New Brunswick’s The Heldrich hotel and conference center is a prime example of how a commercial real estate project can transform a city block. The Press of Atlantic City recently reported on The Heldrich’s debt struggles, an unfortunate yet common issue in urban revitalization.
When Public and Private Interests Merge
The Casino Reinvestment Development Authority loaned the Middlesex County Improvement Authority $20 million in 2005 to fund The Heldrich’s construction. As New Brunswick’s current hotel and conference epicenter, The Heldrich was developed by New Brunswick Development Corporation. The nonprofit corporation is commonly referred to as DEVCO and has developed many of the city’s most revered buildings and projects.
The missed payments are an example of the challenges private firms face when building public projects. Yet, DEVCO is pushing ahead and foresees their cash flow catching up. Perfect timing is the toughest trick to pull off on public projects. This sentiment is echoed by the company’s head, Chris Paladino, “CRDA will be paid, but it’s just going to take a couple more years.”
$30 million has already been repaid with interest to senior bondholders by the Middlesex County Improvement Authority. The hotel attracts 100,000 visitors a year for the city, pays over $1 million a year in taxes, and employs over 200 unionized workers.
An Urban Process
DEVCO defined how a city can be brought back to life. As with any living organism, the process is constant and involves multiple systems. Yet, the nonprofit has refined how to get it done and keep it going. Cities across the country look to DEVCO and their methods as a model for their own urban revitalization efforts.
The key is to assess the best parts of the public and private sectors and encourage them to work together. Founded in the 1970’s, DEVCO was at the forefront and a major player in New Brunswick’s revitalization and urban renaissance.