Website devco.org Founded 1976 | Founder Richard B. Sellars | |
Formation 1976; 41 years ago (1976) Headquarters New Brunswick, New Jersey Key people Christopher Paladino, President | ||
New Brunswick Development Corporation (DEVCO) is a 501(c)(3) non-profit organization. It is best known for real estate development in the New Brunswick, New Jersey area. The corporation claims responsibility for more than $1 billion of real estate projects in New Jersey. New Brunswick Development Corporation has received criticism for incurring large amounts of public debt through its work.
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History
New Brunswick Development Corporation was founded as a "nonprofit, tax-exempt redevelopment corporation" by Richard B. Sellars, a former executive at Johnson & Johnson, in the late 1970s. The corporation's mission centered around assisting New Brunswick entities such as Rutgers University, The New Brunswick Parking Authority and several other government agencies with real estate projects through its use of contractors. Its first major project was a $6 million renovation of a Hyatt Regency Hotel, which was backed Johnson & Johnson.
Since its foundation, the corporation has been associated with Middlesex County politicians and government officials including Mayor James M. Cahill, former Mayor and State Senator John A. Lynch Jr. and Chairman of New Brunswick Development Corporation George Zoffinger. Lynch was investigated for his business dealings in the mid-2000s and pleaded guilty to mail fraud and tax evasion in 2006. Zoffinger, the former chief executive officer of the New Jersey Sports and Exposition Authority, helped to develop the Meadowlands Sports Complex and was investigated in 2009 for ethics violations that led to his resignation from the Sports Authority.
New Brunswick Development Corporation claims that its $1 billion of new development projects have been beneficial to the New Jersey area. It has received opposition from public advocacy groups for the lack of progress in communities. The New Jersey Economic Development Authority has issued more than $300 million in tax exempt debt for various New Brunswick Development Corporation projects, with more than $170 million in tax credit grants.
Criticism
New Brunswick Development Corporation has been criticized for incurring large amounts of debt on the municipal and county agencies to support its projects.
According to Moody's Investors Service, New Brunswick is "credit negative" due to a $250 million debt from New Brunswick Development Corporation's projects. As of 2014, Christopher Paladino, President of New Brunswick Development Corporation, receives an annual salary of $620,000.
The corporation has received media controversy regarding the lack of public bidding on its projects as required by municipalities and universities. This has led to transparency issues in its use of direct non-bidding of contractor construction work and why contractors are selected. AC Devco, a New Brunswick Development Corporation affiliate in Atlantic City, has received scrutiny for a Stockton University construction project at the tax payer's expense. The community called for its local government to audit the corporation's handling of state and county projects in Atlantic City. AC Devco was accused of nepotism for awarding a no-bid contract to Joseph Jingoli & Son, which employed Paladino's son.
In February 2016, the Press of Atlantic City reported that Paladino organized a $20 million loan that has not been paid back to the Casino Reinvestment Development Authority. The loan was used for the development of the Heldrich Hotel in New Brunswick in 2005, which New Brunswick Development Corporation was the designated redeveloper.