The Bayonne City Council has tabled two ordinances that would have condemned the Bayonne Medical Center property through eminent domain.
At it’s April meeting, the council introduced the two ordinances that would initiate eminent domain proceedings which began last year. In May, 2020, the Hudson County Board of Commissioners unanimously voted to approve three resolutions authorizing the Hudson County Improvement Authority (HCIA) to begin the process.
Condemning the property
Redevelopment Counsel Joseph DeMarco explained that the ordinances are interconnected. The first is a lease purchase agreement that guarantees the city will buy the premises back from the HCIA.
The second is a pledge through tax dollars to pay the HCIA’s debt resulting from condemnation of the property. If the board approves the ordinances, they would need to be approved by the Local Finance Board in Trenton.
If the state and council approve the ordinances, the HCIA would be authorized to negotiate with the landowner, Hudson Regional, to purchase the property. DeMarco said that $95 million should be sufficient.
If it cost more, the council would approve additional expenditures. If the negotiations fail, the city would file an action for eminent domain.
Council president opposed
Prior to the May meeting, City Council President Sharon Ashe-Nadrowski announced her opposition to eminent domain, citing the burden it would put on the city.
Mayor James Davis has reiterated his support for BMC Hospital LLC but was 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.”
At the May council meeting, Ashe-Nadrowski said, “Eminent domain should be the last resort. I believe that there are alternatives to ensure a full acute-care hospital in Bayonne while protecting the taxpayers, and I do not believe that those options have been fully vetted.”
A brief history
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, but the litigation has been consolidated. Meanwhile, Hudson Regional terminated CarePoint Health’s lease as operator of Bayonne Medical Center, changing its status to month-to-month pending eviction proceedings.
Hudson Regional Hospital CEO and President Dr. Nizar Kifaieh spoke against the ordinances.
Kifaieh said that Hudson Regional reached out to buy Bayonne Medical Center in 2019, meeting with Mayor James Davis. Hudson Regional promised to turn around the place, that no employees would lose their jobs, that they would invest in the hospital. He said that at the time, Davis said the only way to avoid eminent domain was to strike a deal with then-landlord Eisenreich. Kifaieh said Hudson Regional did just that but now finds itself in the current predicament.
“We thought we were coming to the table with a solution that’s really suitable for this city,” Kifaieh said. “We own the real estate, and we operate the hospital. There’s no reason why we can’t invest our own money into that hospital.”
Kifaieh said Davis has been incommunicado: “We’ve asked for meetings over and over. Let us give you our proposal. We have the land, we can run the operations, we can commit to certain things that will allow you as a city to have control over the future of this hospital. You don’t have to worry about this hospital becoming a nursing home, becoming condos.”
Kifaieh cited Hudson Regional as an applicable success story.
“Yan Moshe, took over Hudson Regional Hospital on January 1, 2018,” Kifaieh said. “He took over Meadowlands Hospital, a hospital that was broken. One of the first things we did was invest more than we were supposed to based on the request of the Department of Health. We also worked on changing the reputation of the hospital, improving the relationship of the community.”
CarePoint Health’s case
Bayonne Medical Center Chief Hospital Executive Dr. Vijay Singh, representing CarePoint Health, supported the ordinances.
“From the events and headlines of the past years, it has become very obvious that our hospital has been held hostage by virtue of the parcel of land that it sits on,” he said. “This land has changed hands three times in the past year or so, and each time it has been used as a point of leverage to further each party’s goals. Why wouldn’t the city secure this piece of land when it has minimal tax implications for the residents of Bayonne?”
Singh questioned why BMC Hospital LLC was receiving flak for not having operated a hospital.
“My question is why is it okay for Secaucus to allow an entity with no hospital experience to run their only hospital and not okay for a much bigger health care group which is partnering with an existing health system, CarePoint Health, to run our hospital in Bayonne?,” Singh said.
BMC Hospital LLC’s case
Wayne Hatami, CEO of BMC Hospital LLC, also supported the ordinances.
Hatami said, “Most recently, we’ve been very successful taking distressed ambulatory surgical centers and turning them around… We got involved in the journey of Bayonne Hospital about a year and a half ago… It was right when the pandemic began… We went into a fair bidding process. We met with CarePoint, and they eventually agreed to giving us the bid to buy this hospital … In the event that eminent domain does not happen or happens, CarePoint still has the ability to make that decision on who’s buying or running this hospital. Hudson Regional Hospital bought the real estate after we entered into a contract to buy this hospital.”
Hatami also criticized Hudson Regional.
