Developer Seeks Zoning for Big Eastern PA Addictions Inpatient Build Near NJ

Addiction Treatment Industry Newswire

09/23/2012 -ATIN- Seeking to fill a regional addiction treatment drug rehab alcohol rehab gap, real estate interests in eastern Pennsylvania’s Lehigh Valley are seeking to make a big multi-million dollar gamble on inpatient care. In a Bethlehem, PA, zoning hearing last week, lawyers for developer Abraham Atiyeh and his Pennsylvania Venture Capital Inc. revealed their intent to build out a t

otal of nearly 75 beds of capacity in two locations, both greenfield redevelopment. Facing the usual NIMBY nonsense from residents unaware that there are already active addicts in their midst all around them, as there are everywhere, Atiyeh’s lawyers pointed out that local hospitals no longer offered addictions care and that residents were forced to leave the area in search of treatment.

Residential Exemption

After the closing of the once gigantic Bethlehem Steel, the region, in the far eastern part of the state right near the border with NJ, has become far less unionized and, being mostly working class, it is likely that area insurance policies, being mostly HMOs, would support relatively short one week to14 day inpatient stays only on average. It is also likely that the facilities would do significant detox business as well. Lawyers told the zoning board it expected stays in the non-lockdown facility to be 14-days to 28-days, but that is probably very much wishful thinking on their part. (Or they don’t want to give ammo to the NIMBYers, who might try to portray the centers as treatment mills.) Atiyeh is seeking a special exemption to build the two facilities in what are currently residential zoned areas. Given the packed hearing last week and the considerable local NIMBY opposition, Atiyeh may face an uphill battle.

Flip Properties to an Experienced Operator?

But it also appears that Atiyeh has considerable experience, and holdings, in the Lehigh Valley real estate market and could leverage that experience and expertise to push through the approvals he seeks. Records show he has not been shy about litigating when it comes to getting what he wants from his properties. While Treatment Magazine was not immediately able to reach Atiyeh for comment, it could be that he is seeking to use local his real estate pull to get the necessary zoning approvals, then build the facilities with the aim of quickly offloading the properties to an experienced addiction treatment operator.

No Lack of Buyers

There certainly would likely be no shortage of potential buyers for such a turnkey inpatient addiction treatment solution. Private equity firm Clearview Capital has made it clear it is highly interested in doing “add-on” acquisitions thru its recently purchased Altoona, PA-based Pyramid Healthcare, which has extensive treatment assets in western and central PA but relatively little in the eastern part of the state. Pinnacle Treatment, which recently bought a center in Kentucky, has been an aggressive acquirer in PA and NJ. Michael Cartwright’s Nashville-based American Addiction Centers might also be interested in such a situation, as Cartwright, in a recent talk with Treatment Magazine, said he was interested in appropriately zoned and located East Coast properties. And one of CRC Health’s earliest purchases was the managed care decimated White Deer Run, which has locations throughout PA and, thus, Atiyeh’s situation might be of interest to CRC as well.