Health Center Will Provide Care for Thousands of Foster Children

PCDC in the News, Novogradac Journal of Tax Credits, June 1, 2011

The foster children of New York’s South Bronx are chronically underserved, according to the Children’s Aid Society (CAS), a not-for-profit that serves low-income children in New York, N.Y. The organization has been assisting foster children for more than 150 years, providing everything from dental care for 7-year-olds who’ve never seen a dentist to counseling for children removed from their parents’ homes. Most of this care has occurred in school clinics, in neighboring Manhattan and in a small Bronx clinic. In 2012, thanks to a new markets tax credit (NMTC)-backed loan from the Primary Care Development Corporation (PCDC), more than 4,000 children will be able to receive primary care services at a new clinic in the Bronx’s Morrisania neighborhood.

“This is a project to improve healthcare services for foster children in the South Bronx. You could hardly identify a more at-risk population,” said Tom Manning, PCDC’s director of capital finance.

Creating a Medical Home

CAS is replacing care facilities in Manhattan and the South Bronx with the 10,000-square foot CAS Bronx Children’s Health Care Facility. The primary care facility will occupy two floors of an existing building and will provide comprehensive medical, dental, mental health and social services for children and adolescents from CAS foster care and prevention programs, children referred to CAS from other agencies and children from the surrounding communities and schools. Additionally, CAS’s Bronx Medical Foster Care (MFC) program will be housed there. The MFC program places children with chronic illnesses and severe disabilities, such as cerebral palsy, Down syndrome and HIV/AIDS in foster and permanent homes.

“Most of the children we serve are in the Bronx and we want to bring those services closer to the children,” said William Weisberg, CAS’s executive vice president and chief operating officer.

Manning hopes that having neighborhood services will encourage families to seek medical attention and increase compliance. “With at-risk populations, it is very common for adherence to be lower … The harder it is to get to the medical services, the more likely it is that adherence drops off,” he said. CAS estimates that the center will provide 15,000 visits per year and will serve 4,000 children living in foster care. CAS will employ 50 medical personnel at the healthcare center. Staff members will include doctors, nurses, social workers, dentists and psychologists. CAS will fund daily operations with a combination of federal, state and local grants, service fees and private donations.

Funding Primary Care

PCDC provided a $7 million NMTC-backed loan for the $10.5 million acquisition and renovation of an existing building in the Bronx. HSBC Bank USA NA (HSBC) provided the project’s equity and debt through a $40 million loan fund launched by PCDC in October 2009. The fund provides low-cost, long-term financing to primary care centers in economically distressed communities throughout New York. Loans, ranging from $1.5 million to $7 million have terms of up to 25 years, are interest-only for the first seven years and feature fixed below-market interest rate for the life of the loan. The loans may be used to purchase, build, buy or remodel existing or new facilities. All not-for-profits with missions to improve health care are eligible for the loans. HSBC’s investment in both the debt and equity sides of the $40 million fund ensures that the healthcare centers will not have to refinance at the end of the seven-year NMTC compliance period.

PCDC anticipates that the fund will fi nance healthcare facilities that will serve an estimated 110,000 patients each year. It also anticipates creating 525 permanent jobs and 365 construction jobs. “HSBC recognizes the critical role that primary healthcare plays in the lives of low-income people,” said Kathleen Rizzo Young, senior vice president for community development at HSBC. “The CAS project is exactly the kind of high-impact project we intended to finance through the fund, and we’re very pleased to have helped facilitate this transaction.”

Additional Funding

CAS provided an additional $2.7 million in funding and received a $350,000 HEAL NY grant for the project. CAS will use $4 million of the loan to renovate and equip the 40-year-old building. CAS will use some of the project funds to digitize the children’s medical records.

“We’re extremely proud and extremely pleased to have been able to help out an organization as important and successful as the Children’s Aid Society,” Manning said.

At press time, renovations on the CAS Bronx Children’s Healthcare Facility building were scheduled to begin in June or July and were expected to be completed by August 2012. Until that time, children will continue receiving medical care at CAS’s Manhattan location and its existing Bronx clinic.

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