The Heldrich Hotel, which was built by New Jersey-based New Brunswick Construction Company, is on the brink. Since the hotel opened its doors in 2007, it has been underperforming, and the Middlesex County Improvement Authority (MCIA) has had problems making good on the $20 million loan secured through the Casino Reinvestment Development Authority (CRDA).
The 2005 loan to the MCIA has been in arears for 5 years. The last $1 million payment also defaulted recently, according to the pressofatlanticcity.com.
The recent loan defaults have put the issue of private companies taking public tax dollars for construction has come under fire.
Chris Paladino, CEO of CRDA says the monies will be paid back, however, it will take a little bit of time.
The Heldrich experiment hasn’t quite panned out as planned. The 257-room hotel was expected to be a smashing success. Quite the opposite has happened. The hotel has been operating in the hole almost since its opening. So cash-strapped, the hotel has been forced to dip into funds slated for basic things to continue operations.
“Sadly, many of the bondholders haven’t been paid in years,” said Paladino.
After the Atlantic County Improvement Authority (ACIA) issued $120 in bonds for improvement to Stockton University, New Jersey Gov. Chris Christie had seen enough. Last May he signed a bill forbidding non-profits and other businesses from receiving additional funds while in default.
CRDC Executive Director John Palmieri says he is optimistic about the future and believes that the economy will soon improve and the loan repaid.
DEVCO is a private non-profit that has done much to improve several New Jersey communities. The company is currently performing upgrades at Rutgers University thanks to funds from a number of local, federal and state resources.
Successful high-impact projects have put the company on the map and contributed to its massive success.