Santa Cruz Community Health and Dientes dental secure million-dollar loans from state

SANTA CRUZ — Santa Cruz Community Health and Dientes, a community dental provider, have been approved to receive two separate 1.5 million dollar loans by the State Department of the Treasury. Those funds will be used to build medical and dental offices in Live Oak, in conjunction with MidPen Housing, a non-profit developer.

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Santa Cruz Community Health and Dientes Community Dental Care announced Friday that Sutter Health has invested $1 million to support the construction and operation of a health and housing project in Live Oak.

“These loans are critical because they target small and rural health facilities that have difficulty getting the financing they need,” said State Treasurer Fiona Ma in a statement.

The project, slated for development at 1500 Capitola Road, will also include 57 low-income residential units. The property, which is currently owned by the Santa Cruz County Redevelopment Successor Agency, is pending sale to MidPen, who specializes in building affordable housing.

Dientes has been approved to use the state treasury loan to build a 5,600-square-foot dental clinic. That facility will be equipped with 11 chairs, and is part of a larger “health campus” vision for the property, Sheree Storm, chief development officer with Dientes, told the Sentinel.

“It’s going to enable patients to have more integrated care between Santa Cruz Community Health and Dientes Community Dental, but also the need in our community for access to affordable care is great,” Storm said. “Dientes serves predominantly those who are on Medi Cal or who have no health insurance.”

That dental facility is estimated to cost $8.6 million to build, and the Santa Cruz Community Health Centers medical center, $19.6 million. Santa Cruz Community Health plans to build a two-story, 20,000-square-foot medical facility with services including behavioral health and pediatric care.

As the Sentinel reported in December, the to-be-developed site is contaminated with tetrachloroethylene, or PCE, a dry cleaning solvent. High levels of the pollutant have been found in soil gas and groundwater.

The site developer, likely to be MidPen, has laid out plans to install a remediation system that decreases pollution levels, as required by the California State Water Resources Control Board. Without such a system, future occupants could be exposed to PCE through inhaling vapors.

That remediation system — when operated correctly — reduces the risk to human health, but does not clean it up, according to Jim Wells, a geologist with L. Everett & Associates, and an expert in soil gas contamination.

Some scientists and advocates have raised concerns that capping the pollution is not a replacement to cleanup. Still, to proceed with construction, MidPen is only required to install such a system, not remove underlying contamination, per the water board.

The pollution source, according to the water board, is likely an adjacent former dry cleaning business that operated in the ’60s through the ’80s. It’s currently unclear how far that soil and groundwater contamination extends, since an environmental investigation is ongoing. No timeline has been set for when a cleanup will occur.

In an area where a housing crisis means a tight rental market and swelling homelessness, County Communications Manager Jason Hoppin said the mixed-use project is crucial.

“Locating community dental and medical services in an area like this would provide critical benefits to the community,” Hoppin said. “In addition, low-income housing is desperately needed throughout Santa Cruz county and this project is virtually unprecedented in providing 100% affordable units.”

That means all future tenants would need to be income-qualified to rent out a unit.

Some local neighbors have expressed concern, questioning the extent of the pollution in the area-at-large, and when it might be cleaned up. Capitola Road Neighbors, a local neighborhood organization, wrote to the Board of Supervisors in December:

“At the outset, although supportive of the final plan that was created for the parcel, we were quite surprised that the information about chemical contamination at the site, the extensive testing, the plans for addressing the health impact problem, plus a change in the sale price of the Redevelopment parcel, was placed on the Consent Agenda! Especially since the public has shown consistent interest in this project. This new situation is serious.”

In an email, MidPen Housing told the Sentinel, beginning construction of the housing site at Capitola Road is dependent on securing funding.

“Starting construction is dependent upon raising all capital financing and MidPen is still hard at work submitting competitive financing applications,” wrote Joanna Carman, director of housing development with MidPen.

Construction on the health campus is slated to begin this spring, and at the earliest, crews could break ground on the housing units in November.