New Brunswick’s run-down Heldrich Hotel was renovated and developed by New Brunswick Development Corporation (Devco). This remodel required $107 million in financing, including $70 million in municipal bonds issued by the Middlesex County Improvement Authority and a $20 million loan from the Casino Reinvestment Development Authority. Unfortunately, the expensive project, designed to [take] a really crappy block and [turn] it into something special, has not yet met its high expectations. In 2015, the Heldrich only managed to occupy its 235 rooms at a rate of 63.5%. In fact according to the Press of Atlantic City, Devco had to use its own funds, to the tune of over three-quarters of a million dollars, for basic expenses to keep the hotel operating. The Heldrich’s lackluster performance has had a direct impact on the Improvement Authority’s ability to timely repay its borrowed funds. Hotel profits are supposed to be used to repay the bonds, and according to Press of Atlantic City, as recently as January, the Improvement Authority missed its $1 million payment to CRDA. This is not to mention the Improvement Authority was already behind for 5 years, missing close to $7 million in payments. Despite these challenges, Stephen Sweeney, state Senate President, has lauded Devco as a paragon of what can be done when public dollars are funneled through private firms to execute large-scale construction.Ó
Devco is a private nonprofit urban real estate development company. Around since the 1970s, Devco helps champion redevelopment and revitalization in New Brunswick. To date, Devco has managed approximately $1.6 billion worth of investment in New Brunswick. Their portfolio boasts a diverse array of award-winning projects – from commercial to residential, education to healthcare, and more.
The original article printed by Press of Atlantic city can be found here: http://www.pressofatlanticcity.com/news/breaking/unpaid-million-crda-loan-raises-questions-about-new-brunswick-devco/article_a03318e2-dcdb-11e5-a563-67611bc7b7bc.htm