Everyone knew cuts were coming. San Diego faces a budget deficit worth more than a quarter-billion dollars.
But Mayor Todd Gloria’s proposal to stop funding a homeless shelter that serves residents with mental health needs still surprised several organizations that help run the place — including the nonprofit in charge.
“We are having emergency discussions with our staff and residents regarding this shocking situation,” Alpha Project CEO Bob McElroy wrote in a text message on Tuesday morning, shortly after the mayor’s budget draft was released. “We still don’t have the details and haven’t heard from anyone.”
The Rosecrans shelter is a large tent in the Midway District that holds 150 beds. The facility opened in 2022 near the San Diego County Psychiatric Hospital, and from the start the program has been a partnership between the county and the city. The city of San Diego hired Alpha Project to oversee the site while the county, which owns the land, paid for mental health clinicians, substance-use counselors and a nurse practitioner.
The county also supplies utilities through the nearby Health Services Complex, and officials have long planned to tear that building down as part of an expansion to the psychiatric hospital. The coming demolition appears to have influenced the mayor’s thinking. Gloria’s announcement said the city should consider walking away from the shelter “given the County’s plans to demolish the adjacent building on the site and cut off utilities.”
At least one county leader, however, bristled at having the blame put on them.
The health services building won’t be torn down until March 2026, and Supervisor Terra Lawson-Remer’s office said new water, sewer and electrical lines could be built in the meantime to keep the shelter open for several more years. Lawson-Remer estimated that construction should cost about $2 million and called on private donors to foot the bill.
She balked at the prospect of the county funding the entire facility. “For the County to take over full shelter operations inside the City of San Diego would be akin to the County running City libraries or paving City streets,” staffers wrote in a press release.
It’s not clear whether other of the board feel the same way. Supervisor Monica Montgomery Steppe added only that she appreciated Lawson-Remer’s leadership on the issue and hoped “we can come to a resolution soon.” A representative for Joel Anderson declined comment while a spokesperson for Jim Desmond didn’t immediately respond to a request for comment.
The county is facing its own deficit of about $140 million.
The current agreement that divides up responsibilities between the county and the city expires in July. Mayoral spokesperson Rachel Laing said that if the shelter does shutter, a plan would be developed to ensure nobody returned to the street. But Laing faulted county officials for not investing more in behavioral health services overall.
“This is typical of the County to the buck and abdicate their responsibility on homelessness and mental health,” she wrote in an email, adding that county leaders could always postpone the planned redevelopment. “It’s extremely concerning that the County believes these shelter residents — the majority of whom have behavioral health issues — can live mere feet from the noise, chaos and pollutants of a demolition site.”
Nonetheless, Gloria has cautioned that his budget proposal is not set in stone. “This is intended to start a conversation,” he previously said, and the details “will likely shift substantially as we get additional economic data” as well as from residents, council and budget analysts.
On the whole, the mayor has publicly declared that San Diego should continue funding homelessness services. “We know it’s actually more cost effective to bring people off the streets and into care than it is to leave them unhoused on the sidewalk,” Gloria said Friday at an unrelated press conference. “It’s very expensive to taxpayers to leave people in unsafe, unsanitary encampments.”
The mayor intends to submit a revised plan in May. The City Council is expected to vote on a final budget in June.
Backing out of the Rosecrans shelter would likely save the city several million dollars. San Diego’s original contract for the site with Alpha Project, which lasted just over a year, cost $4.8 million. The county, meanwhile, spent $1.4 million on behavioral health services during the program’s first fiscal year.
The tent itself was donated by The Lucky Duck Foundation. “The thought of the city eliminating funding is a tragic step backwards,” said Drew Moser, the foundation’s CEO. Moser hopes city and county officials will soon come to a compromise and pledged to aid those discussions in any way possible. “Finger pointing is not a way to find a resolution,” he added.
The city is expanding shelter on other fronts, including through a pair of soon-to-open downtown facilities that together will add around 200 beds to the system for women, children and young adults.
Staff writer David Garrick contributed to this report.
Editor’s Note: This story has been updated with comments from The Lucky Duck Foundation, the mayor’s office and County Supervisor Monica Montgomery Steppe.
