The $2.4-billion Revel casino is bankrupt. Is it time for A.C. to get back to its roots?
The Revel casino hotel was supposed to save Atlantic City, but it couldn't even save itself. The $2.4 billion, 6.3 million-square-foot gambling and entertainment megaplex filed for bankruptcy this week - the second time it's done so in two years. Serious gamblers know when to walk away, and indications are that investors are about to do just that, liquidating the first casino to open in a decade less than two years since Hurricane Sandy left it relatively unharmed. Summer is Atlantic City's biggest season and this one is already shaping up to be more Irish wake than beach party.
The Wall Street term for what's happening on Absecon Island is "Right Sizing," which means that supply (gambling halls, theaters, restaurants) is adjusting to lower demand (people willing to pay to sit in gambling halls, theaters, and restaurants). From the perspective of boardwalk regulars that looks a lot like shrinkage. The Atlantic Club closed earlier this year and rumors have taken up permanent residence in the Showboat and Trump Plaza.
To make matters worse, New York is currently accepting applications from gambling firms looking to build a major attraction in Orange County, a short drive north of the city. That casino - whenever its finished and whatever it looks like - will be more accessible for Manhattanites looking to splash out on a Friday night.
Investors will spend a lot of time mulling whether the Revel failed because of what it did or because of where it was. In truth, it was probably the combination of the two. The casino, which features massive Atlantic Ocean views, a sprawling spa complex, and a Marc Forgione steakhouse brought a bit of Steve Wynn-style glamour back to a town dominated by earthier establishments like the Tropicana, with its unapologetic '50s vibe. The idea was to bring in New York's high rollers, but this is the NetJets, fully-reclined-in-first-class era, and Vegas isn't that far away. Sipping champagne at 30,000 feet is more pleasant than sitting in Expressway traffic. Besides which, glitz was never what Atlantic City did best. If Vegas is Sin City, A.C. has always been Whim City. For New Yorkers at least, it's not a destination so much as a place you end up.
The upside of Chapter 11 is that the Revel's revealing downfall will allow Atlantic City to turn the page on an era during which it tried to be something it wasn't. The town can go back to being a bit seedy and devil-may-care - a place to see and not be seen. This summer may have gotten off to a rocky start, but Jersey has been presented with the opportunity to do what it does best: Get weird.