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Sale amounts to positive economic impact of more than $14 million

TRENTON, N.J. - Mercer County closed on the sale of the County’s Geriatric Center today, officially transferring ownership of the facility to long-term care provider Ocean Healthcare LLC.

The closing completes the nearly three-year process undertaken by County Executive Brian M. Hughes to find a private operator for the facility, which Hughes had said would be sold because healthcare for the elderly is no longer a function best provided by the government.

“My administration, along with the Mercer County Improvement Authority, worked very hard to complete this deal in a way that ensured our residents at the center would be well taken care of but that also removed a significant burden on our taxpayers,” said Hughes. “This is an important step forward for the County’s future.”

Ownership of the facility will be transferred to buyer Ocean Healthcare LLC at 11 p.m., Nov. 30, and patient care and operation of the site will not be disrupted.

Ocean Healthcare paid Mercer County approximately $7.5 million after closing costs for the Geriatric Center and its parking area. It will now be the sole proprietor of the operation, a 240-bed nursing center specializing in sub-acute care, short-term rehabilitation and long-term skilled nursing.

All residents of the Geriatric Center as of Nov. 30, 2010 will remain there, and no resident shall be transferred out of the facility without his or her consent—a critical element of the sale that was negotiated by the County. The majority of residents at the Geriatric Center are Medicare or Medicaid recipients.

Ocean Healthcare of Lakewood, N.J. operates 11 other long-term care facilities in eight counties throughout New Jersey, and was selected after the MCIA received four proposals from qualified bidders on May 18, 2010.

Ocean Healthcare has indicated to Mercer County that it plans to increase the population of the facility to its capacity of 240 residents. In the past several years under the County’s supervision, the facility has averaged slightly more than 150 residents. Because of the stated intention to increase the resident population, the company is reportedly planning to invest approximately $7 million into renovations and capital improvements to the building and its grounds.

Staffing levels will also need to be increased, according to Ocean Healthcare. Ocean Healthcare agreed with County officials that continuity of care for clients and residents was critical, and as a result, the company offered all nursing professionals at the facility who had been employed under the County the opportunity to continue employment with Ocean.

The effort to hire those workers, which was an element of the sale emphasized by Hughes, was successful as Ocean Healthcare extended an offer of employment to 100 percent of the Registered Nurses, and 70 percent of the Certified Nursing Assistants. Ultimately, 15 Registered Nurses and 14 of 45 Certified Nursing Assistants accepted the offer.

“I am very pleased that the County and Ocean Healthcare worked together to support both the residents and the workers at the center during this process,” said Freeholder Chair Ann Cannon. “Those were the two human elements of the sale that the freeholders collectively were very focused on. I am grateful that both the employees and the residents will be well looked after under Ocean Healthcare.”

Hughes has stated his goal of reducing the scope of government through public-private sector initiatives that will relieve taxpayers of millions of dollars in costs. Hughes said he believes that under Ocean Healthcare’s management, residents and their families can look forward to facility improvements and a richer recreational experience. Mercer County residents, too, will benefit by having this underutilized facility open to capacity.

The County began the process of selling the facility in December 2009 after an extensive review of the Geriatric Center found the facility was not sustainable as a government-funded entity. The county hired an outside firm in April 2008 to conduct a financial analysis of the Geriatric Center, and the firm, NW Financial of Jersey City, concluded the county would continue to lose money on the operation, and that the sale of the facility would improve the care and outlook of the facility.

The funds from the sale will be transferred into the County’s surplus fund and will be used to offset future property taxes, Hughes said.

In addition to the money from the sale, the transfer eliminates a projected $7 million loss in the coming year if the County were to continue to operate the facility, amounting to a combined positive economic impact of more than $14 million for Mercer.