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The Cambridge drugmaker’s mRNA vaccine for respiratory syncytial virus, or RSV, got the green light from the FDA on Friday. …
Massachusetts
State support part of talks over Steward hospitals in northern Mass.
New documents in Steward Health Care’s bankruptcy proceeding have shed a touch more light on Massachusetts state government’s engagement as the financially-floundering network looks to offload its hospitals, and the company’s proposal to take bids on its assets in less than a month is getting some pushback from the U.S. Department of Justice.
Gov. Maura Healey, Attorney General Andrea Campbell and other state leaders want Steward out of Massachusetts, but the company has not secured buyers for its Bay State hospitals in the months since its financial predicament came to light. Since filing for bankruptcy protection May 6, Steward has outlined the process it wants to use to sell or auction its 31 hospitals nationwide by early July.
Steward is proposing to sell its physician services network, Stewardship Health, along the same timeline. Before filing for bankruptcy, Steward reached an initial agreement to sell Stewardship Health to Optum, but that transaction has not advanced. A hearing on the proposed timeline is scheduled for Monday.
There are two investment banks working with Steward to market its hospitals in Massachusetts and elsewhere.
Cain Brothers is handling the “Southern Massachusetts” hospitals (Good Samaritan Medical Center in Brockton, Morton Hospital in Taunton and St. Anne’s Hospital in Fall River) while Leerink Partners handles the “Northern Massachusetts” hospitals (St. Elizabeth’s Hospital in Brighton, Carney Hospital in Dorchester, Holy Family Hospital in Methuen and Haverhill Hospital in Haverhill, and Nashoba Valley Medical Center in Ayer.) Norwood Hospital, which was being rebuilt after a 2020 flood, is not mentioned in the latest documents.
In separate filings made Monday, representatives of both Cain and Leerink described how those efforts have been going, and the information suggests that the transitions of Steward’s Massachusetts hospitals will not all be handled the same way.
Cain described a fairly straightforward process for the hospitals it is marketing. The firm said it has contacted 45 parties to gauge potential interest in buying Steward’s hospitals in the southern part of Massachusetts, with 20 of those potential buyers agreeing to sign non-disclosure agreements to receive access to “diligence materials.” The firm also said it has received “a number of indications of interest (‘IOIs’) that … describe the proposed transaction structure and range of value for some or all of the Debtors’ assets located in the Southern Massachusetts market.”
Leerink’s filing described a slightly different process and spoke directly to state government’s involvement. While the firm said that it initially reached out in late February to five groups it determined might have an interest in acquiring the hospitals, the firm later pivoted to “a broader marketing effort with a particular focus on not-for-profit (NFP) hospital owners or systems.”
In all, the firm said it has been in touch with 40 potential buyers, including at least 25 not-for-profit hospitals, “to gauge their interest in a transaction to acquire or otherwise assume ownership of” Steward’s hospitals in northern Massachusetts. Thirteen possible buyers have signed NDAs and received diligence materials, the filing said.
“In addition, the Debtors have been engaged with the Commonwealth of Massachusetts regarding securing a buyer to continue operating the Northern Massachusetts Hospitals with the support of the Commonwealth,” the firm wrote. “In that regard, Leerink Partners has engaged in discussions with potentially interested parties and such discussions remain ongoing.”
No similar language was included in Cain’s filing on the efforts around the other Massachusetts hospitals, but a spokesperson for the Executive Office of Health and Human Services told the News Service on Wednesday that the state’s role is the same for Steward’s hospitals statewide.
“Massachusetts is using all the tools available to protect patients, ensure access to care, and preserve jobs through the transition of all Steward facilities across the state. If Steward enters into a transaction to sell some or all of its hospital assets, the state procedures and standards for reviewing the proposed transaction would apply,” the spokesperson said in a statement shared in response to questions about what kind of state support is being discussed.
The Health and Human Services spokesperson pointed out that the transactions being contemplated would be between private parties and noted that Massachusetts provides support for safety-net providers, including Steward hospitals, and any successor operators that qualify.
