A nonprofit organization that operates residential programs for mentally ill clients is likely purchasing the former Serenity House, a long-running recovery home in downtown Portland that closed its program in July.

Shalom House Inc., a Portland nonprofit, has entered into a contract to purchase the former Serenity House, on Mellen Street, with a closing expected this fall. Serenity House was one of the first recovery homes in Portland, but reimbursement issues led to its closure this summer, officials have said.

Serenity House was taking in $350,000 in annual revenues from Medicaid, but expenses to operate the program totaled more than $500,000, officials with York County Shelter Programs, which operated Serenity House, told the Press Herald in July. An inflexible reimbursement model through Medicaid made it too difficult to continue, officials said.

Norman Maze, deputy director of Shalom House, said the property fits into the mission of the nonprofit to serve those with a “major mental illness” who need housing.

As is the case for substance use treatment programs, the need for residential housing for the mentally ill far outstrips the supply. Maze said there are 363 people on the waiting list to get into one of Shalom House’s 230 units, and it can take years for a slot to open up and become available to those on the waiting list.

The property will undergo a major renovation that will take eight to 10 months, Maze said. Once completed, the Mellen Street property will add 22 units – a mix of apartments and single-room occupancy units – to Shalom House’s supply.

“We have quite a demand for independent housing,” said Maze, noting that for those who have significant mental issues but can live independently, it’s better when they have an understanding landlord.

“We know and work with our clients, and know their needs,” Maze said.

Shalom House connects those living at its residential properties with mental health services and helps clients by providing other services, such as peer support and helping them integrate into the community.

Maze said because it’s still early in the process, they don’t know how much the renovations will cost. He declined to disclose the purchase price because the deal has not yet closed.

Bob Dawber, executive director of York County Shelter Programs, said the goal was to sell Serenity House to another nonprofit that helps the community.

“All of us at York County Shelter Programs could not be happier that Shalom House has agreed to continue the mission of supporting people in need as part of the transfer of ownership of Serenity House. While YCSP had other offers to purchase the property it was very intentional that we sought out another nonprofit,” Dawber said. “Supports for people with mental health needs are at a critically low number, especially housing. We are looking forward to Shalom’s continued service to the greater Portland community as they fill this vital need.”

Joe Lawlor can be contacted at 791-6376 or at:

[email protected]

Twitter: joelawlorph

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