From “The Record” – Expansion Amid Recession

By Harvy Lipman
Record Columnist
Tuesday, February 24, 2009

As anyone who’s driven past Hackensack University Medical Center recently can tell you, the recession hasn’t brought a halt to all non-profit capital projects.

Despite a fund-raising campaign that fell about $5 million short of its goal last year, the hospital’s new cancer center and an adjacent parking garage continue to rise above Atlantic Street.

Five miles away, the new emergency care center at Englewood Hospital and Medical Center is heading for a scheduled September completion.

And in Passaic County, the non-profit New Jersey Development Corp. is moving forward with plans to purchase property and construct two affordable-housing projects.

At time same time, though, Chilton Memorial Hospital in Pompton Plains has frozen all of its building plans.

A new study by Johns Hopkins University shows that many non-profits share Chilton’s problems.

Extrapolating from a survey of nearly 2,000 non-profit organizations, Johns Hopkins researchers concluded that $166.7 billion worth of “shovel-ready” projects are stalled nationwide — $3.2 billion in New Jersey alone. And hospitals and universities aren’t even included in the study.

Most of the projects are considerably smaller than the $130 million Hackensack is spending on the cancer center and garage. The study identified 74 New Jersey non-profits with specific, ready-to-go building projects, with a total cost of $189 million. The researchers concluded that just those projects would create thousands of construction and permanent jobs.

The difference seems to be a simple matter of timing. The major projects that have gotten under way in North Jersey are mostly the result of capital campaigns that began before the worst of the recession hit.

Hackensack’s construction is being financed by a combination of bonds and $75 million in donations to the medical center’s capital campaign, which began in 2007.

“There was never any thought” of delaying the project, despite the recession, said Robert Torre, executive vice president of the Hackensack hospital’s foundation.

The foundation operates a virtually perpetual capital fund-raising campaign, Torre said, adding: “We don’t have a beginning and ending to the campaign, where we take a year off. We’re in a constant campaign, and we were already raising funds for the cancer center before the recession hit.”

The $75 million, Torre said, will be adequate to pay the hospital’s share of the construction. “What I would like to have done is a $100 million campaign,” he said. “We had to cut it back to $75 million.”

Englewood executives also decided to keep construction of the emergency center on schedule.

“The foundation and the medical center had a reserve of $12 million, and we raised $22 million in pledges,” said Margaret Bridge, executive vice president of the hospital’s foundation. “We have sufficient cash resources to pay the contractors and open on time in September.”

The New Jersey Community Development Corp. in Paterson is one of the few non-profits in the region that actually raised more money last year than in 2007.

In fact, the group took in more cash donations in the last quarter of 2008 than it did for all of the prior year. Robert Guarasci, the corporation’s president, attributed that mainly to “a much more successful dinner gala” at the end of the year.

“We stepped up the efforts on the part of our staff and board,” Guarasci said. “It was just determination on our part to be more aggressive in reaching out to people.”

The corporation’s projects also will benefit from various state and federal programs designed to encourage construction of affordable housing, Guarasci added.

One, in Paterson, will house young people aging out of foster-care homes and grandparents who are raising their grandchildren; another in Clifton will take in homeless veterans with disabilities.

Other North Jersey non-profits are less sanguine about being able to fund capital projects.

“We have a whole host of projects that had to be put on hold because of the credit situation,” said Dawn Jones, executive vice president of the Chilton foundation.

“We’ve frozen everything right now.”

Jones added that the foundation is moving ahead with a fund-raising campaign to pay for expanding and renovating the hospital’s Breast Center.

“My wish is that we could raise enough money for it,” she added.

“But I don’t anticipate being able to make up the difference.”

E-mail: lipman@northjersey.com