According to the Press of Atlantic City, the New Brunswick Development Corporation which has been credited with renovating numerous rundown buildings in New Brunswick and generating $1.2 million annually in property taxes, hasn’t repaid its $20 million CRDA loan (http://www.pressofatlanticcity.com/news/breaking/unpaid-million-crda-loan-raises-questions-about-new-brunswick-devco/article_a03318e2-dcdb-11e5-a563-67611bc7b7bc.html).
This has led to questions about New Brunswick Devco which was hailed as an excellent example of what can be accomplished when private firms use public dollars to execute large-scale construction projects. The $20 million loan was used to pay for the 235-room New Brunswick hotel, the Heldrich, and its attached conference center 5 years ago. About $30 million of the original $107 million loan has been repaid with 5% interest. But the Devco now owes $7 million in interest payments.
The New Brunswick Development Corporation is the model for the Atlantic City Development Corporation picked to manage over $200 million in public-private funds to handle the Gateway project in the Chelsea section of the city. Attorney Christopher Paladino who heads both corporations and arranged the $20 million loan said the loan will be repaid but will take a few more years. The economic downturn has led to problems attracting guests forcing the corporation to pay $776,000 for capital improvements from its budget. Revenue from the hotel was supposed to repay the loan.
A private nonprofit created to handle urban real estate development, New Brunswick Development Corporation (DEVCO) was founded in the mid-1970’s. It has been a catalyst for revitalization of the city. DEVCO is a nationally recognized redevelopment model based on solid public policy. Each project DEVCO undertakes is based on a clear understanding of what residents, workers, and visitors to New Brunswick need. The DEVCO’s expertise in leveraging public-private partnership resources is then used to create viable projects. It’s managed almost $1.6 billion in investments since its inception.