BHCIP_Grant_Application_packet-2.pdf

Section 2: Key Information

2. Proposed project title for Bond BHCIP Round 1: Launch Ready funding:

Please note: If awarded, the project title will be used in the project’s Program Funding Agreement (PFA) and will be displayed in communications. Any requested changes will require a PFA modification.

Santa Cruz Coral Street SUD Campus

3. Amount of Bond BHCIP Round 1: Launch Ready funding requested (must align with total Bond BHCIP Round 1: Launch Ready development budget, which is completed in Section 7):

$30,000,000

4. Name and contact information of individual completing the application:

Bonnie?

• Title (Mr., Ms., Mx., Dr., etc.)

• Bonnie

• Lipscomb

Director Economic Development & Housing

• City of Santa Cruz

• 337 Locust Address Line 2

• Santa Cruz Santa Cruz

• CA

• 95060 Blipscomb@santacruzca.gov

831 420-5150

5a. Lead applicant’s legal name as registered with the California Secretary of State and used on legal documents.

If not applicable (e.g., for government entities), enter the name that should be listed on official agreements (this will be used for verification purposes and for executing the PFA).

City of Santa Cruz

5b. Specify any legal “doing business as” (DBA) names under which the organization operates. Do not include an abbreviated name or acronym that is not registered as a DBA.

• N/A https://bizfileonline.sos.ca.gov/search/business

5d. Primary business address of legal entity as listed on official websites. Please provide the current primary operating address. Write out all place names fully (e.g., Road, Street, Place, Boulevard), as abbreviations cannot be used for PFA purposes.

809 Center Street Santa Cruz CA 95060

831-420-5030

• Federal Tax ID (EIN) – 94-6000427

• Unique Entity Identifier (UEI) Number NNFLE88HHW48

5i. Please provide details of all current behavioral health licenses, certifications, and accreditations your entity holds at the state and/or local level to operate any existing programs (excluding any related to the new or expanded facility). Include the type of license or certification, the issuing authority, and the license or certification number for each.

Example:

Types of licenses/certifications: 1. SUD, 2. Community Care Facility (CCF) Issuing authority: 1. DHCS, 2. DSS License/certification numbers: 1. 123456AB, 2. 123456789

Type of license or certification Issuing authority License or certification number

1 N/A

If you have additional licenses, please describe them here:

The City does not carry these licenses. The City will go through a procurement process to select a provider. This provider must be able to secure the following licenses: SUD, DMC-ODS.

Section 3: Project, Facility, and Property/Site Information

12. Project Information 12a. Describe how the proposed project fits into and bolsters the community’s behavioral health continuum of care. What gaps in the continuum does it address?

500 Word Limit

The existing Coral Street Campus surrounds the proposed project to the North, South, and East.

This campus is the most comprehensive mental health and homeless service centers in all of Santa Cruz County. Existing services include: 28 beds of family homeless shelter, 19 beds of adult homeless shelter, 40 pallet shelters, outreach and intake, problem solving and homeward bound, mailroom, hygiene bay with showers and bathrooms, CalFresh Employment and Training, Dientes Community Dental clinic, Homeless Persons Health Project, and 127 units of permanent supportive housing.

Santa Cruz County Behavioral Health internal research shows that there is a significant gap in the continuum of care for two specific target populations: Justice involved people with SUD as they exit incarceration, and homeless persons with SUD. According to recent Santa Cruz County research, 55% of the Santa Cruz County homeless population has a SUD diagnosis. The proposed residential SUD facility is a perfect complement to the existing services provided on campus because there are few existing residential SUD options for clients to step up.

Furthermore, within the proposed facility, clients can step up and down in ASAM treatment levels depending on the need. Finally, and perhaps most crucially, clients exiting the proposed facility can step down to permanent supportive housing – space permitting – and outpatient services all within the same campus. This co-location of services and different levels of care will lead to improved client outcomes by reducing the barriers to ongoing treatment and recovery.

In Santa Cruz County, substance use is a problem that starts in childhood. According to the California Healthy Kids Survey in Santa Cruz County, 34% of 11th graders had reported alcohol use within the last 30 days, with 21% reporting binge drinking within the last 30 days. 59% of 11th grade respondents reported alcohol use by age 17. 43% had used marijuana by age 17. By adulthood, 5.4% of Santa Cruz Medi-Cal enrollees have SUD, but there are only 5 ASAM Level 3.1, 2 ASAM Level 3.5, and one ASAM Level 3.2-WM SUD treatment centers in the entire county based on the DHCS Assessing the Continuum of Care for Behavioral Health Services in California.

12b. Describe how the proposed project will expand behavioral health services in the community or region.

This proposed project will expand behavioral health services in the community and the region by providing 50 licensed beds of SUD residential care, with ASAM levels of 3.1, 3.5, and 3.2 WM. It is estimated that the facility will serve approximately 521 clients per year, based on an average stay of 5 weeks and 90% bed utilization.

