Atlantic City, New Jersey has seen better days. It once was a great vacation destination for thousands of people, offering exciting gambling and luxurious getaways. Over the past 15 years harder times have hit the area but groups like New Brunswick Development Corporation (DEVCO) have tried to offer solutions. DEVCO has been held up as an example for others to follow in the rejuvenation of the Atlantic City economy. Yet questions have been produced about the honesty and validity of the organization.
According to the Press of Atlantic City, its initial loans were made in 2005 the Heldrich, a hotel and conference center, has performed anemically as Casino Reinvestment and Development Authority wait to receive a return on the $20 million loan.
The Devco plan began in 2005 when they borrowed $20 million to finance the construction of the New Brunswick Hotel and Conference Center. In 2007 the doors opened to a lack luster performance. Unfortunately they happened to coincide with an economic depression and the rise of online casinos which made a trip to Atlantic City less of an attractive option. Since that time Devco has collected almost $7 million in payments that were missed and recently they have failed to make a principal and interest payment of $1 million to the Casino Reinvestment Development Authority.
Politicians have touted DEVCO as the model for how to rejuvenate the area by providing public dollars to private firms. The New Brunswick firm was held up as a shining star but today it seems like that star is fading in a backdrop of missed payments. DEVCO leaders assure authorities that all payments will be made but it can’t be hidden that the overall health of the hotel is not great. They struggle to reach 60% occupancy during the year and it seems that investors have seen very little return thus far.
Some will hold DEVCO up as a symbol of rejuvenation according to the Press of Atlantic City. That they have provided the game plan to follow but there are just as many others who see the approach of publicly funding private enterprises as a way to lose public funds.