City-owned Hoboken University Medical Center is listed for sale by principals "HUMC Holdco LLC" as "financing option" to afford hospital improvements

March 02, 2011 Jersey Journal - KATIE COLANERI

HOBOKEN - The city-owned Hoboken University Medical Center's land and building is for sale for $90 million, a real estate firm confirmed yesterday.

Manhattan-based Grubb & Ellis has the hospital listed as a "long term sale leaseback," meaning that the property and building would be sold and leased back to the business that is operating there: the hospital.

A representative from Grubb & Ellis would not divulge who listed it with them, although the listing says it is being sold by a private group.

Daniel Kane, CEO of the Bayonne Medical Center, whose principals, under the name HUMC Holdco LLC, are in negotiations to buy the Hoboken hospital, declined to comment when asked about the listing.

A spokesman for HUMC Holdco did not return calls to comment.

Toni Tomarazzo, the chairwoman of the Hoboken Municipal Hospital Authority, the group that oversees the city-owned hospital, said it was not the authority, but HUMC Holdco who listed the property.

Holdco, she said, was looking to the sale leaseback as a "financing option" in order to make several capital improvements to the hospital, such as a nursing home and new obstetrics center.

Asked how HUMC Holdco could sell a property it did not yet own, Tomarazzo said: "They're not entering into a contract. They're simply looking into possibilities of whether or not it's a viable financing option. They would not be permitted to enter into any kind of contract. They don't own the hospital. We do."

The two parties have been in negotiations since early January when the authority chose HUMC Holdco's proposal out of eight bids. The authority has said previously that they are unable to release the names of the bidders or provide the public with information on the quality of the bids.

The authority put out a request for proposals in July, hoping to privatize HUMC and relieve the city of a $52 million bond debt.

According to Tomarazzo, HUMC Holdco has vowed to keep the medical center operating as a full-service acute care facility for at least seven years as part of its proposal, Tomarazzo said.

As for the leaseback, she added: "They're looking for opportunities to see what the best opportunity is to bring capital into their deal, to do the kinds of things we want to see for the hospital."