ATLANTIC CITY, N.J. (AP) - The man overseeing Atlantic City’s Ocean Resort Casino until new owners take over says the property is re-stocked with cash and is already starting to turn around its performance.
In his first interview since being appointed as the divestiture trustee for the struggling property, Eric Matejevich told The Associated Press that the property once again meets state-imposed requirements to have at least $36 million on hand at all times.
He said the casino is already starting to show significant improvement in business levels, even during the slowest period of the year.
And a new marketing plan stressing customer value, coupled with a new operating philosophy - that this is a casino with resort amenities rather than a resort that just happened to offer gambling - are in the cards, as well.
“The prior two owners advertised this property as a resort,” Matejevich said Wednesday. “We view ourselves as a great casino property with beautiful resort amenities.”
It’s the latest turnaround plan for the star-crossed property that has confounded numerous owners since it opened in 2012 as Revel. Built for $2.4 billion, it never came close to turning a profit, went bankrupt twice and shut down in Sept. 2014 after little more than two years of operation.
Florida developer Glenn Straub held it for three years but never reopened it. Ironically, he is the only owner to ever turn a profit from the property, and that was when it was closed, by selling it for more than he paid for it.
Straub sold to Colorado developer Bruce Deifik in January 2018, and the property reopened in June. But by September, it was already hemorrhaging cash and violating state levels of minimum liquidity.
Matejevich is overseeing Ocean Resort until New York hedge fund Luxor Capital takes over from Deifik. It began to run out of money in September, prompting Deifik to relinquish ownership in January, after just six months.
The immediate priority was to stop the bleeding; the property had been losing money every month since September, and had fallen below state-mandated liquidity requirements.
That situation has been rectified by an infusion of cash from Luxor, which ultimately plans to plow $70 million into the property.
“We’re back in compliance, and we will remain in compliance,” said Matejevich, who formerly served as chief operating officer for the Atlantic Club casino in Atlantic City before it shut down in 2014. “We have a parent company that is a very significant New York fund that is committed to the asset. We’re starting to already see a fairly significant increase in our business levels.”
Messages seeking comment were left Thursday for officials with the state Division of Gaming Enforcement.
In May, the property will launch a new marketing campaign emphasizing its affordability - an antithetical view to that of the original owners, Revel Entertainment, who viewed it as a swanky playground for high rollers and Wall Street types. That was a group that never showed up in significant enough numbers to support the business plan.
“We are able to offer the best value proposition in Atlantic City,” Matejevich said. “We provide the best amenities in this market in our slot product, restaurants, sports book, entertainment venues, hotel rooms, and parking garage, at price points that are comparable to the most value-oriented properties in this market.”
The new emphasis could work, according to David Schwartz, associate vice provost for faculty affairs at the University of Nevada Las Vegas.
“Any new casino has to walk a fine line in Atlantic City, but this new plan seems to be a better fit for the current market,” he said. “By balancing value with the novel experiences of the top-flight amenities the property has, the resort could find a following. With so much competition, properties need to offer both something different, and value. The key will be messaging.”
A plan to build add another 500 hotel rooms to the property is still on the table, though not guaranteed, Matejevich also said. And getting a buffet opened remains a top priority.
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