Santa Monicans near Ocean Avenue spent the Thanksgiving holiday in a state of chaos and confusion over the mysterious occupation of buildings that had previously been targeted as mental health housing. Residents reported people moved into at least one of the two buildings on Ocean on Tuesday, causing officials to scramble to identify what had happened before the Thanksgiving break.
The situation unfolded rapidly beginning Tuesday, Nov. 25, when neighbors near 413 Ocean Avenue noticed unusual activity at the property. By Wednesday morning, residents were alerting each other about people being moved into the building under cover of darkness, prompting emergency calls to city officials.
"There were people coming in. I'm like, Really," said Councilwoman Lana Negrete. "They're dropping off people at night."
The surge of residents prompted immediate complaints of smoking on the property, fights, unsafe animals and noise.
What city officials discovered when they investigated on Wednesday afternoon was an unpermitted residential facility that had already moved approximately 30 vulnerable individuals into a building that lacked proper permits, a certificate of occupancy, or a business license.
The building was one of two developer Leo Pustilnikov previously earmarked for a controversial mental health housing program made public by Negrete earlier this year. Los Angeles County Supervisor Lindsey Horvath eventually terminated the proposal, citing broken community trust and directing officials to find alternative locations.
The projects would have converted former senior living buildings into 49 units of supportive housing for people with serious mental illness and substance use disorders. Operated by St. Joseph Center with county funding, the facilities were weeks from opening before facing criticism over inadequate public outreach.
When city staff first received reports about new activity at 413 Ocean Avenue, they contacted Pustilnikov, who has a lease for the building. According to the City, Pustilnikov told staff he was pursuing a new transitional housing use with a different operator and funding source than previously proposed, but did not disclose that operations had already begun at the property.
City staff immediately drove to the site to conduct an inspection. Upon arrival, they found significant activity and engaged with an on-site property manager who confirmed around 30 individuals were living at the facility. The manager connected staff by phone with a representative from Pacific Transitional & Sober Living LLC, who acknowledged they had moved residents in on Tuesday — several days before their Dec. 1 lease start date.
When staff requested permission to inspect the site, the operator denied access.
"It was a hard time to understand who we were dealing with," said Oliver Chi, a city official involved in the response. "Through the course of our investigation, the last couple of days, it's been described as multiple separate LLCs that seem to be interconnected somehow, and they appear to be operating a for profit sober living facility."
The city mobilized an interdisciplinary response team Wednesday evening that included representatives from Community Development, Building & Safety, Code Enforcement, the Fire Department, City Attorney's Office, Police Department and City Manager's Office. The group eventually gained access and determined the building was not suitable for habitation without additional permitting and inspection.
City officials noted the building had undergone modifications including "mini splits," where rooms were divided to create additional living spaces. These modifications raised concerns about electrical work and fire safety, particularly given that a recent fire on San Vicente had been caused by a space heater in similar housing.
"There were real life safety issues that the staff had," Chi said. "Our staff and the building and safety department, fire department, identified a series of issues that could make the building uninhabitable."
On Wednesday evening, the city issued both a notice to vacate and an administrative citation to the property owner. The vacation order gave the operators 24 hours to relocate all residents. Under Santa Monica's habitability regulations, the landlord was required to provide relocation assistance for displaced residents.
The city also sent a letter demanding the property owner provide a description of the business operation, an overview of state licenses allowing them to manage the facility, and access for a city inspection by Friday, Nov. 28. Officials warned they would seek a court order if denied access.
The walk-through revealed the facility was "not in good shape" and did not appear ready to serve as a residential site. Staff documented numerous issues supporting the city's notice to vacate order.
On-site staff appeared unaware they were operating in an unpermitted facility and told inspectors they were a sober living home program. They revealed their operational plan was to house approximately 58 people in the single building by placing two individuals in each room.
While some residents had been moved to a facility in Sherman Oaks, more than 30 individuals were still residing at the location during Friday's inspection. On-site staff said they were trying to move everyone out by Monday.
According to the City, the company hired to oversee operations was unaware of the permitting problems and residents were under the impression they were moving in early as part of a shuffle from other facilities that were undergoing construction.
City officials continued to struggle with identifying the responsible parties throughout the holiday period.
"There's the property owner in Florida, there's the developer, Mr. Pustilnikov, and we've got this strange web of operators," Chi said. "There's, again, two or three different LLCs that we've encountered that folks work for different entities, but they seem to be all interconnected."
As of Friday evening, the facility remained partially occupied despite the city's vacation order. Some on-site staff claimed they had spoken with someone at the city who gave them more time to relocate residents, but city officials said no such extension had been granted.
Officials also learned during their inspection that a similar sober living use may be planned for 825 Ocean Avenue, another property on the same block.
The city plans to send follow-up correspondence by Monday to the property owner, developer, operator and on-site staff. The letter will reiterate requirements to abide by the notice to vacate and tenant relocation regulations, update administrative citation fines, and outline next steps including the need to identify the use type, complete all permitting requirements, and cease operations pending issuance of a certificate of occupancy and business license.
"If they don't comply next week with the standing orders, then certainly the city would be taking additional legal steps to enforce our notice to vacate," Chi said. "It sounds like they're trying to comply at this point, though, so we're going to continue to monitor everything here and make sure we respond accordingly."