The prices of vacant lots quadrupled in less than four years when they were sold to Riverview in late December. (Photo by John T. Ward. Click to enlarge.)
By JOHN T. WARD
The latest addition to Riverview Medical Center’s Red Bank real estate holdings yielded a windfall gain for the seller, redbankgreen has learned.
Why the hospital paid a whopping price for the site remains unanswered.
Map shows Hackensack Meridian’s Red Bank holdings; click at upper right to expand, and on green circles for more information. Below, Geoff Pierini, seen in a promotional video for his specialty construction company. (Google Map from Monmouth County property records; screengrab below from Vimeo. Click to enlarge.)
In late December, a unit of hospital parent Hackensack Meridian Health paid $5.75 million for three adjoining, vacant lots totaling less than half an acre at East Front and Spring streets, according to deeds uploaded to the Monmouth County Clerk’s database last week.
That’s more than four times the $1.25 million the sellers, companies associated with Rumson resident Geoff Pierini, paid for the lots in 2017.
What changed in the interim? Pierini obtained planning board approval two years ago for a medical office building on the site, and last May demolished several decrepit structures there, but never started construction. It’s now a dirt lot surrounded by wobbly construction fencing.
Pierini did not respond to an emailed redbankgreen request for comment about the $4.5 million gain, and could not be reached by phone Thursday, Friday and Monday.
In response to a series of questions about the rationale for the price paid, Riverview only repeated what it has said before in connection with its land bank: “there are currently no plans for development on any parcel owned by Riverview Medical Center and any future development plans will always proceed through the appropriate Borough departments for consideration and input,” it said in a statement Monday.
Pierini is founder and chief executive officer at Perth Amboy-based Excalibur Group, which provides speciality construction for the medical imaging industry.
County and state filings show that Pierini bought the site, with three vacant houses and a commercial property last used by a lawn irrigation business, through an entity called RB River Properties LLC for $1.25 million in June, 2017.
Last November, just a month before the deal with Riverview closed, RB River Properties sold the assets to two other limited liability companies, called Bomarc and RB2CCM, which had nearly equal stakes, according to information contained in the latest deed filing.
In the sale to Hackensack Meridian, documents identified Pierini as the managing member of both Bomarc and RB2CCM, without specifying his share in either.
Any calculation of profits from the sale would have to take into account the would-be developer’s costs of design, approval, demolition, taxes and other expenses. But what might explain a fourfold increase in value in four years?
“I don’t know how you can justify that price for that parcel,” a local commercial real estate broker who asked not to be identified told redbankgreen.
“That’s quite a premium that’s being paid,” said Jake Rue, an Oceanport resident whose family sold the property to Pierini.
The price was nearly quadruple the assessed value of the properties, a combined $1.5 million. That would seem to hint at a jump in tax revenues to come for Red Bank and Monmouth County – at least until the hospital can have them exempted as part of its charitable mission.
While the nonprofit pays no taxes on property used for healthcare delivery and support, such as offices and parking, it pays taxes on its unused holdings, as shown in the data map above.
The newly acquired sites generated more than $34,000 in property tax billings in 2020, borough records show.
According to borough Assessor Mitch Elias, an application for a tax exemption would have to be filed by November 1. If granted, it would take effect January 1 of the following year.
If the properties remain taxable, the borough and county will see an increase in tax revenue starting in January, 2022, Elias said. But he said he could not estimate the next assessment value. “The sale will have to be reviewed to determine if it reflects market value,” he said.
The borough and Riverview entered into a Payment in Lieu of Taxes (PILOT) agreement for its exempt properties in 2002, but have been tied up in litigation, and the borough has not received any recent payments.
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