Two weeks ago, lawyers for Steward described Massachusetts state government’s role slightly differently, saying Steward was “in discussions with various third-parties interested in purchasing and operating the Debtors’ hospitals in Northern Massachusetts, as well as with state officials and regulators to facilitate the transition of such hospitals to new operators.”
Healey, House Speaker Ron Mariano and Senate President Karen Spilka have all ruled out a bailout of Steward. But their comments have also not ruled out that the state might need or want to provide some other kind of assistance to make the transition from Steward to other operators a smooth one.
The company’s lawyers and Massachusetts state officials have acknowledged that selling the hospitals could be difficult thanks to the sale-leaseback transaction that saw Medical Properties Trust (MPT) buy the land beneath Steward’s hospitals in 2016.
The day after Steward filed for bankruptcy, one of its lawyers told the court that the company faces a June 25 deadline to auction its hospitals in Massachusetts and other states except for Florida under the terms of a loan it got from its landlord, MPT, worth up to $300 million. But he also said that timeline was “not feasible.” The company’s lawyer told the court that “[i]t cannot be overemphasized that time is of the essence” in the sale process given that Steward’s ability to keep its hospitals open is contingent on the loan (also referred to as debtor-in-possession or DIP financing) from MPT.
“Access to the DIP Facility is critical to the Debtors’ ability to continue their operations and manage their bankruptcy estates through the conclusion of the sale process. Failure to adhere to the Milestones could jeopardize the Debtors’ access to cash under the DIP Facility and, in turn, compromise the Debtors’ chapter 11 strategy and ability to maximize recoveries for creditors,” Steward’s filing said. “In light of the foregoing, the Debtors believe that the proposed timeline is both reasonable and necessary under the circumstances of these chapter 11 cases.”
But that timeline, especially as it applies to the sale of Stewardship Health, is not entirely acceptable to the U.S. government. The Justice Department on Tuesday filed a “limited objection” to Steward’s proposed sale schedule, saying that the milestones Steward agreed to with MPT could “interfere with the exercise of United States regulatory rights concerning any proposed sales of the Debtors’ assets” like an ongoing antitrust review of the proposed Stewardship sale.
“The United States’ ongoing review is in its early stages and may require extensive production of documents and data before the United States determines whether to oppose the transaction,” the federal government wrote. “The DIP milestones make no mention of this review and, in fact, could be construed to undercut the United States’ regulatory rights by permitting MPT to impose hasty sale procedures for Stewardship Health and terminate financing if the Debtors fail to close the sale by a date acceptable to MPT.”
The Justice Department added, “Moreover, it is questionable whether the Debtors are properly exercising their business judgment in agreeing to the milestones because they plainly leave inadequate time for compliance with the antitrust review prior to the sale hearing on July 2, 2024.”
While the Justice Department asked the bankruptcy judge to ensure that any order authorizing Steward’s DIP financing and sale schedule include a provision acknowledging that the Stewardship Health sale is subject to the federal government’s enforcement rights, its filing also suggested that the DOJ could take some action of its own depending upon how the transaction unfolds.
“At the very least, the United States reserves its rights to conduct a full antitrust review and, if necessary, file an enforcement action concerning the proposed sale regardless of any milestones agreed to by the Debtors and MPT,” the Justice Department wrote.
Mass. House agrees to 205 targeted alcohol licenses in Boston
Boston would gain 205 alcoholic beverage licenses and an opportunity to bolster restaurants and revitalize neighborhoods and communities of color, under legislation that the House approved Thursday afternoon.
The redrafted bill (H 4696) steers 180 non-transferable licenses over three years to 12 ZIP codes in Roxbury, Dorchester, Mattapan, East Boston, Roslindale, West Roxbury, Hyde Park, Charlestown and Jamaica Plain. The licenses must be awarded to establishments that prepare food on-site, according to Blake Webber, spokesman for the House Ways and Means Committee, which released the bill Thursday.