Santa Cruz County is a small county of less than 300,000 people. Its largest city, Santa Cruz, has approximately 60,000 residents and is the County seat. This mostly rural County has always grappled with drug abuse and homelessness, but in recent years the crisis has deepened.

Downtown Santa Cruz, adjacent to the County administration offices has been heavily impacted by homelessness and mentally ill constituents, creating a public health crisis that voters and elected officials are desperate to address. The Coral Street campus has become ground zero for these issues, with every single inch of space used for treatment, services, emergency shelter or housing. Outreach to County behavioral health officials attest/revealed that SUD prevalence among homeless and mentally ill clients is the highest shared common denominator, and that residential facilities are under-provided in the City. While residential SUD facilities are in development in other parts of the County, the high cost of land and extremely low site inventory has severely limited development led to a lack of residential SUD services in the city.

Central to the project is the strategic hiring of a multidisciplinary team of behavioral health professionals and support staff. There will be 2 LPHA therapists, 4 certified SUD counselors, 2 LPHA counselors, 2 LVN’s, and 2.5 care coordinators and intake counselors. There will be a registered nurse, nurse practitioner, and medical director. These staff will be supported by 20 other staff, from clinical supervisors to QA manager, receptionist, biller, 8 monitors/overnight techs, and 2 cooks.

Clinical staff will practice within a trauma-informed framework to acknowledge that program participants are survivors of trauma, violence, abuse, or neglect. Clinicians respond with supportive services that match the need of each program participant to promote recovery, resilience, and wellness.

12c. Describe the types of service(s) and level of care designation(s) to be offered in the facility once this project has been completed.

This proposed project will provide 50 licensed beds of SUD residential care. It is estimated that 35 beds will be set aside for ASAM level 3.1; 10 beds for ASAM level 3.5, and 5 beds for ASAM level 3.2 Withdrawal Management.

ASAM Level 3.1, also known as Clinically Managed Low-Intensity Residential Services, provides structured and supportive living environments with therapeutic services designed for individuals with substance use disorders. Facilities offering ASAM Level 3.1 aim to provide a stable environment conducive to recovery while teaching individuals the skills needed to transition back into the community and maintain sobriety. It is a Residential Living Environment, with 24-hour supportive housing in a safe and stable environment. Supervision and monitoring are provided to ensure client safety and adherence to recovery goals. Peer-based and community-oriented support are provided to foster accountability and connection. Therapeutic services, case management, care coordination, recovery and relapse prevention, and behavioral health monitoring are part of this level of care.

ASAM Level 3.5, also referred to as Clinically Managed High-Intensity Residential Services, is designed for individuals with significant substance use disorders and co-occurring challenges that require structured, 24-hour care in a highly supportive setting. Clients have a history of relapse or inability to maintain recovery without significant support. These facilities provide intensive therapeutic interventions, monitoring, and support to help clients achieve stability and progress in their recovery. ASAM Level 3.5 facilities aim to provide the intensive care necessary for individuals to stabilize, develop skills for long-term recovery, and prepare for less intensive levels of care (e.g., outpatient or sober living). This level of care consists of 24/7 Residential Support and Supervision, with highly structured, 24-hour staffing and supervision. It is a safe and stable living environment, free from substances. There is 24/7 monitoring of behaviors, health, and safety. Clients receive individualized treatment planning, intensive therapeutic services, psychoeducation, behavioral health interventions, case management and care coordination, non-hospital based medical services including withdrawal management, life skills training, relapse prevention, recovery planning, and peer support.

ASAM Level 3.2-WM, or Clinically Managed Residential Withdrawal Management, provides 24-hour care for individuals undergoing withdrawal from substances in a residential, non-hospital setting. This level of care is appropriate for individuals who require a structured environment and support to safely manage withdrawal symptoms but do not need the intensive medical interventions of a hospital-based detoxification program. This level of care is a critical first step in the recovery process, helping individuals transition safely from active substance use to a state of readiness for ongoing treatment. Services include 24-hour supervision and monitoring, withdrawal management services, assessment and evaluation, psychoeducation and emotional support, non-hospital medical support, case management, transition planning, wraparound supportive services, and coordination with behavioral healthcare.

12d. Describe how the proposed project will receive referrals into the program.

The proposed project will receive referrals from a number of different sources. The primary referral channels will be from the adjacent Coral Street campus, where clients will be referred out by case workers if they need a step up in level of care. The other referral method is via the justice system. Individuals released from jail with substance abuse disorder are at a high risk of becoming homeless and/or committing further crimes. Providing an opportunity and program for these prospective clients will disrupt the recidivism cycle experienced by addicts when they are released from jail. The County operates the Homeless Management Information System (HMIS) a secure state of the art online database that stores data on homelessness services to match them to clients.

