The Middlesex County Improvement Authority neglected its obligation early this year to pay $1 million in interest on a loan worth $20 million. The loan was sourced from the Casino Reinvestment Development Authority (CRDA) in 2005 with the aim of financing New Brunswick’s The Heldrich. The Heldrich is a conference center and hotel, which was built by the New Brunswick Development Corp. The development authority had already accrued $7 million in arrears in failed payments. Initially, the Press of Atlantic City reported the information.
The New Brunswick Development Corporation acts as a model for the Atlantic City Development, which is a sister firm and is required to take charge of more than $200 million in both public and private financing. Stephen Sweeny, the Senate President, voiced the corporation as an example of what is achievable when private firms are used to channel public resources to implement large-scale developments. Chris Paladino, who serves as the head of the two organizations, structured the $20 million Heldrich loan. The hotels comprise of 235 rooms, and it was opened when the economic crisis was creeping in in 2007. However, the hotel has been struggling with ways of attracting guests for a significant period. The occupancy rate of the previous year was at 63.5%.
The Atlantic County Improvement Authority instituted bonds worth $120 million, which were issued in May for the Gateway project. The intentions of the bonds were to construct a satellite campus for the Stockton University, which was to be paid through tax credit sales as well as the dorm room revenue. The bond counsel for the Atlantic County Improvement Authority, John Cantalupo, observed that he had made relevant examinations on the Heldrich financing. He was affirmative that the Gateway bonds would not face similar adversities.
DEVCO was founded in the mid-70s as an accelerator for the city’s revitalization. It is a privately owned not-for-profit real estate development organization. The organization has played a significant role in New Brunswick’s renaissance, as it has appeared as a powerful engine for steering forward economic development and growth. Since its inception, Devco has managed over $1.6 billion in investments inside the city.