In January this year, the Middlesex County Improvement Authority was unable to pay $1 million being the principal and interest on a $20 million loan it received from the Casino Reinvestment Development Authority (CRDA). The Improvement Authority has failed to pay nearly $7 million after defaulting for five years. The loan was advanced in 2005 for the construction of The Heldrich, a Brunswick hotel and conference center which was developed by the New Brunswick Development Corp (Devco).
Devco has been touted by Stephen Sweeney, Senate President, as the blueprint of what can be done to funnel public funds through private firms to execute large-scale construction. Devco is the model for the Atlantic City Development Corp which is a sister firm that aims to oversee over $200 million in public and private financing. The two corporations are headed by Christopher Paladino, an attorney who made arrangements for the $20 million Heldrich loan. He promises that the payment of CRDA will be completed in a couple of years.
The business at the hotel which was opened in 2007 struggled making it struggle financially until the corporation had to chip in its own money to fund its capital expenses. The hotel is owned by the Improvement Authority which was formally the borrower of the loan which was arranged by Devco.
About the New Brunswick Development Corp (Devco)
Devco was founded in 1976 by the late Richard B. Sellars who was J&J CEO at that time. It was founded as a private non-profit and tax-exempt redevelopment corporation. Devco has since built and renovated three theaters, Rutgers student housing, office buildings, government buildings, hotels, hospitals, residential housing, restaurants and a convent. It has been recognized by North Jersey as a “powerful engine for economic growth”.
Originally Reported in the Press of Atlantic City by Reuben Kramer http://www.pressofatlanticcity.com/news/breaking/unpaid-million-crda-loan-raises-questions-about-new-brunswick-devco/article_a03318e2-dcdb-11e5-a563-67611bc7b7bc.html