Ending one crisis in the middle of another

Hudson County Freeholders move to seize three hospitals through eminent domain

Bayonne Medical Center, photo by Daniel Israel.
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Bayonne Medical Center, photo by Daniel Israel.

As Hudson County copes with the COVID-19 pandemic, local officials seek to put an end to another healthcare crisis that could complicate the pandemic response in multiple municipalities.

The Hudson County Board of Chosen Freeholders voted to approve three resolutions invoking eminent domain on three CarePoint Health hospitals. The board voted unanimously in favor of the resolutions at the May 14 meeting on Zoom.

The three resolutions allow the Hudson County Improvement Authority (HCIA) to seize the hospitals using the power of eminent domain.

The HCIA is now authorized to seize owner Avery Eisenreich’s land and his share of the hospitals through eminent domain. The HCIA would then resell the hospitals to entities that would operate them as acute care facilities.

Hudson County Executive Tom DeGise said earlier in the week that the decision came after Bayonne Mayor James Davis told him Eisenreich was blocking the sale of Bayonne Medical Center (BMC) to a private entity that would maintain it as an acute care facility.

That entity is BMC Hospital LLC, which signed a letter of intent to acquire the hospital from current operator CarePoint Health.

Eisenreich is also holding up a transaction that would prevent RWJBarnabas Health from acquiring Hoboken University Medical Center (HUMC) and Christ Hospital from CarePoint.

Eisenreich apparently refused to accept what CarePoint Health called “reasonable offers that will allow the transaction to move forward.”

Not a ‘last resort’

According to a statement on March 24, CarePoint supports the eminent domain efforts in hopes that it would pave the way for both the Bayonne and Hoboken properties to be purchased and allow RWJBH to finalize the HUMC and Christ Hospital transactions.

“We understand that the City of Bayonne and the Hudson County Improvement Authority are discussing the appropriate steps related to eminent domain under their existing authority,” a spokesperson for CarePoint Health told the Hudson Reporter.

DeGise said that while some have called the option a “last resort,” this should not be viewed as an empty threat.

“If the costly sacrifices made to “flatten the curve” during this pandemic have proved one thing, it is that our supply of hospital beds cannot be simply be viewed as a source of private profit, but as a critical community resource,” DeGise said. “I will not lose one life in our county to a game of cheap greenmail. A deal must be reached or we will act to protect the health and safety of our residents.”

In one strategic move, the Hudson County hospital crisis approaches an end.

Eisenreich in opposition 

Angelo Genova, attorney representing Avery Eisenreich, said the HCIA should engage in discussions with Eisenreich directly about securing replacement tenants in a letter written to the Board of Freeholders. Genova said that the HCIA should negotiate with Eisenreich instead of “wasting” taxpayer money.

“The use of eminent domain on the Bayonne and Hoboken properties is as needless as it is expensive,” Genova wrote. “Condemnation will unnecessarily interfere with the existing hospital leases between Owner and CarePoint. In the midst of a looming public financial crisis it is unnecessary for HCIA to incur the debt required to pay fair market value for Bayonne and Hoboken.”

The letter stated that the taking of private property by eminent domain is one of the most extreme actions a government can take and that his client, Eisenreich, is also prepared to stand up to their condemnation threat if a successful business deal cannot otherwise be reached.

The end of a months-long saga

CarePoint Health has dissolved and has been liquidating its assets. That includes selling BMC, Christ Hospital in Jersey City, and HUMC.

In October of 2019, CarePoint and RWJBarnabas Health signed a letter of intent, whereby Christ Hospital and HUMC will become part of RWJBarnabas.

In November, Eisenreich, owner of Alaris Health, purchased the real estate of the Bayonne hospital and 75 percent of HUMC. He also owns 25 percent of Christ Hospital.

But according to CarePoint officials, he is not interested in operating BMC, nor in helping CarePoint Health in its negotiations to find a new operator.

Previous concerns about CarePoint’s potential failure to make a deal with a hospital operator prompted the City of Bayonne to establish a Municipal Hospital Authority that would act as an operator in such a scenario.

However, it seems the new scenario will likely involve BMC Hospital LLC operating Bayonne Medical Center and changing the name to Bayonne Hospital.

Now the power lays in the hands of the HCIA, as eminent domain looms over the three hospitals.

For updates on this and other stories, check www.hudsonreporter.com and follow us on Twitter @hudson_reporter. Daniel Israel can be reached at disrael@hudsonreporter.com.