New Brunswick Devco To Continue Building

September 30th, 2016

Middlesex County in New Jersey defaulted on a $1 million principal payment for a $20 million loan about a month past. Over the last half decade, they have failed pay $7 million in loan payments. They spent the money already on a hotel called the Heldrich, which also has a conference center.
Before the disaster struck, the president of the state senate was singing its praises. And the Atlantic City partner of the New Brunswick Development Corp. (Devco) noticed their actions and followed suit. Now, they plan to build a similar construction in the Chelesea are of Atlantic City.

The attorney, Chris Paladino, was the man who put the deals together. He has acknowledged the delay in payments, but has assured people that they would be repaid in good time. The $20 million loan was only a piece of a much bigger pie. There was a $107 million loan on the table. The senior bondholders of that loan got their money back plus 5%, totaling around $30 million. The other bondholders below them did not, however.

Proponents of the project point to the economic benefits. For example, the hotel pays around $1.1 million in taxes every year. In addition, they employee unionized workers to the tune of 230. That’s no small addition to the local economy that they operate in, claims CRDA director Palmieri.

Devco

A nonprofit company, Devco is headquartered in New Jersey. It focuses on developing large scale projects on land and was founded in the mid 70’s for this purpose mainly.

Now, the New Brunswick Development Corp. has numerous ongoing projects which bring in revenue. It usually involves loans, such as the Atlantic City and New Brunswick projects. They now manage over $1.6 billion.

The original article, of which this is a recap, is in Press of Atlantic City: http://www.pressofatlanticcity.com/news/breaking/unpaid-million-crda-loan-raises-questions-about-new-brunswick-devco/article_a03318e2-dcdb-11e5-a563-67611bc7b7bc.html

 

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