CRDA’s bad loan / $4 million wasted - pressofAtlanticCity.com: Press Editorials

CRDA’s bad loan / $4 million wasted - pressofAtlanticCity.com: Press Editorials

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CRDA’s bad loan / $4 million wasted

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Posted: Wednesday, May 11, 2011 12:01 am | Updated: 1:57 pm, Thu May 19, 2011.

The loss of $3.6 million in casino reinvestment funds to a bad loan for an Elizabeth housing complex is an outrageous, distressing story and - pardon the cynicism - a familiar one in New Jersey.

The Casino Reinvestment Development Authority made the $4 million loan in 2009 through the Department of Community Affairs, reportedly under pressure from the administration of former Gov. Jon S. Corzine.

The interest-free loan helped a politically connected developer acquire a housing complex for redevelopment. The deal bypassed the CRDA's usual procedures, was not reviewed by either the Department of the Treasury or the Attorney General's Office - and former CRDA Executive Director Tom Carver told The Press that the Corzine administration directed the CRDA to approve the loan.

The deal was a hodgepodge of irregularities:

- The DCA said the loan would benefit multiple projects, but the money was always intended solely to help Democratic Party contributor Christiana Foglio acquire Oakwood Plaza Apartments in Elizabeth.

- DCA's plan to guarantee repayment of the loan relied on a tax that ended up not being collected.

- The proposal lacked standard loan protections such as penalties for failure to make payments.

Late last year, the CRDA board voted to forgive most of the loan. The money is gone, along with whatever legitimate redevelopment projects it might have financed. Unfortunately, this was not the first instance of the CRDA sending money to distant projects for apparently political reasons.

In 2006 the agency gave a $16.5 million grant to a Pennsauken project involving an ice-hockey arena that would have benefited Democratic power broker George E. Norcross III. That money has not been returned, even though the arena project has fallen apart.

In 2005 and 2006, the authority approved $5 million in grants for a gym and dormitories at two Essex County Catholic schools with a connection to state senator and former governor Richard J. Codey.

This kind of spending gave the CRDA a reputation as a conduit for political favors. It's a reputation the agency can't afford, especially now.

As the agency in charge of Atlantic City's new Tourism District, the CRDA's actions will help determine the future of the resort. And the successful revitalization of Atlantic City is critical to the entire state.

CRDA's decisions must be based on sound judgment and objective criteria - not on political favors.

To read the original story, click here.

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