Ocean Casino Resort dominated the Atlantic City casino market in the first half of 2021 in terms of having both the highest average room rate and the highest occupancy rate.
So under a new ownership team, the plan is to get even bigger.
The well-known Ilitch family of Detroit — owner of the Little Caesars pizza chain, the Detroit Tigers, and the Detroit Red Wings — obtained approval from state regulators Thursday to acquire half-ownership of the casino from Luxor Capital Group. That hedge fund announced plans in April for the new partnership with the family.
“I won’t say we kissed a lot of frogs, but we batted eyelashes at a few frogs and found ourselves a prince,” Luxor executive Michael Conboy said Thursday.
During a successful two-day approval process before the state Division of Gaming Enforcement and Casino Control Commission that concluded Thursday, executives laid out future plans for the Boardwalk property.
The current 1,399-room footprint, which ranks fifth among Atlantic City’s nine casinos, is set to expand by more than 450 rooms next year, said Bruce Dall, president of the Ilitch family’s Motor City Casino in Detroit. Some new floors could open by Memorial Day, with the lucrative July 4 weekend set as the goal for the full opening.
The $70 million project would add 12 stories to the existing tower. Dall said an initial plan to add 500 rooms was amended to make room for three all-suite floors in response to perceived consumer demand.
In the first half of 2021, Ocean charged a market-high rate of $198.73 while enjoying a market-high room occupancy rate of 85.7%. The overall market figures for Atlantic City were $146.32 per room with an occupancy rate of 61.2%.
The Ilitch family intends to spend another $105 million toward paying off debt at the former $2.4 billion Revel casino site, which opened in 2012 and closed amid a second bankruptcy in 2014. A rebranded and retooled Ocean Resort Casino, whose name soon changed, opened in mid-2018.
CEO departure is addressed
“It’s fluid — everything is fluid in our industry,” Dall said, but he declined to elaborate on whether the rest of the upper-management team would remain intact.
During Glebocki’s tenure in 2020-21, Ocean rebounded from being the sixth-rated revenue producer in the market to No. 3.
Conboy said that an interim CEO would be named “in the next 10 days.” He added that Glebocki’s particular skill was in righting the financial ship of the once-troubled casino, which he said has now been accomplished.
“We now have a very deep senior management team, and I think this is the most financially stable asset in Atlantic City right now, even if that is hard for some to believe,” Conboy added. “We’ll miss [Glebocki], who was a strong CEO and a good leader. Sometimes the sign of a good leader is you create your own obsolescence.”
Dall said that the Ilitches looked at the Revel property as a possible acquisition target in 2014, “but given all the real estate taxes and the utility costs, it was a non-starter.”
After a shaky start for the rebranded Ocean project, Luxor Capital took over in 2019, which renewed the interest of the Ilitches.
“The property is phenomenal, so all they needed was solid management,” Dall told division and commission members on a remote call Wednesday.
Dall spoke of expecting closer collaboration with nearby rival Hard Rock — the No. 2 casino and leader of the six Boardwalk properties — on reinvigorating the shared North Beach area.
The rooms are the focus
Both Dall and colleague John Policicchio, a marketing executive with Motor City Casino, said that shrewd management decisions over the past two years have left them pleased with the Atlantic City property’s overall direction.
Included in that is a $15 million spend in the past year on a high-limit slots area, a new lounge, and the creation of a clear pathway for customers to better navigate the spacious casino floor.
Policicchio said that in the original review of the site as the dormant Revel, “a lot of baggage came with that property. But things had changed by the time we looked again [in 2019].”
“The marketing side is doing a good job, including going after higher-end customers,” said Policicchio, who added that a likely additional focus would be attracting visitors from the massive New York City market for a few days of rest and relaxation at the casino.
As for the name, Policicchio said there are no plans for a change.
“The brand is not going to turn into ‘Motor City East,’ or anything like that,” he said.