By John Burton
Following in the footsteps set by a Morristown court case last year, both Holmdel and Red Bank are taking steps to challenge their hospitals’ existing tax-exempt status.
Red Bank, which is host to Riverview Medical Center, and Holmdel, which is home to Bayshore Community Hospital, have begun action in state tax court in Trenton against the respective facilities calling into question whether the hospitals can legally claim they don’t have to pay property tax – especially in light of the services municipalities continue to provide.
“Everyone who’s got a hospital is going through this,” acknowledged Holmdel Mayor Eric Hinds.
Hinds was uncertain where things currently stand with the matter. But the Holmdel Committee had retained special legal counsel, Matthew O’Donnell, a Wall Township tax attorney, to handle the situation. The New Jersey Hospital Association lists Holmdel as one of the towns challenging hospitals’ tax status.
Following in the footsteps set by a Morristown court case last year, both Holmdel and Red Bank are taking steps to challenge their hospitals’ existing tax-exempt status.
Red Bank, which is host to Riverview Medical Center, and Holmdel, which is home to Bayshore Community Hospital, have begun action in state tax court in Trenton against the respective facilities calling into question whether the hospitals can legally claim they don’t have to pay property tax – especially in light of the services municipalities continue to provide.
“Everyone who’s got a hospital is going through this,” acknowledged Holmdel Mayor Eric Hinds.
Hinds was uncertain where things currently stand with the matter. But the Holmdel Committee had retained special legal counsel, Matthew O’Donnell, a Wall Township tax attorney, to handle the situation. The New Jersey Hospital Association lists Holmdel as one of the towns challenging hospitals’ tax status.
O’Donnell did not immediately respond to a phone call this week seeking comment.
“It’s the only fair thing to do,” but to seek some financial redress, said Red Bank Mayor Pasquale Menna.
Red Bank has filed complaints against Riverview over six separate properties the medical center owns in the borough which either in their entirety or portions of are deemed not-for-profit and claim property tax exempt status for them.
“It’s the only fair thing to do,” but to seek some financial redress, said Red Bank Mayor Pasquale Menna.
Red Bank has filed complaints against Riverview over six separate properties the medical center owns in the borough which either in their entirety or portions of are deemed not-for-profit and claim property tax exempt status for them.
According to court filings, the total assessed values of the six locations in Red Bank amounts to $90.8 million.
“We put them on notice we object to their status,” Menna said of his town’s actions.
The New Jersey Hospital Association, a trade association representing health care facilities, said 35 municipalities around the state that play hosts to not-for-profit hospitals have taken the same steps.
Red Bank will look to hire its own tax attorney for this matter, Menna said.
Neptune has taken the same measures against Jersey Shore University Medical Center.
Jersey Shore, like Bayshore and Riverview, is part of the Hackensack Meridian Health network.
In response to a request for comment, Hackensack Meridian said in an email: “Hackensack Meridian values the relationships we have with the towns where our hospitals are located and we expect to maintain those relationships for years to come. We remain in discussions with Red Bank and Holmdel concerning their property tax assessments. In addition, we continue to work with the New Jersey Hospital Association concerning a legislative solution for not-for-profit hospital and host municipalities.”
These actions grew out of a case in the Tax Court of New Jersey last year involving Morristown Medical Center, as Judge Vito Bianco ruled in favor of the host municipality, finding the medical center did not meet the requirements as a not-for-profit organization for at least two years. The community is required to provide services, such as police, fire, EMS and public works, to the hospital, as it would to any other property owner, often placing a strain on those services.
“We put them on notice we object to their status,” Menna said of his town’s actions.
The New Jersey Hospital Association, a trade association representing health care facilities, said 35 municipalities around the state that play hosts to not-for-profit hospitals have taken the same steps.
Red Bank will look to hire its own tax attorney for this matter, Menna said.
Neptune has taken the same measures against Jersey Shore University Medical Center.
Jersey Shore, like Bayshore and Riverview, is part of the Hackensack Meridian Health network.
In response to a request for comment, Hackensack Meridian said in an email: “Hackensack Meridian values the relationships we have with the towns where our hospitals are located and we expect to maintain those relationships for years to come. We remain in discussions with Red Bank and Holmdel concerning their property tax assessments. In addition, we continue to work with the New Jersey Hospital Association concerning a legislative solution for not-for-profit hospital and host municipalities.”
These actions grew out of a case in the Tax Court of New Jersey last year involving Morristown Medical Center, as Judge Vito Bianco ruled in favor of the host municipality, finding the medical center did not meet the requirements as a not-for-profit organization for at least two years. The community is required to provide services, such as police, fire, EMS and public works, to the hospital, as it would to any other property owner, often placing a strain on those services.
It is the organization’s obligation to prove its not-for-profit status to justify its property tax exemption, explained Daniel J. O’Hern Jr., the former Red Bank borough attorney who did the initial tax court filings.
In the Morristown case, the medical center and municipality reached a settlement with the medical center agreeing to pay $15.5 million over the next decade.
There were bills in the state Legislature that would seek to strike some parity between hospitals and host communities, requiring the health care facilities to make community service contributions to the host municipalities. Gov. Chris Christie, however, asked for a commission to be established to study the issue. To form that committee requires its own legislation, which has been introduced but not voted on.
In the Morristown case, the medical center and municipality reached a settlement with the medical center agreeing to pay $15.5 million over the next decade.
There were bills in the state Legislature that would seek to strike some parity between hospitals and host communities, requiring the health care facilities to make community service contributions to the host municipalities. Gov. Chris Christie, however, asked for a commission to be established to study the issue. To form that committee requires its own legislation, which has been introduced but not voted on.
Menna pointed out that within the walls of Riverview there are gift and flower shops and Dunkin’ Donuts concessions – hardly not-for-profit endeavors. “I’m sure there are a number of other portals in there that have to be addressed,” contained within the medical center, he said.
“They know they take some tolls on the town, they cause pressure on our infrastructure,” Hinds said of Bayshore.
But Hinds, like Menna, believes “this can be resolved without conflict.”
“We want them to be a good neighbor and they are a good neighbor. We want them to develop into a first class medical center,” Menna said. “But there are inequities that have to be addressed.”
Riverview contributes an annual payment in lieu of taxes, or PILOT, amounting to $169,316 for 2016.
Bayshore does not provide compensation to Holmdel.
“We don’t think this piece-meal approach – 35 lawsuits up and down the state – is the best way to resolve this situation,” said Kerry McKean Kelly, a New Jersey Hospital Association spokeswoman. The association is advocating for legislative approach that would allow for commission, she said.
Of the 71 acute care medical facilities in New Jersey 64 are not-for-profit hospitals, according to the hospital association.
“They know they take some tolls on the town, they cause pressure on our infrastructure,” Hinds said of Bayshore.
But Hinds, like Menna, believes “this can be resolved without conflict.”
“We want them to be a good neighbor and they are a good neighbor. We want them to develop into a first class medical center,” Menna said. “But there are inequities that have to be addressed.”
Riverview contributes an annual payment in lieu of taxes, or PILOT, amounting to $169,316 for 2016.
Bayshore does not provide compensation to Holmdel.
“We don’t think this piece-meal approach – 35 lawsuits up and down the state – is the best way to resolve this situation,” said Kerry McKean Kelly, a New Jersey Hospital Association spokeswoman. The association is advocating for legislative approach that would allow for commission, she said.
Of the 71 acute care medical facilities in New Jersey 64 are not-for-profit hospitals, according to the hospital association.
