New Brunswick Development Corporation (DEVCO) is a real estate development company that was founded in 1976 by Richard B. Sellars, chief executive of Johnson & Johnson Corporation. It is a private, non-profit organization, which concentrates on construction of residential and commercial facilities. The corporation’s headquarters are located in New Brunswick, New Jersey.
A few years ago New Brunswick consisted of run-down buildings and other facilities. A review of this company finds that it has built government buildings, hotels, restaurants, healthcare facilities, schools, theaters and many other structures in the city. This has upgraded it to a desirable location.
Money for these projects was obtained from things such as the Economic Development Authority (EDA) Urban Transit Hub Tax Credits, the state’s Higher Education Facilities Trust, bonds and other public entities, says Atty. Chris Paladino. This has led to a problem with final repayment of the money.
A February 29, 2016 article by Reuben Kramer of the Press of Atlantic City lists a problem with payment of principal and interest on a $20 million loan given to the Middlesex County Improvement Authority. According to the article, the 2005 loan was used to have the New Brunswick Development Corporation build the New Brunswick hotel and conference center. He states the payments have been in arrears for the past five years.
The loan used to build this hotel included Middlesex County Improvement Authority municipal bonds. The money was to be repaid by hotel revenues, which has not been realized.
While many of this organization’s projects have been successful, using public funds to finance an independent company’s building costs is always a risk. This hotel, now owned by the Improvement Authority, has not fulfilled their revenue expectations and they continue to be losing public money on the deal.