City council president opposes eminent domain for BMC

Two ordinances would condemn Bayonne Medical Center property

The battle has primarily been waged over which entity will operate Bayonne Medical Center. Photo by Daniel Israel.
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The battle has primarily been waged over which entity will operate Bayonne Medical Center. Photo by Daniel Israel.

Ahead of the Bayonne City Council meeting May 12 where the council will vote on two introduced ordinances that would condemn the Bayonne Medical Center property through eminent domain, City Council President Sharon Ashe-Nadrowski has announced her intent to motion to reject the ordinances.

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, signing a 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, however, 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.

At it’s April meeting, the Bayonne City Council introduced to ordinances to condemn the hospital through eminent domain. Eminent domain proceedings began in May of 2020 when the Hudson County Board of Commissioners unanimously voted to approve three resolutions authorizing the Hudson County Improvement Authority to begin the process.

Motion to reject

Ashe-Nadrowski has apparently signaled support for Hudson Regional Hospital, citing the burden eminent domain would put on the city.

“HRH has agreed to preserve Bayonne Hospital at no cost to the city taxpayers,” Ashe-Nadrowski said. “They provided a letter indicating a willingness to drop any litigation related to the rezoning of property. This is important because it is through zoning that the city controls what uses are allowed on the property. Additionally, HRH has agreed to enter into negotiations with Bayonne to give us a right of first refusal which means if they decide to sell the property or change its use, we can buy it. There is still a lot of details to be worked out, but this is an opportunity for us to save the hospital and protect the taxpayers.”

Ashe-Nadrowski said she will motion to reject eminent domain in favor of negotiating with Hudson Regional Hospital.

“At zero cost to the taxpayers, Bayonne Hospital will continue to operate for generations to come,” Ashe-Nadrowski said. “Therefore, at this Wednesday’s meeting, I am going to make a motion that we reject eminent domain and instead authorize the city’s special counsel to enter into negotiations and reach an agreement with the property owner which reflects the spirit of the letter.”

Ashe-Nadrowski hopes this will end the ordeal and stop the litigation.

“We save the hospital and do not put taxpayers at risk – it is a win-win for Bayonne,” Ashe-Nadrowski said. “My only concern is protecting the hospital not picking who gets to run it. History has taught us that the government should not be in the hospital business. Hopefully, both sides will be able to sit down, stop suing each other and figure this out.”

This is the second instance recently where Ashe-Nadrowski has taken a stance that differs from that of Mayor James Davis. The first was when she was the only city official to comment on Business Administrator Melissa Mathews’s gender discrimination lawsuit against the city and a number of municipal employees. Davis has reiterated his support for BMC Hospital LLC numerous times, but remained vague in a recent statement.

“The goal of the City of Bayonne is to pursue all available avenues for maintaining a community hospital to serve our residents,” Davis said.

Mixed reactions

“We are very appreciative and gratified that Bayonne Council President Sharon Ashe Nadrowski has entrusted Hudson Regional Hospital to create a program that addresses the healthcare needs of the Bayonne Community,” said CEO of Hudson Regional Hospital Dr. Nizar Kifaieh in a statement. “For us, the dialogue over the future of Bayonne Medical Center has always been about securing acute care services for Bayonne residents in perpetuity, and we have committed to operate an esteemed hospital at Bayonne Medical Center or provide the City with the opportunity to purchase the property from us.”

Kifaieh attacked the use of eminent domain. Hudson Regional Hospital has long 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.

He continued: “There has never been a rationale for using eminent domain when we have been eager to bring our unique benefits to the community without public funding, and we will make Bayonne proud as we make Secaucus proud of our support of the community and its healthcare needs. We hope the Council is similarly enthusiastic about our capacity to provide a healthcare solution for Bayonne as both property owner and hospital operator.”

Earlier in the day, BMC Hospital LLC released a statement announcing that it will guarantee its potential rental payments will fully cover the debt service obligations the city will have to bondholders if eminent domain proceedings of the land under Bayonne Hospital reach a conclusion, and BMC is the operator. BMC Hospital LLC has been in favor of the eminent domain proceedings.

“It is our intention to see that no additional financial burden will be placed on the taxpayers of Bayonne if eminent domain goes through, and we operate the hospital,” BMC Hospital LLC said in a statement. “We believe eminent domain is the only way for the city to secure the long-term stability of Bayonne Medical Center and ensure that wealthy landowners can never destabilize health care for thousands of patients again simply because they want to maximize profits. If taxpayers own the land, then the taxpayers decide.”

A battle brewing

Ahead of the May 12 meeting, both entities have been waging a war in the media. Hudson Regional Hospital has created its own website dedicated to the issue as well as mailed letters to all Bayonne residents, among other actions. Both Hudson Regional and BMC Hospital LLC have taken out full pages ads in this newspaper.

“We are commencing a plan to engage the residents of Bayonne in a dialogue that reveals threats to their healthcare system and a profound waste of taxpayer money,” according to a statement by Hudson Regional. “Among other activity, we have issued a letter to the Bayonne City Council expressing our dismay over the concept that eminent domain is an appropriate vehicle to foreclose on our property, especially when BMC Hospital LLC’s filings indicate that they expect to operate their first foray into acute care as a for-profit enterprise that receives a discounted rent from City of Bayonne, whose taxpayers will bear the cost of the bonds issued to foreclose on the site, and who will guarantee payment on the bonds if BMC Hospital LLC fails.”

Hudson Regional Hospital offered assurance to staff that it was not on the verge of closure. Hudson Regional has reiterated that there is no danger that any potential eviction of CarePoint will result in a closure of the hospital; that it has a plan to immediately assume ownership of the hospital with continued employment for staff; that it will honor its labor agreement with the HPAE at Bayonne Medical Center; and that it will make substantial improvements to Bayonne Medical Center upon taking over its operations.

Tensions rising

“We have made our position abundantly clear to the Department of Health and all local officials,” according to a statement by Hudson Regional. “But beyond our interest as a property owner, our commitment to Hudson County’s healthcare marketplace demands that we take a protective posture in this scenario. The public’s understanding and involvement in the process has become unavoidably necessary, and while it has never been our intention to disrupt Bayonne’s political process, at this point we are left with no choice but to take preventative action. The consequences from this ill-conceived, highly suspect proposed transaction cannot be allowed to proceed unabated. We, like the residents of Bayonne, want to ensure that Bayonne Medical Center is always high performing, and will back up this pledge to the community when we are able to operate the hospital in addition to owning the land.”

According to a statement by BMC Hospital LLC, “HRH’s patient census is very low which raises serious doubts about their financial viability. They are also ranked as one of the worst hospital systems in terms of quality care in Hudson County and New Jersey by the independent rating organization Leapfrog, and their senior executives are facing millions of dollars in lawsuits based on very troubling allegations. For them to characterize themselves as responsible actors is ridiculous. BMC has spent the past year integrating into the community, honoring and supporting the men and women that deliver care at Bayonne Hospital and have already begun the process of expanding services and enhancing operations. We are invested in the success of this hospital because our number one priority is to continue serving this community and providing our patients with the quality care they depend on.”

The saga continues

The May 12 meeting at 7 p.m. at the Bayonne High School auditorium at 669 Avenue A, will be the city council’s first in-person meeting since the onset of the pandemic. Residents can attend in person by registering here. To attend virtually, go to bayonnenj.org and click on the event on the calendar webpage.

The NJ Department of Health has yet to take final action on either entities’ applications to operate Bayonne Medical Center.

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.