Tomarazzo: Last Minute Negotiations May Save Hospital Sale

A few hours after Mayor Dawn Zimmer and Hoboken Municipal Hospital Authority Chairwoman Toni Tomarazzo said the hospital would close , Tomarazzo said that “a new option” was on the table to try and reach a settlement.

Zimmer and the Hoboken Municipal Hospital Authority will be meeting with a creditors’ committee at 9:30 a.m. on Thursday in Newark before a scheduled court hearing to settle a bankruptcy deal that’s needed for the sale to go through, Tomarazzo said around 2 a.m. on Thursday.

Two hours earlier, Tomarazzo and Zimmer had said that the action of the council minority—mayoral critics Theresa Castellano, Beth Mason, Michael Russo and Tim Occhipinti—would force HUMC to close and cause 1,200 people to lose their jobs.

Before the meeting on Wednesday, Zimmer said that the unions also didn’t agree with the agreement. JNESO, the nurses union, and 1199J are the unions involved.

Tomarazzo said she had not spoken to the union representatives. Earlier on Wednesday night, a source said that the unions and the buyer had not yet reached an agreement.

If the bankruptcy settlement between Hudson Healthcare Inc.—the hospital’s management company that —and its creditors doesn’t go through, the sale is off. Holdco is looking to finance the roughly $90 million deal in a sale-lease back agreement with an Alabama-based firm.

Creditors earlier this week rejected a settlement between $5 and $8 million. from the city was the mayor’s last option to keep the institution open, she said.

According to sources with knowledge of the negotiations, on Tuesday, Holdco was not willing to put in more than $5 million toward the settlement. It’s unclear if that number has changed since.

When asked, around midnight, if there were any other options to save the hospital, Tomarazzo answered: “No, this was it.”

Two hours later, though, she said “another option” had occurred. Tomarazzo would not elaborate on what had happened in the meantime, or if a back-up plan had been on the table before she left City Hall.

“It’s not a sure thing,” Tomarazzo said. “We’re trying to find another option.” She declined to elaborate on the new developments.

Closure of the hospital would also mean that roughly 1,200 people lose their jobs and the city’s only acute care facility would cease to exist. The city is also on the hook for a $52 million bond obligation on the hospital. The failure to save the hospital, Zimmer said, will mean a tax increase and lay offs for the city of Hoboken.

After the vote on Wednesday, Zimmer and Tomarazzo huddled in a circle with bankruptcy attorney Paul Hollander as well as HMHA members Eric Kurta and Steve Rofsky before leaving City Hall.

Council members Mason and Russo earlier in the week said they didn’t think the $5 million bond ordinance was the last option to save HUMC.

“I’m not sure I buy that claim,” Mason said in a recent interview. On Wednesday—before voting down the bond—she said she didn’t want to spend any more taxpayer money on the hospital.

Throughout negotiations of this deal, Zimmer and Tomarazzo have maintained that without a sale to Holdco, the hospital—which is currently operating in the red and will run out of money early next month—will be forced to close.