This article describes a small (38 bed) tertiary mental health facility in the community developed as part of the downsizing and replacement of a large provincial mental hospital in British Columbia. Development took place in two phases: an initial pilot project comprised of 12 beds in two open units (1994-2002) and the subsequent rebuilding as a 38 bed facility which included two secure units (2002 - present). The project has attempted to demonstrate the feasibility of integrating a rehabilitation focus into a program that treats some of the most difficult patients. The planning process and philosophy, the patients, program and staffing are reported, together with the informal results from phase 1 and some of the early results from a formal 5-year evaluation of phase 2.