Bancroft Neurohealth secures $107M bond deal for move to Mount Laurel
Bancroft Neurohealth's plan to spend $75 million to move its school and residences for children with autism and other developmental disabilities from Haddonfield, where it was founded in 1883, to Mount Laurel is a huge step.
But it is only part of the tax-exempt organization's growth strategy, which also entails expanding its services and its reach into the community.
Toni Pergolin, Bancroft's chief executive, described the new school, which will be more than three times bigger than the current building, as a potential "destination for the autism community."
"We will be able to serve many more than just the Bancroft students," said Pergolin, mentioning kids on the autism spectrum who go to public school but might not participate in township sports leagues on weekends, for example.
"That's not always an area that is right for them," giving Bancroft the chance to offer such activities, Pergolin said.
To pay for the move and retire existing debt, Bancroft is borrowing $107 million in the municipal bond market, a deal investors agreed to Wednesday. The deal, which is scheduled to close next Thursday, will bring a big increase from Bancroft's current debt level of about $26 million.
Other efforts to expand the reach of Bancroft, which had $141 million in revenue in the year ended June 30, up from $98 million five years ago, include a bigger push into Philadelphia; the launch of a subsidiary late last year to offer a broader range of medical services, such as primary care, to its clients and others; and the May acquisition of Independence Rehab Services, of Cherry Hill, to beef up its unit that treats people with brain injuries.
"They, along with the other players, are starting to diversify," said Valery Sellers, chief executive of the New Jersey Association of Community Providers, a trade group in Ewing for providers of services for people with intellectual, developmental, and other disabilities.
Long before the latest steps to diversify, Bancroft was wrestling with what to do about what Pergolin called its "antiquated" Haddonfield campus, where the school, founded by a Philadelphia schoolteacher named Margaret Bancroft, moved in 1892.
"Over the next 125 years, as the next need presented, they just built something, so there's no flow," Pergolin said. "There's no kind of natural, efficient use of the space."
That will change in Mount Laurel, where Bancroft paid $5.8 million for 80 acres. The site near the intersection of Route 38 with I-295 and the New Jersey Turnpike will make the campus more accessible to central New Jersey, she said.
Plans for the Mount Laurel campus, projected to open in 2018, call for the school and residential buildings to surround an expansive courtyard and outside play space, which is scarce in Haddonfield.
Dennis Morgan, a Bancroft executive whose responsibilities include employment services, last week showed off gardens on the Haddonfield campus where students get horticultural training.
He envisions an expansion of those programs in Mount Laurel, where part of the land is farmed. He imagines Bancroft-raised produce in local stores.
As part of vocational training last week, Andrew Raymond, 17, operated a laminating machine, making number cards to be used at the school.
About three-quarters of Bancroft's students move into Bancroft group homes for adults when they leave the school.
The most intense program at Bancroft is the Lindens Neuro-Behavioral Stabilization Unit, which Pergolin described as Bancroft's emergency room, for children in crisis, typically nonverbal and liable to hurt themselves.
Lindens' licensed capacity is normally 22, but that was reduced after two employees were charged in December with physical abuse of a resident. Bancroft expects to be back to 22 licensed beds by the end of the year, according to its preliminary offering statement for the bonds.
As part of its effort to diversify, Bancroft wants to reduce the number of beds it contracts to the New Jersey Department of Children and Families to 12 from 20, so it can bring in more patients from Pennsylvania, the offering statement said.
One possible source of patients is Community Behavioral Health, which manages mental-health and substance-abuse benefits for Medicaid recipients in Philadelphia.
"We clearly see them as an avenue for us to potentially utilize them more, but we really have just started those conversations," said Joan L. Erney, CBH's chief executive.
In the 11 months ended May 31, Bancroft increased its revenue from Pennsylvania Medicaid beneficiaries to $7.6 million from $4.8 million, the offering statement said.
"We're really looking to diversify because we know there's a need out there," Pergolin said.
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Bancroft sees its new, bigger, N.J. campus as part of a wider autism outreach.
Bancroft Neurohealth is spending
$75 million to move its school for developmentally disabled children.
Haddonfield Mount Laurel
Acres 19 80
Campus workers 504 536
Students 224 264
On-campus
residents 66 74
SOURCE: Bancroft Neurohealth
