Paterson will get $6 million from St. Joseph’s hospital under tax deal
By Jayed Rahman
Published: November 19, 2020
Mayor Andre Sayegh’s administration struck a deal with St. Joseph’s Regional Medical Center that will yield $6 million in property tax payments or so-called “community service contribution.”
Under the agreement, St. Joseph’s Regional Medical Center will pay the $6 million over the next five years. Payments will cover tax years 2020 through 2024, according to the agreement. Each year Paterson will receive $1.2 million in payment from the hospital’s various properties.
“This had been a high priority item for us,” said Sayegh on Wednesday morning.
“We are pleased to come together with the city in order to reach an agreement that benefits the Paterson community,” said Kevin Slavin, president and CEO of St. Joseph’s Health. “We recognize that the hospital utilizes city services and, working closely with Mayor Andre Sayegh and his administration, has enabled us to achieve a sound resolution. We applaud the mayor and City leaders for their foresight in resolving this complex issue so we can all continue to focus on the health of our community.”
Sayegh said the tax deal settles a long-running dispute between the hospital and the city. Both parties were in state tax court arguing whether the hospital is tax exempt or whether it has to pay property taxes since 2016.
The battle began soon after the 2015 court decision in the Morristown Medical Center case. A Judge had ruled parts of the hospital were not tax exempt.
Members of the City Council approved the agreements after closed-door discussions.
“This has been going on for a long time. This can drag on for another five more years, we don’t know,” said councilwoman Ruby Cotton before voting on the two agreements.
Cotton said the settlement brings closure to an issue that has dragged on for far too long. She pointed out St. Joseph’s Regional Medical Center is one of the largest employers in Paterson.
“I’m not looking to have another four years of this,” said councilwoman Maritza Davila.
“I’d hate to see St. Joseph’s leaving Paterson,” added councilman Luis Velez. “At least we have a hospital that sit in our city.”
Council president Flavio Rivera and councilman Michael Jackson opposed the agreements.
“I’m not a just-take-whatever-I-can-get kind of a person,” said Jackson. He suggested the city continue litigation. “We accept anything that we are given. And we allow people to take advantage of us as no other municipality allows in New Jersey.”
Jackson said the hospital would pay millions more under regular taxation. He also accused his colleagues of “negotiating and favoring” the “adversary.”
“I agree that St. Joe’s is a partner. As a councilman at-large, I also have to look after the best interest of the taxpayers,” said Rivera.
Sewer agreement
Rivera pointed to the second agreement, a sewer payment deal between the hospital and the city. The sewer agreement states Paterson has over charged the hospital sewer fees from 2012 through 2019. As a result, the city owes the hospital $1.8 million.
Under the sewer agreement, the city will give sewer credits to the hospital for $1.8 million from 2020 through 2024. The credit amounts to $360,000 per year, according to the agreement.
“They were overcharged. So, in all fairness, they’re giving us a credit,” said Sayegh.
Council members approved both agreements in a 6-2 vote.
Council members Gilman Choudhury, Cotton, Velez, Al Abdelaziz, Davila, and Lilisa Mimms voted in favor while Rivera and Jackson voted against.
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