Is the Ocean Grove lifestyle at stake? Paul Goldfinger photograph. ©
By Paul Goldfinger, Editor @Blogfinger
As predicted, this issue (“Should a rehab facility be permitted in Ocean Grove?”) has spawned a variety of sub-discussions. We would like the dialogues to be coherent in terms of organization. So we will establish a series of related “Rehab” posts on Blogfinger so that commenters can post their opinions under a particular heading.
You may just have to look at each post regarding the “Rehab” issue and then read the comments. It’s a bit like herding cats.
Some of you have raised questions regarding the economics of the situation. It is relevant because it offers us insight into why this is happening here and how the finances fit into the puzzle.
One such comment came in this morning accompanied by a link from the APP from “Exgrover”:
“Paul, reminds me of the 80’s, with deinstitutionalization of the mentally ill and dumping wholesale on seasonal shore towns. It’s structured by the state. Hotel owners bought out and hearings scheduled in the dead of winter when the town empties out. Then a meeting on a cold February night will be postponed to a later date if a crowd shows up. That will continue till the town folks get discouraged. You know the story.
“But this APP article (linked below) really tells the story of the why in OG. This is not pretty, and lots of money to be made with legislated mandates.”
Exgrover..
The essence of the Asbury Park Press story noted above is that there is a growing demand and a reduced supply for drug rehab. facilities. Insurance money is sometimes available to pay for treatment, and law enforcement now has tools to coerce addicts into treatment when, in the past, the addicts often would refuse. The leverage is to offer treatment instead of jail. You can read the article for the particulars, and since there are big drug issues in Monmouth and Ocean Counties, there will be increased efforts to open such facilities at the Shore—-perhaps in Ocean Grove. It seems to be a profitable business, although some are non-profit enterprises. We don’t know about Sprout.
If the client can pay cash (ie “self pay”) that’s fine, but the sums can become huge for an individual or family. A one month stay can cost $30,000 or more. Insurance companies may pay for one round, but usually only one, and addicts often are readmitted over and over. Sometimes the facility will treat someone for free, referred by law enforcement, in exchange for referrals of those with insurance who are trying to avoid jail time. This speaks to the financial pressures upon those who would probably stay at the Laingdon.
A different story/different take on B and B’s/Ocean Grove’s high taxes:
A few months ago I met a lovely retired woman whose family owns a home on the water. Due to skyrocketing OG taxes, she and her husband decided to turn their home into a B and B. They chose that unique alternative instead of selling. I did not get into the details (e.g.. how they got approvals, or if the home had originally been a B and B, etc.) But I did get the impression that they make enough to pay their property taxes, but not much else.
Another example of this is the gorgeous Handford home that sits at Ocean and Main, stretching for one full block facing the Ocean. After the owner passed away a few years ago, the home was acquired by family members. In order to keep the property, they rent out the house for weddings, weekly rentals, etc.
Fortunately for them, it is one of the most recognized houses in town. It’s prime location allows them to ask a very hefty rental price. I have seen parties and other events going on there, so hopefully their taxes and upkeep are being covered.
As a former condo owner in the Grove (1998-2014) we watched the closing and conversion of many of the hotels to single family homes and condo buildings. I think what Surfguy expressed is right on..that is the high tax cost has basically driven these hotels to the point of being unprofitable. To expect hotel owners to just walk away is unrealistic especially when there are firms like Sprout ready to step in. To my mind the answer is conversion to condo buildings and build a parking garage on the north end.
Since several people have asked what type of company Sprout is, I tried to do a little internet research. It appears that it is a for-profit LLC, that seems to cater to an upscale crowd. At least one private equity firm has invested in Sprout, about a year ago. I know you don’t generally post links, but I thought you might want to check my sources
Editor’s note: Deirdre, It is not our job to investigate the financials, the investors or other background information re: Sprout. You are right; I don’t want to be responsible for any digging into private companies via links that can be traced back to Blogfinger—–especially when the linkers are anonymous.
We know enough to form general opinions about opening Rehab centers in this town, and looking up their business variables is not a road I want to travel down. Maybe the Zoning Board might want to check all that. Thanks, Paul
This rehab center will be a commercial use in a residential zone. There’s no parking and no easy or fast way to access law enforcement or first aid.
Beyond that, this will be a major crime center, where people sell heroin substitutes on the street. This an incredibly bad idea, and I know that from what happened in Ocean Grove and Asbury Park in the late 70’s and early ’80’s.
One thing to consider is that the extreme taxation of OG by Neptune has made running a profitable B&B in town nearly impossible. These high value, large buildings carry a massive tax burden. Year round taxes, quaint but not high value commanding rooms, cost of historic upkeep, and lack of readily available parking makes them a non-viable business. The Lilligard, Laingdon, Sea Spray Inn, you name it, they are all up for sale.
I do not own a B&B in town, but as a business man I have run the numbers and it does not make financial sense to touch one. So with tax costs preventing them from being bought/sold/run as hotels, what options are left for their owners?
If these were profitable businesses they would not be up for sale or would sell quickly at a premium dollar value. Instead they are bad investments that needs to be dumped by their owners.
Unless some tax abatement, incentives or something else which could help those businesses is put in place you have solved nothing. They will only be affordable for “insurance guests” to visit, or better off, condo conversions.
Best to look at the cause of the problem; than fight the problem created by these bad economic policies.
I support the need for more drug rehab facilities. However,for drug rehab to be effective, you must isolate the user from any triggers that may prompt a relapse. Drugs are readily accessible around OG, Neptune, Bradley Beach and Asbury Park and Sprout should know this and that it is counter productive to place a drug rehab facility here. However, it appears Sprout may be looking more at an enticing setting and the dollars it brings rather than the success of the program.
Does anyone know the tax status of Sprout Health Group? Is it a non-profit (perhaps 501c3)? Is it for-profit? Would it pay local taxes or be tax-exempt? Does it receive federal or state funds?