City officials and local health advocates are watching a lawsuit facing Northeast Ohio Neighborhood Health Services with concern about what it could mean for healthcare access on Cleveland’s East Side.

A private equity company said in a lawsuit last week that Northeast Ohio Neighborhood Health Services defaulted on an $11 million loan meant to help rebuild its Hough health clinic, which burned down in 2021. The company, All Pro Capital Funding, is asking the judge to appoint a receiver who would have the power to run NEON’s finances and sell its properties, with the goal of collecting money it owes.

Northeast Ohio Neighborhood Health Services, commonly known as NEON, is a nonprofit with several healthcare clinics that offer medical services to patients regardless of their ability to pay. It served about 17,000 patients in 2023, the majority of whom were African American.

“I am scared about this right now,” said Council Member Kevin Conwell, the leader of City Council’s health committee. Two NEON clinics are in the ward Conwell represents. 

“I don’t need them to go under. The community don’t need them to go under,” Conwell said. “They battle against health care inequality.”

Conwell and Council Member Stephanie Howse-Jones, whose ward includes the former Hough Health Center and NEON’s headquarters, said they did not know what exactly a receivership would mean for the health care provided at the clinic. 

Yvonka Hall – executive director of the Northeast Ohio Black Health Coalition – worries that, if receivership is granted, the sale of NEON’s buildings would be imminent. 

“Liquidating assets for a health center would mean the loss of facilities, the loss of jobs for people, and then the loss of access for the community,” Hall said.

In a statement to Signal Cleveland, All Pro Capital wrote that it is “aware of the important services that NEON provides in its neighborhoods and will be supportive of solutions that will allow such services to continue.” 

The company said it is asking the court to appoint receiver John Lane because he and his team have the ability to manage an operating healthcare practice while simultaneously addressing NEON’s outstanding financial situation. 

Dr. David Margolius, the city’s director of Public Health, said he’s also concerned about whether receivership could make it harder for East Side residents to access primary care. But he added that he hoped the outcome of the receivership would be positive. 

“I am hopeful that in the not-too-distant future that, somehow, we can figure out a way for an organization with the right mission to work with NEON to be able to deliver excellent primary care services to residents on the east side of Cleveland,” Margolius said. 

Willie Austin, NEON’s CEO, did not respond to phone calls or emails asking for insight on what receivership could mean for the clinic. Signal Cleveland visited NEON’s headquarters and spoke through a phone in their lobby with Karen Butler, the organization’s chief operations officer. Butler told Signal that she does not do interviews and said she would pass Signal’s message to Austin. 

Signal Cleveland also reached out to Al Barker, NEON’s chief information officer, and several of the organization’s board members but did not receive a response.

NEON provides healthcare access to Cleveland’s East Side, but has seen fewer patients in recent years

Northeast Ohio Neighborhood Health Services was incorporated as a nonprofit in Cleveland in 1969, as President Lyndon B. Johnson pushed the war on poverty and civil rights leaders advocated for community health centers. 

The clinic received federal money to provide outpatient healthcare to low-income families on Cleveland’s East Side. Its flagship clinic, the Hough Health Center, opened in the mid-1970s and was expected to serve 20,000 people a year, according to a 1972 Plain Dealer article. 

In the ‘70s and ‘80s, NEON opened two more health centers, including one in Glenville and one on Superior Avenue. By 2009, NEON was operating seven locations, according to a 2009 Plain Dealer article.

It primarily served African American patients. Between 2019 and 2023, about 94% of its patients were Black, according to data from the U.S. Health Resources & Services Administration (HRSA)

Community leaders are concerned that a NEON closure could increase Cleveland’s health equity gaps. Black Clevelanders are significantly less likely than white Clevelanders to have their health status rated as good, according to the 2025 Cleveland Health Survey. 

“We already have people who have really hard access getting to the doctor,” Hall said. “And so having centers in our communities [is] vitally important. … When we’re talking about resilience and how do we help community with the tools they need to be healthier and live longer, NEON is that tool.” 

In recent years, the number of patients NEON serves has fallen, according to data from the U.S. Health Resources and Services Administration: from 27,619 in 2019 to 16,785 in 2023. 

In that time period, the clinic’s Hough Health Center burned down. It has not reopened. And the nonprofit has been embroiled in other legal trouble: A partner in a project to open a fresh food market was convicted in federal court in 2023 of embezzling more than $800,000. A former Cleveland City Council member who championed restoring the Hough facility was sentenced to prison for stealing from the organization.

“If you talk to folks who have been here for decades, especially on the East Side of Cleveland, NEON does have this storied history of kind of being there when other folks and other systems weren’t there,” Margolius said. “But, you know, today, they just have not been there as much.”

Between 2018 and 2021, independent annual audits flagged the nonprofit for lacking sufficient internal controls – which are mechanisms and rules inside a company that ensure the accuracy of financial information and prevent fraud.

In 2021, the auditor found that the nonprofit’s chief financial officer handled all accounting and financial transaction responsibilities. As a result, there were “misstatements” in financial reports and disclosures, the audit found. It also said that the nonprofit wasn’t consistently tracking and monitoring transactions associated with Community Integrated Services, which as of 2023 was listed as a for-profit corporation that supports NEON’s tax-exempt mission. CIS developed the New Eastside Market grocery store at 10505 St. Clair Avenue

But in NEON’s most recent audits, auditors indicated that these issues are resolved. The auditors did not find deficiencies or weaknesses in the organization’s financial accounting or compliance with federal grants in 2022 or 2023.

NEON bought property next to headquarters in 2024, when loan came due

NEON took out the $11 million loan with All Pro Capital Funding in May 2022, according to court documents.

The loan was supposed to be paid back in full about a year later. But NEON asked to extend that due date twice, and All Pro agreed, according to court documents. The deadline was pushed back by a year, to June 2024. 

At the end of June 2024, NEON hadn’t paid back what it owed on the $11 million loan, according to court documents.

But property records show that the nonprofit did buy several pieces of property on Payne Avenue in that same month. 

NEON paid $635,000 in cash for land that housed a former automotive shop and a parking lot. The property is adjacent to its corporate headquarters on Payne Avenue. 

Austin, the CEO, did not respond to questions about its intentions for the property.