By Jorge Casuso

October 6, 2025 -- A County funded transitional housing program for homeless individuals with serious mental illness is slated to open this month on two oceanfront facilities in Santa Monica, The Lookout has learned.

The facilities at 413 (photo left by the Santa Monica Coalition), and 825 Ocean Avenue, which were formerly used for senior assisted living, total 49 beds and will be operated by Venice-based St. Joseph Center, according to City officials.

Posts on social media have provided scant, and sometimes misleading, information about the facilities, prompting neighbors to worry about the impact they will have on one of Santa Monica's most exclusive areas.

Meanwhile, City officials have no way to stop or significantly alter a "private project that doesn't require nor allow any City oversight," according to a text message from City Manager Oliver Chi to Mayor Lana Negrete.

City officials were recently alerted about the facility when its new owner, SHL Investments led by Leo Pustilnikov, applied for a Change of Use Permit (CUP) for the two properties across from Palisades Park, Negrete said. (Mayor Negrete's statement)

The City has been trying to get more detailed information about the program from the LA County Department of Mental Health (DMH), which is providing $4 millon in funding, and from St. Joseph's Center, Negrete said.

The details have been sketchy, the mayor added, noting that so far, the City has learned that the facility will not be locked down, allowing residents to leave the premises.

St. Joseph Center's staff will provide a case worker, medication management, housing management and 24-hour security, while DMH will provide a clinician and a transport van.

City officials have asked if St. Joseph's will supervise residents when they are off-site and how the program could impact an already stressed local police force, Negrete said.

"They weren't clear," the mayor said. "They suggested folks could be chaperoned if appropriate. We kept asking the same question. They said there would be no loitering because they would have 24/7 security."

Negrete said St. Joseph Center has suggested a curfew from 10 p.m. to 9 a.m. and has said County Sheriffs would be made available if needed. Residents of the facilities would not be allowed to have drugs or weapons.

Negrete said the City is organizing a town hall meeting with the key players -- the County Department of Mental Health, County Supervisor Lindsey Horvath's office and official's from St. Joseph Center.

"We're frustrated about the lack of communication," Negrete said. The handling of the facilities' opening "is not how you build community trust."

The one key player who is not expected to attend the community meeting is Pustilnikov, who last year purchased 17 buildings in LA's Skid Row for $10 million.

The Superior Court Judge who approved the purchase said it was in "the best interest of formerly homeless tenants and L.A. taxpayers who had been financing the portfolio’s maintenance and repairs for 16 months," according to the LA Times.

The two properties in Santa Monica are considered prime real estate. A post advertising the sale of 413 Ocean Avenue noted the property, with an asking price of $8.5 million, is "breathtakingly located on a bluff overlooking the sparkling Pacific Ocean."

The 13,025 square-foot, two-story property built in 1959 has 29 individual suites, some with with balconies and ocean views, according to the listing.

The sales pitch from EXP Realty said the property was ideal for "multi-family redevelopment, a luxury condo development, land banking or a future dream home."

The terms of the contract between the County and St. Joseph Center or the center and Pustilnikov have not been disclosed.

There is no online listing posted for the other building at 425 Ocean Avenue.

Pustilnikov "is responsible for submitting the first Builders Remedy applications in the State in Santa Monica and Redondo Beach," according to SLH Investments, which is based in Beverly Hills.

The company says it currently has 12 Builders Remedy projects -- which can override local zoning if a city was not in compliance with the State's housing mandate.when they are submitted -- "located in various jurisdictions across Southern California."

Pustilnikov recently filed a lawsuit against the City after he was one of six members of the Downtown Santa Monica, Inc. (DTSM) board removed by the City Council.

The lawsuit, filed along with former board member Jon Farzam, seeks to invalidate the Council's actions.