In a report that appeared on the pressofatlanticcity.com website, Middlesex County Improvement Authority, last month, failed to pay $1 million in interest and principal on their loan of @2 million it received from Casino Reinvestment Development Authority.
The Development Authority had been in arrears for five years; it racked up almost $7 million in payments skipped. The mortgage, made in 2005, financed the construction of the Heldrich, the conference center and Brunswick Hotel that was developed by the non-profit company by the name New Brunswick Development Corp.
The state Senate President, Stephen Sweeney, touted the corporation as a paragon of what can be done when public funds are channeled through the private firms in large scale construction execution. The New Brunswick Outfit is also the Atlantic City Expansion Corporation, a sister company expecting to oversee over $200 million in private and public financing – including the new CRDA money that is $19.5 million. Towards the development of the Gateway project in Chelsea section of the city.
Both companies are chaired by attorney Chris Paladino, who arranged the Heldrich loan worth $20 million. “it will take a couple of years, but CRDA will be paid,” he said this past week. The 235-room Heldrich Hotel started operation entirely in 2007as the economic crisis set in, has always struggled in attracting customers. This past year, its tenancy rate was 63.5 percent, and the biggest occupant of the year was Johnson & Johnson, whose executives are chairing New Brunswick Development Company as their board of directors.
The hotel is by far cash-strapped that the company has had to tap more than $776,000 of its money for funding necessary expenses such as carpet and mattress replacement, according to Paladino. Paladino went ahead and said that they want to make it healthy and continue to be engaged in the project.