12e. Is the proposed project connected to step-up/-down services?

This project is both a step up and a step down in the level of care already provided at the Coral Street campus. It is a step up because clients receiving existing outpatient services, or living in permanent supportive housing, can enter this residential SUD facility and experience 24/7 care.

Within the facility, clients can step up or down between ASAM level 3.1, 3.5, and 3.2-WM depending on their needs. When the client has completed their stay at the proposed facility, they can step down to permanent supportive housing, or transitional housing at the adjacent Coral Street campus. By the time this project opens, there will also be a new 120 unit permanent supportive housing building in operation on the campus, just to the south of the site.

12f. Describe the priority considerations or unmet needs that will be addressed by the proposed project; please reference state or local needs assessments as applicable.

The City of Santa Cruz is many years into a crisis, as homelessness, mental illness, and drug abuse are pervasive in the City. Every Santa Cruz resident and nearly every block of the city have been impacted in some way.

The 2024 Point in Time (PIT) count in Santa Cruz County estimated a total of 1,850 people experiencing homelessness in the County. Tellingly, 22% of those surveyed listed Substance Use Disorder as the primary condition that led to their homelessness. 46% of homeless respondents self-reported SUD, while 37% self-reported having a psychiatric or emotional condition. While the City has limited resources to provide economic assistance and housing assistance to those who became homeless for economic reasons, there are fewer resources available to those with SUD. Services at the Coral Street campus do not have intensive residential SUD treatment. The Coral Street campus can treat clients on an outpatient basis, but the more intensive cases involving SUD and mental illness that need 24/7 supervision are not being addressed. There are residential SUD facilities in the County, but they are far from the downtown area where the target population is located and the wait times for space are long.

HMIS baseline data over the past three years shows a 25% higher rate of returns to homelessness among those with behavioral health conditions, particularly those with substance use disorders.

Working toward reducing the risk of relapse and housing loss will be an important area of focus over the next three years. The Homeless Housing Action Plan (HHAP) for Santa Cruz County aims to reduce returns to homelessness among those with behavioral health conditions, particularly those with substance use disorders by 5%. The aim is to get to 20% or lower.

Within the population of clients being served by the Santa Cruz County Behavioral Health System of Care, 20% are experiencing homelessness. This statistic is important because clients receiving SUD treatment are at much higher risk of relapse if they must live with the stress of being homeless. Providing SUD services to these clients in a monitored 24/7 residential environment will lead to better outcomes and a lower burden on the overall behavioral health system.

13. Proposed population(s) of focus:

Indicate which population(s) the proposed project will serve. For each population indicated, please summarize the applicant’s related prior experience, describing the successful development, ownership, or operation of a comparable size and type of project for individuals who qualify as members of the population(s) of focus. You will be asked to provide additional information related to populations served in Section 3.

Will the proposed project serve the population?

Briefly describe prior experience and plans for serving

Children and youth (newborn-age 15)

No

Transition-Age Youth (TAY;

age 16-25)

No

Adults (age 26+)

Yes The facility will serve primarily adult males and females with SUD. The TBD provider that will be selected by the City after award must show relevant experience with the target population reflected in the successful development, ownership, or operation of a comparable project.

Perinatal (pregnant and postpartum women and their children)

No

Older adults (age 65+)

Yes The facility will serve older adult males and females with SUD. The facility will be ADA accessible for those clients with physical disabilities. Additional accommodations will be made for older adults including installation of ramps, handrails, grab bars, and elevators to support mobility and prevent falls. Non-slip flooring, well-lit pathways, and clear signage for navigation will also help. Age specific counseling groups will be provided to focus on aging-related topics like grief, isolation, retirement challenges, and managing physical health in recovery.

14. Additional Information on Population(s) of Focus 14a. Please indicate which racial and ethnic populations the proposed project will serve. For each population indicated, summarize the applicant’s related prior experience and explain how the proposed project will serve that population. Select all that apply.

Racial and Ethnic Populations

Will the proposed project serve the population?

Briefly describe prior experience and plans for serving

White Yes

Black or African American

Yes African Americans are disproportionately represented in both mental health and homeless services in Santa Cruz County.

American Indian or Alaskan Native

Yes

Hispanic, Latino, or Spanish Origin

Yes The City of Santa Cruz works with non profit service providers such as Nueva Vista, Beach Flats Community Center, the Community Action Board and Senderos to do targeted outreach with the Latino community that is culturally relevant and provided in multiple languages.

Asian Indian Yes Cambodian Yes Chinese Yes Filipino Yes Hmong Yes Japanese Yes Korean Yes Laotian Yes Vietnamese Yes Native Hawaiian Yes Guamanian or Chamorro

Yes

Samoan Yes

Other Yes

14b. Please indicate which special or priority population(s) the project will serve. For each population indicated, summarize the applicant’s related prior experience and explain how the proposed project will serve that population.

