The New Brunswick Devco – A Non-Profit Company or a Public Cash Funneling Scheme?

The new Brunswick DEVCO is a private non-profit urban real estate company based in Brunswick, New Jersey. It specializes in redevelopment and has played an important role in the revitalization of this city. It has been touted as a “powerful engine for economic growth” by New York Times. The Head of the corporation is renowned attorney Chris Paladino who also heads its sister firm.

The firm was recently in news in an article written in the Press of Atlantic City for failing to pay the loan which is taken by the improvement authority in Middlesex county. The loan amount was for financing the redevelopment project handled by Devco. This amount bankrolled the development of “The Heldrich” hotel and conference center which has been constructed by the development corporation. The total loan amount is $ 1 million as principal and the interest on the $20 million loan which it had taken from the Casino Reinvestment Development Authority(CRDA). The hotel failed to attract people and the occupancy rate has declined since its inception. The sister firm of Devco, known as The Atlantic City Development Corp. is working towards raising money to repay the loans and bring the hotel back from bankruptcy. The Middlesex Authority and the CRDA both maintain that the loans shall be repaid once the economics of the project improve. Both authorities are fully aware of the risks involved in the business.

The New Brunswick Devco has undertaken many redevelopment projects and all projects are aimed at improving the city for its people. They develop strong public-private alliances and innovative financing structures for implementing their projects successfully. The firm has won many awards for its smart project designs.