State rescinds $73.4-million grant for controversial San Pedro rehab center proposal

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Set us as preferred The state has rescinded a $73.4-million grant for a new mental health and drug treatment facility in San Pedro, putting the future of the controversial project in jeopardy.Neighbors had picketed outside the property at 2100 S.Western Avenue and packed a town hall in April to oppose the project, with some expressing fears about drug users coming to the area.The nonprofit Fred Brown Recovery Services was seeking to acquire the five-acre property and turn it into a 106-bed inpatient recovery center for “veterans, the justice-involved, the unhoused, and those with co-occurring conditions.” The facility also would serve about 200 outpatients a day.About 70 elderly residents who live in a nursing home on the property would have had to move, some opponents of the project said.

Others said they supported mental health treatment in general but argued that the proposed center would be too close to nearby schools, day cares and churches.The grant, which would have covered most of the project’s cost, was funded partially by Proposition 1, a $6.4-billion bond measure approved by California voters in 2024 to improve mental health and addiction treatment.

In a letter dated July 15, the California Department of Health Care Services said it rescinded the grant because Fred Brown Recovery Services failed to meet a cash match requirement and did not address discrepancies in an appraisal document.The matching funds cannot come from the seller of the property, and the match documentation was signed by Brian Dror, a manager for the current property owner, 9 Gem Capital Group, said the letter, which was addressed to Fred Brown Recovery Services.

The letter also noted that there is no process to appeal the decision.Dror, a partial owner of the property, said that state bond guidelines do not prohibit an owner from providin...