OC’s Main Provider of Homeless Services Draws Fire From Advocates

Nick Gerda/Voice of OC

Mercy House Executive Director Larry Haynes responding to public concerns about the county's year-round homeless shelter at a public forum last year.

While there are many organizations in Orange County that provide services to homeless people, one towers above all others when it comes to getting county contracts to operate emergency housing.

That organization is Mercy House, a nonprofit that runs both of the county’s seasonal homeless shelters in Santa Ana and Fullerton and is expected by many to be tapped to run the county’s first year-round emergency shelter when it opens in Anaheim.

Since 2009, Mercy House has been awarded $36 million in county contracts to not only run the armory shelters, but also for homelessness prevention, rapid re-housing, and renovating properties for permanent affordable housing. The contracts are nearly all funded by the U.S. Department of Housing and Urban Development and managed by the county.

But while Mercy House has for years been the go-to provider for county and city officials, the organization and its executive director, Larry Haynes, have not been as well received by many who operate at the street level.

Several key homeless advocates and providers who work in the trenches describe Haynes and Mercy House as difficult to work with on many levels. They say, for example, homeless people are sometimes not treated with courtesy and respect at the check-in center that Mercy House operates.

And, some providers and advocates say, while Mercy House has continued to get city and county government contracts, many of the promised services don’t materialize.

“They can’t do the job but they get the project anyway. It just doesn’t make sense,” said Larry Smith, a leading homeless advocate in the Civic Center who goes by the name “Smitty,” referring to a recent contract for El Niño emergency beds.

For his part, Haynes acknowledges he’s made mistakes in some community relationships and acted in a heavy-handed way. But he also emphasizes that Mercy House programs have had major successes, including the placement of thousands of people in permanent housing, with well over 900 people expected to be placed this fiscal year.

And he says one of the main reasons why Mercy House gets the lion’s share of these contracts is that other organizations haven’t been willing to step up to the plate.

“We’re gonna do incredible work. [And] 90 some-odd percent of the time we get it right,” Haynes said during a wide-ranging interview last week. “If you’re wrong, you’re wrong, and all you can do is hear it, feel it, and act on it…And I’m gonna do the best I can.”

Broken Trust With Advocates

Advocates say they’ve lost trust in Mercy House, complaining that Haynes has rebuffed efforts to dialogue about how to improve services and incorporate good ideas.

That frustration has been expressed by members of the self-organized homeless advocacy group Civic Center Roundtable, like Smitty, as well as service providers like Dwight Smith of Isaiah House.

“I would say that his outreach to the homeless is uninspired, off-putting and not at all helpful,” said Smith, who has served the Civic Center homeless for over 20 years.

When asked about the breakdown in trust, Haynes took full responsibility, particularly for the fraying of relations in the Civic Center.

“That is fair. I want to acknowledge it. I want to publicly apologize for it, and it is unacceptable to me…the entirety of that mistake is on me,” Haynes said. “It is rooted in my arrogance…it is rooted in my not stopping and being more decent sometimes. And I am sorry. I know better.”

The irony of it, Haynes added, is that it stands in “stark contrast” to Mercy House’s history, which includes being the first provider in the county to have homeless clients define project goals instead of staff being in charge.

And, he said, the “overwhelming majority of the response” from people we serve “is deep appreciation and support.”

That being said, “there’s been a lot of soul searching,” Haynes acknowledged.

When it comes to relationships in the Civic Center, Haynes said he has staff who are doing more outreach, like attending Civic Center Roundtable meetings and helping people get placed into housing.

Perception of Unmet Promises

Advocates have also been frustrated by the lack of progress in establishing a long-promised Santa Ana check-in center for homeless people’s belongings, despite the city approving $200,000 for Mercy House to operate it more than a year ago.

They also point to Mercy House’s role as the service provider for promises county leaders made regarding 440 extra emergency beds for homeless people during this winter’s El Niño rains. In December, after months of warnings about threats the rains presented, the county outsourced the service to Mercy House. But the beds hadn’t materialized when the first storm came in early January.

Adding to the frustration in the aftermath of the storm, Smitty said, was that a Mercy House program director “actually admitted Mercy House cannot supply the [440] beds” promised by the county.

Haynes acknowledged the perception problem, but said he and his staff did the very best they could within the tight time constraints they faced.