Each of the ZIP codes would get three non-transferable restricted licenses for the sale of all alcoholic beverages to be drunk on the premises and two non-transferable restricted licenses for the sale of wines and malt beverages to be drunk on the premises annually over a three-year period.
Three non-transferable licenses are also earmarked for the Oak Square neighborhood in Brighton, with another 15 non-transferable licenses designated for “community spaces,” including outdoor spaces, theaters and nonprofits. The bill also carves out seven transferable licenses that do not have location restrictions, Webber said.
Bill sponsor Rep. Chris Worrell called the legislation’s momentum “game-changing” and an “incredible win” for spurring economic opportunity for communities of color. Worrell invoked the potential of Blue Hill Avenue, describing it as one of the busiest streets in the commonwealth but one with only about three to five sit-down restaurants.
Restaurants that gain coveted liquor licenses could double their profits, the Boston Democrat said.
“I think it’s a great win,” Worrell told the News Service. “Any day when you’re fighting for one (license) every time, and now you’re getting 205 for the city of Boston. It’s an incredible win. I think the demand is there.”
As the House approved the bill during a sparsely attended informal session, Worrell told staffers in the chamber, “There you go guys — we did it.”
The redrafted bill slashed 45 liquor licenses for targeted communities contained in the original filing, Worrell said.
Webber, asked about the cut, told the News Service, “We will reevaluate the effects of the legislation after the 3 years is up.”
“After speaking with the Boston Legislative delegation, 15 licenses per zip codes over three years is what delegation members from those areas felt was an appropriate step, especially given the food provision being a requirement for those particular licenses,” he said.
The Legislature often passes bills that grant cities and towns just a handful of additional liquor licenses, even as municipalities look for greater control to boost economic activity. While Gov. Maura Healey’s office in January previewed a policy allowing “local governments to set their own liquor license quotas and bypass the existing home rule petition process,” the governor ultimately did not include the reform in her “Municipal Empowerment Act.”
During an October committee hearing on Beacon Hill, Boston Mayor Michelle Wu and city councilors lamented the scarcity of licenses and the hefty $600,000 price to purchase a license from an establishment going out of business.
The dynamic has helped fuel a racial wealth gap and disproportionately concentrated restaurants and bars in wealthier Boston neighborhoods, such as the Seaport, elected officials said. Poorer neighborhoods, in turn, have been left with fewer dining options, especially sit-down restaurants.
“We are, I believe, in such dire need of licenses across the board that we very well may be coming back to you in the future as we see where things go,” Wu told the Joint Committee on Consumer Protection and Professional Licensure on Oct. 3. “I’m confident that with this first threshold and first set of permits, we’ll be able to make some significant headway on that and very likely we will need more as the success grows.”
The committee on Oct. 30 had reported out Worrell’s bill favorably, accompanied by Sen. Liz Miranda’s parallel proposal (S 2380), and shipped it to the House Ways and Means Committee.
Wu, in a statement to the News Service Thursday, expressed appreciation for House lawmakers, saying the bill they advanced will “help provide economic opportunity and vibrancy to neighborhoods across the city.”
“These needed liquor licenses will help bring new life to vacant retail spaces in neighborhood commercial districts and strengthen our economy and community,” Wu said. “The parameters in the legislation tying nontransferable licenses to specific zip codes will help counter the current inequities where licenses are concentrated in a few areas and are unavailable or unaffordable for new entrepreneurs due to scarcity from the cap.”
Worrell implored the Senate to “see the urgency” of the bill.
“I don’t even drink, but I know the importance of this legislation,” Worrell said.
Miranda, in a statement, applauded the House’s action.
“This legislation is essential in rebuilding sit-down restaurants in our community – an essential piece of thriving neighborhoods, which have become a distant memory for so many in our community,” the Boston Democrat said. “Whether it’s Mass Ave in South End and Lower Roxbury, or down Blue Hill Ave from Roxbury to Mattapan, many neighborhoods in my district were once the cultural hubs of the City of Boston – known for their unique restaurants, nightlife, and strong sense of community. The secondary market, without this measure as a first step, has perpetuated the racial wealth gap, but also created an ecosystem in our City where only affluent property and restaurant owners can afford the cost of operating.”