Select all that apply.

Special or Priority Populations

Will the proposed project serve the population?

Briefly describe prior experience and plans for serving

People with disabilities

Yes Approximately 29% of the homeless population in Santa Cruz County self-reported a physical disability.

The facility is designed to accommodate people with disabilities. The proposed project will comply with Americans with Disabilities Act (ADA), and all publicly accessible areas will have an accessible path of travel.

The entire facility will be served by an elevator.

Additional accommodation will be made for people with physical disabilities including installation of ramps, handrails, grab bars, and elevators to support mobility and prevent falls. Non-slip flooring, well-lit pathways, and clear signage for navigation will also help.

People experiencing homelessness or housing instability

Yes This facility was designed with tailored accommodations to effectively serve individuals experiencing homelessness. This population often faces unique challenges, including lack of stable housing, unmet basic needs, and complex health and social barriers. The facility provides a stable, clean, and safe environment free from substances, offering respite from the streets or shelters. Food service is provided, and there is access to laundry facilities and hygiene kits. Staff will be educated on the effects of trauma and homelessness, emphasizing empathy and nonjudgmental support. Trauma-informed therapy is offered to address the effects of chronic instability, abuse, or violence. To keep clients out of homelessness upon release, the City will partner with local housing agencies and programs to help clients secure permanent supportive housing, transitional housing, or rapid rehousing options. This target population will also receive Comprehensive Health Screenings to address untreated medical conditions common among individuals experiencing homelessness, such as chronic illnesses, infections, and dental issues.

Both Housing Matters (the nonprofit that provides the other services on the campus and is constructing the permanent supportive housing on campus) and the

County, who operates the Homeless Persons Health Project on the campus, are well trained in providing trauma informed care to the unhoused people who live on campus and those who frequent the campus for the day services.

People who identify as LGBTQ+ (sexual orientation and gender-identity minorities)

Yes Approximately 16% of the homeless population in Santa Cruz County identifies as LGBTQ+. This population often experiences unique challenges related to discrimination, stigma, and trauma, which can impact their recovery journey. Staff will be trained on LGBTQ+ terminology, pronouns, unique stressors, and health disparities to promote inclusivity and avoid microaggressions. Staff will acknowledge the higher likelihood of trauma, discrimination, and stigma experienced by LGBTQ+ individuals, and integrate trauma-informed practices. The provider will implement policies that allow transgender and nonbinary individuals to choose housing based on their gender identity. The provider will offer group therapy or support groups specifically for LGBTQ+ clients to provide a safe space to address issues like coming out, minority stress, rejection by family or community, and building resilience. The provider will create a visibly inclusive environment with symbols of support, such as pride flags or posters, to signal safety and acceptance.

Black, Indigenous, and people of color (BIPOC) or other racial/ethnic minorities

Yes Approximately 44% of the homeless population in Santa Cruz County identify as Black, Indigenous, and People of Color (BIPOC). The proposed facility will care for the BIPOC population by addressing systemic inequities, cultural needs, and barriers to treatment.

Staff will be trained on systemic racism, implicit bias, microaggressions, and the historical and cultural contexts of substance use in BIPOC communities.

Where possible, the provider will employ diverse clinical and support staff to reflect the backgrounds of the clients served. Staff will provide care in a way that recognizes the impact of generational trauma, discrimination, and racial stressors on substance use and recovery. Staff will provide interpretation and translation services for clients with limited English proficiency, as well as materials in multiple languages.

Staff will be trained in a strength-based approach that highlights cultural resilience and strengths as part of the recovery journey. Staff will invite guest speakers, facilitators, or thought leaders from BIPOC communities to lead recovery-related workshops or events.

People living with serious/severe mental or behavioral health conditions

Yes Approximately 37% of the homeless population in Santa Cruz County self-reported a psychiatric or emotional condition.

People who are justice involved

Yes Approximately 40% of the homeless population in Santa Cruz County self reported having been in jail in the past year or being on probation/parole when they became homeless. Justice involved individuals may face unique challenges related to legal obligations, trauma from incarceration, and social stigma. Staff will be trained to acknowledge and address the psychological impact of incarceration, such as PTSD, institutionalization, or feelings of disempowerment.

Case workers will assist clients in meeting court requirements, such as probation or parole check-ins, mandated drug testing, or attending court dates. Case workers will also provide reentry support by partnering with reentry programs to help clients reintegrate into society, including finding stable housing, employment, and support systems. Another key component of care is recidivism prevention, which focuses on triggers that may lead to both substance use and criminal behavior, such as stress, peer pressure, or financial instability.

The Coral Street location of the facility is within one mile of the County Superior Court.

15. Please indicate which of the State Priorities the lead applicant’s proposed project is aligned with (RFA Section 1.1 Behavioral Health Continuum Infrastructure Program (BHCIP) Round 1 (2024):

Launch Ready Request for Applications) and describe how the project will meet each of those priorities. Please use a distinctive description for each priority indicated. Select all that apply.

