A high-speed plan to build sober-living homes in Santa Rosa has hit a wall, as negotiations over county opioid settlement dollars have collapsed between Sonoma County officials and one of the region’s most prominent developers. The Gallaher group says that new contract terms from county staff would scare off lenders and stall the project. The company sent the Board of Supervisors a sharply worded letter laying out its frustration. The disputed award would send nearly $3.9 million to Buckelew Programs for several recovery residences, including a Doyle Park campus, while county staff say their proposed language is aimed at safeguarding public money as the projects move toward construction.
Gallaher group says terms are blocking loans
In its letter to supervisors and in later comments to reporters, Gallaher Companies and its partners argue that a county-added deed restriction and a subordination clause would stop both construction and permanent lenders from closing on the deal. The partners say they are prepared to build the homes at cost and turn them over fully furnished, but contend the new language makes borrowing “impossible.” The Press Democrat reports that the proposal calls for four sober-living houses totaling about 68 beds, while county estimates put local overdose deaths at roughly a dozen each month.
Board approved the Buckelew award but says it is conditional
The Board of Supervisors has already voted to recommend awarding $3,873,235 in opioid settlement funding to Buckelew Programs for the recovery residences, yet county officials emphasize that no money moves until final agreements are in place. According to Sonoma County, the county has accepted roughly $14 million in settlement payments so far and expects more in coming years, all under strict rules that tie spending to treatment, prevention and capital projects. Those timelines and restrictions are central to the contract language county staff are trying to lock in.
What the project would look like
State environmental filings describe a countywide effort to acquire or rehabilitate up to four single-family homes to operate as sober-living environments, with at least one site in Santa Rosa. The CEQA notice says the residences would be placed in existing neighborhoods, prioritized as single-family structures and spaced so that no neighborhood hosts more than one facility. The filing is posted on CEQAnet. On its philanthropy page, Gallaher Companies identifies a Doyle Park campus at 520 Doyle Park as a planned two-house location, with two 10-bedroom residences. The company says it and Poppy Bank are prepared to support development and lending as part of the partnership with Buckelew Programs.
County counsel says these tools are not unusual
Sonoma County’s legal team maintains that deed restrictions and subordination clauses are standard features in publicly funded capital projects and are widely used in affordable housing finance. Deputy county counsel Jeremy Fonseca told The Press Democrat that such provisions are common in affordable housing agreements and that there are lenders willing to work with those terms. County administrators say they have floated multiple counteroffers over the course of negotiations, trying to balance lender requirements with the county’s need to enforce how the properties are used.
What comes next
The county’s own Notice of Intent to Award for the opioid funding spells out that the recommendation is not final and that “a failure to reach agreement will prevent the execution of an agreement and the award of funds,” a reminder that the deal can still be paused or reworked. Sonoma County officials say they are targeting a transparent, competitively awarded use of settlement dollars that complies with the settlements’ legal limits. Both sides maintain that they want new sober-living beds online as quickly as possible, but the schedule now hinges on whether the contract language can be revised in a way that satisfies lenders while keeping the county’s oversight intact.
Why it matters locally
Backers of the proposal argue that the planned beds would significantly boost recovery options at a time when county leaders say overdose deaths remain a serious concern and treatment access is stretched. Advocates and county officials point to projects such as the Athena House and Hope Village partnership as examples of how development and operations teams can move quickly when financing and contract terms line up. For now, the dispute highlights how the fine print of law and lending can decide whether opioid settlement dollars become real beds in real houses or stay parked in negotiations.
