In January 2016, Middlesex County Improvement Authority failed to pay a loan. It had received $20million from Casino Reinvestment Development Authority and had failed to pay $1 million. This Improvement Authority had been in arrears for five years and had accumulated a total of $7 million in missed payments. The loan which was acquired in 2005 funded the construction of a New Brunswick hotel and conference center (The Heldrich). This was developed by a non-profit organization known as the New Brunswick Development Corporation. On the corporation, State senate president Stephen Sweeny said that the loan issue portrays what happens when public funds are used by private firms to execute large scale constructions.
Both CRDA and MCIA are headed by Christopher Paladino, the Attorney who arranged the $20 million Heldrich loan. He stated that CRDA will be paid the full amount but that may take a number of years. The Heldrich has 235 rooms but it has struggled to lure guests in the recent past having a 63.5% occupancy rate. The hotel is reported to be undergoing a financial crisis as they had to use their own money (around $776000) to cater for basic commodities such as mattresses and the replacement of carpets according to Mr. Paldino. More information can be found here on Press of Atlantic city website.
The New Brunswick Development Corporation (Devco) is a private non-profit urban real estate development company. It was founded in the 1970s for the purpose of revitalizing the city. Their philosophy is that the building of a city is never completed. They have experts who are involved in creating private-public partnerships, innovating project financing solutions and mutual alliances. Devco’s unique approach to redevelopment has enabled them rack around $1.6 billion in investments in New Brunswick.