Priority Does the proposed project align with this priority?

Briefly describe prior experience and plans for serving

Address urgent needs in the care continuum for people with mental health or substance use conditions, including unhoused people, veterans, older adults, adults with disabilities, and children and youth

Yes The Coral Street campus in Santa Cruz co-locates medical services, outpatient mental health services, transitional housing, and permanent housing to create a continuum of care for unhoused people with mental health and substance use conditions. The existing campus served 3,586 people in fiscal year 2024. The proposed project addresses the urgent need to add residential SUD treatment to the continuum of care by providing 50 beds of SUD treatment with ASAM levels 3.1, 3.2WM, and 3.5.

The current service providers on the Coral Street Campus, Housing Matters and County Health Services Agency staff are thoroughly trained in trauma informed care and use the County HMIS system to connect clients to services and track use.

Invest in behavioral health and community care options that advance health equity of behavioral health care and community options

Yes According to the 2024 Point in Time homeless count in Santa Cruz County, 46% of homeless people self-identified as having a substance use disorder, while 37% of respondents reported having a psychiatric or emotional condition. At the same time, the ethnic breakdown of the homeless population is quite disparate from the general population: While only approximately 1% of the county population is African American, roughly 6% of the homeless population is African American. The proposed facility was designed to create a safe and empowering environment that acknowledges and addresses the systemic barriers and cultural needs of BIPOC clients. Staff at the proposed facility will be trained on systemic racism, implicit bias, microaggressions, and the historical and cultural contexts of substance use in BIPOC communities. We also recognize that justice-involved individuals are often disproportionately from marginalized communities, and the facility will tailor care to address these systemic inequities.

https://infrastructure.buildingcalhhs.com/wp-content/uploads/2024/07/bond_bhcip_round1_rfa_508.pdf

Increase options across the life span that serve as an alternative to incarceration, hospitalization, homelessness, and institutionalization

Yes The proposed ASAM levels of care for this project share a common theme of relapse prevention.

During engagement with City and County officials, a frequent concern was the occurrence of relapse and recidivism among the target population; this targeted group often has a history of relapse. Providing a residential program with 24/7 support and a safe, encouraging environment is a higher level of care than the outpatient SUD treatment that clients may be familiar with. Serving as a landing space for homeless people looking for a new start, and for people newly released from the justice system, the residential environment takes away the stressors of danger, food insecurity, and personal health.

Providing this service in a residential environment, as opposed to in jail or in a state hospital, is cost efficient and effective. Improved outcomes will reduce relapse rates and shorten rehab times. The proposed facility is designed to accommodate the “three P’s” of support to the maximum extent possible providing space for Possessions, Pets, and Partners.

Meet the needs of vulnerable populations with the greatest barriers to access, including people experiencing unsheltered homelessness and justice involvement

Yes The dual target population for the proposed project are homeless individuals and justice involved individuals. Based on internal research from the County of Santa Cruz, these two populations benefit the most from a residential environment that is safe and stable, and where case workers and staff can address clients’ needs. Both populations often face unique challenges, including lack of stable housing, unmet basic needs, and complex health and social barriers. All of these challenges are barriers to treatment that are addressed in the proposed supervised residential setting. This project is estimated to serve roughly 521 clients annually, which will cumulatively create a very big impact in this community.

Ensure care can be provided in the least restrictive settings to support community integration, choice, and autonomy

Yes The proposed facility will provide a stable, clean, and safe environment free from substances, offering respite from the streets or shelters. However, treatment is voluntary. There are no locked beds, and clients are treated at the least restrictive level of care based on their diagnosis. Freedom of choice is a pillar of the Coral Street campus, where clients are treated with dignity and not hassled to receive treatment. Outdoor spaces are included and designed to present a variety of therapeutic options for programming recovery activities for residents and family support visitors.

Leverage county and Medi-Cal investments to support ongoing sustainability

Yes It is expected that 100% of the clients at the proposed facility will be Medi-Cal. The billing will all be Drug Medi-Cal (DMC) and Medi-Cal.

Leverage the historic state investments in housing and homelessness

Yes The City of Santa Cruz was awarded a HomeKey 2 award to the Coral Street campus for the adaptive reuse of a historic structure into seven units of permanent supportive housing. That HomeKey site, now operational, is located less than 150 feet away from the proposed project site. The two sites will work together to provide a variety of residential options for clients experiencing homelessness, from transitional shelter to residential SUD treatment, and eventually to Permanent Supportive Housing. Space permitting, the step down from the SUD facility into a permanent supportive housing unit represents the ideal scenario for a continuum of care.

