New Jersey hospital to pay $550K annually to city after challenge of tax-exempt status

Jersey City (N.J.) Medical Center has reached an agreement with Jersey City after the city appealed the hospital's tax-exempt status, The Jersey Journal reported.

Five things to know:

1. The agreement is part of a legal settlement between the parties. Under the agreement, the hospital will pay $550,000 annually to the city from 2018 until 2023, and the city will drop its appeal of the hospital's tax-exempt status, according to the report. The medical center also agreed to drop its counterchallenge.

2. The medical center is part of West Orange, N.J.-based RWJBarnabas Health. It is on a 15-acre campus that includes the Wilzig Hospital, the Provident Bank Ambulatory Center and the medical office building. According to the report, the assessed value of  the medical center's main campus is $126 million. Based on comments from City attorney Nick Strasser, the hospital would owe $800,000 in property taxes in 2018 if it weren't tax-exempt.

3. One agreement in the legal settlement requires the medical center to pay $300,000 in "voluntary" property taxes annually, The Jersey Journal reported.  The annual payments are retroactive to 2016 and end in 2023. The city, in turn, will stop challenging the hospital's tax-exempt status.

4. Another agreement requires the medical center to make "healthcare collaboration" payments to the city annually, according to the report. The payments will be $1 million for 2016 and 2017 and then $250,000 annually from 2018 until 2023.

5. The report notes the city could still challenge the hospital's tax-exempt status after 2023.

Access the full report here.

 

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