Coming out of an article recently published by Press of Atlantic City, we keep up on the latest developments concerning last month’s failure by the Middlesex County Improvement Authority to make good on more than $1 million in principal and interest. That being said, payments have been in arrears for five years now and amount to nearly $7 million on its original $20 million loan money received from the Casino Reinvestment Development Authority.
Originating in 2005, the loan helped bankroll the start of The Heldrich hotel in New Brunswick. Part of the construction also included a conference center that was to be developed by a nonprofit entity by the name of the New Brunswick Development Corp. (DEVCO).
DEVCO, a nonprofit corporation dedicated to urban real estate development, serves as a beacon for the revitalization of Atlantic City. Moreover, DEVCO has previously received recognition by the New York Times as a “powerful engine for economic growth.”
Its expertise lies in creating strategic alliances, unique public-private partnerships and innovative financing structures for its many diverse projects. Since its inception, DEVCO has been development successful overseers to $1.6 billion worth of New Brunswick projects.
The New Brunswick group, and a sister firm, the Atlantic City Development Corporation, were supposed to be the premier prototypes of what it takes to save Atlantic City. “CRDA will be paid, but it’s just going to take a couple more years,” said attorney Chris Paladino, who arranged the $20 million Heldrich loan and heads both corporations.
The Heldrich, with its 235-room capacity, opened in 2007 and has struggled to fill its vacancy rate ever since. Consequently, the hotel last year saw an occupancy rate of just 63.5 percent.
All of this comes on the heels of Governor Christie having last December signed a law that prohibits state agencies from giving any loans, grants or other business subsidies, to any business or nonprofit entity that is in arrears or has defaulted on state-issued loans and bonds.
Meanwhile, Mr. Paladino continues his optimistic outlook that things will eventually pan out as he said: “We took a really crappy block and turned it into something special.” “Will I be happier with the project once it pays all its debt? Yes.”