It must be noted that the state’s investment into Homeless facilities and prevention through the HomeKey and HHAP programs has been working in Santa Cruz County. The 2024 Point in Time (PIT) homeless count for the County was 1,850 people:

the lowest count since records began, and a full 20% drop from the peak in 2022. It is estimated that the proposed facility will treat around 521 clients per year. Given the overlap between homelessness, mental illness, and substance abuse disorder, we believe that this facility will greatly impact the overall homeless count as clients are stabilized and provided with SUD and case management services.

There is also a new 120-unit permanent supportive housing building under construction adjacent to this facility.

16. Services Payors 16a. Describe how the behavioral health services to be delivered at this project site will be funded upon completion of the construction/expansion.

500-word limit

The behavioral health services at this project site will be funded through a multi-tiered public funding structure, ensuring comprehensive and sustainable financial support. The primary funding for behavioral health services will be provided through Drug Medi-Cal (DMC) funding, facilitated by Santa Cruz County as part of its Organized Delivery System (ODS). This funding stream is supported by allocations from the State of California and federal Medicaid reimbursements, ensuring coverage for a wide range of treatment services. Services eligible for reimbursement under DMC-ODS include residential treatment, withdrawal management, case management (or care coordination), and medication-assisted treatment (MAT). Santa Cruz County's oversight will ensure alignment with state and federal requirements while meeting the local community's needs.

16b. Describe how the behavioral health services to be delivered at this facility will be funded for the full duration of the 30-year service use restriction period.

500 Word limit

A diversified funding model will be implemented to ensure that behavioral health services remain sustainably funded throughout the 30-year service use restriction period. While DMC funding will serve as the program's primary financial foundation, additional sources will bolster long-term sustainability. These include the development of an outpatient clinic to deliver concurrent mental health services alongside residential SUD programming, leveraging separate funding streams for mental health and SUD services with no lock-out. Supplemental funding will also come from Santa Cruz County's behavioral health budget to support services not fully reimbursed by DMC, such as specialized programming, ancillary services, or community outreach. The program will actively pursue grant opportunities through California's behavioral health initiatives, including the Mental Health Services Act (MHSA) and SAMHSA, to enable innovative service delivery. Collaborative agreements with local nonprofits, foundations, and philanthropic organizations will fund family education, community reintegration, and recreational therapies. Additionally, revenue streams will be enhanced by accepting private insurance and self-pay patients, while in-house fundraising initiatives—such as annual giving campaigns, grant writing, and partnerships with local businesses—will further engage the community and stakeholders. This multi-layered funding strategy will provide the financial flexibility needed to adapt to changing fiscal environments, ensuring the delivery of high-quality, evidence-based behavioral health services for decades to come.

16c. Please include anticipated percentages of individuals to be served by the construction/expansion based on the payor source. This is the anticipated percentage of funds by payor (the entire facility, including the portion that would receive Bond BHCIP Round 1: Launch Ready funding).

Enter whole numbers only. Enter 0 if a payor category does not apply. The total must equal 100%.

Payors Anticipated Percentage

Private insurance or employer-provided % Medi-Cal 100% Private pay % Mental Health Services Act (MHSA) % Behavioral Health Services Act (BHSA) % Substance Abuse and Mental Health Services Administration (SAMHSA) % Other % Total %

Section 4: Development Plans and Financing

20. Which phase of development describes the current project status? (Refer to RFA Section 2.2.)

• Phase 2: Design development

21. Describe how the proposed project fits in the phase of development selected above.

500-word limit

This project perfectly fits the requirements of Phase 2: Design Development. The Applicant – the City of Santa Cruz – owns the site fee title. The site plan, floor plans, elevations, and renderings are complete and are included in this application package. The site has received its Phase I and Phase II Environmental Site Assessments, and the ALTA survey is in process. Included in this application package are support letters from the City Mayor, the County Supervisor, State Assemblymember, State Senator and the major community stakeholder/partner Housing Matters, that has the 55 year lease on the rest of the City owned Coral Street property and that owns two parcels t the adjacent Coral Street Campus. Finally, the project is able to gain building permits within six months of funding, and start construction within nine months. This is because the City owns the project site and is the agency that issues its own permit.

22. List all construction approvals, will serve letters, and building permits required to complete each facility type referenced in this application and describe your strategy for applying for each within 6 months of fully executing a Bond BHCIP Round 1: Launch Ready PFA.

500 word limit.

In accordance with California WIC section 5960.31, the proposed project will go through a streamlined ministerial planning entitlement process. That process involves reviews by the Planning and Building Divisions of the Planning & Community Development Department, Fire Department, Public Works Department, Water Department, Police Department, and Economic Development & Housing Department.

The project will also require approvals of building and fire permits, as well as permits for public right-of-way and utility improvements. Finally, the City will obtain a design permit, non-residential demolition authorization permit, and special use permit.

Since the City is both Applicant and reviewer for the permits, the interdepartmental communication will be orderly and collaborative, resulting in a project that has buy in from the community and from internal stakeholders.

