Power is restored to former Revel

ATLANTIC CITY - After 20 days in the dark, power was restored to the Revel property shortly after 11 a.m. Wednesday, but the future of the former casino hotel remained murky.

Lights began to gradually come on in the 47-story tower that once was the $2.4 billion Revel, as the result of a temporary deal between new owner Glenn Straub and the energy company built to power the 6.2 million-square-foot property.

Timothy Lowry, attorney for ACR Energy Partners, said the company's agreement to turn on the power was the result of a deal orchestrated by U.S. District Judge Jerome Simandle. Straub will pay $262,500 for two weeks of power.

ACR shut off power April 9, two days after Straub bought the property out of bankruptcy for $82 million.

Reached Wednesday morning, Straub said he doubted he would be able to reach a long-term deal with ACR. "We will not pay more than a rate that is the market rate," he said.

He repeated a desire to power the property in other ways, possibly through the nearby former Showboat building, which he has an agreement to buy from Stockton University. That deal has been under increasing scrutiny and may have led in part to president Herman J. Saatkamp Jr.'s going on medical leave this week.

Another plan, to bring generators to the site, was nixed by the state Department of Environmental Protection as potentially in violation of clean air standards.

Straub has come up against energy regulators before. In 2003, the State of Ohio sued his Tri-State Group Inc. charging failure to properly operate Flyash Disposal, a coal-ash processing plant, according to court docket entries and a judgment reviewed by The Inquirer.

The Ohio attorney general claimed Straub did not implement required safety procedures, creating a threat to drinking water, according to court documents.

In a 51-page opinion, Common Pleas Court Judge John V. Solovan said he agreed with the state that the site "constitutes a threat to groundwaters and must, therefore, be closed." The case was recently reported by the Florida Courant website.

On Wednesday, Straub said he had been working inside the powerless Revel with the aid of a small generator.

Around 10:30 a.m. Wednesday, he went inside the ACR plant across Oriental Avenue to meet a crew working on restoring power.

Straub had been fined $5,000 a day by Atlantic City over the unpowered structure, which officials declared a hazard due to its nonoperational fire suppression systems. His certificate of occupancy was also revoked.

His engineer, who would not give his name, said that outside of a few leaky pipes, there did not appear to be damage from the 20-day energy gap.

The temporary energy source is for lighting and fire systems.

ACR, which financed the construction of the energy plant in part with $119 million in high-interest municipal bonds, had a deal that cost Revel $36 million a year, including $20 million in debt and equity payments.

Potential buyers who walked away have said they were unable or unwilling to meet ACR's terms for energy. ACR is a joint venture of two New Jersey companies, each of which put up $20 million in equity. One is a subsidiary of publicly traded South Jersey Industries Inc., an energy company in Folsom with regulated and unregulated arms.

The other is privately held DCO Energy L.L.C. of Mays Landing. Through top management, including Joseph R. Jingoli Jr. and Michael D. Jingoli, it is affiliated with Joseph Jingoli & Son Inc., a national commercial builder and construction-management firm based in Lawrenceville.

Jingoli was a prime contractor for the still-unfinished Meadowlands Xanadu project.

Straub's plans remain unclear. There was last-minute interest from two other buyers just before U.S. Bankruptcy Judge Gloria Burns approved Straub's deal under pressure from Revel A.C. and Wells Fargo, which was financing the bankruptcy and had had enough. Leo Pustilnikov, an associate of the Isek Shomof group, which made an unofficial bid, said the group had not made any recent offers. "I don't think the power issue will be resolved any time soon," he said.

Straub said Wednesday he would not rule out selling the property. "We never turn down offers," he said. "People make us offers every day. Our policy is, we're not in love with anything."