According to an article published on Press of Atlantic City, Christopher Paladino, the head of DEVCO, the New Brunswick Development Corporation who developed and found funding for the Heldrich Hotel renovations, has recently gone on record stating that they still fully support the project even though it has not performed as they would have hoped. The company’s mission, since its creation in the mid-70s, has been to find and revamp less than desirable properties in New Brunswick in hopes of revitalizing an area that was once alive and vigorous. Paladino states “We took a really crappy block and turned it into something special.”
The problem lies in that since the performance of the hotel has not been up to par, with average occupancy being at a mere 63.5 percent, the company who borrowed the money and did the work (Middlesex County Improvement Authority) has not been able to start making payments on the $20 million in debt it incurred completing the project. A spokeswoman for the company, Maria Prato, says that this is due to the type of contract that was signed, namely one that stipulated that debt repayment was to occur with available revenue from the project. Since the project is not performing, that revenue has not been available.
Devco, the developer on this project and many others, was started by Johnson and Johnson to help revamp downtown New Brunswick back in the 1970s. They now work largely as a separate entity and to date have handled over $1.6 billion in city renovations and improvements. Devco do this with an aggressive, momentum-driven approach that allows them to find land that is not desirable to for-profit companies and turn it into useful city-supportive properties.