Hospital Repurposing in New Jersey

During the “Great Recession,” many hospitals in the tri-state region suffered greatly financially; many were forced to close their doors. What we are seeing now, specifically in the state of New Jersey, is the successful “repurposing” of these closed and vacant facilities.

The dictionary defines repurposing as: to use or convert for use in another format or product. One example of conversion worth mentioning is Barnett Hospital, located in Patterson, NJ. This massive facility, more than 300,000 square feet, was forced to close its doors in 2008. The space was recently purchased, renovated and “repurposed” by the organization Community Healthcare Associates, LLC (CHA). This new “medical arts complex” is experiencing great success and is on its way to reaching full occupancy by many different providers.  By products of its success include the creation of hundreds of new jobs in the community and hundreds of thousands of dollars a year in property taxes paid to the state.  Other current examples of CHA’s efforts to repurpose New jersey hospitals include Kessler Memorial Hospital and Greenville Hospital.

The costs to identify, purchase and then renovate a closed facility for repurposing are massive.  Due to the debts on these closed facilities, these costs become very prohibitive and can kill all efforts.  In response to these costs, CHA has reached out and is working with NJ assemblymen and assemblywomen to create a bill that will provide relief for CHA and other similar developers.  The relief will be in the form of tax credits that will benefit CHA-type developers who specialize and focus on transforming closed hospitals into multi-tenant health care facilities. These tax credits would free up developer funds to be put toward the necessary purchasing and renovation costs for closed hospitals.

This bill is now in the state Senate after being approved in the Assembly on January 28, 2013.

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