4.5M tax lien, property sale raise eyebrows among union, lawmakers

Jessica Perry//March 28, 2013

4.5M tax lien, property sale raise eyebrows among union, lawmakers

Jessica Perry//March 28, 2013

Concerns about the financial stability of Meadowlands Hospital and Medical Center are again being raised by lawmakers and the nursing union at the hospital.

On Monday, the Health Professionals and Allied Employees union sent a letter to Gov. Chris Christie outlining reasons the state should insert a temporary manager and investigate several claims the union has made against the ownership group, for-profit MHA LLC.

In addition to labor and financial stability concerns raised last year by HPAE — along with state Sens. Joe Vitale (D-Woodbridge) and Loretta Weinberg (D-Teaneck) and multiple advocacy groups — the union provided documents showing $4.5 million in tax liens from the federal government placed on the hospital, and a sale-and-lease deal for the hospital’s property with a Canadian real estate investment group. The property was sold in December to MHR Investments, of Montreal, for $18 million, and leased back to MHA for 98 years.

William Maer, spokesman for MHA, was unable to return a request for comment before publication.

Ann Twomey, president of HPAE in New Jersey, said while the sale needs more clarity, the liens show the hospital “presents to us as a hospital that is in some financial difficulty, if not crisis.”

Donna Leusner, spokeswoman for the Department of Health, said in an e-mail that the department is sitting in on board meetings at the hospital, and installing a monitor is “one of the options that is under review and consideration.”

Leusner said the Health Department takes seriously the concerns raised by HPAE, and is engaged in ongoing discussions with the hospital. Mediation between the union and hospital on labor relations issues is slated to begin next week.

The liens were discovered by HPAE researchers looking for the terms and conditions of the sale-and-lease deal. According to the documents, the liens were placed on MHA and the hospital for unpaid payroll and unemployment taxes for periods during 2011 and 2012. As of March 21, the liens were still in place, according to HPAE spokeswoman Jeanne Otersen.

Meadowlands Hospital was sold by Liberty Health to MHA LLC two years ago for $15 million, including $11 million for the land. The lease documents do not mention the rent being paid by the hospital back to MHR. Vitale said he was concerned that, since that same land was just sold for $18 million, the true value of the land the hospital sits on is unknown.

Because the sale of the land, and not the building, does not change the licensure of the hospital, the sale does not have to be reviewed through the certificate of need process or the community health assets protection act process.

Otersen said she is concerned that, without more transparent documentation of the lease agreements, the community and employees cannot be assured of what happens to the hospital if it defaults on the lease.

MHR is a limited partnership formed under the private company RosDev, a Canadian real estate group. RosDev also owns the former Crowne Plaza, now Empire Meadowlands Hotel by Clarion, which is on property adjacent to the hospital. According to a 2009 Star-Ledger story, which HPAE linked to in its letter to Christie, RosDev was indicted by the state on charges of polluting the Hackensack River. RosDev pleaded guilty to the pollution charges in 2010 and paid a $75,000 penalty.