|Caron Foundation Has Big South Florida Expansion Plans|
|Caron Foundation Has Big South Florida Expansion Plans|
But NIMBY is Increasingly Rearing its Head at the Foundation's Delray Beach Locality
In 2003, the Caron Foundation swooped into the South Florida addiction treatment marketplace with its purchase, for an undisclosed sum, of the Renaissance Institute, whose founder Sid Goodman is among the pioneers of the Florida Model of treatment, which has been widely imitated in the region and, many think, kick started renewed addiction treatment growth after the dark days of managed care in the early 1990s.
Other outside players have since followed Caron CEO Doug Tieman's lead into the South Florida market, with CRC Health Corporation buying Renaissance's close ally, Wellness Resource Institute, in 2005 for $6 million, and recovering entrepreneur Chaz Cabela picking up ARC, Advanced Recovery Center, in the same year. Both these centers are also Florida Model adherents. (For more on the Florida Model see our Special Report)
As it turns out, Caron's purchase of Renaissance was just the beginning for the renowned non-profit, which, with 400 beds, is among the nation's largest and oldest addiction treatment enterprises.
Caron is in the midst of a multi-million dollar expansion of its Florida Model operation in South Florida, with the completion of a major new $9 million Boca Raton clinical facility slated for September. Clients from the Renaissance Institute will receive treatment at the new 22,000 square foot, state-of-the-art clinical center and live nearby at leased Delray Beach apartments, a quintessential Florida Model arrangement. Planting the treatment flag firmly in its Delray Beach locality, Caron has signed a new 30-year lease on its apartments, and will significantly expand its residential capacity.
Previously, Renaissance had only occupied about half the units at the complex, but with the new 30-year lease, and nearly $2 million in renovations, Renaissance will double its capacity from 60 to 120 beds, now filling up all the units at its apartment block, located about a mile west of downtown Delray Beach.
Caron's major expansions, both clinical and residential, no doubt caught the eye of Delray Beach city officials, who, along with officials at municipalities throughout South Florida, have been wary of the rapid growth in Florida Model treatment facilities, as well as the attendant, and even more rapid, growth of halfway houses within their borders. And it is not just Caron that is expanding, but others as well. CRC's Wellness Resource Institute has expanded bed capacity recently from around 30 to 50, while ARC has had a similar expansion. And their seems to be new Florida Model centers opening in the region every year, and in Delray Beach in particular. Last year, Gateway to Recovery, a small Florida Model operation, opened its doors in the municipality.
Having long disliked the Florida Model, Delray Beach and other city officials believe it is an effort by treatment providers to essentially circumvent state residential licensing requirements and, thereby, also an effort to get around difficult local zoning ordinances.
And, to a large degree, these city officials are correct. The impetus behind the Florida Model has indeed been to deliver a lower cost regulatory model. But Florida regulators at the state level are standing firmly behind the Florida Model and those providers employing it.
In 2005, after intense lobbying by some South Florida and other regional treatment operators, the state blessed the Florida Model with its own distinct "Day/Night" regulatory classification, which cleared up considerable regulatory uncertainty and risk surrounding the Florida Model, and no doubt also helped clear the way for some of the recent transactions, such as CRC's, to take place. But despite the improved state regulatory environment for the Florida Model, its growth in South Florida has prompted increasingly harsh NIMBY - not in my backyard - responses from local city officials, especially in Delray Beach and, in respect to sober houses, also in the city of Boca Raton and in Sarasota.
Late last year, Delray city officials, began hatching a plot to curb the growth and hinder the ongoing operations of Florida Model players in Delray Beach by attempting to interfere with the housing element of the Florida Model equation. The commissioners announced they would be introducing an ordinance for passage in the city council that would require a special lease for those treatment centers operating under the Florida Model, this under the guise of "protecting the tenants rights" of those undergoing treatment at Florida Model operations in the city.
"City officials in Delray seem to be proceeding along these lines irregardless of whether their stance passes legal muster or not," says Caron CFO Drew Rothermel, who is running point for the foundation in the Delray NIMBY battle. He points out that legal counsel has advised Caron and its ally in the battle, CRC, that the proposed ordinance is clearly in violation of federal statutes, including the Americans with Disabilities Act and the Fair Housing Act. In Boca Raton, city officials have passed an ordinance that restricts the operation of halfway houses to commercially zoned areas, prompting a major private lawsuit and, last September, a lawsuit by the Justice Department, which seeks to have a federal judge vacate the Boca Raton legislation based on the above two pieces of legislation.
Likely seeing that it was standing on thin legal ice with its proposed Florida Model tenant ordinance, Delray Beach commissioners canceled a scheduled January 2nd vote on the local legislation, a vote that would have passed the bill into law. Caron, which had invited addiction activists such as Christopher Kennedy Lawford, a Caron consultant, to a rally opposing the ordinance, went ahead with the rally anyway despite the vote's cancelation.
Delray Beach officials now tell Caron that they may move forward with a tenant ordinance that applies to other landlords throughout the city and not just Florida Model operations. But that may be just idle chatter as such a move would likely alienate large swaths of the local real estate community, which, by and large, tends to be the most powerful of municipal constituencies. "A commissioner called me up, infuriated, saying the next thing they were going to do was get us on code violations," says Caron"s Rothermel. "But I haven't seen them make any moves on that front yet."
State addiction officials have lined up behind the Florida Model operators, and many of the state officials have made their support abundantly clear in letters to Delray Beach officials.
One letter pointed out that Palm Beach County, in which Delray is located, has among the highest incidences of drug abuse in the state, and indeed the nation. The letter said it was critical that more local treatment options be made available, including Day/Night centers. But the majority clients at Delray and other Day/Night centers tend to be from out of town, usually the Northeast. JW
On the Cover: Jacob Levinson
Founder, CEO MAP