ATLANTIC CITY, N.J. — Revel, a $2.4 billion Atlantic City casino resort that almost didn’t get built, cleared its final major hurdle on Monday.
The New Jersey Casino Control Commission approved a casino license for the resort, which will become the city’s 12th casino when it opens April 2.
Gambling is only part of the resort; it also has a luxurious spa, 14 restaurants, 10 pools, and a theater with 5,050 seats that will host Beyonce on Memorial Day weekend.
“We’ve convinced people for 30 years that if you’re not a gambler, you can’t come here,” said Kevin DeSanctis, Revel’s president and chief executive officer. “We want to convince them you can. We’d love to have you.”
Linda Kassekert, chairman of the casino commission, said Revel will be the kind of game-changer in Atlantic City that the Borgata was in 2003.
“We are placing a great deal of confidence in you, Mr. DeSanctis, and your team at Revel,” she said. “Your ability to market this property and draw new people to come and experience what Atlantic City has to offer will play an enormous role in the future success of the gaming industry here.”
The project ran out of money during the recession but resumed last year with the help of some state tax incentives. Original backer Morgan Stanley pulled out of the project and took a $1.2 billion loss on it. Much of the remaining financing for the project came from J.P. Morgan, DeSanctis said.
Located at the extreme northern end of the Boardwalk, next to the Showboat Casino Hotel, Revel is the first casino to open since its main rival, the Borgata Hotel Casino & Spa, debuted in 2003. With its angular slanted roof and its giant white light-up ball atop the 47-story structure - at 710 feet, it’s the second-tallest in New Jersey - Revel is already an iconic presence in the nation’s second-largest gambling market after Las Vegas.
The struggling seaside gambling resort, which soon will be surpassed by Pennsylvania as the nation’s second largest, is counting on Revel to help revive its economy.
Michael Garrity, Revel’s chief investment officer and a former Morgan Stanley executive, said the resort’s business model differs from its competitors.
“We’re fundamentally betting on the demographic underpinning of the northeastern United States,” he said. “It’s not just about Atlantic City.
“What always amazed me about Wall Street guys is our willingness to get on a plane, and fly five or six hours to Las Vegas,” he said. “Because we’re gamblers? No. Because we want to have fun. That’s what Revel is all about.”
Revel will not compete hard for the convenience gambler, who comes to town, plays for an hour or two, then leaves, DeSanctis said.
“That’s not a customer we can survive on,” he said. “It’s just not going to happen. We need an overnight stay. We’re looking for two nights.”
In terms of financial stability, Garrity said, Revel has seven months of interest payments set aside in an account, and expects to secure a $50 million revolving credit line by mid-April.
The resort will be Atlantic City’s first smoke-free casino. Eighty percent of residents in the northeast - Revel’s target market - are non-smokers, DeSanctis said, and when you add the smokers who wish they could quit, the number approaches 90 percent.
“Most resorts today, the smoking thing is sort of out of date,” he said. “I don’t think smoking is going to come back indoors in any large sense anytime soon. I believe it’s the right decision, and we’re going to have the right environment because of it.”
Revel is hosting three so called “play days” this week for invited guests only, including construction workers who helped build the resort. It will open on April 2 with a champagne toast at sunrise.
Business, Pages 22 on 03/27/2012