New Jersey’s Division of Gaming Enforcement is investigating claims that Revel has not fully paid some of its construction contractors months after work was completed on the $2.4 billion megaresort.
Documents on file with the Atlantic County Clerk’s Office show that at least six companies have submitted construction liens against Revel ranging from about $152,000 to $1 million, according to a review by The Press of Atlantic City.
Revel, however, says that any unpaid bills are part of a routine “closeout audit” that typically takes three to five months to finish before all accounts are paid.
“Liens are part of the closeout audit process,” Revel spokeswoman Maureen Siman said in a statement. “As the project is closed out, all outstanding invoices will be audited. Once the audit is complete, each vendor will be paid what is owed, liens will be cleared, and the project will be closed out.”
Concerns that Revel has not been paying its bills were first raised in a July 16 letter sent by New Jersey Senate President Stephen Sweeney, D-Salem, Gloucester, Cumberland, to the Division of Gaming Enforcement and the Casino Control Commission, the state agencies that regulate Atlantic City’s casino industry.
“In fact, it was recently brought to my attention that vendors and contractors may not be receiving payment for services provided to Revel,” Sweeney wrote. “I felt it critical to bring this issue to your attention for whatever action you feel is appropriate.”
David Rebuck , director of the Division of Gaming Enforcement, responded by letter on Monday, promising Sweeney that “your information that vendors and contractors may not be receiving payment for services provided to Revel will be investigated by my agency to determine if any regulatory action is warranted.”
“I can assure you that with respect to all of the casinos in Atlantic City, the Division of Gaming Enforcement carefully examines the management and operation of each property to ensure compliance with the Casino Control Act and its regulations,” Rebuck continued. “An important component of this examination includes an ongoing review of each casino’s financial affairs. Revel casino is subject to that same scrutiny, and the division has been closely monitoring all aspects of its financial performance.”
Sweeney spokesman Christopher Donnelly released a brief statement Tuesday, saying, “The Senate president appreciates the division agreeing to investigate, and we look forward to hearing the outcome.”
In his July 16 letter, Sweeney said recent press accounts of Revel “have raised concerns regarding Revel’s financial solvency.” He added that Revel was only able to increase its gambling revenue from $13.9 million in May to $14.9 million in June, placing it just eighth among Atlantic City’s 12 casinos.
New Jersey has played a key role in the funding and development of Revel, approving $261 million in state tax reimbursements over the next 20 years to help with its financing. Sweeney characterized the state as essentially a “junior partner” in the Revel project.
“We all have a duty to ensure that taxpayer funds are spent in a manner that improves opportunities for New Jersey’s businesses, including not only Revel casino, but also the vendors who do business with the casino,” Sweeney wrote. “I cannot understate the importance of Revel’s financial solvency to Atlantic City and the region.”
Siman said Sweeney’s office did not share the letter with Revel. She said Revel assumes that Sweeney’s concerns about unpaid bills are related to the closeout audit.
“We have had no communication with him whatsoever,” Siman said of Sweeney.
Siman said Revel has been going through the closeout audit since construction on Revel was completed in May and expects to finish the process within several months. At that time, she said, “any outstanding invoices will be paid.”
Some of the construction liens reviewed by The Press were filed as far back as April. Others followed in May and June.
One of the construction companies, Galway Development Corp. , of Pennsauken, Camden County, claims it is still owed $397,400 from a $2.1 million contract to install custom woodwork in Revel’s casino, conference areas and lobbies.
Sean Hanratty , Galway’s office manager, said the firm has been fully paid within 30 to 60 days on other construction jobs. He said this was the first time he had heard of a closeout audit before accounts with contractors were completely settled.
“It’s not like they were saying they weren’t going to pay,” Hanratty said of Revel.
But, Hanratty said, Galway filed the construction lien anyway to protect its right to seek payment. Under the New Jersey Construction Lien Law, a contractor, subcontractor or supplier has the right to place a lien against a job site to ensure payment for its work. For commercial projects, the lien must be filed with the county clerk within 90 days of the work being completed.
Thomas Company Inc. , an Egg Harbor Township company, has filed a $259,501 lien against Revel for installation of a decorative covering, known as a screenwall, on the casino’s parking garage. Thomas’ lien said the company has been paid about $4.9 million so far on a $5.2 million contract
“We’re talking to them about it right now,” Michael Thomas Sr. , the company’s vice president, said of discussions with Revel about the lien. “They are going through an audit, and I understand they are closing out contracts. I have no other comment at this point.”
Glenn Rieder Inc. , a Milwaukee-based company that has filed a construction lien, says it is still owed $1 million from a $7.3 million contract for architectural millwork at Revel. Carla McGinn , Glenn Rieder’s chief financial officer, could not be reached for comment.
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