Residents in a well-to-do neighborhood of Santa Monica are up in arms following the unexpected arrival of a ‘sober living facility’ that brought fifty new, and disruptive, faces into their community under the cover of night.

The scene unfolded on the eve of Thanksgiving when vans quietly pulled up to a vacant building on Ocean Avenue. What emerged was a group of individuals who quickly made the space their own, much to the surprise and concern of those living nearby. The locals were soon to learn that this unannounced occupation was intended to serve as a sober living facility, though it lacked the necessary permits.

Eyewitness accounts described a chaotic introduction to these new neighbors. According to the Los Angeles Times, some of the new arrivals were seen smoking cigarettes, some had unleashed dogs, and tensions flared resulting in at least one altercation.

Ashley Oelsen, a resident of the area, expressed her disbelief to the outlet, saying, “If I didn’t know what was going on, I would have thought it was theater.”

The sudden transformation of the vacant building into a living facility without any prior notice left many in the community feeling blindsided, as there had been no opportunity for public discussion or comment.

This incident adds to the growing list of disputes involving Leo Pustilnikov, the individual behind the facility. Pustilnikov has been at odds with residents and Santa Monica officials before, recently criticized by the Downtown Santa Monica Board of Directors for not being a “helpful contributor” to the community.

Officials imposed fines against the developer and ordered the building be vacated. The following Monday, the building was emptied, according to the outlet.

Pustilnikov, who leases the buildings from Bourne Financial Group, told the Times that his efforts were in an attempt to begin earning rental income while he sought change of use permits from the city. 

Fifty strangers were moved into the vacant building for the unpermitted sober living facility in the middle of the night before Thanksgiving 

Developer Leo Pustilnikov leased the two buildings on Ocean Ave. and attempted to move nonprofits into the buildings to produce income while he sought change of use permits

Locals in the affluent area were in uproar over the lack of communication and opportunity to oppose the facility 

It was Pustilnikov’s second failed attempt at such a project after he made plans to home county behavioral health patients over the summer. 

‘I didn’t realize you’re not allowed to help people that are struggling in affluent communities,’ he told the outlet. 

For Pustilnikov, in attempts to generate income faster as he undergoes the lengthy rezoning process, it means renting to nonprofits until he can redevelop.

‘I don’t try to hide the ball,’ the developer told the Times. ‘The idea was always, I pay the property owner, someone pays me rent, I more or less break even and I have time to entitle the property for something bigger.’

However, surrounding residents felt blindsided by Pustilnikov’s efforts. Renovations during the summer, including new paint, security cameras and a private property sign, sparked suspicions. 

But it wasn’t until months later that neighbors discovered that the renovations were to allow 49 behavioral health patients to move in. 

While the empty buildings at 413 and 825 Ocean Avenue have long been zoned for supportive housing, surrounding locals have raised safety concerns and outrage over the sober living facility.

‘It doesn’t make any sense,’ Cort Wagner told Fox 11. ‘Everybody here pays a premium, and the safety is less than anywhere else in the city.’ 

It was Pustilnikov’s second failed attempt at such a project after he made plans to home county behavioral health patients over the summer

Cort Wagner said that just two months after moving his family to the area, his family had a terrifying encounter with a homeless man wielding a knife

A homeless man seen on Venice Beach in Santa Monica

The two buildings are surrounded by luxury condominiums, with some selling for up to $7 million.

Wagner told the outlet that just two months after moving his family to the area, his family had a terrifying encounter with a homeless man wielding a knife. 

‘If this really turns out to be similar to what the other [mental health] houses have done where they’re escaping and there’s criminal behavior, and violent behavior [then] yeah, we’re going to move again,’ he said.

In October, locals packed into a City Council meeting to voice their concerns. 

‘No one told the community. We asked if the residents were violent and we got no answers,’ Charlie Loventhal, a local resident, told the outlet. 

Opposition to Pustilnikov’s plans grew quickly, as local Greg Morena told Fox: ‘It got big really fast. We ended up with 600 letters to the supervisor and city council and they’re still coming in.’

According to the Times, Pustilnikov, partnered with Bourne Financial Group and St. Joseph Center, received $3.5 million in bridge housing funds for renovations to house homeless locals. 

However, following the extensive backlash, the plans were put to a stop and the City Council claimed that they were just as unaware as the opposing residents. The county took responsibility for its failing to properly communicate with locals on the plans, the Times reported. 

Local Greg Morena said opposition to the mental health patient housing grew quickly and more than 600 letters against the facility were received 

Locals attend a City Council meeting in October to oppose Pustilnikov’s plans to home mental health patients in the summer

Charlie Loventhal said: ”No one told the community. We asked if the residents were violent and we got no answers’

Pustilnikov claimed that was his last planned endeavor to fill the building until he was approached in November by Pacific Coast Healthcare, operators of a sober living facility. 

‘I said, “Sure, why not?’ It sounded fine. They seem like reputable people,’ he told the outlet. 

However, as prospective residents were being moved in on that evening in November, the business had yet to obtain a business license or move-in approval from the city, City Manager Oliver Chi told the outlet. 

Pustilnikov also claimed that he hadn’t been aware of the operation to move them in during the middle of the night. Yet, despite the developer’s alleged lack of awareness, locals and officials were once again outraged. 

‘They brought all those folks in and then it took them a few days to relocate them. To an addict, all that chaos is just an opportunity for a relapse,’ Santa Monica Councilmember Lana Negrete told the outlet. 

‘Are we exploiting vulnerable populations in order to float some 20-story luxury project?’ 

Pustilnikov, however, has had a track record of dodgy dealings in the business after defaulting on some $19 million loan payments in 2020 after he bought a retail space in the Third Street Promenade. 

The developer was ousted by the City Council, appointees of the Downtown Santa Monica Board of Directors and even Caroline Torosis, the city’s mayor, who has been left uneased by Pustilnikov. 

New Mayor Caroline Torosis took issue with the intentions of moving in vulnerable groups without the proper permits, and said Pustilnikov’s actions left the city with ‘questions’

Pustilnikov is said to be scouting other sites in Santa Monica whilst in discussions with the Department of Mental Health 

‘I think that you need to center the needs of the people that you’re trying to help and ask, “Does it serve someone to pull the rug out from under them?”,’ Torosis told the outlet. 

‘Anyone who wants to work with us in earnest to solve our affordable housing and homelessness crisis, we want to work with… That said, his actions in and around the city leave us with questions.’ 

However, Pustilnikov’s efforts are far from over as the county Supervisor Lindsey Horvath’s office confirmed to the Times that he has been in discussions with the Department of Mental Health to look into other sites in Santa Monica. 

The Daily Mail reached out to Mayor Caroline Torosis, Bourne Financial Group, St Joseph Center and Leo Pustilnikov for comment.