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Health Center secures finances for new site

This schematic shows how the Sonoma Valley Community Health Center plans to lay out its new clinic at 19270 Sonoma Highway.

This schematic shows how the Sonoma Valley Community Health Center plans to lay out its new clinic at 19270 Sonoma Highway.

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With the combination of a $5 million loan, public and private grants, and more than $800,000 in donor contributions, the Sonoma Valley Community Health Center is within spitting distance of fully financing its relocation to 19270 Sonoma Highway. Officials expect to close escrow on the new site in coming weeks, with plans to begin treating patients there next spring.

“We have now acquired all of the funds we need to close escrow,” Marc Schwager, a board member at the health center, said in an email. “We have received contributions from over 60 donors to the capital campaign.”

For years, health-center officials have wanted to move out of its patchwork series of buildings on West Napa Street, into a larger space that could better accommodate patients and improve efficiencies for staff. After earning a $5 million Health Resources and Services Administration (HRSA) grant last year, the health center had the seed money to begin looking for a new site. It identified the former home of Sonoma Rental Center on Sonoma Highway as an ideal location based on its size, large parking lot and proximity to county transit lines. The total project cost, which includes purchasing the building and remodeling it into a clinic, came in at about $11 million. Since the HRSA grant can only be applied to construction costs, not property acquisition, the health center launched a capital campaign to raise the funds needed to buy the building.

The effort got a boost from the Sonoma County Board of Supervisors, which contributed a $200,000 grant on Sept. 24. A private foundation that asked to remain anonymous contributed another grant of $50,000. Meanwhile, the health center’s public appeal for support raked in more than $800,000 in donations in recent months. That put the center in the financial position to close escrow on the new site, although it won’t happen for a few weeks.

“At the agreement of all parties, the date of escrow close has been extended at the last minute in order to complete some additional work required for the site,” Schwager said. “This does not affect our construction schedule – our next step is to obtain the construction permits, which we are currently pursuing. We still anticipate opening the doors of our new home in the spring of 2014. We will announce a final date for closing in the very near future.”

To cover the final costs of the relocation project, the health center obtained a 10-year, $5 million loan from NCB Capital Impact, a lender that specializes in working with nonprofit entities. Because the center will no longer have to pay rent in its new building, as it does now on West Napa Street, Schwager said the center would be able to service the debt through patient-generated revenue. That means the health center is around $100,000 shy of covering all of the project costs.

“We may choose to pay off some or all of the loan amounts early. The advantage of doing that is that, with the increased cash flow, we can invest in new services for the community,” Schwager said. “We will be launching a new fundraising drive in the New Year to help achieve these goals.”

He added that they plan to wait until after Sonoma Valley Hospital completes its $11-million capital campaign, which is expected to wrap up this month before the new wing opens in November.