Mercy House applied to provide 200 of the beds, he said, but wasn’t told it received the county contract until around Christmas, just a few days before the first storm hit on Jan. 6. And the official contract wasn’t signed by the county until Jan. 27.

“You’ve got to find these locations, you need to get approval…It’s just really difficult” in that short of a timeframe, Haynes said.

Plus, Haynes said he knew from the outset that the timing of the contract would make it extremely difficult to find bed locations and get city approvals for pick-up locations. So he reached out to other providers to join in and collaborate on finding space. But, Haynes said, he was left standing alone.

“I personally asked all of my colleagues” if they’d help on this, to split the beds, Haynes said. “Everyone said no. Everyone. So as it turns out, we were the only respondent.”

What remains to be answered is why county staff, particularly Community Resources Director Karen Roper, set up a process where the beds contract wouldn’t be signed until late January, when they knew in October about the threats the winter storms presented to the lives of homeless people in the Santa Ana riverbed and elsewhere.

Roper hasn’t responded repeated interview requests through county spokeswoman Jean Pasco to discuss what happened.

Asked about the timing, Pasco said staff acted as soon as they brought a bidding process to supervisors on Dec. 8 and got approval. “When [supervisors] provided the direction the [request for bids] was issued” that same day, she said.

For the Santa Ana check-in center, Haynes said the hang-up has been in finding a workable location, something the city is responsible for.

“There was a real difficulty in locating a site,” he said.

He did, however, reiterate that he made mistakes in building his relationships with Civic Center homeless leaders at the beginning of the process, and apologized. “I admit there is something about my personality that is toxic there.”

More recently, Haynes said he and his staff have “absolutely” been doing the best they can. The plan going forward is to set up a mobile check-in center using a modified vehicle, which Haynes said he thinks would be up and running in March.

Concerns About a Lack of Respect

While a similar check-in center in Anaheim has been up and running for a couple of years, there have been complaints about some Mercy House representatives treating homeless people with a lack of respect.

At the Anaheim center, homeless people’s belongings were stored in trash cans, according to Ian Daelucian of the non-profit Heart of Delight, who cited that last year in urging Santa Ana officials to question whether their check-in center will respect people’s humanity.

“When we provide a service, let’s put ourselves in that position of being the service recipient,”  Delucian said.

And at the same Mercy House-run check-in center, signs issued stern warnings about bringing pets in and suggested the center was on the verge of being shut down if people didn’t help keep it clean.

One sign reads in big bold letters at the top: “NO ANIMALS ALLOWED IN THE YARD,” followed by: “ The owner of any animal seen in the yard will receive a warning that counts toward the 3 Warnings and Out for 30 Days Rule.”

Mercy Houe check in sign on Animals


That’s followed by: “If you use services here, please do your part to help maintain the area surrounding the yard. Please help keep the Port-o-Potties clean, as well as the alleyway/sidewalk. Lack of cooperation may lead to the closure of this facility and the services provided here.”

Mercy House check-in sign - shut down

Asked about the signs, an advocate with the ACLU of Southern California said research shows that coercive requirements and threats degrade the quality and effectiveness of services.

“The worker-client relationship deteriorates, and clients engage in flight behavior (i.e., they avoid service providers),” ACLU homelessness analyst Eve Garrow said of the studies. “The core of effective and successful service provision is the trust between providers and clients, which is fostered by respectful and collaborative relations and is undermined by threats and coercion.”

Haynes said he wasn’t aware of the signs until a Voice of OC reporter asked about them on Saturday.

“The wording could probably have been [phrased] a little more diplomatically,” Haynes said after a reporter read the wording on the sign to him. But, he added, the underlying reasons for the signs were valid.

“Regarding the pets, we have had to place stricter controls for health and safety considerations, as people were not cleaning up after themselves,” Haynes said. “We tried several, softer approaches, and unfortunately were left having to be more strict than frankly we wanted, or want to be.”

As for the bathrooms, Haynes said “they were being abused to an extent that required a stricter response and communication style than is our norm or preference.  But, we needed to get control of the situation or risk losing the resource.”

Regarding the storage containers, Haynes said the intent was not to be inhumane or disrespectful, with the contains being chosen after touring and researching other providers who use those bins.

