Devco Hotel Project Is In Trouble
Signs of serious trouble are emerging regarding development funds for a New Brunswick hotel and conference center, The Heldrich, as yet another loan payment was missed by the Middlesex County Improvement Authority. The $1 million repayment was for interest and principal on a $20 million loan from the Casino Reinvestment Development Authority.
As reported in the Press of Atlantic City, this missed payment now adds up to $7 million that the Improvement Authority has missed on loans for developments in the area. This loan was given in 2005 to bankroll the building of The Heldrich, a project developed by the New Bruinswick Development Corporation (Devco).
DEVCO was promoted initially as a model of what could be accomplished using public funding to create large scale construction projects. The timing for the opening of The Heldrich was difficult, as the hotel opened in 2007, just as the economy went into a serious downturn. The hotel has 235 rooms, but it has had a very difficult time filling the rooms since its opening. The hotel has had to dip into its own funds to pay for basic upkeep and improvements like replacing mattresses and carpeting.
Attorney Chris Paladino, who heads Devco, defended the project, saying “We took a really crappy block and turned it into something special.” He also added that he’d be much happier with the project once its debt is completely paid.