Business & Finance

Runnells to be Sold to Private Company: Big Payday for Berkeley Heights

March 14, 2014 at 6:10 PM

BERKELEY HEIGHTS, NJ - On a 7-1 vote, the Union County Board of Chosen Freeholders approved a measure granting the Union County Improvement Authority the permission to negotiate the sale of Runnells Specialized Hospital, a Union County facility, to Center Mangement Group of Flushing, New York, a private company.  The sale is projected to save the County $56 million over the next five years and generate an estimated $500,000 in new property tax revenue per year to Berkeley Heights and Union County by putting the property back on the tax rolls.

Mayor Joe Bruno told The Alternative Press of Berkeley Heights that this is a fantastic move.   "This is what I was saying right along, sell Runnells.  Cost of medical care is not what governement should be involved with," said Bruno.

"Runnells became a drain, losing $13 million last year and close to $20 million the year before," said Bruno.   

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The Freeholders mandated a number of conditions be met for the completion of sale, requiring that Center Management:

  • pay not less than the appraised value of $26 million to the County;
  • give current Hospital patients the right to remain at the Hospital;
  • protect the Hospital employees, in good standing, by offering the right of first refusal and providing as many employment opportunities as possible at the Hospital and at Center Management Group's other locations;
  • guarantee a five-year capital improvement plan;
  • commit to sharing revenue with the County for any new health care related services or facilities Center Management Group adds to the Hospital;
  • agree to a deed restriction that will require the Hospital remain a health care facility for long-term care patients;
  • and agree that a certain percentage of beds at the Hospital shall remain available for Union County residents and to indigent patients.

“Every angle was analyzed and every option was put on the table,” said Freeholder Chairman Christopher Hudak, adding the decision “of this magnitude” was “not an easy one and required two years of work.”

“Ultimately, this Board believes we’ve made the best decision possible toward maintaining the financial viability of the hospital and quality care for its patients,” Hudak said. “Employees in good standing will also have a first right of refusal at employment with the proposed operator.”

The County has paid a total of more than $30 million over the past two years to subsidize the facility. This year the total subsidy amounted to $13.5 million.

Because Counties have in part experienced decreasing reimbursements, several counties in recent years have sold their nursing homes to private operators:

These Counties include: Burlington (2012), Camden (2013), Cumberland (2011), Essex (1996), Hudson (2002), Mercer (2010), Salem (2009).

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