“In no way was there any indication that use of these containers was at all perceived as inhumane or disrespectful” in the research, Haynes said.

He also said there’s a practical reason for the containers to have wheels and lids, and that they’re “purchased new and have never been used for trash. We simply would not do otherwise.”

A Close Relationship With the County

Another issue that frequently comes up is how county’s emergency housing contracts seem to always go to Mercy House, with advocates noting a close working relationship between Haynes and county officials like Roper.

Mercy House has been the county’s sole armory shelters contractor since 2008, and was the only group to bid for the contract in 2011, with the county exercising built-in renewal options that expired last summer. The contract was then extended for this fiscal year without a re-bidding.

“It just can’t be every time you send out an [request for proposals], one person” applies, said Smitty. “It just doesn’t make sense,” he said.

Asked about the perception of Mercy House being the sole provider on the contracts, Pasco, the county spokeswoman, said county staff reached out to other emergency housing non-profits like the Illumination Foundation and the OC Rescue Mission, to invite bids for the recent El Niño contract.

“For whatever reason, the [request] didn’t yield more than just one responder, and that was Mercy House,” Pasco said.

Haynes, for his part, emphasizes that he also has been trying to get other providers to apply for county contracts, to no avail.

And when it comes to the El Niño contract, he said it would have been extremely difficult, if not impossible, for anyone to deliver what the county wanted by the time the first rain storm came.

“There were flaws in our grant application…we knew it,” Haynes said, noting that he only applied for 200 of the 440 beds.

But, he said, he took an approach of “let’s step up, and let’s do the best that we can.”

Nick Gerda covers county government for Voice of OC. You can contact him at ngerda@voiceofoc.org.

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  • aristotle

    Larry Haynes and his great crew at Mercy House have done a fantastic job that other County’s would love to copy. Smitty is a little like Larry and I were some 30 years ago and he is vital to getting better services for the homeless. Today, Larry is very much a businessman with a balance sheet to manage so as to borrow the funds necessary to build shelters….and, he is great at both.

  • dc matthews

    OK OC Rescue misson will incarcerate homeless for 90 days blocking all outside medical and mhcare even VA care. instead as part of their program… or is that programming. .. Why wont others participate? OC Govt made sure to NOT sign contacts and effectively make sure program did not occur. Is that in violation of anything since they receive fed funds? What is solution(s) to any of this?

    • OCResident

      As long as the specific programs you note at OC Rescue Mission don’t use any federal funds, then Jim Palmer and his staff are free to do pretty much whatever they want with their programs – short of violating federal Fair Housing laws. It doesn’t make what they do right, just legal.

  • LFOldTimer

    “It just can’t be every time you send out an [request for proposals], one person” applies, said Smitty. “It just doesn’t make sense,” he said.”
    Like I told ya earlier, Smitty. It all makes sense. In fact, it makes perfect sense.

  • LFOldTimer

    “They can’t do the job but they get the project anyway. It just doesn’t make sense,” said Larry Smith, a leading homeless advocate in the Civic Center who goes by the name “Smitty,” referring to a recent contract for El Niño emergency beds.”
    Come on, Smitty. Think about it. Of course it makes sense. Government contracts are almost always overpaid and in almost all cases underperform. If you followed the money trail you would understand why. Actually getting the work done effectively is not a priority when it’s funded with other people’s money. Finding willing and generous sugar daddies who’ll play the game to keep the political beneficiaries happy is what it’s all about. Besides, most of the funding comes from the Feds and it’s darn easy for County bureaucrats to award jobs using other people’s money. Try spending other people’s money sometime. I bet you’d both fun and personally rewarding.
    As far as disrespect for the homeless…if you keep in mind that these programs are generally designed to benefit the bureaucrats and administrators and their cronies – the disrespect part makes sense. It doesn’t make it right. But it may relieve some confusion.
    I don’t want to give them any ideas….but let’s be grateful that the BoS hasn’t required the homeless to sing “Amazing Grace” to get hot meal from Mercy House. But Bartlett is the new Chair. Her seat’s barely warm and she’s already acting like Nurse Rached. So stay tuned.

    • David Zenger

      Have any guesses how much this Haynes guy pulls down being basically the second middleman for Federal funds?

      I wonder if the Supervisors have a clue.

