The Middlesex County Improvement Authority is said to have missed a vital payment of $1million in principal and interest to Casino Reinvestment Development Authority as payment of a loan advanced to them totaling to $20million. This report is not an isolated event with the Middlesex county reported to be in arrears for the past five years with loan penalties totaling to 7million.
The loan was taken in 2005 in a bid to fund The Heldrich, a hotel and conference center for a nonprofit organization New Brunswick Development Corporation. Senate President Stephen Sweeney is on record addressing the issue. Stating that ‘the Heldrich can be viewed as a paragon of what can be done when public dollars are funneled through private firms’. This is as reported by 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
This remarks come in the wake of Atlantic City which is the sister project of Heldrich and takes the same model, with investments of over$200million expected to be taken from public and private financing. All in a bid to develop the city’s Chelsea section.
CRDA are set to recover from the loan, but this payment wil take much longer than expected because the Heldrich which first opened doors in 2007 is still struggling. The situation is so bad that the Hotel struggles to maintain its own capital expenses. The repayment process is further constrained by the fact that the loan documents indicate that the loan is to be paid from money generated from project revenues and after senior lien public bond holders are paid.
The CRDA Executive Director John Palmieri is on record addressing the issue sighting the loan repayment program as a bad business decision. This is because the projections of the money that were expected from the Heldrich upon its completion are yet to be met.