Middlesex County Improvement Authority is treading a thin line over the unpaid interest and loan from Casino Reinvestment Development Authority (CRDA) amounting to $20 million. The Improvement authority has already been behind in arrears for 5 years, which had raked up to almost $7 million by 2015. The loan was made in the year 2005, and was undertaken for the construction of a New Brunswick Hotel. The contract of the work was given to the non-profit organization called the New Brunswick Development Corp. The Press of Atlantic City posted ran a story on the news.
The recent news has come under sharp criticism from State Senate President Stephen Sweeney who has termed the actions of the New Brunswick Development Corp as a paragon of what can happen when public dollars are being funneled through private firms in execution of large scale constructions. The Brunswick Outfit is also the model of the Atlantic City Development Corp and both the organizations are headed by attorney Christopher Paladino. The Atlantic City Development Corp is expected to oversee more than $200 million in public and private financing plus an additional of $19.5 million from the CRDA in the development of the Gateway project in the Chelsea Section of the city.
The Heldrich Hotel, creation of the New Brunswick Development Corp was opened in 2007 but has failed in generating any profit whatsoever. Mr. Paladino said that the amount will be paid in a couple of years. The $20 million loan is part of the $107 million generated to build the Heldrich. The package includes $70 million in municipal bonds which is supposed to be repaid with the revenue of the hotel.
In further developments, the Atlantic County Improvement Authority (ACIA) is preparing to issue $120 million in bonds for the Gateway Project. John Cantalupo, bound counsel for the ACIA issued a statement saying the Gateway bonds won’t be experiencing the same problems.
The New Brunswick Development corporation or DEVCO is a private non-profit organization found to steer the growth of New Brunswick. Since its inception in the late 70’s, Devco has overseen about $1.6 billion investments in the city and has also earned awards for its work like the Excellence of Development Award in 1997 and the 2012 Smart Growth Awards.