Lenore Dickinson gets a vaccine on Jan. 4, 2021, at Neville Place in Cambridge. (Image: Carolyn Cote)

Cambridge is increasing a loan to its city-affiliated Neville Place assisted-living facility near Fresh Pond despite Neville Place’s failure to accept the original loan for undisclosed reasons.  

During the year between the approval of the original loan and the increase, Neville Place did not carry out many of the requirements attached to the original loan, and a reportedly imminent refinancing did not happen. Its financial situation improved, though, according to information in a report by the city’s Affordable Housing Trust, which is lending the money.

The increase of $3.2 million approved March 28 brings the total loan to $5.7 millon, more than double the original amount the trust agreed to lend Neville Place in May. Increased construction costs caused most of the rise, with the price of a new roof more than doubling, window work and paving tripling and unit remodeling costs almost doubling, the trust report said. The higher loan also covers more work, such as an increase in the number of units that need upgrading.

Trust staff and the agency’s report didn’t say why Neville Place didn’t act on the original loan or carry out many of the loan requirements. City spokesperson Jeremy Warnick referred questions to Andrew Fuqua, chief counsel to the Cambridge Health Alliance and the president of Neville Communities, the nonprofit corporation that owns Neville Place and its affiliated nursing home on the Fresh Pond site, Neville Center. 

Warnick said Fuqua was willing to answer questions about Neville’s “operations, vouchers, decisions on loans, financial help.” But Fuqua didn’t answer an email from Cambridge Day asking about those issues or the refinancing that didn’t occur.

The health alliance, the Cambridge Housing Authority, the state, the city and the trust were involved in the creation of Neville Place and Neville Center in 1998 on the property where the city formerly operated a nursing home. Representatives of the trust, the Alliance, the housing authority and the city sit on the Neville Communities board.

Neville Communities was established to provide “quality health care and  housing services at affordable rates and rents” to “low-income elderly,” according to its corporation papers. Because of this, at least 57 of the 71 apartments in the assisted-living facility must be affordable to lower-income residents and at least 75 percent of the nursing home residents must be supported by government health insurance such as Medicaid, the program for low-income persons. In contrast, most assisted-living facilities cost several thousand dollars a month, and some nursing homes limit or refuse to accept people on Medicaid.

When the trust approved the initial loan to Neville Place, it said the organization had used up much of its reserves during the pandemic and did not have the money to finance necessary repairs such as a new roof.

The trust’s explanation of the need for its loan increase disclosed a possible sticking point. It indicated that Neville needs to refinance mortgages for Neville Center, the nursing home, as well as for Neville Place. The bank “will require evidence of funding to complete needed capital work on both properties” to refinance, the trust said.

The Affordable Housing Trust can help only housing entities such as assisted-living facilities, not medical centers such as nursing homes. At the March 28 trust meeting, City Manager Yi-An Huang said “the city is in separate conversations with the skilled nursing side to see how we can support” the nursing home. Trust member Susan Schlesinger asked why the bank couldn’t refinance only the loan to the assisted-living facility. “From a trust perspective we would want to bifurcate this, but the entity is connected to” the nursing home and assisted-living center, Huang said, referring to Neville Communities.

Warnick didn’t say what the city is considering in the way of help for the nursing home.

Questions that were raised when the trust approved the first loan include how Neville Place selects lower-income residents and how it could use all 30 Section 8 rent vouchers that the housing authority gave to Neville Place when it was created. Those vouchers could help residents pay the rent portion of assisted-living fees, but Neville Place is still using only 18 of the 30, the same number as last May.  The trust report then said Neville’s selection process was complicated and could discourage lower-income people from applying for and using the vouchers. 

Neville Place did ask for an increase in the maximum rent that can be funded by the vouchers, though, which significantly improved its financial situation, the trust said.

The loan increase approved last month contains the same requirements attached to the first loan and adds one: that Neville gets an assessment of capital needs over the next five to 10 years from a “third-party professional.” Neville used an estimate by the private company that manages the facility, Senior Living Residences, to come up with its request for an increase.