An unpaid loan installment by Middlesex County Improvement Authority (MCIA) sheds light on dealings of New Brunswick Devco.
The MCIA a $20 loan from the Casino Reinvestment Development Authority (CRDA) and failed to make good on last month’s $1 million interest and principle installment. The MCIA has a record of not making good on payments is $7 million in arrears dating back five years.
According to the Press Of Atlantic City, the original 2005 loan was given for the construction of the New Brunswick Hotel, The Heldrich. Before the hotel was purchased and renovated, it was rundown and abandoned. The hotel and conference center was developed by the New Brunswick Development Corp., an area non-profit organization.
Although the organization has been touted as an extremely efficient model of success when public dollars are used correctly, it hasn’t quite lived up to its name. It’s sister firm, Atlantic City Development Corp., is having much more success in its namesake.
Christopher Paladino, attorney for both corporations, insists the debt will be paid very soon. “Due to the economic downturn and misjudging of the market, the Heldrich wasn’t quite as profitable as we thought it would be,” said Paladino.
The 237 room establishment only had an occupancy rate of about 63 percent last year. The hotel is extremely cash-strapped and barely has enough money to provide basic services. The hotel was forced to tap its own funds to pay for items such as carpet and mattresses.
Paladino says he is confident they can make it work. “It’s just going to take some time.”
“We believe the economics and forecast look a lot better. We have no doubt that all financial obligations will be satisfied,” said Paladino