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Staff Report

Lancaster City Council
August 12, 2025

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Staff Report
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August 12, 2025
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Lancaster City Council
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STAFF REPORT
City of Lancaster
CC 1
8/12/2025
TN
Date:August 12, 2025
To: Mayor Parris and City Council Members
From:Nicole Jones, Sr. Analyst – Community Development
Subject: Approval of CEQA Notice of Exemption and Adoption of Resolution 25-XX Authorizing the City Manager to negotiate, finalize, and execute certain documents relating to the California Department of Health Care Services Bond BHCIP Round 1 Launch Ready Program Funding, including, but not limited to: (1) Ground Lease agreement with Universal Health Services, Inc.; and (2) Program Funding Agreement with Advocates For Human Potential, Inc. and determining such actions to be exempt from the requirements of the California Environmental Quality Act Recommendation:

1.Approve California Environmental Quality Act Notice of Exemption

2. Adopt Resolution 25-XX
a. Authorizing the City Manager to finalize, negotiate and execute a Ground Lease Agreement with UHS, Inc.
b. Authorizing the City Manager or his designee to sign Program Funding Agreement (PFA) and Attachments as appropriate with Advocates for Human Potential, Inc. for the California Department of Health Care Services Bond BHCIP Round 1 Launch Ready Program Funding for the Behavioral Health Hospital Grant
G.C. Section 84308: No
Fiscal Impact:

None.

Background:

In partnership with Palmdale Regional Medical Center (PRMC), the City applied for grant funds under the California Department of Health Care Services Behavioral Health Continuum 2 1
3 6
Infrastructure Program (BHCIP). PRMC is owned and operated by a subsidiary of Universal Health Services, Inc., one of the largest healthcare management companies in the nation. On December 10, 2024, the City Council approved the submittal of the grant application.

In May of this year, the City was notified that it was selected to be an awardee for Round 1 in the amount of $83,740,546 to develop a 96-bed behavioral health hospital. Envisioned services will include an acute psychiatric hospital, outpatient community mental health clinic, crisis stabilization unit, outpatient treatment for substance use disorder, and a partial hospitalization program.

As a step forward in this process, a ground lease agreement with UHS, Inc. and appropriate signatory approvals for the Program Funding Agreement and attachments as appropriate with Advocates for Human Potential, Inc. are required. Those attachments include:

1. Certification regarding lobbying

2. The sponsor public works certification

3. Budget prevailing wage compliance

4. Related party & related party transaction disclosure

5. Match funds, property equity, or in-kind match

6. Declaration of restrictions

7. Legal review of ca welfare and institutions code §5960.31

8. Planning agency review

9. Due diligence completed

10. Design development drawings 100% complete

11. Construction drawings for first submittal to building department

12. Construction contract with construction contract addendum

13. Prevailing wage compliance

14. Utility service commitments, building permit receipt and notice of exemption filed

15. Required insurance and notice to proceed

16. Project construction is 50% complete

17. Receipt of certificate of occupancy

18. Notice of completion and receipt of conditional/unconditional final releases of liens

19. Receipt of business license and operational

20. Project close-out, retention funds, excess funds, and continued compliance

21. Regulatory agreement and declaration of restrictions

22.Construction contract addendum

23.Facility access agreement
Attachment:

Resolution 25-XX

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