There is much concern across the struggling communities of New Jersey regarding the repayment of development loans with one of those being a $20 million Casino Reinvestment Development Authority (CRDA) loan provided to New Brunswick Development Corporation, or Devco. With a vision of urban redevelopment in New Brunswick, NJ, Devco has a history of bringing together both public and private funding to redevelop urban areas into profitable projects for the benefit of the communities. Devco was founded in the mid-1970’s and since then has overseen nearly $1.6 billion of investment in the New Brunswick area. This model has been replicated in Atlantic City and other areas hard-hit by the recent economic recession. This particular loan is for a project renovating the 235-room Heldrich hotel and conference center, which opened in 2007 as the recession hit, and has struggled to attract guests with only a 63.5 percent occupancy rate in 2015. Business has been so poor for the hotel that Devco was forced to provide an additional $776,000 to pay for necessary mattress and carpet replacement. Funding for the Heldrich project also included $70 million from municipal bonds alongside the CRDA amount. While $30 million has been repaid to the senior bond holders, this $20 million CRDA loan has been delinquent for years. Municipal lenders do not seem concerned, as local employment, a rise in real estate taxes, and local tourism due to the hotel have benefited New Brunswick.
The information in this article was originally published by Press of Atlantic City and can be found at this link below: