Plans to replace Mt. Kemble rehab with apartments will test Morristown / Morris Township relations

The Atlantic Rehabilitation Institute has been designated for redevelopment. Photo by Kevin Coughlin
The Atlantic Rehabilitation Institute on the Morristown/ Morris Township border has been designated for redevelopment. Photo by Kevin Coughlin

UPDATE: This version adds comments from Township Mayor Dan Caffrey.

The Atlantic Rehabilitation Institute has been designated for redevelopment. Photo by Kevin Coughlin
The Atlantic Rehabilitation Institute has been designated for redevelopment. Photo by Kevin Coughlin

By Peggy Carroll and Kevin Coughlin

The Atlantic Rehabilitation Institute, which traces its roots back to the first hospital in Morris County, will be closing its doors.

It will be replaced by an as-yet-unspecified number of apartments, if approvals can be secured from Morris Township and Morristown.

Toll Brothers Commercial, a rental developer based in Horsham, PA, has a contract to buy the Mount Kemble Avenue property  from the Atlantic Health System, knowledgeable sources tell

The site straddles the Morris Township / Morristown border, and is just down the street from a major commercial/ residential Morristown redevelopment project touted as the “Gateway to Morristown.”

The Morris Township Committee has taken the lead on the Mount Kemble project, unanimously accepting a planning study that determined the Township portion of the site meets requirements for designation as an area for redevelopment.

It also determined that four lots across the street (including part of the Institute’s parking lot) are areas for rehabilitation.

“I think this is a great opportunity for Morristown and Morris Township to work together,” said Morris Township Mayor Dan Caffrey.  

Although he declined to discuss specifics, saying everything is very preliminary, he said the project could be a good tax ratable that also would include some affordable housing units on the Township side.

Video: Courtesy of Friends of Televised Access in Morris Township

Because the border runs smack through the middle of the hospital and parking lot, however, Morristown’s participation is considered crucial. And so far the town has not initiated a study of its half – which contains the main hospital building.

Morristown Mayor Tim Dougherty said he anticipates meeting soon with Township officials to learn more.

“I haven’t seen any plans. I believe they did a blight study, but I haven’t seen the results of it,” he said, noting that a portion of the site abutting Fort Nonsense has steep slopes that would challenge developers.

But the Mayor, who won a landmark tax settlement from Morristown Medical Center last year, said he welcomed the chance to explore the Mount Kemble project with his Township counterparts, and even suggested such cooperation could lead to a merger.

“This may be the wave of the future, where we become one community. Maybe we start here with a joint development, and then maybe we merge the towns,” Dougherty said.

Caffrey responded:  “Tell the mayor he would make a great deputy mayor for me.”

Details about the size and scope of the apartment project remain sketchy. A spokesperson for Atlantic Health, the parent organization of Morristown Medical Center, said only that pending necessary approvals, Atlantic does plan to sell the Mount Kemble property.

“We will have more details, including the potential future owner, as the governing bodies of both Morris Township and Morristown move through the redevelopment process,” said  Elaine Andrecovich, public relations manager for Atlantic Health.

She said Atlantic Health eventually plans to leave the site, “and instead relocate services to a more modern, adaptable facility that will better support the exceptional services provided there.”

GOING, GOING... ? The Atlantic Rehabilitation Institute. Photo by Kevin Coughlin
GOING, GOING… ? The Atlantic Rehabilitation Institute. Photo by Kevin Coughlin

Andrecovich said Atlantic Health has been “forthcoming” with officials in both towns. But she declined to disclose where the new rehab center would be.

Services will continue at the Institute as the redevelopment process moves forward, she said.

The project was initiated by Atlantic Health, Mayor Caffrey said.

“It’s not about ratables as much as [it’s about] that property has reached the end of its useful life,” Caffrey said. “At this point, Atlantic Health will vacate the property for its [rehab center]. Something has to be done with that property. It’s not up to us, it’s up to Atlantic Health who they want to sell it to.”

In a presentation this month to the Township Committee, planning consultant Susan Gruel cited the “obsolete condition” of the rehab facility and said it was nearing the end of its “useful life.”

A redevelopment study was begun in January by Gruel’s firm, Heyer, Gruel and Associates of Red Bank. In her report, she said the first step was to inspect the properties to see if they meet the state’s redevelopment criteria.

Planners found the portion of the Institute within the Township does meet these requirements.

This Rehabilitation Institute parking lot can use some rehabilitation, according to a planners' study. Photo by Kevin Coughlin
This Rehabilitation Institute parking lot can use some rehabilitation, according to a planners’ study. Photo by Kevin Coughlin

This portion, Gruel wrote, is “mostly the utility annex (built between 1958 and 1960) as well a corner of the main building (originally constructed in 1919)…. several parking areas and driveway aisles… and a significant area that is green and steeply sloped.”

“We believe that the buildings and the improvements on the site in Morris Township are obsolete and are in faulty design arrangements,” Gruel said.

While the other properties were in need of cosmetic improvement, they fulfilled the legal regulations for rehabilitation, not redevelopment, according to the study.

The primary distinction between these designations, she reported, is tax abatement – short term versus long term. Right now, the vast majority is exempt from paying property taxes. A few small portions in Morris Township do pay taxes.

