Hoboken Municipal Hospital Authority Signs Letter of Intent With Prospective Purchaser of Hoboken University Medical Center
Months-Long Public Process Ensures HUMC Will Remain Open as a
Full Service Acute Care Community Hospital
HOBOKEN, NEW JERSEY – The Hoboken Municipal Hospital Authority (“Authority”) announced today that it has signed a Letter of Intent with HUMC Holdco LLC, an entity having common ownership with nearby Bayonne Medical Center. HUMC Holdco LLC has pledged to keep the Hospital open as a full-service, acute-care, community hospital for at least seven years. The parties plan to complete due diligence and conduct negotiations leading to the execution of a binding asset purchase agreement by the end of the first quarter of 2011.
Mayor Dawn Zimmer said, “The Authority’s action marks another step towards privatizing the Hospital. There can be no guarantees, but we are one step closer to an agreement with a new ownership group that will operate the Hospital, relieve the City’s taxpayers of the bond guarantee obligations made to save the Hospital in 2007, and advance the state’s goal of reducing reliance on state subsidies while maintaining access to quality health care. Most importantly, the Hospital will remain open as a full-service, acute-care community hospital.”
Toni Tomarazzo, Chairperson of the Hoboken Municipal Hospital Authority, said, “We’re very pleased to have reached this stage. The comprehensive process to identify a buyer for the Hospital has been ongoing for almost a year. The Authority's Request for Proposal (RFP) was issued in July 2010 and set forth the Authority's clear objectives: maintain the facility as an acute-care hospital, preserve the jobs of Hospital employees, continue the valuable working relationship with the medical staff of the Hospital, and relieve the City of Hoboken of its bond guarantee obligations.
“We have followed a very deliberate and thorough process, which has included input from a wide cross-section of the Hoboken community. We are optimistic that we will reach an agreement with a very qualified owner-manager.”
E. Norman Wilson, Vice Chairperson of the Hoboken Municipal Hospital Authority, said, “This is a positive step for Hoboken. In 2006, Hoboken’s hospital was on the verge of shutting its doors for good after it received no interest from a potential new owner. Today, thanks to the hard work and dedication of everyone at Hoboken University Medical Center, we are at the beginning stage of a potential new chapter for our community’s hospital.”
Joseph Kozel, MD, a member of the Hoboken Municipal Hospital Authority, said, “We are early in the process, but this represents a good opportunity for Hoboken University Medical Center, its employees, and our community to maintain a full-service, acute-care community hospital in Hoboken.”
Spiros Hatiras, CEO of Hoboken University Medical Center, said, “I'm pleased with our progress and that HUMC Holdco has indicated it will work to preserve relationships at Hoboken University Medical Center with our outstanding employees and medical staff. As the process moves forward, I am looking forward to working collaboratively to help ensure these aims are achieved.”
HUMC Holdco LLC has indicated its intention to pursue and secure fair and reasonable contracts with most, if not all, third-party payors following the receipt of all regulatory approvals and prior to closing. And, at this stage of the process, HUMC Holdco LLC would be pleased to enter into negotiations with any insurance provider that currently has a contract with the Hospital.
With a Letter of Intent executed, the process will move on to the negotiation of an agreement after a due diligence phase. While the Authority has sole authority to reach an agreement to transfer ownership of the Hospital, any such decision is subject to review by the New Jersey State Department of Health and Senior Services, through the Certificate of Need process, which will also include a public comment process.
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Talking Ed Note: MSV filmed most of the event and will have extensive video shortly.
The Hoboken Journal has some initial video of the meeting now:
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