Father Lausen, who led the missionary system following Father Serra's death, raised the cross on August 28, 1791 on where Mission Santa Cruz, or "Holy Cross," was to be built. On September 25, 1791, the Mission Santa Cruz was formally founded as the 12th California Mission.
Mission Santa Cruz is known as "the hard luck mission." The first hard luck that the Mission suffered came in the form of floods. The original Santa Cruz Mission was located on the banks of the San Lorenzo River near what is now downtown Santa Cruz. This was a perfect location because the river produced such rich, fertile soil for growing food. In fact extra fruits and vegetables from mission's fields sometimes helped feed the people at Mission San Carlos Borromeo. No one predicted that heavy rains would cause the river to swell and flood the mission twice. The second flood forced the padres to rebuild the mission on a hill overlooking the city.
If only the padres knew what further trouble awaited them! The Governor of Spain decided that a pueblo was to be founded a few miles away from the mission. This pueblo was named Branciforte after the Viceroy at that time. To the padres' dismay most of the people that settled the town of Branciforte were convicted criminals. Branciforte soon became a center for smuggling and drinking. Many of the Ohlone Indians from the mission visited this town to learn more about the vices of the colonists. The Franciscans were very frustrated to see members of their mission community exposed to such unchristian behavior. To top off all this misfortune, the people from Branceforte robbed the mission while the padres were at a celebration at nearby Mission Santa Clara.
In the 19th century the mission fell into disrepair. In 1840 it's bell tower fell down and in 1857 the entire mission was destroyed in a bad earthquake. Between 1835 and 1840, following Mexican independence from Spain, the mission establishment was secularized. The 35 adobe structures on Mission Hill, which had been the core of the mission settlement, became the nucleus of the early pueblo (town) of Santa Cruz and were gradually converted to commercial uses.
In 1930 a wealthy family planned to build a full-sized copy of Mission Santa Cruz a few hundred yards from where the old mission stood. While the new Mission was being built the stock market crashed. This meant that the family lost their fortune and could only afford to build a mission half the size of the original one.
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