NEW YORK (Reuters) - The chief executive of Revel Entertainment LLC, the company in the midst of building a $2 billion casino on Atlantic City’s boardwalk, plans to bid for Morgan Stanley’s (MS.N) stake in the project.
The Wall Street firm said in a filing in early April that it would sell its $1.2 billion stake in the project at a “substantial loss.
Revel CEO Kevin DeSanctis said he “intends to a be a bidder” for this interest and would likely bring in partners. He has no specific partner on board yet and envisions his purchase will be financed largely with debt.
“I’m probably in a better position than anyone to understand the project at this point, having worked on it for the last 3-1/2 years,” DeSanctis told Reuters in an interview on Thursday.
Morgan Stanley’s decision to pull out of the project came after three tough years in Atlantic City, the seaside casino town with 11 casinos, including three run by Trump Entertainment Resorts TRMPQ.PK.
Gaming revenue has fallen every year since 2007, hurt by a fresh crop of slot machines in neighboring states such as Pennsylvania.
The bank’s move has spurred some casual conversations with “industry acquaintances” and other investors, who have been scouting out potential opportunities, but they haven’t gone far, DeSanctis said.
He said Morgan Stanley is putting together materials to sell their equity and the marketing process could start as early as the next “two, three weeks.”
“There will be people who are interested,” he said. “This is a very different situation from perhaps other situations in Atlantic City.
The project is widely seen by analysts as one that could revive the city’s staid image and lure new customers. If the project is completed, it will be the first new casino in town since 2003, when the Borgata Hotel Casino & Spa opened.
The development emphasizes its spas, restaurants and pool as much as its slots.
“I took our place as offering a product to a much different demographic,” DeSanctis said. “Less gaming-centric, more entertainment-oriented.”
Construction on the Revel project began in 2007. But last year, its opening was delayed indefinitely as it slammed into financial hurdles.
Work continues on the exterior. DeSanctis estimated the structure will be completed around mid-June, while repairs to the building’s glass — which was knocked out during recent storms — could be completed by August.
“I think it’s an opportunity to invest in a project that could have a positive significant impact on Atlantic City,” DeSanctis said. There may not be “a lot of interest, but there will be enough interested parties to get this deal done.”
Reporting by Deepa Seetharaman; Editing by Richard Chang