Mayor to City Council: Update on HUMC, the midtown garage, avoiding layoffs and Sinatra Park

Office of the Mayor announces:

Update from Mayor Zimmer on Hoboken University Medical Center and Sinatra Park Reconstruction

Hoboken, NJ – Monday, October 17th, 2011

In a memo to the City Council, Mayor Dawn Zimmer provides an update on Hoboken University Medical Center and the reconstruction of Sinatra Park and Castle Point Park. The full text of the memo is included below.
October 17, 2011
Dear City Council Members,
I am writing to provide an update on two very important matters related to Hoboken University Medical Center and an agreement with Stevens developed to ensure the repairs for Sinatra Field and our walkway are as efficient and cost-effective as possible.
HUMC Update
Late Friday my Administration received word that HUMC Holdco agreed to changes we sought in the parking agreement, an agreement necessary for the sale of the hospital. The changes would shift a significant portion of the HUMC employee parking out of the Midtown garage to City garages along Hudson Street. An ordinance with this new version of the agreement was approved on first reading at Saturday’s Council meeting.
The use of the Midtown garage by a new private owner of HUMC will still require either refinancing the midtown garage to a taxable status or paying down the debt enough so that it fully covers the private use due to the taxable exempt status of the existing Garage Bond.
Thanks to the cooperation of HUMC Holdco, a revised agreement has been reached whereby many HUMC employees will park in City garages on Hudson Street, where no bond issues exist. As a result of the modifications made to the Agreement, the City will have two choices. We can refinance the bond changing to taxable status, putting no stress on next year’s budget and saving $50,000 in debt service costs. In the alternative, we can pay down the current bond debt by $4.5 million requiring the otherwise unnecessary allocation of $4.5 million from our budget, creating serious budgetary pressures.
This revised agreement was negotiated based on the concern that the Council would not approve the refinancing of the Midtown garage which is scheduled for a second reading on Wednesday. The changes made would reduce a required payment from $10 million to $4.5 million in the event the bond refinance is not approved. While this change eliminates the need for wide-scale layoffs, only the approval of the refinancing of the Midtown garage bond and the multipurpose bond for crucial Police headquarter upgrades and other essential initiatives for road cleaning and snow plowing will enable the City to completely avert the need for layoffs as a result of these transactions (Without the equipment requested in the multipurpose bond, my Administration will be forced to outsource in order to maintain the level of services our community needs).
As bond counsel has indicated previously, refinancing the Midtown garage bond would actually save taxpayers $50,000, and it would make sense to do this regardless of the hospital sale. Unfortunately if the City Council fails to authorize the refinance of this bond, then layoffs will be unavoidable to absorb the costs and avoid a tax increase.
A special meeting will be called for Tuesday, October 25th for the second reading of the parking agreement ordinance. As previously discussed, a parking agreement is essential to the completion of the sale of HUMC, scheduled for Wednesday, October 26th.
Sinatra Park/Stevens Update
The Department of Environmental Protection recently approved the City’s plans to reconstruct the collapsed field and walkways at Sinatra Park and Castle Point Park. As soon as that approval was received, the City submitted the approved construction drawings to the Army Corps of Engineers for their review. That approval is expected by the beginning of November, allowing the City to go out to bid.
As part of the design work regarding the construction of Sinatra Field, the City determined, in coordination with Stevens, that the current deteriorated condition of the City’s low level relief platform and the associated seawall prevent the final connection of the Stevens walkway to Sinatra Park until repairs to the structure are completed. As a result, discussions occurred between the City and Stevens on how to accomplish the final connection of the Stevens walkway into the Sinatra Field and walkway in the most efficient and effective manner.
Rather than Stevens spending an estimated $78,000 to complete its walkway (in addition to the materials they have already purchased), only for the City to have to partially demolish it in order to complete the reconstruction of Sinatra Park and the City’s walkway, we determined that a public-private partnership agreement would represent a win-win for both parties.
The intent of the agreement is for the remaining work of the Stevens walkway and the City’s project at this particular connection to be conducted all at once. To do so, it is expected that the City will coordinate the construction utilizing the remaining materials for the Stevens walkway which have not been installed and are currently being stored at the Stevens site. It is also the understanding that the materials will remain stored at the Stevens facility until the materials were needed for the project. Again, the thinking for the agreement is that it will enable Stevens to avoid the cost of having to complete the walkway and avoid delay in closing the Stevens walkway contract, and to enable the City to avoid having to wastefully demolish a walkway just constructed in order to complete the reconstruction of Sinatra Field and the City’s walkway, only to have to rebuild the walkway again. Stevens will realize a savings in the construction costs, and the City will be able to move forward efficiently with the completion of its project with little rework.
I thank Stevens Institute of Technology and the newly inaugurated President Farvardin for working with my Administration to finalize the attached agreement. I hope you will approve this agreement on Wednesday so there won’t be any further delays to begin construction.
Once this agreement with Stevens is approved, the City can finalize the bid specifications to ensure the accurate labor hours and materials are incorporated. We expect to have an approval of the construction drawings from the Army Corps of Engineers at the same time as the bid specifications are completed in order to go out to bid in early November. Attached is an aggressive, yet realistic, timeline for the project, assuming that the bid process and winter weather go smoothly. As you can see, as soon as the bid is awarded, the demolition and piling work can begin. Therefore there is no lag during the cold weather months.
Although the project completion is expected by the end of September, the field itself will be completed before that. The field can be constructed as soon as the deck and backfill is completed. The work to be done in September includes the finishing touches, such as the pavers for the walkway, railing installation, bench placement, etc.
Dawn Zimmer
  • Sinatra Field Reconstruction Timeline
  • Stevens Waterfront Agreement
  • Stevens Waterfront Agreement Exhibits

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