The Heidrich Hotel as been operating, but very minimally since 2005 when it reopened after new construction and renovation. The Casino Reinvestment Development Authority, CRDA, along with several other lenders, loaned the DEVCO Development Company $20 million for this reconstruction. The Press of Atlantic City reported that Devco has now missed $1 million in payments to the CRDA, along with past missed payments that total over seven million dollars.
The spokeswoman for the Devco renovation company, Maria Prato, responds by saying that Devco has been renovating the downtown New Brunswick area since the 1970s. and they are not going to stop now. They have been turning what was old and debilitated into beautiful works of art, and they fully intend to repay the debt.
The problem lies in the sagging economy and the crisis that occurred in 2008. Ever since then according to the Press of Atlantic City, the Heidrich Hotel has never had full occupancy, so it doesn’t have the funds for the extra payments.
In 2015, the hotel showed an average of 63.5 percent occupancy, and these funds were used for general operating costs. The largest account in the Hotel is Johnson & Johnson, and they sit on the Board of Directors of Devco.
For over 20 years, Devco has participated in the new construction in the downtown New Brunswick district, and the renovations restore the older buildings while eliminating the deterioration that overtook the city.
This project is a much needed and worthwhile adventure that will continue for years into the future. The transformation that Devco contributes to is succeeding in transforming dingy streets into gorgeous hotels, convention centers, and retail stores. The total loan for the Heldrich construction was $107 million, and Devco has already repaid the $30 million in bonds. Their attorney, Chris Paladino. sees no problem in repaying the loan, “It will just take a few years longer.”