What the abatement means to Atlantic Health – or future owners – is among the present uncertainties.The properties which the planners identified as “areas for rehabilitation” are these:

  • 102 Mount Kemble, the Bargain Box, a hospital-owned consignment shop constructed in 1950 and operated by the Woman’s Association of Morristown Medical Center. The Bargain Box will “continue its charitable mission of supporting Morristown Medical Center,” regardless of the outcome of the redevelopment proceedings, Andrecovich said.
  • 106 Mount Kemble. A single-family house built in 1887 owned and rented by Memorial Realty Corp., a division of Atlantic Health System. It is occupied.
  • 108 Mount Kemble.  Also owned by Memorial Realty, this single-family house generally is rented to company employees. At present, it is unoccupied.
  • A portion of the Institute parking lot.

While Caffrey does not favor merging Morristown and Morris Township, he is hopeful that they can create a merged planning board for this project.  That would streamline the process, he said, and also ensure that no new buildings straddle the border, which would create confusion for emergency responders.

Caffrey noted that the Old Forge apartments span both municipalities. But they are configured as East and West, with buildings on one side identified by numbers and on the other half by letters, so dispatchers know which police and firefighters to send.


The building that houses the Rehabilitation Institute began life in 1892 as All Souls Hospital. It was established by leaders of Assumption Church who brought in the Grey Nuns of Montreal to staff it. The original building was Arnold’s Tavern, George Washington’s headquarters during the general’s first winter in Morristown.

The house was relocated from the Green to Mount Kemble in 1888 and served as a boarding house before it was bought for the hospital. It burned down in 1918 and was replaced by the current Institute Building. In 1913, operation of the hospital was transferred to the Sisters of Charity.

The hospital was not only the county’s first general hospital, but conducted the area’s only nursing school.

In the ’60s, the hospital began to struggle with financial problems and the Sister planned to close it. It was saved by its medical staff and supporters who won a court case allowing a secular board to take over. The hospital was renamed the Community Medical Center.

    The Bargain Box. Photo by Kevin Coughlin
The Bargain Box. Photo by Kevin Coughlin

The new board spent a good deal of money on improvements, which served to increase its debt. In 1977, it declared bankruptcy and in the following year it was bought by what was then Morristown Memorial Hospital for $4.4 million.

Memorial converted the building to rehabilitation services, from cardiac rehab to addiction rehab.

Today, the building offers both inpatient and outpatient services, ranging from post-stroke care to audiology.

If redevelopment plans go forward, they will transform a corridor to downtown Morristown, feeding into Market and Bank streets, where a triangular office building, apartments, a restaurant and commercial storefronts are in the works.

A Cambria hotel also has expressed interest in Market Street, across from the 40 Park and Metropolitan luxury condos and apartments that were centerpieces of Morristown’s massive redevelopment of the former Epstein’s department store. More apartments are about to rise on DeHart Street as a final piece of the Epstein’s project.


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  1. When a planner identifies a parking lot as an area for “rehabilitation”, is that just a euphemism for the area needs to be paved or resurfaced? (lol) I’m thinking the walls in my house need “rehabilitation” too. I think I’ll just repaint them.

  2. Matt S. who does not let us know who he is, seems to have a lot of opinions with very few facts. None of the reports I saw mentioned keeping anything historic or preserving any of the housing in that area. If this project was to be a restoration project, I’m sure it would have been mentioned. Has he attempted to get to or park any any of the other AHS facilities in Morristown lately?

  3. Morris Township officials can laugh at the Town of Morristown’s government but voters in Morristown have the right to the process of voter initiative and referendum; in other words, if the governing body does not support a voter initiative, the voters can petition to place the issue on the ballot for the voters to decide. I would not want to merge the Town of Morristown with the Township if a merger meant losing such a right.

  4. Margret Brady- Every time I see a comment from you on this site it is negative about ANY type of development or redevelopment in town.

    The Rehab place will go somewhere else (in a better location probably) and the building will be re-purposed to its former glory and made into apartments. It is a win-win…

  5. This is another attempt by the Township to maintain lower taxes for their residents by letting Morristown taxpayers subsidize all the services their residents receive from Morristown. and all the non-profit taxpayers located within our borders.

  6. This rehab center is the only one in the AHS system that you can count on for actual rehab with proper care. Its loss would hurt all the rehab patients who have benefitted from their care, available parking and convenient location.

    There is no need for another apartment complex on Mt. Kemble Avenue abutting the historic Fort Nonsense and overshadowing the historic neighborhood below. Apatments may be more profitable ofr developers but they are not cost effective for the communities where they are located. The ratio of apartments to owner occupied dwellings in Morristown is already at a tipping point. Our street are jammed and parking is getting scarce with the trend of singles sharing units and expenses but also increasing the number of cars per unit beyond traditional levels. The Township has no sidewalks or amenities for renters to use nearby, so all the additional cost of supplying services to those units will become the responsibility of Morristown, while the Township gains a new ratable.

    Also, moving the rehab facility to the AHS campus on Franklin Street will only add to the negative impact on the franklin Corners and Vicinity neighborhoods, where there is already a great shortgage of open space, playgrounds etc. due to past hospital expansions.

    When is enough, enough?

  7. Inter-municipal cooperation is great, but a merger is the last thing Township residents should want, if they calculate what their local taxes would be under Morristown-style government.