As the opioid epidemic rages on, there is high demand for residential addiction treatment facilities in Delaware. With its 16-bed facility in Wilmington under pressure to relocate, leading treatment provider Gaudenzia needed a new home. They found a vacant office building in nearby Claymont that they could renovate into a 16-bed and 10-apartment residential treatment and transitional housing center. The new building will allow Gaudenzia to provide a greater range of treatment options to women and men battling substance use disorder, mental illness, and personal care issues, such as poor health and nutrition. Gaudenzia will also support clients in recovery by providing Intensive Outpatient Program services at the Claymont Community Center.
For help acquiring and rehabilitating the property, they turned to the National Council on Agricultural Life and Labor Research Fund, Inc. (NCALL), a leading CDFI on the Delmarva Peninsula. NCALL, which typically participates out 50-70 percent of each loan they originate because of limited capital, turned to us.
“Most banks in Delaware would not take on that subordinate position. NCALL’s Executive Director, Karen Speakman, has a good relationship with NC and has known them for a long time. She reached out as it seemed up NC’s alley, and it was,” said Paul Marcus, Founder of Marcus Reinvest, a lending consultant to NCALL.
We worked with NCALL to buy 63% in their $1.75 million subordinate construction-to-miniperm loan with a term of 72 months. Our loan is subordinate to a loan from Citizens Bank. The project will be financed with conventional bank financing, and funding from the Boston, New York, and Boston FHLBs, as well as local foundation grants; more than half of the project costs in AHP and grant funding, $2.3 million.
“NeighborWorks Capital is easy to work with. They offered a quick response of interest, and willingness to understand the project and the challenges. That gave us confidence to move forward, knowing we would have our funds available for the project,” Marcus said. “Not every lender is able to be as responsive and make a decision quickly. We were well able to meet our timelines.”
With this financing, Gaudenzia will develop the new Claymont Transitional Housing, which includes a 16-bed residential addiction treatment program for men and women, and 10 apartments for single women in recovery from substance abuse with children under the age of 10. The facility will replace a 16-bed one in Wilmington pressured to relocate due to neighborhood opposition. A regional transit rail stop right across the street from the new location will make it easier to get to as well.
The mid-October groundbreaking of Claymont was an emotional event attended by government officials, community leaders, parents, and people in recovery who have benefited from Gaudenzia’s services, including some now-staff members.
Patricia Wignall, our Loan Closing Administrator who attended the event, said, “This facility in invaluable as it helps individuals in the community overcome drug abuse, alcohol dependency, mental illness, and related conditions. Not only will this facility help heal those directly impacted, but also the entire family. It feels good to know that by providing capital solutions to acquire and rehabilitate this facility that NeighborWorks Capital is also contributing to Gaudenzia’s mission.”
Gaudenzia provides housing and services to individuals seeking mental health, drug and alcohol treatment. This year is Gaudenzia’s 50th anniversary. After starting with one treatment center outside Philadelphia in 1968, Gaudenzia grew to operate 161 programs at 90 facilities, with a significant track record of success throughout Pennsylvania, Delaware, and Maryland. They serve more than 20,000 patients and clients annually.