      • LFOldTimer

        Oh I’m sure the BoS knows. And they likely remind Haynes on a regular basis too. I wonder if or how much Mercy House donates to political causes and where the money flows? $36m in County contract awards is nothing to sneeze at. If that were ever to go bye-bye it would probably sink their boat.

        • OCResident

          501(c)3 non-profits are not allowed to expend any of their funds on political campaigns or causes. 501(c)4’s can (think superPACs). But Mercy House isn’t that kind of non-profit. You can also check their 990’s online to verify that.

          • LFOldTimer

            If a tree falls in the forest and no one is around to hear it, does it still make a sound?

          • OCResident


      • OCResident

        That information is publicly available. According to their most recently available IRS 990 tax forms (2013), the Mercy House agency assets (both physical and cash) equaled $8,436,000. Larry Haynes’ salary is about $108,000. That’s 1.2% of the agency’s total budget for that year. I don’t see that as being at all unreasonable. Feel free to look them up on either Charity Navigator or Guidestar if you’d like to check my math.

        • LFOldTimer

          What’s his total compensation? Sometimes salaries at the non-profits are only the teasers.

          • OCResident

            Sure, point taken. For context, I recommend looking at Charity Navigator’s 2014 study of non-profit CEO Compensation, in which they looked at a sample of total compensation packages for CEOs/Executive Directors across the country for 2011 and 2012 (http://www.charitynavigator.org/docs/2014_CEO_Compensation_Study.pdf). They looked at over 3,900 mid and large sized charities broken down into seven geographic regions (we were the Pacific West region). In the “Human Services” category, into which homeless services falls, the median compensation – salary and benefits – for 2012 was $110,000. The median means half of the sample was below the median and half above, not an average which is highly skewed by outliers.

            Looking back at the 990 for Mercy House from 2014, there is a line entitled “Compensation of current officers, directors, trustees and key employees” which has a total value of $125,000. Given that no board members/trustees are paid a dime, and since Mr. Haynes’ salary is already listed at approximately $108,000 earlier on the form, I would assume that this larger amount includes both his salary and benefits. Going back to the amount I noted earlier today of approximately $8,436,000, this larger compensation package still only accounts for 1.4% of the agency’s budget.

            Now I suppose one could argue that the organization is “hiding” something that wouldn’t be reflected on their 990s. Sure, anything is possible. But having worked in or around non-profits for my entire career, I have found that 99.9% of them are completely honest about their finances and regularly do excellent work on meager budgets.

            I believe where you and I differ here is that I feel that to automatically assume that Mercy House’s business relationship with the County of Orange is somehow tainted simply because it has been the only provider to regularly submit to, and therefore the only agency available, to take on these contracts is simply misguided and without factual basis. If you can show the VoC readership any evidence to the contrary, I’m absolutely willing to review that evidence and draw an appropriately informed conclusion.

          • LFOldTimer

            A reasonable man would wonder why only one firm would jump at the chance to obtain $36m in government funds since 2009. The article did not explain the reason, it only compounded the confusion. If I understand the article correctly, MH was the sole bidder in 2011 and since that time the contract was automatically renewed or extended foregoing any further bidding process. Was the RFP written is such a way that only one firm in our thriving economic community could meet the basic human and property servicing components of the contract? Why does MH seem to have a monopoly on the homelessness business in OC? There are many unanswered questions here. The public has witnessed some big problems with county contracts in unrelated areas. So our skin is thin. That is not to say there is any what you called “taint” going on here. There are just a lot of unanswered questions that I believe the public should get answered since it involves a large expenditure of our taxdollars. This is particularly true since some homeless advocates have criticized some services rendered by MH. That could be a result of a lack of competition. You seem to be a MH advocate. I am a taxpayer advocate. Hopefully we can meet somewhere in the middle.

          • OCResident

            I can certainly agree that our BoS (both its current members and it’s past versions) have done a sorry job of governing in a transparent way that actually provides services our tax dollars pay for. So I think I understand why you and other commenters frequently question – as you should – the validity of any contractual arrangement for anything at the county level. But let me be clear that I don’t mean to be a MH advocate specifically, but an advocate for ending homelessness in Orange County. Although I have been following the VoC articles for many months on this and other homelessness related issues in OC, I decided to finally chime in because I fear that the impressions left by this article in particular (or at least what it’s headline implies) could help dismantle the incredible progress that’s been made on this complicated policy issue in the last few years.

