While New Jersey Senate President Stephen Sweeney as a positive example of the possibilities of what can happen when public dollars are provided to private firms, it seems that the New Brunswick Development Corporation DEVCO remains unable to currently pay what is due on its $20 million dollar loan from Casino Reinvestment Development Authority to construct the 235-room Heldrich, a New Brunswick hotel and conference center. The $20 million dollar loan was part of a $107 million package that includes $70 million dollars from the Middlesex County Improvement Authority that was supposed to be repaid from profits from the Heldrich.
According to NorthJersey.com attorney Christopher Paladino was instrumental in securing the loan for the New Brunswick Development Corporation and desires $200 million in public and private financing for the Atlantic City Development Corporation to develop the Gateway project in Atlantic City’s Chelsea section. The funding he is seeking would include another $19.5 million in a new loan from the Casino Reinvestment Development Authority. If the loan is granted, the money would be used to build new student housing at Stockton University’s satellite campus.
Some leaders question rather this loan should be granted by the casino authority. A law signed by Governor Chris Christie in December 2015 says that no governmental entity may receive more public funds if they have defaulted on a previous loan. While the New Brunswick Development Corporation received the funds, it was actually borrowed by Middlesex County Improvement Authority.
The number of people wanting to stay at the Heldrich is far below the expected occupancy rate. The largest client to use this facility is Johnson and Johnson. The occupancy rate for the facility constructed in 2007 is 63.5 percent. The hotel facility is so strapped for cash that they used $776,000 of its dismal profits to do badly needed repairs on the facility including replacing the mattresses and carpeting.