A little over five years ago, the Casino Reinvestment Development Authority gave a $20 million loan to the Middlesex County Improvement Authority for the construction of the Heldich. In January 2016, the improvement authority should have repaid $1 million of that loan, but it has failed to meet this deadline. A Middlesex authority says that it will take at least two more years before it can start making repayments on this loan.
Senior authorities with the Casino Reinvestment Development Authority says that they knew that they might not be repaid on time when they made the risky loan. The purpose of making the loan was to encourage senior lenders to approve financing for the Heldrich’s construction. According to a report by pressofatlanticcity.com, as of early February, the Middlesex County Improvement Authority had repaid over $30 million to these senior leaders. Additionally, they have paid about 5 percent interest to these lenders. The $20 million owed to the casino authority is part of $70 million in loans the Middlesex authority received before construction began on the property.
Authorities with the casino commission say that while they are not happy about the delay, the situation could be a whole lot worse. The property where the Heldrich now sits was an eyesore that was generating very little income. Now, the owners pay over $1.2 million in property taxes annually. Additionally, there are about 235 unionized jobs at the hotel and conference center.
Middlesex authorities say that it is not all their fault. Construction on the property was finished in 2007. After the great economic collapse of 2008, far fewer people were traveling. In its first year of operation, the occupancy rate was at 65 percent. Almost 100,000 people staying at the facility had ties to Johnson and Johnson.
The loan was given by Middlesex authorities to the New Brunswick Development Corporation(DEVCO). This corporation is now busy on a new construction project involving a $300 million initiative at Rutgers College. When completed, the new project called The Hub will offer professionals an exciting place to live and work. The non-profit DEVCO is very excited about the future of the New Brunswick region because of its infrastructure, tax initiatives, diverse workforce, stable environment and low corporate tax rate.