“We can talk about HRH’s successes, but if you look at the census, which is the standard of what disciplines it offers to the community, it is one of the lowest in New Jersey right now,” Hatami said. “So although they’ve done a great job, I’m sure, in turning the hospital around, they do not offer the services that Bayonne needs to have… The only way to keep this hospital in Bayonne is for you to vote yes on eminent domain.”
During the public comment portion of the hearing, many residents and employees spoke passionately about their experiences at each hospital. However, it was clear that due to the media campaigns waged ahead of the meeting that many residents did not understand the implications of the ordinances due to the flyers, newspaper ads, social media ads and even text messages.
Officials reiterated that BMC will remain a hospital due to a zoning ordinance enacted last year. But the two proposed ordinances will not designate who operates the hospital.
Resident Gail Godesky favored tabling the eminent domain ordinances.
“The Bayonne City Council and the Zoning Board have already cleared the property to be a hospital,” she said. “I don’t care who runs it, just as long as it’s there. Why would we lose taxpayer dollars, and I believe its like $750,000 a year?”
Ashe-Nadrowski confirmed that the city would lose $750,000 a year in real estate taxes.
“Nobody will lose their jobs,” Godesky said. “So let’s take the politics out of Bayonne. I am urging the council to vet … before making a decision … There are other options. So please, table it.”
DeMarco confirmed there were avenues available to the city other than eminent domain, but he and Law Director Jay Coffey said they were not aware of attempts to look for other options.
Third Ward Councilman Gary La Pelusa motioned to table the ordinances.
“I am the only sitting councilman who was also a councilman the last time we went through this process in 2008 and 2009,” he said. “What I remember is the feeling of helplessness because the city of Bayonne was at the mercy of the hospital offerings. Time after time, the solution would go up in flames when it came time for people to put their signatures on the paper.”
He argued eminent domain gives the city leverage: “By proposing eminent domain, we give the city a little bit of leverage in the negotiations with hospital operators. Bayonne needs an acute care hospital.”
But La Pelusa felt he didn’t have enough information to make a decision yet.
“Are we willing to explore other potential options so we can make a smart educated decision?,” La Pelusa said. “I want to hear from the public, I want to hear from our bond council, I want to hear from HRH, BMC Hosptial LLC, Surgicore, the financial analysts, other potential hospital operators if they are out there. I want to hear from the HCIA, the Local Finance Board, and the hospital workers.”
Though Ashe-Nadrowski favored rejecting the ordinances, she too agreed to table them.
“I’m not sure all parties are going to negotiate in the same manner as they would without eminent domain hanging over their heads,” Ashe-Nadrowski said. “I agree it needs to be tabled, I just wish it wasn’t with the threat of eminent domain.”
“I’m very concerned about the status of the hospital,” City Councilman At-Large Juan Perez said. “A lot has changed in the past 24, 48 hours that most of us were not aware of until we read the papers.”
First Ward City Councilman Neil Carroll, before voting to table the ordinances, offered a warning to all entities involved: “I would urge in the time between this meeting and when we revisit this issue, that you replace the fear with fact on these documents. That you take the time to actually educate the population. if you are going to speculate and spend money on an ad campaign, make it achieve something.”
All sides claim victory
Following the meeting, both Hudson Regional and BMC Hospital LLC both claimed victory.
“Hudson Regional Hospital was very pleased by the Bayonne City Council’s deep questioning and insistence on more education before considering the future of Bayonne Medical Center,” Kifaieh said. “We had outstanding support from unbiased members of the public, which held in high esteem our work as a health care operator.”
In a statement, BMC Hospital LLC said, “Last night’s council meeting made clear there is broad support for the Bayonne Hospital land solution. Eminent domain remains the best option to ensure the care of tens of thousands of patients is never again threatened by a wealthy landowner looking to maximize profits. BMC stands by its commitment to fully cover the city’s future debt service and past tax revenue if we are the hospital operators, which means taxpayers will not bear any financial burden nor the city lose any revenue.”
The council will likely vote on the matter at the June 16 meeting. However, Second Ward Councilman Sal Gullace will abstain because he is a Bayonne Medical Center board member. That, paired with Ashe-Nadrowski’s objections, would make the ordinance fail because state law requires two-thirds of the council to vote yes.
Meanwhile, Davis is working on getting the Local Finance Board to sign off on the matter to allow the ordinances to be voted on at the June council meeting.
For updates on this and other stories, check www.hudsonreporter.com and follow us on Twitter @hudson_reporter. Daniel Israel can be reached at firstname.lastname@example.org.