23. What is the estimated total development cost to acquire, plan, permit, insure, construct, license, and open services at the completed facility?

$30,000,000

24. Will the application budget cover 100 percent of the estimated total development cost of the proposed project?

Yes

25. Awardees of Bond BHCIP Round 1: Launch Ready funds shall be solely responsible for any cost overruns beyond the award amount. Neither DHCS nor Advocates for Human Potential, Inc. (AHP), the Bond BHCIP Round 1: Launch Ready administrative entity, will be responsible for any cost overruns. Please describe your scope and cost containment strategies, as well contingency plans for any project cost overruns.

500 word limit

Our first line of defense against cost overruns is creating a seasoned team of development and construction professionals to help us navigate the complex realities of construction pricing. We decided on a prudent strategy of bringing in a national-level architect and contractor to offset the potential challenges that arise from working in a smaller metro area like Santa Cruz. We are concerned that the local subcontractor base might not be compatible with the quality of construction that we expect, so utilizing regional contractors and architects empowers them to bring in the trades they need from the nearby metro areas of San Jose and San Francisco. Our contractor, Swinerton Builders, is a nationwide leader in healthcare and behavioral health construction, with over $641 Million of behavioral health projects completed and in progress nationwide. The company is 100% employee owned, and employs 4,300 people. They have a dedicated estimating team that is up to speed on the latest construction pricing trends. The principal in charge of this project, Lia Tatevosian, has a 31-year career in construction that includes the construction of four prominent healthcare facilities that are comparable to the proposed project.

Gensler Architects is one of the largest architecture firms in the world, with 53 offices across the globe including in nearby San Jose. In 2024, Gensler was recognized as one of the World’s Most Innovative Companies by Fast Company, earning the #6 overall ranking and #1 in the Urban Development and Real Estate category. Interior Design magazine called the firm the #1 Architectural Firm in the world in 2024, and Architectural Record and Building Design+Construction acknowledged Gensler as the #1 Architecture Firm in the U.S. Their work in healthcare is unparalleled, as evidenced by their 2023 AIA Healthcare Design Award for a Neuroscience Wellness Center. This is the “dream team” for designing a practical, design forward building that is economical and sustainable.

This team is actively developing other projects right now, and they have real time access to current and future pricing trends. We have built cost escalation contingencies into the hard costs for additional cushion. We are fully aligned with our development team, and the team members understand that we cannot go back to BHCIP for more money later.

Once the project is underway, there are two additional sources of contingency funding if there are additional unforeseen cost overruns: First, the project has been designed to be operationally sustainable. The surplus generated from operations can be leveraged with a private mortgage on the property. While this is not ideal for the facility, we know that at any time we can divert the net cash flow into a mortgage and cover cost overruns. The second source of contingency funding is the City of Santa Cruz.. In March, City voters approved a half of one percent sales tax increase that is dedicated in part to fund the City’s Homeless Response Programs. That funding would be available, if necessary, to provide gap financing of the project.

26. Describe the fiscal strategies for managing the proposed project. Include specific examples of potential project cost savings; cost efficiencies; cost leveraging; braided funding; and additional funding, including other grants, philanthropic contributions, or contingency funding that may demonstrate conservative fiscal strategies and an industry-standard “responsible use of funds.”

The facility will be operated by a provider that is selected after the City’s procurement process.

Upon award, the City will release a Request for Proposals (RFP) to cast the widest net possible.

The City is aware of four qualified providers who intend to respond to the RFP. A condition of the RFP is that the provider must operate the project with no ongoing funding from the City of Santa Cruz.

The CD-RG program design team has proposed a blend of ASAM levels that is not only needed in the community but also sustainable to operate. As shown in the operating pro forma included in the application submission, the project income exceeds project expense by at least 3% in all of the first five years of operation. We believe that this program design is fully sustainable in perpetuity given the existing funding landscape. Since the City owns the site, another contingency over time is to reduce the amount of rent charged to the provider if there is a budgetary instability. This will allow the provider to concentrate their resources on patient care instead of rent.

While the price and complexity of this project are increased due to its central location in the urban core of Santa Cruz, the benefits far outweigh the costs. Increased construction line items for central infill sites include the cost of vertical construction and compact amenities, which contribute to a project that is substantially more expensive than a similar project in a suburban or exurban location; however, data from the US Census indicates that a one mile radius around the proposed project captures the highest density neighborhoods in all of the Central Coast region.

Locating this site so conveniently to so many people will effectively remove barriers to treatment because it shortens the travel time for clients. The site has excellent access to public transportation as Coral Street is on a local bus route and a regional Metro Transit Center is located within one mile.

27. Please use the fields below to provide details about the proposed project’s construction and design.

27a. Describe all due diligence, feasibility studies, and site inspections completed to date that indicate site appropriateness for the facility.

