According to Press of Atlantic City website, Middlesex County Improvement Authority received a $20 million loan from Casino Reinvestment Development Authority in 2005 for the construction of a New Brunswick Hotel and conference center known as The Heldrich. Christopher Paladino headed the investment. Last month they failed to pay $1 million in principal and interest of that loan. The loan has also been in arrears for five years that has totaled to $7 million. Stephen Sweeney (state senate president) feels that the above saga is an example of how public funds can be mismanaged and embezzled when channeled through private firms to executive large- scale projects.
The hotel opened in 2007; it has got a total of 235 rooms, and its occupancy rate was 63.5% last year. Johnson 4Johnson was its largest occupant. The $107 million that was needed to finance the hotel building included $70 million municipal bond and $20 million CRDA loan.
The New Brunswick and Atlantic City Development Corp are sister companies and are both headed by attorney Chris Paladino. Atlantic City Development Corp is expected to run a project that is worth more than $200 million to develop Gateway project in the Chelsea section of the city. The project also includes $19.5 million CRDA money. On this project, County Improvement Authority intends to issue $120 million bonds in May next year. However, John Cantalupo is confident that the bond will not experience any shortfalls as per hid Heldrich finance review. The Press Atlantic City has detailed information on the DEVCO debt and can be accessed on https://www.google.com/url?sa=t&source=web&rct=j&url=http://www.pressofatlanticcity.com/news/breaking/unpaid-million-crda-loan-raises-questions-about-new-brunswick-devco/article_a03318e2-dcdb-11e5-a563-67611bc7b7bc.amp.html&ved=0ahUKEwjPyeSo4c_PAhVgOMAKHUizBdQQFgj-ATAc&usg=AFQjCNG_P5TUHF91uMjPpSosGtwrhFuEKA&sig2=mtperPIKoeTnSwtfjZ1PUA
DEVCO is a real estate development firm that was founded in 1970 by Richard B. Sellar with the aim of handling private and public investment in New Brunswick. It has managed to run more than $1.6 billion in investment from the time of its inception. It has been criticized for incurring massive debts through its projects. Hyatt Regency Hotel $60 million project was its first major project.