Summer conditions settle in for the weekend
This is the weather we’ve waited all year for — sunshine and 70s are inbound to kick off June.
One of the bonuses to the forecast this weekend will be the lack of humidity. Dewpoints do slowly creep up on Sunday evening and Monday, but the da…
Boston City Council still not ready to move on Wu’s tax shift proposal
With the window for the necessary state legislative action quickly closing, Boston city councilors still have many questions about a proposed tax-shift plan that has drawn the ire of some influential real estate industry leaders.
A council subcommittee spent more than four hours Thursday weighing Mayor Michelle Wu’s plan to temporarily rebalance the property tax split between residential and commercial owners, at times expanding their inquiry to revenue-generating steps the city could take.
Members of Wu’s team are hopeful for prompt action on the proposal the mayor filed nearly two months ago, which they view as a targeted strategy to smooth out a potential sudden spike in residential property taxes that could result from a drop in commercial property values.
They said Thursday that failure to secure the measure’s passage in the council and then Legislature before July 31, when lawmakers wrap up their major business for the term, could leave the city with limited or no time to react if the property-tax dominoes begin to fall.
“If we don’t have this flexibility, we will have a very narrow to no timeline available to us to get this in place if we see commercial values decline in such a way that we see a 17 or higher percent increase in residential taxes,” Ashley Groffenberger, the city’s chief financial officer and collector-treasurer, said. “If this isn’t in place, and we see that change in value and subsequent result in the residential taxes, taxpayers will have 30 days to make up an enormous increase in their taxes relative to the prior two quarters.”
Public debate about the city’s property tax levy exploded in February, when a report from the Boston Policy Institute think tank warned that a pandemic-fueled drop in commercial property represented an “economic act of God” that could eat away at the city’s tax revenues.
There’s still no clear timeline for action. Wu filed a proposed home rule petition in early April that would temporarily give city officials the ability to shift a larger portion of property taxes onto business property owners if commercial values drop, effectively sparing homeowners from making up a revenue shortfall all at once.
The council’s Committee on Government Operations met to discuss the topic Thursday, six weeks after it convened an earlier hearing about the same measure. Councilors might move next to hold an additional “working session.”
“I think there’s still a few questions that remain unanswered,” Councilor Julia Mejia said at the end of Thursday’s proceedings.
Councilor Gabriela Coletta Zapata, who chairs the committee, said she too still has “outstanding questions,” especially about an idea she floated to embrace a local-option small business tax exemption as a partial offset for the effects of the proposed rebalanced tax levy.
“We are on a very real timeline at the State House,” she said, noting that other Boston home rule petitions affecting alcohol licenses and the Boston Planning and Development Agency spent months in limbo on Beacon Hill before moving.
“This is the time to get this up there,” Coletta Zapata added about Wu’s tax plan.
Even if councilors come to an agreement to support Wu’s proposal, its outlook in the Legislature is unclear. Rep. Aaron Michlewitz, the North End Democrat who is one of the most powerful figures on Beacon Hill, so far has avoided taking a stance on the measure.
The Legislature also has a mountain of its own business to address, including high-profile housing and economic development bond bills that still need to be introduced, approved in both chambers and reconciled in the next two months. That could leave limited bandwidth to take up a Boston-only priority, no matter how dire the warnings are from City Hall.
Under state law, municipalities can create separate tax rates for commercial and residential property and require commercial owners to pay up to 175% of what the single, unified property tax rate would have been.
Wu proposed giving the city the ability to increase the maximum commercial shift as high as 200% if business property values drop significantly, then reducing it a bit each year until it returns to 175% in the fifth year.
Homeowners would likely still need to pay higher property taxes if commercial values drop, but officials believe the temporary shift would phase in the increase instead of allowing it to hit all at once.
