More than 40 construction companies involved in the building of Revel, the $2.4 billion luxury megaresort, have filed liens seeking payment of about $37.6 million, an analysis by The Press of Atlantic City has found.
A trade group representing New Jersey construction companies warns that some of Revel’s contractors may not be able to survive going months without receiving payment.
“I’d venture to say that there will be contractors who will be put out of business because of this,” said Jack Kocsis Jr., CEO of the Building Contractors Association of New Jersey.
An Atlantic City labor union that has clashed with Revel initially said the casino had been slapped with $51 million in construction liens and lawsuits for unpaid bills. Local 54 of UNITE-HERE later amended the figure to about $53.5 million.
Revel spokeswoman Maureen Siman issued a statement calling the union’s figure “not accurate.” She declined to specify how much Revel has paid so far to settle contractors’ claims.
“We won’t detail the exact amount, but I will say this: It’s about half the amount quoted and declining each time a contract is closed out,” Siman said.
In addition to construction liens, Local 54 included one contractor lawsuit against Revel for $15.3 million and another for $545,000 in its total figure of $53.5 million. Revel has been locked in a lengthy court fight with Stone Concrete Inc., of Pleasantville, over the contractor’s $15.3 million claim. The $545,000 suit by ABM Janitorial Services was dismissed in November for undisclosed terms, court records show.
Siman said Revel has pledged to pay contractors everything they are owed, once the casino completes a final audit of the construction work.
“We are engaged in a close-out audit of a $2.4 billion construction project and are taking the appropriate steps to ensure fair payment for work performed,” she said. “This is routine for a project this size, and the process should be finished by the end of this year.”
Revel has struggled financially since it opened in April, although it saved its formal grand opening ceremonies for Memorial Day weekend. The casino’s construction was interrupted last year by funding shortages. Revel was able to complete the project after securing an extra $1.1 billion in construction financing.
Bob McDevitt, Local 54’s president, wrote to state Senate President Stephen Sweeney on Monday to question whether Revel has enough money to pay the construction liens. Sweeney, in turn, sent a letter Friday to the New Jersey Division of Gaming Enforcement raising his own doubts about Revel’s finances, including its ability to pay contractors what they are owed.
Sweeney said he continues “to receive a flood of reports that (Revel’s) creditors are still waiting to be paid for services rendered.”
“I believe that serious attention to this issue is necessary to ensure that Revel’s failures do not jeopardize the businesses that acted in good faith to provide various services to the casino,” Sweeney said in his letter. “No business can afford to sit around and wait to be paid in this fragile economy.”
The Press first reported in July that Revel’s contractors had begun filing construction liens. Since then, the number of contractors and liens has ballooned. One lien was filed as recently as Nov. 1, according to documents posted on the Atlantic County Clerk’s Office website.
Falasca Mechanical Inc. of Vineland has filed one of the largest construction liens against Revel, seeking payment of nearly $2.5 million for heating, plumbing and air-conditioning work on Revel’s hotel tower. Daniel Falasca, the company’s president, could not be reached for comment.
Simon Watt Construction Services Inc. of Pleasantville filed a nearly $1.6 million lien for drywall and carpentry work it did at Revel. Rich Fire Protection, another Pleasantville company, is seeking $544,714 for installing parts of Revel’s fire-protection systems. Representatives of Simon Watt and Rich Fire could not be reached for comment.
Kocsis, whose association represents many of the Revel contractors, said some construction companies have waited for a year to get paid, putting them under tremendous pressure to stay in business.
“It’s unfortunate that Revel has put itself in the situation of having so many liens and lawsuits filed against them,” Kocsis said. “We’ve been told by some (contractors) that in some cases they’re being offered pennies on the dollar by Revel. There’s not a whole lot of fairness in this whole thing.”
In response to Kocsis’ statement, Siman said Revel “is paying what we owe to each vendor for work completed.”
Kocsis said his association has asked Sweeney and Gov. Chris Christie to intervene on behalf of Revel’s contractors. There was no immediate comment from the Governor’s Office.
“We’re concerned about it and have been trying to bring it to the attention of people in government,” Kocsis said. “We want to bring it to the level it needs to go to.”
The Division of Gaming Enforcement first began investigating Revel’s construction liens in July at Sweeney’s urging. In August, the division concluded that Revel had enough money to meet its financial obligations and was taking steps to pay the contractors. Sweeney remains unsatisfied, demanding in his letter Friday that the division conduct another investigation of Revel’s finances.
For months, Local 54 has questioned whether Revel meets the “financial stability” requirement that is a key part of a New Jersey casino license. Local 54, Atlantic City’s largest casino union, has repeatedly battled with Revel over attempts to unionize the casino’s work force. Local 54 also has objected to public subsidies given to Revel, including $261 million in state tax breaks over the next 20 years.
Revel disclosed last week that it is in discussions with its lenders to provide additional funding, although the amount was not revealed. Revel said it expects to close the deal within 45 days.
The megaresort has gotten off to a weak start since its April debut. It had a gross operating loss of nearly $37 million in the third quarter, following a $35 million loss in the second quarter. Revel has been stuck near the bottom of the pack among Atlantic City’s 12 casinos in monthly gambling revenue.
Contact Donald Wittkowski: