City Council introduces ordinances that would condemn Bayonne Medical Center property

Public hearings will be held at the May 12 council meeting

The battle continues over the operations of Bayonne Medical Center. Photo by Daniel Israel.
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The battle continues over the operations of Bayonne Medical Center. Photo by Daniel Israel.

The Bayonne City Council has introduced ordinances that would condemn the Bayonne Medical Center property.

A public hearing on the proposed ordinances will be held at the May 12 council meeting at 7 p.m. Residents can attend in-person at the council chambers at City Hall at 630 Avenue C or virtually via TetherView. For more information, go to bayonnenj.org and click on the event on the calendar webpage.

CarePoint Health has been selling its assets, which include Bayonne Medical Center, Hoboken University Medical Center, and Christ Hospital in Jersey City. In November of 2019, Avery Eisenreich, owner of nursing home operator Alaris Health, purchased the real estate of Bayonne Medical Center and 70 percent of the real estate of Hoboken University Medical Center.

CarePoint has been searching for an operator for the facilities ever since, eventually signing a formal sale agreement with BMC Hospital LLC to operate Bayonne Medical Center. Meanwhile, Hudson Regional Hospital in Secaucus has closed on the purchase of the real estate of Bayonne Medical Center for $76 million and is in contract with Eisenreich to acquire Hoboken University Medical Center for $144 million.

When the sales close between Hudson Regional Hospital and Eisenreich, Hudson Regional intends to operate the hospitals, not BMC Hospital LLC. This has sparked a war between the two entities over who will operate the hospitals.

The battle has largely played out in court, with a number of lawsuits among the entities. The litigation has since been consolidated and is still active. Amid the legal developments, Hudson Regional terminated CarePoint Health’s lease as operator of Bayonne Medical Center through a notification served on Dec. 31, changing its status to month-to-month pending eviction proceedings.

Condemnation ahead?

The Hudson County Improvement Authority (HCIA) began eminent domain proceedings in May of 2020. The Hudson County Board of Commissioners unanimously voted to approve three resolutions authorizing the HCIA to begin eminent domain proceedings on the three CarePoint Health hospitals.

Law Director Jay Coffey told the Bayonne Community News the proposed ordinances would allow the city to condemn the hospital property, in conjunction with the HCIA, through eminent domain.

“It’s a continuation of a process initiated last year for the acquisition of the Bayonne Medical Center,” said a spokesperson for the HCIA.

“We have an untenable situation with the hospital at this point,” Coffey said. According to Coffey, the city is no longer sure of the hospital’s continued viability, citing the numerous lawsuits and other issues that have arisen throughout the fight over the facility.

“It’s the administration’s desire that Bayonne be served by a hospital like it’s been served for the past 100 years,” according to Coffey. He said one option would be to condemn the property.

Coffey said that to condemn the property, certain steps must be taken, and this is just another one of those steps, akin to the creation of the Bayonne Hospital Authority last year. While the framework for the BHA has been created, the entity itself has not.

Up to $95 million

The first ordinance funds the condemnation of the hospital property. The HCIA will finance the condemnation and under the proposed ordinance the city could bond up to $95,000,000 as a reimbursement.

According to Coffey, $95,000,000 is a worst case scenario and the maximum that the city would need to bond. He said that number is based on an analysis of “wants and needs.”

Coffey continued: “Everyone wants a hospital. Whether or not a hospital is needed is another matter. But if you need a hospital, you have to consider what you’re willing to pay for it. That’s the decision the council and mayor are going to have to make.”

No funds have been committed yet. Coffey compared it to a football game: “The game hasn’t started really. This is just the playbook for if the game starts, then this is the play we are going to run first.

The second ordinance is a lease that deals with payment of the bond. If the city takes the title of the hospital property, it will then seek an operator to run the hospital. The amount of the contract is set up to cover the debt service. 

According to Coffey, the revenue generated by the lease holder of whomever operates the hospital would provide enough revenue to cover the annual costs of the bond. If the revenue is inadequate, the city will be responsible for covering the difference. 

Entities respond to the move

Two of the entities were in favor of the introduced ordinances. BMC Hospital, LLC issued a statement praising the move.

“Wednesday’s move by the City Council is a positive step toward stabilizing health care access for tens of thousands of patients who depend on Bayonne Medical Center,” according to the statement. “The people of Bayonne want and deserve a long-term solution for Bayonne Medical Center that prioritizes high-quality patient care, and this is the first step toward making that happen.”

CarePoint Health also applauded the ordinances.

“CarePoint welcomes Wednesday’s move by the City Council as a positive step toward stabilizing health care access for tens of thousands of residents in Bayonne,” according to the statement. “CarePoint Health is committed to keeping and enhancing all three hospitals under operation. The  recent steps by the hospital system leadership to bring in world renowned partners to work with CarePoint hospitals in Hudson County is a strong testament to this commitment toward Bayonne Medical Center and the other hospitals.  We appreciate all the ongoing support from the counties and officials.”

HRH condemns the condemnation

Hudson Regional Hospital, the current property owner, opposes the use of eminent domain and questioned why this step was taken.

According to the statement: “Hudson Regional Hospital has provided stable ownership to the Bayonne Medical Center property, resolving issues that had festered for more than 20 years. The proposal to burden the public with an eminent domain proceeding is unnecessary, as we have committed to long-term ownership and maintain Bayonne Medical Center as an acute care facility.”

Hudson Regional continued: “We look forward to collaborating with Mayor Davis and the City Council on a plan to address the community’s true concern about Bayonne Medical Center, which is the compromises in its operations as a result of CarePoint’s reduced services and failures under its lease as it struggles to find a legitimate plan to exit its ownership. As we achieved in Secaucus at Hudson Regional Hospital, we are positioned to helping Bayonne create a quality acute care facility and recover the vitality of the institution.”

Hello, operator?

If Bayonne Medical Center property is condemned, it is not clear which entity would operate the hospital. The likely answer seems to be BMC Hospital, LLC, which Mayor Davis and other city officials have publicly supported. Hudson Regional Hospital has alleged that the eminent domain process would be used as part of BMC Hospital, LLC’s plan to acquire the hospital at a reduced rate.

After months of calm, it appears the Hudson County hospital saga is yet again approaching a climax. It is certainly not the end as has been proven time and again throughout the crisis.

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.