The Middlesex County Improvement Authority has recently failed, yet again, to pay $1 million it owes the Casino Reinvestment Development Authority on a loan they were given. According to Press of Atlantic City, they have already been behind in payments for five years and have racked up almost $7 million in payments missed.
The loan in question was made in 2005 and funded the construction of The Heldrich. The Heldrich is a New Brunswick Hotel and conference center developed by New Brunswick Development Corp.
This corporation, known as Devco, is an archetype of what can be done with public dollars when they are filtered through private firms to fund large-scale constructions. Attorney for Devco, Chris Paladino, claims that the CRDA will be paid eventually, but certainly not right away.
The Heldrich made its opening debut in 2007 and has struggled to attract guests ever since. Its largest account was from Johnson & Johnson. Executives from the company also sit on Devco’s board of directors. The Heldrich’s finances are so tight that Devco had to use three quarters of a million dollars of its own money to take care of basic expenses.
This $20 million loan in question from the CRDA was part of $107 million in financing that was pulled together by Devco to build the hotel. This financing even included $70 million from municipal bonds given by the Middlesex County Improvement Authority. Those bonds will need to be paid back from the revenue earned from the hotel.
Devco is a private nonprofit real estate development company founded in the 1970’s. Their goal is to serve as a facilitator of the city’s revitalization and they have been recognized for helping the city achieve a significant resurgence.
Since its establishment, Devco has led almost $1.6 billion worth of investment in New Brunswick. With their great expertise, Devco is always opening a project, starting another, getting financed for another, and all while creating visions of projects for the future.