A new Orange County campus designed to house the mentally ill has finished construction in Irvine, but can’t because of a lawsuit between county leaders and the nonprofit that helped build it.
It’s part of a years-long dispute between the county and Mind OC, who were once fierce partners in a public-private partnership to create a network of mental health treatment centers called Be Well OC that has been touted as the next big thing in Orange County’s health care system.
Now, Brain OC leaders claim the county is trying to steal the building it jointly paid for the two agencies and take them out of the process by voiding their leases.
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Meanwhile, county leaders allege the nonprofit defrauded them and engaged in a conflict of interest in a filing filed Tuesday.
It’s a custody battle with major implications for how the county continues to provide mental health and addiction treatment, with county leaders accepting the dream of private insurance money that helps fund treatment through the program has died.
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The legal dispute centers on a mental health treatment clinic in Orange County that opened in 2021 off the 57 Freeway in Orange.
Initially, both Mind OC and the county worked together on the project, with the county contributing more than $16 million for the Orange site while Mind OC helped arrange a $12 million grant for construction.
The two sides agreed that Maine OC will handle construction and property management when the center opens, with the nonprofit paying $1 a year for the building under their lease, an agreement county attorneys say is intended to help save money on the site.
But by mid-2024, county attorneys say the relationship began to sour, alleging Mind OC was pocketing more than $2 million a year in subleases to various medical companies on top of what they charge to manage the building, in violation of patient privacy rules.
The county also cited an internal audit that found Brain OC violated 38 different terms of the lease.
“Despite technical support deployed daily at the Orange campus by HCA staff, Mind OC has failed to fulfill its responsibilities,” county attorneys wrote, asking a judge to have Mind OC “return nearly $64.5 million in ill-gotten funds and public property.”
Brain OC CEO Phil Frank said the county is misrepresenting the nonprofit’s charges for rent, saying the companies are nonprofits in a statement to Voice of OC on Wednesday.
“What some refer to as ‘benefits’ are operating and facilities funds necessary to support Orange County’s 60-year commitment to operating and maintaining good campuses,” Franks wrote. “Every dollar raised by Brain OC is invested back into the campuses and behavioral health system they were created to support.”
The county terminated Mind OC’s lease through February 2025, noting in its suit that it paid Mind OC more than $41.2 million during the lease, and that it has refused to reimburse the nonprofit’s funds.
“Public trust dollars belong to the county and must be reimbursed for mental health services,” county attorneys wrote in their complaint.
County attorneys also allege the nonprofit may have ties to the corruption scandal of former Supervisor Andrew Doe, who is currently serving five years in prison for taking bribes to change contracts.
The attorneys noted that Do helped increase Mind OC’s role in managing medical operations at the site, even though they were unlicensed, and pointed to a $275,000 contract made with the wife of Do’s then-Chief of Staff Chris Wangpurn.
“The Brain OC has provided no evidence that the contracted services were ever performed,” county attorneys wrote. “Brain OC promised an investigation into the misappropriation, a promise that has so far not been fulfilled.”
Jeff Singletary, a partner at Snell & Wilmer representing Mind OC, said they had received the county’s complaint and were “carefully reviewing it” in a statement Tuesday evening.
“Time tells and it reacts,” Singletary wrote. “The county’s decision to raise these charges now, for the first time, in a single complaint, speaks for itself.”
Mind OC sued the county to terminate the lease of the Orange site in 2024, claiming at the time that it was under pressure to occupy the site.
“It has become clear that the county used the land lease, and this dispute, as leverage to push another agenda, which is to take operational control of the Orange campus and replace the plaintiff’s employees with county employees,” Mind OC attorneys wrote in a 2024 statement signed by CEO Philip Frank.
City leaders are calling for mental health services to remain open during the trial
Amid the dispute between Mind OC and the county over the B-well facility, it is unclear when the Erwin B-well facility will open, according to county spokeswoman Molly Nicholson.
“The opening of the Irvine campus has been delayed because the county is unable to approve Mind OC’s sublease request that exceeds its significant costs for property management,” Nicholson wrote in a statement Tuesday. Nicholson wrote in a statement on Tuesday.
The facility is more than 75,000 square feet, covers 22 acres with more than 150 vacancies, costing Mind OC about $5 million in construction.
Supervisor Katrina Foley was more forthright with Brain OC leaders at the supervisor’s public meeting this week after several members of the nonprofit’s board spoke during a public comment period and encouraged the county to open the Irvine facility.
“Give us the keys,” Foley said in a stern response from Tuesday’s meeting.
She asked Mind OC to leave the property in a statement after the meeting ended.
“This action by Mind OC is like a hired contractor building a beautiful home for your family to find health and wellness and then refusing to give you the keys,” Foley wrote. Orange County owns the land and invested more than $68 million in taxpayer dollars to build the Irvine Health Campus to offer mental health and substance use treatment, rather than creating a structure where private interests drive unreasonable costs.
Irvine leaders are also pushing to reopen the facility, passing a resolution at a special meeting Tuesday night to open its doors in the county.
“Who isn’t on a case with the province right now?” Councilman Mike Carroll said, referring to a separate case between the county and the OC Power Authority.
He continued: “Every day that’s not open, there’s a 17-year-old young woman, maybe a 16-year-old, her parents are in crisis, her parents don’t know what to do.” “Every day this facility is not open, that child is not abandoned and not helped.
Editor’s note: Bill Taormina sits on the board of both Mind OC and Voice OC.
Noah Besiada is the voice of The OC Reporter. Contact him at nbiesiada@voiceofoc.org.
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