A long-delayed plan to expand Morristown Medical Center got a jump-start from the Morristown council after it authorized a $48 million “community service contribution” agreement with Atlantic Health, the hospital’s owners.
The agreement is designed to settle years of property tax litigation between the town and the hospital — including appeals for the 2024, 2025 and 2026 tax years. The contribution from AHS Hospital Corp. will be paid out over the next nine years.
The two parties previously settled outstanding 2006-2015 property tax appeals. That agreement, in 2015, followed a landmark tax court decision that rejected Atlantic Health’s challenge to the Morristown tax assessor’s 2008 decision to deny a municipal property tax exemption for certain operations at the hospital — then known as Morristown Memorial — for the tax years 2006, 2007 and 2008. That 10-year agreement expired last year.
Without discussion, the resolution authorizing the new agreement was passed unanimously at the end of the council’s hourlong May 26 meeting.
Town administrator Jillian Barrick, reading a statement into the record, said the “successor” agreement “resolves several tax appeal applications that could otherwise have a significant negative effect on the town’s tax base. It reduces the risk of costly and prolonged litigation.”
Artist rendering of a scaled-down version of Morristown Medical Center’s proposed West Pavillion.
Plans for a billion-dollar expansion of the 736-bed hospital, first unveiled in 2023, were scaled back last year after public comments were critical of its scope. The original plans included an 11-story West Pavilion near Route 287, which has been lowered by 30 feet by removing one inpatient floor and a large parapet feature on the rooftop. In addition, a “specialty medical building” would see two floors removed and its height lowered by 26 feet. A three-level garage would be built under the building.
But little progress on the project has been shared with the public since the revisions were unveiled in March 2025.
Impact on residents, taxpayers
Significantly, the agreement also “provides immediate financial support to help offset the impact of the proposed expansion on our residents and taxpayers,” Barrick said.
“Tuesday night’s resolution related to our CSCA continues Atlantic Health’s longstanding support of the Town of Morristown,” Atlantic Health spokesperson Luke Margolis said. “We are pleased to extend our formal commitment as a good neighbor and corporate partner.”
The successor agreement “establishes a structured process for evaluating Atlantic Health’s expansion proposal through a general development plan, and creates the opportunity for meaningful public engagement through the GDP process before any zoning changes are considered,” Barrick said. “The general development plan, similar to a master planning process, is a comprehensive conceptual plan that outlines the fundamental parameters of a project. As part of the approval process, the GDP must include a detailed breakdown of the site plan and its impact, supported by extensive analysis.”
Mayor Timothy Daugherty stressed that the successor agreement does not approve any construction.
“It’s just a financial agreement,” he said.
The resolution also authorizes an additional payment tied to the town’s release of a recorded deed restriction affecting the land parcel included in the hospital’s expansion project.
Artist rendering of a scaled-down version of Morristown Medical Center’s proposed expansion.
Before final approvals for the project, Barrick said, “residents will have an ample opportunity to learn about the proposal, hear from the professionals presenting it, and ask questions during the public hearings before the planning board.”
Morristown Medical Center is already the third-largest hospital in New Jersey. Executives at Atlantic Health said they need to respond to a steady rise in the local population. Morris County has seen its population increase by more than 100,000 residents in the last 35 years, topping out at an estimated 524,251 as of July 2025, reported the U.S. Census Bureau.
“Morristown Medical Center’s proposed state-of-the-art expansion would ensure one of the nation’s premier health care destinations remains conveniently accessible to you and your family,” Atlantic Health states on its hospital expansion website.
This article originally appeared on Morristown Daily Record: Here’s the multi-million price for Morristown hospital expansion
