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

TRENTON, N.J. - Mercer County has reached an agreement to transfer ownership of the County’s Geriatric Center to Ocean Healthcare LLC, meaning the facility will be privately-run within months.

Ocean Healthcare, which operates 11 long-term care facilities in eight counties throughout New Jersey, will pay Mercer County $7,650,000 for the Geriatric Center and its parking area. The County freeholder board voted 7-0 to approve the sale on Aug. 12, while the board of the Mercer County Improvement Authority voted unanimously to approve the sale on Aug. 10.

Ocean Healthcare, of Lakewood, N.J., was selected after the MCIA received four proposals from qualified bidders on May 18.

All residents of the Geriatric Center at the date of closing will remain there, and no resident shall be transferred out of the facility without their consent—a critical element of the sale that was negotiated by the County.

“As I stated when we began this process, this was a very difficult decision, but one that had to be made in the best interest of our taxpayers,” said Mercer County Executive Brian M. Hughes. “But we also wanted to ensure, without a doubt, that the Geriatric Center would continue to have room for those who cannot afford long-term nursing care. This pending sale has alleviated a financial burden on the County but, more importantly, this facility will remain a home for many of our older residents.”

Ocean Healthcare also agreed to accept Medicaid-eligible persons as residents of the Geriatric Center, and to endeavor to accept all such persons for whom the Geriatric Center is a last resort because of their financial status. The majority of residents currently at the Geriatric Center are Medicare or Medicaid recipients.

In addition, the buyer has promised to consider current employees of the Geriatric Center for employment once the transfer of ownership occurs, although it is not obligated to hire any particular persons. Ocean Healthcare will have authority over hiring once the sale is complete.

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.

“The entire Ocean Healthcare team is very excited to have the Mercer County Geriatric Center join our family of facilities. As one of New Jersey’s top providers of skilled nursing and rehabilitative care, we plan to bring our extensive experience in quality care, innovative programming, and our dedication to senior services to the Center and its residents. We will ensure that each resident and patient at Mercer County Geriatric Center receives the best possible care and will provide a true home like environment,” said Joseph Kiernan, Vice President for Ocean Healthcare.

The proposed sale now awaits the approval of the state Department of Health and Human Services, Certificate of Need and Healthcare Facility Licensure. Closing is expected to occur in mid-October.

The County began the process of selling the facility in December 2009 after an extensive review of the operation 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.

Hughes has said previously that one of his goals is to reduce the scope of government through public-private sector initiatives that will relieve taxpayers of millions of dollars in costs. Once this new, private care provider is in place, Hughes believes 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.

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.

The Geriatric Center employs 148 people, all but one of whom have Civil Service status. The County will follow all guidelines as set forth by Civil Service in terms of re-employment to other county positions for which these workers qualify. The County has held information sessions for residents, their families, and employees multiple times since January 2010.