HOBOKEN – In order for the pending parking agreement between the potential new owners of Hoboken University Medical Center and the city to go into effect immediately, a resolution will need to be approved by a supermajority of the City Council at a Sunday evening special meeting, Mayor Dawn Zimmer said in an interview on Thursday night. Unfortunately for her, Zimmer has only five steadfast allies on the council, but the resolution “declaring an emergency” needs six votes.
The potential hospital owners do not feel comfortable closing on the sale unless the parking agreement is in place, Zimmer said.
An attorney for the potential purchasers, HUMC Holdco, an ownership group from Bayonne Medical Center, said on Wednesday that the group was not able to sign off on the deal because the parking agreement was not in effect. A sale closing scheduled for Wednesday was cancelled.
While her five council allies voted for the parking agreement ordinance on Tuesday at a special meeting, Zimmer’s four council foes, at the same meeting, voted against a resolution that would make the agreement effective immediately. The resolution would have bypassed the usual 20-day waiting period for an ordinance to become law. Zimmer said that a sixth vote would be necessary to eliminate the waiting period.
The parking agreement passed on Tuesday would take effect in mid-November, but Zimmer said the hospital is “running on fumes” from a financial perspective and needs to sell to the buyers soon.
Zimmer said that through moving money around, the hospital was able to make payroll this week.
Under the new agreement, the employees of the hospital would have access to parking in three city garages for 99 years at a rate of $45 per month for the first three years, and $65 per month for the rest of the lease. The rates could increase depending on the fluctuation of the market rate. The owners would be provided with 1,000 transponders to park in two garages on Hudson Street and a garage connected to the hospital.
Consequences: Tax increase, layoffs
In early October, Hudson Healthcare Inc., the now-bankrupt operator of HUMC, reached a bankruptcy settlement after long negotiations with creditors to the tune of approximately 30 cents on the dollar. Zimmer said that if the agreement is not approved on Sunday, she will have to go back to the creditors to tell them the hospital will not be able to pay the settlement, and they will have to re-negotiate. If the entire hospital sale fails, Zimmer said the city will be hit with a massive tax increase and massive layoffs to pay off over $60 million in bonds. The city took ownership of the hospital in 2007 after guaranteeing $52 million in bonds to keep the financially failing facility from closing.
Zimmer scheduled a press conference for 11 a.m. on Friday at HUMC to “provide an update on the sale of Hoboken University Medical Center.”
Keep reading HudsonReporter.com for more updates on the sale, and make sure to pick up a copy of The Hoboken Reporter this weekend. — Ray Smith