ATLANTIC CITY, N.J. (AP) - The city’s main casino workers’ union says Revel Casino Hotel is worth between $25 million and $73 million.
The casino, which is seeking a buyer, cost $2.4 billion to build. It has struggled since opening two years ago and emerged from bankruptcy court last May.
Local 54 of the Unite-HERE union issued a report Wednesday examining Revel’s finances through publicly available documents.
“We want potential buyers to fully understand Revel’s financial position,” said Ben Begleiter, a research analyst for the union. “It’s not good for the workers at Revel, the community or the industry if a buyer overpays for this property. Overpaying could lead to an even more painful bankruptcy down the road.
“Irrational enthusiasm and lack of clear-eyed analysis is what led to the mess we have today,” he added. “We don’t want the cycle to be repeated.”
The union asserted that in the casino industry, the true value of a property is usually calculated from its earnings before interest, taxes, depreciation and other costs. But Local 54 projects that Revel will not be profitable until 2024.
Because of that, the union based its estimate of the casino resort’s value on the worth of its land or its hotel rooms. Based on the recent sales of Resorts Casino Hotel, Trump Marina (now the Golden Nugget Atlantic City) and the shuttered Atlantic Club, the going price of casino land in Atlantic City is between $1.25 million and $2.71 million per acre. Hotel rooms are valued at between $28,925 and $52,198 apiece, the union said.
Local 54 has been locked in a dispute with the non-union Revel since before it opened.
Revel officials declined comment.
Earlier this month, Revel President Scot Kreeger told The Associated Press the casino hopes to conclude a deal by the end of this year that could take the form of an outright sale, a strategic alliance with another company or a joint venture among two or more companies to operate it. He also said he cannot rule out a second Chapter 11 bankruptcy filing.
The casino posted a gross operating loss of $130 million last year. For the fourth quarter of the year, it reduced its operating losses ($22.2 million) by nearly 43 percent compared with the last three months of 2012.
It has been seeking cost-cutting strategies and promotions to attract new customers to help it win a larger share of the ultra-competitive Atlantic City market that is also dealing with casinos in neighboring states.
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Wayne Parry can be reached at https://twitter.com/WayneParryAC
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