This site has been subject to significant due diligence over the last few years as the City negotiated for the purchase of the property. This includes a Phase I environmental site assessment dated September 2019. The Phase 1 recommended a Phase 2, which was completed in January 2020, with the recommendation of no further action. As part of the purchase due diligence, the site was inspected by City Planning as well as Building and Safety and real estate professionals in the Economic Development Department. The existing building is past its useful life, therefore demolition and redevelopment has always been the City’s intention..

In 2022, the City commissioned a massing study by a local architecture firm which included a site plan study and various building configurations. The City commissioned a second architectural massing study by Gensler Architects, which ended up becoming the basis of design. The site conditions in this extremely dense neighborhood are such that the design team had to consider the placement of the building and parking in relation to the rest of the Coral Street Campus.

At first, the design included a vehicular pass through to the rest of the campus, but after multiple iterations, the design team removed this vehicular pass through and replaced it with a parking lot only for the SUD facility and only accessible via Coral Street. In fact, after stakeholder outreach with the Coral Street campus, it was determined that this property should have its own identity and access; this is to preserve the residential nature of the facility and give the recovering clients some space away from the bustle of the rest of the campus. Easy pedestrian access and proximity will ensure that the connections between the proposed and existing facilities will be porous.

As part of the massing studies, the architect performed shade studies on nearby parcels, as well as wind studies to understand the prevailing breezes for cross ventilation. As part of their massing studies, the design team and City considered fire department access to all four sides of the building.

27b. Describe any preliminary site plans, design drawings, and/or construction plans. If no construction plan is yet in place, please plan to submit a valid rough order of magnitude (ROM) cost estimate from an architect, engineer, or licensed general contractor (Section 6: Required Documents).

The world-renowned team of Gensler Architects and Swinerton Builders has collaborated to create a schematic design that is accompanied by a Rough Order of Magnitude cost estimate.

The schematic design set by Gensler includes a site plan, landscaping plan, circulation plan, floor plans, and elevations. Swinerton Builders created a real bid based on take-offs from the schematic design set. The estimating team at Swinerton based their ROM on comparable costs building other similar residential and healthcare facilities in this region. The bid considered the existing conditions, the construction type, and the interior and exterior finishes of the design.

Design principals include maximizing natural light and ventilation, along with the use of healthy materials to promote healthy indoor air quality. In addition to the 50 beds for SUD treatment, the architects have including the following design elements: Starting at the front of the property, there will be a roughly 400 square foot lobby that serves as the welcome area for clients and visitors. Then there are three group rooms including a larger multi-purpose room. There are six individual counseling and therapy rooms of approximately 100 square feet each. The beds themselves will be in a suite layout, with two bedrooms sharing a bathroom and common area, and additional common areas throughout for convening. On the ground floor, there will be two staff/visitor restrooms and a staff break room. There will be a medical suite for MAT administration and withdrawal management services.

Central to the design is a dining area that will be able to accommodate a minimum of 50 persons.

There will also be a commercial kitchen attached to the dining area. The commercial kitchen has a long and narrow design that optimizes for line cooking that is typical for this programming. The dining area will include modular furniture to quickly convert to a gathering area. The dining area will be the centerpiece of the design, as it is the design element that connects the residential component to the services component. It is also the primary location of client interaction and staff outreach. The dining area will be connected to the outdoors via indoor-outdoor space that can open up and expand the group area when the weather permits. Finally, the building will contain laundry facilities and enough storage space for case workers and maintenance staff.

27c. Please specify the process used to develop your Bond BHCIP Round 1: Launch Ready application budget, including naming who (company, title, name) produced the budget estimates.

The budgeting team represents the most qualified team possible for this type of work in Santa Cruz. This starts with Gensler Architects. They have over 100 years of experience building healthcare facilities in northern and coastal California, including recent work in Santa Cruz. The contractor, Swinerton Builders, is similarly well qualified. With deep healthcare roots in Silicon Valley, Swinerton is widely recognized as a leader in healthcare construction. Their understanding of healthcare construction and their current access to subcontractors and pricing makes them an ideal construction partner to help with not only bidding but also design efficiencies.

The Rough Order of Magnitude (“ROM”) construction costs are a real bid based on take-offs from the schematic design set, and were created by the estimators at Swinerton Construction based on comparable costs building other similar residential and healthcare facilities. The bid considered the existing conditions, the construction type, and the interior and exterior finishes of the design. It also includes sustainability elements like Title 24. The project will fully comply with ADA requirements as well. The construction bid is included in the attachments of this Proposal to demonstrate that the team is indeed ready to start and that our numbers are reliable.

We want to point out that our construction budget considers the recent spike in materials and labor costs, and we believe our budget has enough escalations and contingencies built in to complete the construction in any macroeconomic environment.

The development budget was managed by Kevin Rodin at Community Development Resource Group. Kevin has twenty years of experience utilizing state funds for healthcare and affordable…