|By Donald Wittkowski, The Press of
Atlantic City, Pleasantville, N.J.McClatchy-Tribune Regional News
Feb. 08, 2011--ATLANTIC CITY -- A Wall Street credit ratings company says the Revel casino project will boost the ailing Atlantic City market but could ignite stiff competition among the gaming industry for conventions.
Moody's Investors Service said the $2.8 billion Revel megaresort is designed to accommodate large convention groups, a highly profitable segment that currently represents only a small piece of the overall casino market.
"We believe Revel can expand this segment and boost overall Atlantic City market visitation, which will benefit all (casino) operators at least for a period after its opening," Moody's wrote in a credit report Monday.
At the same time, Moody's cautioned that Revel's success "could come at the expense of other properties," even stronger ones such as the top-grossing Borgata Hotel Casino & Spa.
"Revel is likely to pursue Borgata's customer base," Moody's said. "However, Revel's success could give a lift to Borgata over the longer term, because Borgata also conducts some group business. We believe Borgata will not sit still in the face of competition for the top spot in Atlantic City."
Meanwhile, Revel is pursuing a $1.15 billion financing deal to finish the half-built casino. The company's funding plan includes two private loans of $850 million and $305 million. Revel also would receive $261.4 million in state tax reimbursements over a 20-year period to solidify its financing.
Gov. Chris Christie used Revel as the backdrop for an Atlantic City bill signing ceremony last week. The legislative package is designed to revive Atlantic City by creating a new state-run Tourism District and by easing New Jersey's casino regulations.
Christie said Revel is expected to complete the financing deal this week, but the company's chief executive officer, Kevin DeSanctis, has declined to comment until the deal is done. The financing plan would allow Revel to resume construction on the building's interior, which was halted in January 2009 when the project began experiencing money shortages.
A grand opening is targeted for the second quarter of 2012. About 2,000 construction jobs and another 5,000 full-time positions will be created by Revel, making it one of the biggest private employers in southern New Jersey.
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