Brookfield Property Partners backs out of Revel Atlantic City buy

The Revel Casino in Atlantic City, N.J., faces yet another hurdle as Brookfield Property Partners withdrew its plans to buy the property. 

Bloomberg reported that the Toronto-based investment company planned to purchase the property for $110 million from bankruptcy court, but is backing out of the deal after it was unable to win a reduction in electricity payments. Revel had a contract in place to purchase power and other utility services from ACR Energy Partners, a joint venture between South Jersey Industries and DCO Energy, for $3 million a month. Don Lockwood, a spokesman for South Jersey Industries, told Bloomberg that ACR Energy Partners was not involved in talks between Brookfield and bondholders of the joint venture.

The Revel closed down on Sept. 10 of this year after opening in May 2012 at a cost of $2.4 billion. The property as of yet has not found a buyer.

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ABC News reported that Atlantic City mayor Don Guardian is still hopeful that a buyer for the casino can be found. "I am sorry to hear that the Brookfield transaction was not completed," Guardian said. "Although Brookfield would have been a good fit for Atlantic City, we will continue to attract new investors. Atlantic City is a resilient city, and better days are still ahead of us."

In late October it came to light that Florida developer Glenn Straub, who lost his bid for the Revel to Brookfield, was planning to block the sale. Straub and his attorney claim the auction for the casino was done improperly and in secret. Now, with Brookfield out of the picture, Straub could potentially be interested in the property.

But there are still factors to be ironed out in the sale of the property. Most recently it was revealed that the Revel still owed Atlantic City $32 million in unpaid taxes, which were expected to be paid after the Brookfield acquisition. This is not an insignificant figure, as a September court filing by the city found that property taxes on casinos account for more than 60 percent of Atlantic City's annual tax levy. The $37 million due from Revel this year accounts for about 18 percent of the city's budget.