Glenn Straub Refuses to Pay PILOT Bill on Revel Building for Q1 of 2016
Glenn Straub is refusing to pay his part of the PILOT taxes this year, as a form of protest for his inability to attain a casino license. He claims that the taxes assessed to him should consider TEN Casino, formerly known as Revel Casino, as an “abandoned building”.
In a phone call with the Press of Atlantic City, Glenn Straub said, “We are not going to pay them.”
Straub said he is on firm legal ground in refusing to make a PILOT payment. The Florida real estate developer said that the Casino Reinvestment Development Authority imposed a deed restriction in 2014 on the Revel Building. The deed restriction states that gaming on the property is barred until the CRDA is repaid money it loaned to Revel’s prior ownership group.
Elaine Zemansky Disputes Straub’s Story
Glenn Straub said, according to the PILOT program enacted in May 2016, former casinos with covenants such as deed restrictions are exempt from PILOT program payments. Elaine Zamansky, a CRDA spokeswoman, disputes the casino owner’s claim, though. Zamansky told the Press of Atlantic City that the deed restriction was removed when Glenn Straub and Polo North bought Revel Casino out of bankruptcy in the spring of 2015.
Elaine Zemansky added, “As a result, the deed restriction previously agreed to by Revel no longer exists.”
The New Jersey Department of Community Affairs, which oversees Atlantic City’s finances at the behest of Gov. Chris Christie, did not return calls to comment on the dispute either on Friday or Monday. A DCA spokeswoman recently told reporters that all casinos “except one” made their estimated first-quarter PILOT payments. The DCA representative did not name the Revel’s owners, but that is clear now.
Straub Accused CRDA of Blackmail
When asked about the discrepency, Glenn Straub accused the CRDA of “blackmailing” him to pay the deed restriction fees, then said, “They put a deed restriction on that says if the property was ever sold that the new people, meaning us, would have to sign up for the $20 million. We didn’t, because it’s not our bill.”
Straub seemed to take the stance that the Revel Casino has been shut down for 3 years, so it is absurd to charge taxes for an operating casino. He said, “We’ve been shut down now for three years. As an abandoned building, we want the value of an abandoned building, not the value of a casino hotel.”
This is the latest fight Glenn Straub has had with New Jersey officials. He has battled the Casino Control Commission, the Division of Gaming Enforcement, and the CRDA over the licensing process and fee assessments. Before that, Glenn Straub became embroiled in lawsuits with his electricity providers, ACR Energy Partners, and the Revel Building’s former tenants. His lawyer also threatened to sue during the bankruptcy process, after Brookfield Property Management won the first bankruptcy auction. Eventually, Brookfield pulled out of its purchase, citing ACR’s exorbitant energy costs.
Glenn Straub’s PILOT Bill
It is unknown at this moment how much money Glenn Straub owes Atlantic City in PILOT payments. The City Clerk’s Office says Glenn Straub paid $5.2 million in property taxes in 2016. That amounts to $1.3 million per quarter, so a safe estimate of Glenn Straub’s likely debt to Atlantic City at the moment is $1.3 million.
Glenn Straub paid $82 million to buy the Revel Building, which cost $2.4 billion to build. The Revel Casino’s high costs left its original owners massively in debt, so the casino underwent bankruptcy twice in a 29-month period. When the second bankruptcy happened, Revel Casino closed and has not opened since.
What Is a PILOT Payment?
“PILOT” stands for “payments in lieu of taxes”. The New Jersey State Legislature passed a PILOT bill for Atlantic City’s casinos in May 2016. The PILOT payments were meant to circumvent the costly and time-consuming tax assessments, because those assessments led to annual appeals court battles. One such battle between Borgata and Atlantic City placed the city hundreds of millions of dollars in debt.
Under the PILOT program, the Atlantic City casinos agreed to pay $120 million a year for 10 years. The various casinos would be charged a percentage based on their revenues for the year. The most successful brick-and-mortar casino, Borgata, would pay the lion’s share of the PILOT costs. A casino like Revel, which has been closed for 2 and 1/2 years, would pay a nominal amount of the $120 million annual bill.
