahamas and the Hard Rock Hotel & Casino in Las Vegas, and had pledged to reopen Revel as a casino.
The main competing bidder, Florida developer Glenn Straub, had other plans for the property.
Straub filed a lawsuit after the bidding to challenge the auction process as unfair, but now could have his $90 million bid be selected to purchase Revel.
Straub said Wednesday he still was interested in buying the property, according to the Philadelphia Inquirer newspaper.
The luxurious casino-hotel opened with a splash in 2012, featuring attention-grabbing performances by top recording artists The Eagles, Beyonce, Rihanna and Maroon 5 in its entertainment halls.
Revel was the site of the infamous elevator incident between now-suspended Baltimore Ravens running back Ray Rice and his then-fiancee, Janay Palmer.
But difficult economic times and increased competition have caught up with the gaming industry, which is slumping region-wide.
Revel was the fourth Atlantic City casino to close this year and a fifth, Trump Taj Mahal, has threatened to close on Dec. 12.
The old Showboat casino, which closed Aug. 31 after 27 years, has agreed to be acquired by Richard Stockton College of New Jersey and be converted into a college campus.
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