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From the day it opened last April, Revel insisted it was a different kind of casino.
It shunned bus-riding day-trippers, banned smoking, hired a mostly nonunion workforce and told employees they'd have to reapply for their jobs every five years or so. It concentrated on the well-to-do leisure traveler and the business client instead of the slot-playing granny and opened up views of the ocean with floor-to-ceiling windows in a seaside resort where everyone else sought to keep gamblers focused on gambling.
Yet less than a year after it opened, Revel finds it has become like many other Atlantic City casinos: drowning under way too much debt, fighting for a share in a shrinking market and preparing for a date in bankruptcy court with major questions about its future.
Revel said Tuesday that it will file for Chapter 11 bankruptcy protection in late March. The voluntary, prepackaged bankruptcy will wipe away about two-thirds of its $1.5 billion in debt by converting more than $1 billion of it into equity for lenders.
Kevin DeSanctis, Revel's CEO, said the restructuring will give the casino resort more flexibility to operate, calling it "a positive step for Revel."
"The agreement we have reached with our lenders will ensure that the hundreds of thousands of guests who visit Revel every year will continue to enjoy a signature Revel experience in our world-class facility," he said.
Existing management will remain in place, no layoffs are planned, and employees and vendors will be paid as usual, the company said. The restructuring should be completed by early summer.
The $2.4 billion casino never caught on as much as it had expected to, and it remained mired toward the bottom of Atlantic City's 12 casinos in terms of gambling revenue. Revel had to line up two rounds of additional financing since August to keep operating.
In January, it posted its second-worst month, winning less than $8 million from gamblers. During the second and third quarters of last year, it reported gross operating losses of $35 million and $37 million.
Revel's largely nonunion stance earned it the undying enmity of Local 54 of the Unite-HERE union, representing most of the city's casino workers.
"Over three years ago, Local 54 began expressing to every elected official in the city, the state and the governor's office that this project was doomed to failure," said Bob McDevitt, the union's president. "Had they listened to us three years ago, we would not have this catastrophe on our hands now."
Gov. Chris Christie on Wednesday said he remains confident in Revel's ability to help give a lift to Atlantic City, which is off to what could be its seventh straight year of falling casino revenues. He also said he did not believe the bankruptcy decision sends a negative message to other companies thinking of investing in the city.
"Those people who were owed debt are now taking ownership in the hotel — they're showing their faith and confidence in the future of Atlantic City by not walking away and closing the place down," he said.
"We've got challenges in Atlantic City. This is not a news flash," the governor said. "We've had challenges in Atlantic City for a decade that nobody's been willing to do anything about. And we're actually trying to do something. I told you, give me five years to see if we can fix A.C. We're about 2 1/2 years into it."
David Rebuck, director of the state Division of Gaming Enforcement, said the Chapter 11 filing needs to happen.
"The agreement between Revel and its lenders will allow for a necessary financial restructuring and improve the property's financial condition going forward," he said. "We see this as a positive step that will allow Revel to comprehensively address its financial needs while continuing normal business operations."
It is the latest in a series of recent bankruptcies involving Atlantic City casinos. Trump Entertainment Resorts emerged in 2010 from the third Chapter 11 bankruptcy that it or its corporate predecessors had filed, and the Tropicana Casino and Resort was sold that same year out of bankruptcy court to billionaire Carl Icahn.
As part of Revel's restructuring, some of its lenders will provide approximately $250 million in debtor-in-possession financing, about $45 million of which constitutes new money commitments and approximately $205 million of which is prepetition debt. No taxpayer funds will be used to finance the restructuring, the casino said.
The company didn't identify which lenders will be part of the filing; it said only that "a majority" of its lenders have agreed.
Revel was the first new casino built in Atlantic City since the Borgata Hotel Casino & Spa opened in 2003.
It was an ambitious, risky project in a declining market. It saw itself not as a casino resort but as a resort that happened to have a casino. But the distinction seemed to have been lost on many customers, who found its restaurants and hotel rooms pricey.
The project had to overcome numerous obstacles before its opening. Three key executives working on the project died in a Minnesota plane crash in July 2008; a worker pouring concrete was struck by lightning and killed in 2011.
The project ran out of money during the recession and had to stop construction halfway through. Morgan Stanley pulled out, taking a $1.2 billion loss. It only got completed with the help of state tax incentives that were approved in February 2011.
Wayne Parry can be reached at http://twitter.com/WayneParryAC