A day after an announcement by St. Joseph’s Regional Medical Center that it has dropped the plan for a $129 million hotel and conference center project by Medical Missions for Children on its property neither the mayor nor his economic development director provided an explanation to the city council earning rebuke from council members.
Council president William McKoy described the announcement by Kevin Slavin, president of St. Joseph’s Regional Medical Center, as “significant.” He expressed disappointment that neither economic development director Ruben Gomez nor mayor Jose “Joey” Torres came before the council to address the matter.
“This letter warrants a conversation. This is a game changer,” said McKoy holding up the press release issued by the hospital on Tuesday afternoon. He said not addressing the letter is almost an act of “negligence” and “incompetence.”
“Given the explosive impact of this memo that was sent off last evening it is my expectation the director and the mayor would have been here,” said McKoy. He said he expected staff from Medical Mission, a nonprofit which serves sick children, to appear as well to either re-assure the council or to redirect the project elsewhere.
“Why isn’t there anyone here?” asked Maritza Davila, councilwoman at-large.
“For me this is an emergency,” said council vice-president Alex Mendez. He said he expected the director, the mayor, and other stakeholders to have a discussion with the council.
Business administrator Nellie Pou told council members the economic development director and others are scheduled to appear before the council on June 14th, 2016 when the council would have the 30-year tax abatement agreement for a vote.
Pou said the administration is just as concerned about this project as the council.
“With this information, it’s not going to happen. They stopped the deal,” said Mendez referring to Slavin’s announcement. He said voting on the tax abatement agreement and the developer’s agreement next Tuesday makes little sense.
McKoy said both agreements have been upended by the hospital’s announcement. Although he was not present at the meeting, Torres has said he intends to intervene to potentially salvage the project for its job creation possibilities.
“We expect St. Joseph’s to stick to their original agreement,” said corporation counsel Domenick Stampone.
“There is no lease agreement,” said Warren Cooper of Evergreen Partners, which represents the law office of McCarter English, which is working for the hospital.
Stampone insisted there was an agreement. The hospital’s board of trustees approved a resolution on January 20th, 2016 staking out their position against the hospital project.
The board’s attorney conducted checks and concluded “no evidence” exists of an agreement between the hospital and medical missions. There is information that the hospital’s previous president executed and delivered documents to medical missions which have been characterized as “leases” dated March 30, 2013, February 1, 2014, March 24, 2014, and November 20, 2014, according to the resolution.
However, none of those amendments or “leases” were ever approved by the board. The term of the ostensible March 24, 2014 lease agreement states the hospital leased the land for 99 years to medical missions for a nominal $1 per a year rent.
“This was something that was spoken about for over five months yet they came here not once but twice and never mentioned this agreement,” said Davila referring to medical mission’s failure to mention there was an issue with the agreement. “At that moment the dreams were shattered.”
Medical missions has indicated it intends to file a lawsuit against the hospital for $20 million or so in pre-construction cost it has incurred if the project does not happen.
Council members also sought ways to save the $105.5 million the New Jersey Economic Development Authority (EDA) issued to the city. The mayor has said he wants to put in a request to redirect the funds to another project possibly close to the Great Falls National Park; however, that may not be possible.
“Awards approved under legislatively-established tax incentive programs administered by the New Jersey Economic Development Authority are not transferrable from one project to another,” said Virginia Pellerin, spokeswoman for EDA. “In this instance, the Medical Missions for Children project was approved under the Urban Transit Hub Tax Credit program, which is no longer accepting new applications.”
Pellerin said tax credits for any other project requires submission of an application to the current programs and would be subject to eligibility criteria.
Council members are hoping talks between all parties will succeed in saving the tax credits. “Paterson has had far too many missed opportunities,” said Andre Sayegh, 6th Ward councilman. He said the magnitude of the project requires all parties to do something between now and Tuesday to avoid missing another opportunity.
“There’s a need to have this conversation yesterday,” said Mendez. He called for a special meeting to plot a course to save the project.
Torres did not respond to a message for comment for this story.