Council To Vote On Bond Change To Facilitate Hospital Sale

The Hoboken City Council took the first steps to refinance a bond on the midtown garage that is attached to the Hoboken University Medical Center on Tuesday, when the ordinance passed on first reading.

The city council plans to go out to bond for $19 million, said Councilman Peter Cunningham, who sponsored the ordinance. The bond will not cost the city any more money, he said, because the city already bonded for the money more than five years ago. This would be a re-financing, he added.

Cunningham said the bonds must be changed from non-taxable (for a non-profit such as the government of the city of Hoboken) to taxable bonds (for a for-profit, such as the future owners of the hospital, HUMC Holdco LLC).

But while the council majority sees the re-financing as a simple measure, the council minority said during the meeting that they do not have enough information to vote for the bond change.

"This is the second time the admin is coming forward and asking us to do something," said Councilman Michael Russo, referring to a vote during a previous meeting to approve a bankruptcy settlement between the hospital and the city. "There’s nothing simple about it. This is an involved transaction."

"We're asked to pass things blindly," said Councilman Tim Occhipinti after the meeting.

Councilman David Mello, who is a supporter of the hospital sale and voted in favor of the ordinance on Tuesday, said that by voting "no" on re-financing the bond, council members put up "an unnecessary blocade" to the sale of HUMC.

In order for the hospital to be sold, the bond needs to be changed, Cunningham said. There is a back-up plan, Cunningham said, in case the ordinance fails, indicating that the sale will go through even if the bond doesn't pass.

The change passed on first reading in a 5-3 vote on Tuesday, with the five majority council members voting in favor. On second reading, the bond ordinance needs six votes to pass, which means that one member of the council minority will have to be convinced to vote in favor of the bond. If it passes, the local finance board—located in Trenton—has to approve it. 

In another 5-3 vote, the city council also voted to send the ordinance down to the local finance board for review.