            Homelessness was largely ignored by all of our OC elected officials – county and city – for over 3 decades. Passed off as something that the private sector could and should handle. The problem is that this issue is far too complicated for only one sector to address, and it is irresponsible for our policy makers to perpetuate and expand the scope of homelessness in our community by doing nothing. What the impetus has been for the BoS to finally take notice of this issue, I have no idea, and ultimately I really don’t care, as long as we start getting folks off the street permanently.

            As to why MH has been the only respondent to the county’s RFP, I think the answer is quite simple, although understandably not obvious to people not in the know. Working with “rough sleepers”, or people who’ve often been living on the streets for many years, is hard work. If an organization can make their money from whatever source (foundations, private donations, government grants, etc.) to help single mothers and their young children, or homeless kids who are escaping the foster care system, or even veterans, they’ll do that because it’s so much easier than serving single men and women who appear to “want” to be homeless (a complete misconception that would be a discussion for another day). It’s so much easier to get donations from folks when you have pictures of adorable kids and their families on the cover of your annual report than if you have photos of residents of the Civic Center on the cover instead.

            I think its shameful that so many other providers would rather cherry-pick the easier to serve clients than help those who need a ton more help and will die 20 years earlier than the rest of us if they don’t get it. While I understand the personality conflicts among some advocates, MH, and the homeless residents themselves, the impression suggested by this story could also be used by those with ill intentions to scuttle the major initiative that’s been made so far. Is this progress perfect? Surely not. But a lot more people will become homeless in Orange County, and even die on our streets in the months and years to come, if we wait for the perfect rather than working for the good.

          • LFOldTimer

            Thanks for your feedback, OCResident. It was helpful. You strike me as someone who cares about the homeless and not just another overpaid bureaucrat promoting his next meal ticket. Best wishes to you.

          • OCResident

            LFOldTimer – thanks for your kind words. I don’t generally get involved in online comments because the anonymity can really ramp up the trolling and negativity. But I’ve enjoyed having a great discussion with you over the last few days, and am glad to have shared some information you found useful. I suspect one doesn’t change many minds in online commenting, but I appreciated the opportunity to share my thoughts, and do sincerely hope that our entire Orange County community – elected officials included – can come together to actually solve homelessness, rather than use it as another political football for the next election cycle. Best you you as well.

          • anonymiss

            You do seem very biased as far as it comes to the Mercy House. I can tell you I helped contribute to this article and witnessed the appalling behavior by the staff and the corruption that goes on with the Mercy House. I will remain anonymous, because Larry has been know to try and manipulate the homeless so that they do not speak out against him. I worked at the Check In Center for over a year and still do advocacy for the homeless in Anaheim. The fact is that Larry hires incompetent staff and has interns write all the grants for Mercy House. The interns are not incompetent and they are the ones that brought light to this serious situation. So before you jump on Larry Haynes fan wagon. You should maybe go to La Palma Park where the Check In Center is located and ask the homeless people how they feel they have been treated by James Brooks who runs the armory and Check IN Centers. He is Larry Haynes confidant. Larry is well aware of how unhappy the homeless people are with the Mercy House’s services. They do not treat the homeless people with dignity. When was the last time you have gone and volunteered with the homeless in these areas? Have you ever been to the armory? Have you ever been to the Check In Center? Obviously not. And if you have been, then it proves that you are on here to defend the Mercy House.

          • OCResident

            Although I find your assumptions about a complete stranger to be both insulting and uninformed, I will go ahead and respond to your missive. I am also an advocate in Anaheim and have worked with James and his staff quite closely over the last several years. Although there can be some variation in the quality of the volunteer organizations that come to provide services at the check-in center, I have found the MH staff to be nothing but professional and compassionate. I also know their Development Director – the person who writes their grants. And, no, she doesn’t use interns for that part of the job.

            I have volunteered at both the check-in center and the Armory. Neither is a great option, but better than no options at all. I think MH staff are doing their best with limited resources. You also seem to have no idea and/or memory of how the Armories were run by the MH predecessor. You want lack of dignity – try regular sexual and physical assaults on both adults and children, no food or floor mats, stealing of belongings, and being completely ignored by that organization’s staff. I have no idea if MH is the best shelter operator ever, I just know they are doing a great job with the resources they have with a program that was almost completely shut down because the previous operator ran it into the ground.

