Neville Center, the financially struggling nursing home affiliated with the city, finally won city help it has been seeking for more than a year. City councillors voted unanimously Monday to give the nursing home $1.5 million so it can reduce a loan it needs to refinance, and another $1 million for roof repairs.
Councillor Patty Nolan had prevented a vote three weeks before because she opposed contributing city funds to a private, for-profit bank – the $1.5 million that will reduce Neville Center’s loan. She voted in favor of the $1 million for repairs and against the loan reduction while reiterating her criticism of the proposal.
“I am disappointed,” Nolan said.
The bank that holds the mortgage loan, Rockland Trust, has earned $8.8 million in interest over 10 years, Nolan said, citing information she received from the city in answer to her questions. “This is money that has come out of a nursing home,” she said, adding that the loan “is profitable for the bank.”
Nolan said she believed the interest rate the bank is offering for the refinancing “is too high.” She also criticized Neville Communities – the nonprofit company that holds the nursing home and its affiliated assisted living center, Neville Place – for not enlisting help from state legislators from Cambridge to negotiate with the bank. Neville Communities is governed by representatives of the city, the Cambridge Housing Authority and the Cambridge Health Alliance.
Nolan did credit the bank for loans it has made to businesses and affordable housing in Cambridge. Still, she reiterated that “I remain concerned about giving our tax dollars to a for-profit bank.”
Attempt at a second solution
Councillors’ opinions have changed markedly since last summer, when a majority voted to ask Rockland Trust to forgive part of the loan. At the Monday meeting, councillor Paul Toner said he viewed the situation differently from Nolan.
“I don’t actually see this as giving money to a for-profit bank, but money to support a nonprofit that has been doing good work supporting Cambridge residents and assisted living and affordable housing for seniors. It’s unfortunate that we’re in this situation, but hopefully that by taking this action, we’ll help you get out of that situation and have a steady path forward,” Toner said told Andrew Fuqua, chief counsel of the health alliance and president of Neville Communities.
Nolan tried to save her opposition to the deal by separating the $1.5 million that will go to repay part of the loan from the $1 million for the roof, but councillors voted for both payments.
Toner had asked Fuqua what would happen if councillors delayed help again. “Although we believe that we have a solid plan for moving forward, it would make things extraordinarily tight, and I would be much less comfortable offering any sort of guarantee,” Fuqua said.
Neville Center and Neville Place were built on city land near Fresh Pond in 2000, replacing the city-owned Neville Manor nursing home, which had significantly deteriorated. They are unusual in that a percentage of beds in both facilities must be reserved for low- and moderate-income residents. City and state money helped develop the project, and Neville Place was given a number of federal Section 8 rent vouchers by the housing authority to help lower-income residents seeking an assisted-living placement.
Recovering from a fall
Both facilities suffered financially during the Covid pandemic. The city’s Affordable Housing Trust agreed to lend $2.5 million to Neville Place in 2023 for a new roof and other upgrades, and increased the loan to $5.7 million last April.
But there has been no financial aid from the trust because Neville Communities needed first to refinance Rockland Trust mortgages to the assisted living center and the nursing home. And o do that, the city needed to pay down $1.5 million of the loan to the nursing home, plus help finance repairs to the roof.
The latest refinancing plan for the two senior housing sites calls for the new loans to be combined into one mortgage, which will be paid by Neville Place. Neville Place’s financial situation has improved and it’s capable of repaying both mortgages, according to the Affordable Housing Trust.
That will help Neville Center, the nursing home, because it will no longer have debt payments. The nursing home, like other skilled nursing centers, has seen sharp increases in staffing costs while reimbursement from Medicaid, the government program that supports health care for low-income individuals and families and pays for a large proportion of nursing home residents, falls short of covering expenses, Fuqua and health care finance experts have said.
This post was updated Jan. 31, 2025, to correct the record on a vote by Patty Nolan.
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