The Press of Atlantic City recently reported that the Devco Development Company has fallen behind in repaying $1 million in principal with interest, it received for the construction of The Heidrich Hotel. In 2005, the Casino Reinvestment Development Authority, CRDA, along with other lenders, made a loan to Devco for $20 million for the new construction in the downtown district.
This development company has been rennovating downtown New Brunswick since the 1970s, but since the economic crisis of 2008 they have had problems with payments much like many Americans across the country. During the past five years, they have missed over seven million dollars in payments. The problem being that the hotel has never been filled to capacity long enough to pay the bills. In 2015, the hotel only showed 63.5 percent occupancy, and Johnson & Johnson, their largest account, sit on the Board of Directors of the development corporation.
Christopher Paladino, the attorney who arranged the loan, said that there is no need for worry. The development company will pay the loan, it will just take longer than expected.
The New Brunswick Company is a non-profit, cutting-edge, urban development company that has already contracted and repaid $1.5 billion on previous renewal projects, and they are not going to stop now.
The redevelopment of the downtown district is a worthwhile project that will continue for years into the future. Devco has been successful in transforming the lifestyle from dingy street blocks into gorgeous hotels and convention centers. They have a talent and a skill for designing and constructing new buildings to replace the old.
The total borrowed for the Heldrich construction was $107 million, with $30 million of the bonds issued by the Middlesex County Improvement Authority repaid on schedule. Board members have paid over $700,000 on supplies and equipment necessary to run the hotel in the past few years. Devco will remain on alert for the repayment of the loan.