The city of Santa Cruz has secured a $30 million state grant to build a new residential treatment facility aimed at supporting adults with substance use disorders, according to city officials.
The funding, awarded by the California Department of Health Care Services, will help develop the Coral Street Substance Use Disorder Treatment Center, a 50-bed, non-medical facility that will provide around-the-clock recovery-focused care for some of the region’s most vulnerable residents, according to a statement from the Santa Cruz City Manager’s Office.
The center, which will be located at 125 Coral St., is expected to address a long-standing gap in the local health care system by offering immediate, sustained treatment for people experiencing addiction, particularly those who are unsheltered, veterans, or have disabilities.
“This $30 million award is a major step forward for Santa Cruz,” Mayor Fred Keeley said in a statement. “When I ran for mayor, two of the most urgent issues I heard about were affordable housing and homelessness. This new treatment center directly addresses a critical missing piece in our homelessness response: access to residential substance use disorder treatment.”
City officials say individuals in need of residential care often face long wait times, sometimes while living unsheltered, due to a severe shortage of local treatment beds. The Coral Street facility aims to reduce these delays and improve recovery outcomes by providing stable, around-the-clock support.
“We are proud to partner with the State of California and our local stakeholders on this project,” said City Manager Matt Huffaker. “The Coral Street project directly addresses one of the most urgent gaps in our continuum of care. This investment will create lasting infrastructure to support recovery, stability, and long-term well-being in our community.”
The project is part of the Behavioral Health Continuum Infrastructure Program, funded by Proposition 1, a bond measure to fund mental health facilities that was approved by California voters in the March 2024 election.
The initiative is distributing $3.3 billion in competitive grants statewide to improve access and equity in behavioral health services. Santa Cruz was among 124 recipients in the “Launch Ready” round of funding, according to city officials.
Funding for construction is expected to become available in 2026.