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Sale of hospital approved
(by Maggie Fazeli Fard - March 26, 2008)
Despite objections, the $45 million sale of the bankrupt Pascack Valley Hospital (PVH) site to Hackensack University Medical Center (HUMC) and Touro University College of Medicine was approved by a federal court judge last week.
HUMC and Touro University College of Medicine won the bid for PVH on Feb. 27 for a combined offer of $45 million. Crippled by $100 million in debt, PVH declared bankruptcy last September and closed its doors two months later.
The winning bid proposes to reopen an emergency room, followed by additional acute care services. HUMC, which has operated PVH’s mobile intensive care unit (MICU) since last fall, has submitted an application to the state to reopen the emergency room and is awaiting licensure from the state.
The bid did not include furniture and diagnostic equipment, meaning that the hospital is now empty. Westwood Mayor John Birkner said that based on his conversations with John P. Ferguson, president and chief executive officer of HUMC, the emergency room is not expected to re-open until this fall.
“They’re going to completely renovate the emergency room area,” he said. “They have to equip it; they have to get laboratories and other supports up and running.”
HUMC has yet to outline exactly what services will be offered beyond an emergency room, with Ferguson stating in a press release only that the hospital will “focus on restoring emergency medical services on the campus as soon as possible. We will evaluate other clinical programs and services that will best serve the community in that location.”
But Birkner is confident that the region will eventually have a community hospital back in operation. “It’s certainly not going to be a medical transfer center,” he said.
In addition to acute care services provided by HUMC, Touro University College of Medicine plans to open a medical school on the site, hoping to welcome 40 students and 30 faculty members in September 2009.
In early March, the university hosted representatives from the Liaison Committee on Medical Education (LCME), the agency that accredits medical schools throughout the country. The LCME is expected to make a decision on whether or not to give Touro University College of Medicine preliminary accreditation in June.
The hearing to approve the sale to HUMC and Touro University College of Medicine was held on Tuesday, March 18, when U.S. Bankruptcy Court Judge Rosemary Gambardella reviewed two objections, one from an Emerson-based nurse’s union seeking negotiations and the other from the Borough of Westwood, one of PVH’s creditors, in an attempt to recoup lost funds.
“Our objection was two-fold,” explained Westwood Borough Administrator Robert Hoffmann, who attended the March 18 closing. “It centered around the payment in lieu of taxes.” The borough is owed approximately $60,000 for 2006 and $80,000 for 2007.
Also, said Hoffmann, the borough is owed additional taxes because PVH did not file paperwork required of a non-profit agency and because space had been leased out to private doctors and for an antenna. “They lose their tax-exempt status for a portion of the building,” he explained.
Hoffmann did not know the precise amount of taxes that are owed, but estimates that it will be in the six-figure range. “It is significant,” he said, noting that the money will probably be paid out of the ongoing lease payments as some of the buildings are still occupied.
Gambardella decided not to hold a full hearing on the union’s objection, stating that it is not the bankruptcy court’s role to determine whether the union must be recognized.
Similarly, said Hoffmann, the judge acknowledged that the Borough of Westwood does have a claim, but that “her court was not the correct venue to figure that out. We will probably have to go to tax court to figure out the correct value. Going forward, we probably have a legitimate claim.”
While Westwood’s objection went unheeded, it was not to the detriment of the borough’s enthusiasm over the sale.
“I’m very encouraged by the Hackensack-Touro group coming in,” said Birkner. “The opportunity is something that’s going to benefit the entire community.”
Maggie Fazeli Fard's e-mail address is fazelifard@northjersey.com.
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