Council still wary of voting $52M bond deal

November 10, 2006 Jersey Journal

A rift over how to best secure the future of St. Mary Hospital showed little sign of closing at Wednesday's Hoboken Municipal Hospital Authority meeting.

The disagreement flared the previous week after City Council members refused to introduce a $52 million bond to guarantee a loan for improvements to the hospital.

Mayor David Roberts said the deal is the best hope for maintaining a hospital in Hoboken. Under the proposal, Bon Secours Health System would transfer to the city, at no cost, the debt-free hospital and its land, worth $45 million, plus $13 million in cash for operations.

But some council members who attended the meeting wondered if issuing a $52 million bond is in the best interests of the taxpayers because if the hospital went belly-up, the city would be left holding the bag.

"We can't make an educated decision until we have all the facts," said Councilwoman Theresa Castellano. "They gave us the X-Y-Z but we want the A-B-C."

Castellano said she and other council members were led to believe the transfer would include two more buildings, which, with the hospital building, would serve as "collateral" to repay in a worst-case scenario.

But the two buildings - which house the Family Health Center on Willow Street and FAITH Services at Second and Clinton streets - were never part of the deal, said Harvey Holzberg, who will be the future CEO of the nonprofit that will run the company, Hudson Healthcare, Inc.

Holzberg said that the city is now negotiating to buy the buildings, which have been appraised at $6 million, to run family and AIDS programs.