Costly power plant contributes to $2.4bn casino bankruptcy


An expensive power facility is partly responsible for what is being called the most costly failure in the US casino resort of Atlantic City’s history.

The Revel Casino Hotel has had to file for bankruptcy for the second time and the $2.4bn complex is set to shed 3,170 employees in the process. A$160m district energy centre powering, cooling and heating the facility is being blamed for its part in the hotel’s demise.

The centre is owned by Energenic, a partnership between DCO Energy of Mays Landing and Marina Energy, a South Jersey Industries subsidiary and features four 1,200-horsepower boilers that can use as many as 200 million BTUs of natural gas in an hour. It also uses six 2,500-tonne chillers to provide cold water for Revel’s air-conditioning system. Once warmed in the casino, the water returns to the plant to be compressed, cooled and cycled back inside.
The Revel
Revel lawyer John Cunningham recently told a judge that Revel was losing $2m a week, and has already lost $75m this year.

“Simply put, Revel is not profitable,” he said. “It has over $400m of first-and-second-lien debt. It has steep operating costs, including $3m a month under a burdensome contract with the energy company that runs its power plant.

Associated Press reports that energy company, ACR Energy Partners, is the largest creditor listed in the casino’s bankruptcy filing, with a claim of nearly $10 million.

Potential buyers in bankruptcy court had been put off by the expense of the plant, and have sought unsuccessfully to exclude it from their purchase offers. Revel had hoped there would be additional development in the immediate area that it could sell utility service to, but that never materialized.

The massive hotel opened in 2012 with 3,800 hotel rooms, many overlooking the Atlantic Ocean, along with 10 freshwater and saltwater pools, restaurants, nightly entertainment and a spa.

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