Rehab provider agrees to cut beds

The largest operator of sober-living homes in Newport Beach has agreed to preliminarily cut by a third the number of beds it provides at its drug and alcohol recovery facilities to settle a discrimination suit the company brought against the city.

Sober Living by the Sea sued Newport Beach in February, alleging that the city discriminated against recovering drug and alcohol users by passing an ordinance that curbed operations at its facilities.

The ordinance was passed after years of complaints from city residents who said the high number of rehabilitation homes had turned their neighborhoods into quasi-hospitals, bringing traffic congestion, noise, secondhand smoke and other problems to an already dense waterfront community.

The tentative settlement was reached a month after a federal judge issued a preliminary ruling upholding much of the ordinance, which required about 80% of the rehabilitation centers to apply for permits in order to stay open.

In its February lawsuit, Sober Living by the Sea said the ordinance violated the Americans With Disabilities Act and federal fair housing laws by targeting recovering drug and alcohol users, who are considered disabled by law.

The agreement, announced Saturday by city officials, calls for Sober Living by the Sea to reduce its number of beds on the Balboa Peninsula by about a third. In conjunction with the city ordinance, the agreement will nearly halve the number of recovery centers in Newport Beach, officials said.

Assistant City Manager Dave Kiff said the tentative settlement “reaches into an area we haven’t been able to go before” by regulating state-licensed facilities that treat six people or fewer at a time.

“We’ve been able to do what no city has been able to do,” he said.

The agreement has yet to be approved by the city Planning Commission and City Council, which may take it up as soon as next month, Kiff said.

Kiff said the city still faces legal challenges from two other recovery-center operators, Pacific Shores Recovery and Morningside Recovery, in addition to mediation talks with activist group Concerned Citizens of Newport Beach, which has demanded greater restrictions on the facilities.

Still, Newport Beach Mayor Edward Selich said in a statement that his city would see “a dramatic and permanent reduction in the over-concentration of recovery facilities.”

Sober Living by the Sea applauded the agreement.

“I think it’s a great step forward,” said John Peloquin, vice president of operations for CRC Health Group, which owns Sober Living by the Sea. “We’ve found some common ground.”

Peloquin said the company “made some concessions” about Sober Living by the Sea’s presence in the neighborhood and will likely have to close several of its roughly 35 centers to comply with the agreement. Yet Peloquin characterized the deal as “win-win.”

Under the settlement, the firm would drop its discrimination suit against the city.

A city survey had found that 76 sober-living homes provide more than 500 beds total, four times the number it would have if the homes were distributed evenly per capita statewide.

The California Department of Alcohol and Drug Programs requires licenses for homes that provide on-site treatment. Only 28 of those 76 facilities were licensed by the state, the survey found.

Local activists expressed doubt about the effectiveness of the deal.

“We do not believe that the city has stemmed continued over-concentration,” said Denys Oberman, chief executive of Concerned Citizens of Newport Beach, who disputed some of the city’s bed-reduction figures.

The case had been closely watched by other California communities grappling with large numbers of sober-living homes, said Jim Markman, at attorney who represented Newport Beach.

“When we started to tackle this issue almost two years ago, Newport Beach willingly entered into uncharted territory knowing that just about every group home operator and many California cities were watching and waiting to see how we would fare,” Markman said in a statement. “This settlement is proof -- we hope -- that we’ve set a course of cooperation others can follow.”

In addition to reducing the homes’ beds citywide to 156 from a high of 238, the tentative settlement requires Sober Living by the Sea to move homes from heavily concentrated areas on Balboa Peninsula and Lido Isle. The dispersal of homes would bring the company into compliance with the new ordinance, which requires there be no more than one such facility per block.

If Sober Living meets those requirements, under the settlement terms the cap on its beds would rise to 204.

The company must also keep treatment centers 1,000 feet from elementary schools and day-care centers.

“Everybody is in favor of treatment and recovery,” said Malibu City Atty. Christi Hogin, whose city has been watching the issue. “The problem is there is a very lucrative business that tends to get out of control.”

Newport Beach officials are reviewing permit applications submitted by roughly 15 other sober-living operators that have about 173 beds citywide.

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susannah.rosenblatt@latimes.com