[ad_1]
By WAYNE PARRY
Associated press
ATLANTIC CITY (AP) – A struggling Atlantic City casino will finally make a profit this month and chart the way forward with the ownership of a hedge fund in New York.
The Ocean Casino Resort, which called Ocean Resort Casino until a few weeks ago, has significantly reduced its debt and will return to profitability in May, according to Eric Matejevich, Acting CEO. responsible for the management of the property at the seaside, during the transfer of ownership. .
The property, opened in 2012 as Revel and closed two years later, is changing hands again. He is being transferred from Bruce Deifik, the Colorado real estate developer who died in a road accident last month, to hedge fund Luxor Capital, who had agreed to take over and invest $ 70 million. dollars in the property while Deifik had exhausted its financial resources. The transaction could be concluded in June.
Of the $ 70 million that Luxor injected into the property earlier this year, $ 50 million was used to pay down the debt, leaving a significantly improved balance sheet, Matejevich told The Associated Press.
This encouraged David Schwartz, an expert at gambling at the University of Nevada in Las Vegas.
GUIDE: Casinos in the Tri-State
"Reducing the burden of debt will relieve a lot of pressure, which will make it easier for property to invest in facilities and promotions that will attract customers," he said. "Often, putting a casino on a stronger financial foundation can make a big difference."
The complex began to run out of money in September, prompting Deifik to abandon its property in January after just six months.
The immediate priority was to stop the bleeding; the property was losing money every month since September and had fallen below the liquidity requirements imposed by the state.
"In many ways, we are going faster than we imagined," said Matejevich. "We have largely eliminated the losses on the property and are making significant efforts to reintroduce this property into the premises."
This is a small, but encouraging sample: the casino gained more slot machine customers in April than any other previous month and posted its second highest hotel rate . The exact numbers will be released by the state regulators later this month.
The history of the property has not been good. Initial investors, Morgan Stanley, pulled out before half of the deal, losing $ 1 billion. Revel went bankrupt twice without profit and was shut down in September 2014. It remained closed under the ownership of Florida developer Glenn Straub, who sold it to Deifik in January 2018.
Deifik reopened under a new name last June, but quickly ran out of money at the end of the busier summer months. The casino lost $ 3.2 million in September; $ 4.1 million in October; $ 5.5 million in November and $ 5.8 million in December; and in January, Luxor, who had been one of its lenders, agreed to take over.
When it was called Revel, the property was one of only five casinos out of 12 in Atlantic City to have ceased operations between 2014 and 2016. With less competition, the surviving casinos began to fall apart. Come out better. But with the reopening of Revel with Casino Ocean and Trump Taj Mahal under the name of Hard Rock, a higher level of competition was reintroduced in a market that had just recovered. Operating profits in Atlantic City fell by more than 15% last year.
Ocean has put in place a new marketing plan focusing on its casino offerings – hence the transposition of "resort" and "casino" on its behalf – and tackling the long-standing problem of customers in adding new elevators to facilitate access to the casino from the hotel.
Players Club members now receive offers seven days a week, instead of once a week, said Mike Donovan, director of marketing for the property. He added that the casino has a database dating back to the time when it was operating under the name of Revel and contacted old customers "with whom we had not spoken since. one moment".
One of its big goals is to add 500 hotel rooms in its existing tower, increasing its stock by 1,400.
The casino is adding 200 new slot machines and has announced that it has acquired from its operator Ivan Kane the lease of the Royal Jelly burlesque club on its premises. Ocean will replace it with the Memorial Day weekend by what he describes as a "speakeasy" club that will also feature burlesque, as well as table games of chance.
Other amenities advance more slowly. The property still has no buffet and will not do it this summer either; a food court is planned in the meantime. A Starbucks located at the main entrance of the casino has been in the books for months, but construction has not started yet.
The most important development is perhaps the commitment made by the future property owners to keep Ocean open and operational for the foreseeable future, after the busy summer months.
The main union of the Atlantic City casinos recently asked regulators to help protect jobs in hedge-fund casinos, accusing them of seeking short-term profits at the expense of investment and investment. long-term growth. Union President Bob McDevitt, however, said Luxor appeared to be sincere in his desire to rebuild the Ocean business and exploit it for the foreseeable future.
"Luxor is determined to exploit Ocean and is pleasantly surprised by the speed of operational improvements on the site," said Matejevich. "Luxor fully anticipates the slowdown in the market related to the autumn and winter seasons."
___
Follow Wayne Parry at http://twitter.com/WayneParryAC.
(Copyright 2019 The Associated Press Inc. All rights reserved This document may not be published, disseminated, rewritten or redistributed.)
05/05/2019 09:50:20 AM (GMT -4: 00)
[ad_2]
Source link