In January 2016, Middlesex County Improvement Authority missed a $1 million payment owed to Casino Reinvestment Development Authority. The improvement authority had borrowed $20 million back in 2005 that was used to develop the Heldrich Hotel. However, it is confident that it will fully repay the loan in the next few years.
The project was spearheaded by New Brunswick Development Corporation, a nonprofit corporation that is engaged in developing huge projects in New Brunswick. Currently, the corporation is a model for Atlantic City Development Corp. The two are headed by lawyer Christopher Paladino who was instrumental in arranging for the Heldrich Hotel loan in 2005.
Heldrich Hotel was opened in 2007 with a 235 room capacity. Despite a slow start, business has picked up with more hotel and room bookings. In 2015, it had a 63.5 percent occupancy rate. Devco has continued to be engaged in the Heldrich project according to an article published by pressofatlanticcity.com, with a view of turning the hotel into a financial success soon. To date, holders of bonds worth $30 million have already been paid. The next repayment phase of subordinate bondholders is currently underway.
Atlantic County Improvement Authority is currently preparing a $120 million bonds issue to finance the Gateway project and a satellite campus for Stockton University. The loan will be repaid from revenue collected from dorm room collections.
About New Brunswick Development Corporation
The New Brunswick Devco was founded in the 1970’s. It operates as a private nonprofit dealing with real estate development. It is mainly involved in major development projects that aim to catalyze the city’s growth and revitalization. To date, Devco has achieved remarkable renaissance success in the city’s real estate sector. It has created strategic alliances and strong partnerships from both the private and public sectors. To date, it has overseen over $1.6 billion in investment development in New Brunswick.
Originally published at Press of Atlantic City: http://www.pressofatlanticcity.com/news/breaking/unpaid-million-crda-loan-raises-questions-about-new-brunswick-devco/article_a03318e2-dcdb-11e5-a563-67611bc7b7bc.html