DEVCO Plans New Development in Atlantic City

Around 30 days ago, the Improvement Authority of Middlesex County wasn’t able to pay down a $1 million hit to their $20 million loan. That was just the principal. It got the laon from the Casino Reinvestment Development Authority. In five years, there have been $7 million in total missed payments. The loan was used in the building of The Heldrich, which is a hotel and conference center in New Brunswick.
Stephen Sweeney is the president of the New Jersey state senate and he thought that the New Brunswick Development Corp. (DEVCO) was a great instance of what happens when public money goes into private hands for large scale developments.

In fact as reported on the Press of Atlantic City, Devco is related to the New Brunswick branch and plans to model them. They are building on in Chelsea and manage about $200 million.

Chris Paladino is the attorney who put the two deals together. The $20 million CRDA package is rolled into a bigger $107 million deal for the Heldrich. The bondholders who were senior have received their money back, while other bondholders haven’t been paid for a number of years.

John Palmieri is the Executive Director of the CRDA and acknowledged the failure of the loans. He said they understood they wouldn’t be paid first if something went wrong. However, he pointed to the economic benefit of the project, such as employing over 200 workers in unions and paying over $1 million in taxes every year due to real estate fees.

DEVCO

DEVCO is based in New Jersey. It is a development company focusing on large projects and was founded in the middle of the 1970’s.

They plan to build more and expand soon. Chelsea is the next step for the DEVCO. They manage over $1.6 billion in assets in New Jersey and beyond.

This article recaps an article written in Press of Atlantic City: http://www.pressofatlanticcity.com/news/breaking/unpaid-million-crda-loan-raises-questions-about-new-brunswick-devco/article_a03318e2-dcdb-11e5-a563-67611bc7b7bc.html

 

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