STATEWIDE – Despite cuts he made to the state budget this year in tough economic times, Gov. Christopher Christie said on Thursday that he will make available $5 million of state funds to contribute to a bankruptcy settlement that Mayor Dawn Zimmer said could save Hoboken University Medical Center from closure.
Besides this money, the state had already earmarked $11 million to ease the sale, potentially bringing $16 million of state funds into the local deal.
Zimmer thanked the governor on Thursday afternoon.
“He just breathed life into Hoboken University Medical Center,” Zimmer said in a phone interview. “It’s clear that the hospital can be saved…I’m hopeful it’s all going to come together.”
Attorneys from the hospital were meeting with creditors in bankruptcy court in Newark to try to come to a settlement on Thursday.
The city-owned hospital is in the process of being sold to a group that also owns Bayonne Medical Center, HUMC Holdco. The potential new owners are large contributors to Reform Jersey Now, a political action committee that has supported Christie, to the tune of at least $25,000.
The city guaranteed $52 million in bonds to save the failing facility from closure in 2007, and if the hospital were to close, the taxpayers of Hoboken would be responsible for the bond guarantee.
The operators of the hospital declared bankruptcy on Aug. 1, and creditors have demanded more money, and have asked the city to contribute.
Zimmer went to the council on Wednesday night, asking for $5.5 million to contribute to the bankruptcy settlement. Even though five out of nine council members are Zimmer's allies, a bond ordinance needs six votes to pass. Zimmer’s five allies voted yes, and her four opponents voted no, citing various problems with the hospital deal.
Zimmer said the hospital deal “was on life support” before the vote.
The council was left out of the discussions of the hospital sale up until recently, some council members have complained. When the mayor asked the council for their vote, some members on the council, including Councilwoman Beth Mason, asked for stipulations, such as that the hospital property have a seven-year deed restriction to hold the buyers to their promise to keep the hospital an acute care facility for seven years. However, attorneys from the hospital said that a deed restriction would hurt the financing for the new buyer.
Zimmer has publicly supported Christie, even though she is a Democrat and he is a Republican.
Christie issued a statement blasting the City Council.
“It is completely unacceptable that the City Council placed local politics ahead of the 1,300 employees at the Hoboken University Medical Center and the people in the community who rely on the critical services provided by this hospital,” Christie said in a statement. “This administration is not going to allow political bickering to put this hospital in jeopardy and potentially have a negative and irresponsible impact on the city’s finances, which is why the state will contribute the $5 million, if needed, to ensure the Hoboken University Medical Center deal closes and the hospital stays open.”
Christie also blamed the unions, calling on them to make concessions “to keep the hospital running.”
Zimmer added that she needed to go to the council last night, and it was the state’s position that the city should pitch in. “I’m still stunned [at the council’s actions],” Zimmer said. “I did not believe they would be that reckless.”
Mason, who voted against the bond ordinance last night, was not happy with the governor’s pledge.
“Last night, four members of the Hoboken City Council took steps to protect the long term viability of Hoboken University Medical Center by asking the Hospital Authority to impose a deed restriction in the sale contract,” Mason said in a statement on Thursday afternoon. “Furthermore, we asked for transparency in this extremely troubling and secretive process by calling on the Mayor and Hospital Authority board members to release their depositions. Now the Governor wants to support a backroom deal to sell the hospital to one of his biggest campaign contributors for pennies on the dollar.”
The state earmarked $11 million out of the state budget to help extinguish the city’s $52 million bond guarantee on the hospital, which would ease the sale. The earmark became controversial because it was discovered two relatives of a potential new owner donated $2,600 each to Assemblyman Ruben Ramos (D – Hoboken), the sponsor of the legislation. Ramos gave the money to charity after the issue came to light. Ramos also issued a statement earlier today blasting Zimmer.
Zimmer said on Thursday she is hopeful that the deal will still get done, and was still at bankruptcy court in Newark. For updates, keep reading HudsonReporter.com - Ray Smith