“This is just spread out over a couple of years. This isn’t ‘save the residents, tax the commercial’ — you’re going to have to pay that full amount anyway and in not that long a period of time, and potentially do irreparable harm to our downtown core and our neighborhood small businesses,” Councilor John Fitzgerald said Thursday.
Marty Walz, a former state representative and lobbyist who is interim president of the Boston Municipal Research Bureau, said the city could achieve “more of a shared sacrifice” by keeping the commercial property tax shift at a lower figure than 200% — in other words, make a change similar to Wu’s idea, but to a lesser degree.
“I honestly think that’s a good one,” Boston Assessing Commissioner Nicholas Ariniello said of the idea Walz floated. “The beauty of the proposal is that we have that flexibility and that ability to decide that. It doesn’t change anything about the administration and the council’s responsibility and duty and ability to set a shift every single year. Even if this legislation were passed, we wouldn’t have to go up to the 175 percent shift if we felt that that was not the appropriate level to reach. It gives us the flexibility to choose the right amount.”
Wu’s proposal has drawn criticism from groups such as the Greater Boston Real Estate Board, whose CEO argued last month that adding more tax burden to commercial property owners “could do irreparable harm to an already struggling industry.”
Several affordable housing advocates, community organizers and labor leaders used Thursday’s hearing to line up in support of the plan, arguing that failing to soften a possible residential tax hike could add even more fuel to the housing crisis.
Symone Crawford, executive director of the Massachusetts Affordable Housing Alliance, told a council subcommittee that homeowners and those looking to buy houses in the city already face a steep climb due to high interest rates and soaring prices.
“A tax increase on our homeowners would also be a burden that most of us could not rebound from,” she said.
Representatives from civic groups such as the Charlestown Neighborhood Council and some labor unions also voiced support for the proposal during the early stretch of Thursday’s hearing.
Some councilors and attendees signaled Thursday they want to rethink the city’s reliance on property tax as such a major source of revenue. The Boston Policy Institute report estimated that property tax collections currently make up 75% of the city’s revenue, up from 54% in 2002.
Walz said her group is researching other “revenue diversification” options and described a need to put the topic “back at the top of our collective agenda.”
“We’ve had the luxury over the past number of years of not having to think very hard about this. I think that those days are over now,” Walz said. “That’s a longer-term solution because we can’t just flip a switch and make that happen. It’s likely to require going back to the Legislature. But it’s something that if we start now, we will be ready by next year to perhaps do another home rule petition.”
“It’s a two-edged sword. It’s a blessing and a curse,” replied Councilor Liz Breadon. “Now we’re facing the consequences. The City Council and all of us need to really put our minds to seriously looking for other revenue sources so we’re not so incredibly reliant on real estate taxes to pay our bills in the city.”
As Thursday’s hearing wrapped up, Coletta Zapata urged more city residents to get in touch with councilors and share their opinions on the topic. Even a one- or two-sentence message would suffice, she said.
“There has not been as much participation as I thought there would be,” she said.
Equestrian center destroyed in massive fire overnight in Templeton
An equestrian center was destroyed in a massive fire overnight in Templeton, Massachusetts.
The Gardner Fire Department said in a Facebook post that they responded to the fire scene shortly after 9 p.m. Liberty-Belle Stables, located on Patriots Road in Templeton, was fully involved in flames, and the fire had also extended into the adjacent home.
Fire officials said all of the horses were safely removed from the barn.
Liberty-Belle Stables said in a Facebook post at 9:42 p.m. that their barn was on fire, but all of the horses had been saved.
The stables posted an update on Friday morning asking people to share happy stories about the stables, or some way it has touched their lives.
“We need all the good memories we can get. This place was my dream, and I went into it with one of the best instructors out there. I could not ask for a better barn family. We are so grateful to have you all.”
Over 100 people had commented on the Facebook posts as of Friday morning, offering support and even assistance in boarding the horses.
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