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Press release

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Orange County leaders are set to take over two mental health campuses that have been at the core of a years-long lawsuit between the county and Mind OC, a nonprofit they once partnered with.

The settlement, signed on Oct. 5, ends the debate about who owns the property and a partnership fraught with accusations of fraud and mismanagement. 

It comes after Mind OC, a nonprofit the county partnered with for years to help run their largest mental health outreach programs dubbed Be Well OC, sued the county in 2024, alleging that county leaders violated the ground lease and essentially executed a hostile takeover of their shared facility in Orange just off the 57 Freeway. 

County lawyers filed their own cross complaint earlier this year, claiming that Mind OC violated dozens of the lease terms and pocketed millions of dollars improperly. 

Neither side’s allegations were decided in court, with both sides choosing to drop the litigation and allow the county Health Care Agency to take over running both the Orange facility and an Irvine facility the two sides completed but never opened amid the litigation. 

In exchange, county leaders are letting Mind OC keep a contested pot of around $2.1 million according to the settlement agreement, and both sides agreed not to disparage one another. 

The transition is set to take about 90 days, according to the settlement agreement.

During that time, Mind OC is slated to hand over all things needed to run the two campuses and sign over all their existing sub leases to the county, effectively removing them from any healthcare management. 

This clears the way for the Irvine facility to finally open its doors; while construction was completed months ago, no one could open it amid the dispute on who owned the land.

Originally, Mind OC was set to operate both campuses as a one stop shop for mental health care, accepting both private insurance and Medicare patients, but county leaders say that vision never fully materialized. 

Both Mind OC and the county put out statements on Tuesday supporting the transition, with OC Board of Supervisors Chairman Doug Chaffee saying it “reflects a mutual understanding that our missions may now be supported through separate operational pathways.” 

It remains unclear what Mind OC’s future work will be without their flagship projects.

“Be Well OC has always been about more than buildings, which were just one of our pillars of our original blueprint,” said Dr. Richard Afable, chairman of Mind OC’s board of directors, in a statement to Voice of OC. . 

“Our mission is to strengthen Orange County’s behavioral health system through public and private partnerships, and that hasn’t changed. We look forward to continuing to serve Orange County residents in new ways and continuing our system navigation services,” he continued.  

CEO Phillip Franks declined requests for an interview, and Afable also put out a short joint statement with the county praising the settlement.  

“The mission of Be Well OC is to enhance the behavioral health care system for all Orange County residents through transformational public and private partnerships, and we are proud to have built two state-of-the-art campuses for behavioral health services in Orange County. We look forward to continuing our mission and serving Orange County residents,” Afable said. 

One of the requirements of the settlement was that both sides would release one joint press release. 

Initially, both Mind OC and the county worked together on the Orange site that opened in 2021, with the county contributing over $16 million to construction while Mind OC helped organize a $12 million donation. 

Both sides agreed that Mind OC would manage construction and property management once the center opened, with the nonprofit paying $1 a year for the building under their lease, an agreement county lawyers say was intended to help save money on the space. 

But after a county audit found systemic problems with Mind OC’s billing of the county and questions on the contractors they hired, supervisors pulled back most of the funding they’d committed and looked to remove Mind OC from having anything to do with patient care. 

The settlement requires county auditors not to initiate any new investigations into Mind OC. 

The end of the lawsuit also comes as some cities have dropped Mind OC as their contractor for mental health services, instead opting to contract with other nonprofits or discontinue services for things like social workers for homeless people. 

Editor’s Note: This article was updated to attribute several quotes to the Mind OC Board Chair Dr. Richard Afable after a spokesperson clarified attribution after publication of this story.

Editor’s Note: Bill Taormina serves as a board member for both Voice of OC and Mind OC. 

Noah Biesiada is a Voice of OC reporter. Contact him at nbiesiada@voiceofoc.org.