            If that alone makes me a de facto defender of Mercy House, then guilty as charged. And proudly so.

          • aristotle

            Good desire and I think that both the taxpayer and the homeless have been really well-served by Larry Haynes Father Karcher and Mercy House.

    • OCResident

      I can’t speak to how or even whether Supervisor Bartlett will continue to address homelessness in Orange County during her leadership tenure. What I can say is that after over 20 years of forcing the non-profits and faith community to completely care for homeless issues in our county, our local leaders are finally doing something they should have been doing all along. To simply ignore our homeless neighbors for so long is criminal as far as I’m concerned. I don’t know why this is suddenly on the radar for the elected officials here, but I guess I don’t really care as long as they are finally putting money where it belongs – into ending homelessness in Orange County. Neither the service providers nor the government agencies can address this alone, and for some reason, the elected side of the equation has finally gotten the message.

  • David Zenger

    County programs aren’t supposed to work. It’s the gesture that counts, not the end result. Confusing statistics with “metrics” is the way to paper over any embarrassment.

    As for spokesperson Jean Pasco, I’m still waiting for the former newspaper reporter to “speak” about how she and Tom Daly fooled the Board into buying the worthless, derelict property at 433 W. Civic Center for a County Archive and Sports Hall of Fame, swindling the public out of $2.1 million.

    • OCResident

      While I don’t think that a 100% government-led effort is completely appropriate on this issue, I also don’t think it’s fair to single out Mercy House for negative attention on this just because they were the only applicant. I don’t see the OC Rescue Mission, Illumination Foundation, Families Forward and others banging down Karen Roper’s door for all of that allegedly sweet HUD cash. Truth is, working with HUD money (or any federal grant, for that matter) is a singular clusterf*ck with all of the reporting requirements and auditing that’s required. None of the other shelter providers want to do it because it’s a ton of work for almost no administrative money. That’s great for the services, but at some level, you need staff people to do things (like submit all of the crapton of paperwork that HUD requires), and people need money to live, so they kind of need to get paid. You can’t run operations like this on volunteers alone. I’ve managed enough volunteer-run events and programs in my time to both love their dedication, but loathe how unreliable they are.

      • anonymiss

        The reason Oc Rescue Mission, Illumination Foundation, Families Forward and many others are not “banging down Karen Roper’s door”, is because the Mercy House has the largest amount of money in Orange County and they are highest funded monopolized non profit in Orange County. Many other smaller non profits made a bid for the proposed shelter off of Kramer st. They were denied. Larry has his hand in dirty politics and has a lot of power with city council members and dirty politicians. Since you say you have ran many volunteer events alone then you should know about the shameful bureaucracy that occurs in Orange County. You seem so admirable of Larry and the Mercy House. You need to ask the people they serve, regarding their feelings about how the Mercy House treats them. The Mercy House’s goal is to help the homeless population in Orange County not degrade them.

        • LFOldTimer

          Thank you for the other side to the story. There’s always more to the picture than what meets the eye.

        • OCResident

          To my knowledge, no agency was “denied” an opportunity to apply for the Armory contract a few years back. In fact, if memory serves, the Rescue Mission seriously considered it, but decided not to. I don’t think IF even existed then, or if it did, was tiny at the time. I don’t believe the property on Kraemer has even closed escrow yet, so there is no RFP for anyone to have applied for, let alone be “denied”. Even Mercy House hasn’t applied for anything yet related to the Kraemer property because the county doesn’t own it yet.

          I don’t see what running volunteer events has to do with “shameful bureaucracy that occurs in Orange County”. Although I’ve had many of my volunteers over the years be folks who were government employees of all kinds (federal, state and local), I never organized an event specifically for a government agency, so the two are completely unrelated. Whether a volunteer is corrupt is irrelevant to me – I just need them to show up at the appointed time and volunteer.

          I believe I sense that you personally have been offended by someone or a group of someones at Mercy House. If so, did you ever speak to James and/or Larry Haynes? What was the outcome of that interaction? If you have specific concerns that can be addressed, it seems logical to give them the opportunity to change, rather than just demeaning them anonymously online.