A nonprofit founded by Stockton Vice Mayor Jason Lee could be allowed to use city property worth an estimated $6.5 million to bolster its case for receiving millions in behavioral health money from the state.
The city previously declined to support four other nonprofits seeking the same state funds.
A City Council vote is set for tonight on whether to use the vacant, city-owned Teen Impact Center in downtown Stockton for a proposed project that Hollywood Cares — a nonprofit Lee founded — plans to pitch to state funders. The project would transform the building into youth housing.
When an official’s organization is offered a deal with the city, it often raises questions about fairness and possible conflicts of interest. So far, it’s not clear that either the city or Lee broke any local or state ethics laws in furthering Hollywood Cares’ proposed project. The vice mayor told Stocktonia he plans to recuse himself from Tuesday’s vote.
But the CEO of one nonprofit the city declined to support said his organization wasn’t offered use of the Teen Impact Center — or any other city property — to back their project.
“I would’ve been very interested,” Tony Yadon, CEO of Main Street Youth & Family Services, said.
Hollywood Cares
Founded by Lee in 2022, Hollywood Cares stormed onto the scene in Stockton the following year, before Lee was eventually elected to represent City Council District 6.
That spring, Lee — then a full-time entertainment industry commentator based in Los Angeles — campaigned vocally at Stockton City Council meetings for Hollywood Cares to receive $1 million in city funds for his proposed “I Am Ready” youth program.
Ultimately, the nonprofit wasn’t chosen. Then-City Manager Harry Black said the nonprofit’s plan for the money was too vague, The Record reported. Lee was elected to the District 6 council seat in November 2024.
The state money
In June, Stockton accepted competitive applications from local nonprofits looking for the city’s support in getting a piece of the $800 million state behavioral health money, according to a report included in Tuesday’s City Council meeting agenda.
California set aside the $800 million for new behavioral health centers following the November 2024 election, where voters passed a ballot initiative to put billions toward more behavioral health facilities and healthcare.
To get a slice of the funds, which California plans to distribute across the state, nonprofits must convince their local governments to front 10% of the cost of their proposed projects. Only then will the state consider funding the rest.
Four organizations — Friends Outside, Community Medical Centers, Service First of Northern California and Main Street Youth & Family Services (formerly Parents by Choice) applied, the report included in Tuesday’s agenda said.
After weighing their applications, the city declined to support any of the four organizations “due to the 10% match requirements and the lack of available funding for the City to contribute toward the match,” the report stated.
Sometime after the groups were rejected, Hollywood Cares approached the city with its idea to turn the vacant Teen Impact Center at North El Dorado and Park streets into transition-aged youth housing and a peer respite center, the report said. The Teen Impact Center property would count as the city’s 10% contribution.
It’s unclear if the nonprofit or the city first proposed using the center itself for the 10% match.
Stocktonia asked Jordan Peterson, deputy director of redevelopment at the city’s Economic Development Department, if city property could’ve been used to back the other nonprofits’ proposals.
Peterson didn’t answer directly.
“We don’t do behavioral health facilities,” he said by phone Friday. “So, it was just like, who’s out there who can put together the means to make an application happen.” Peterson added that he’d explain the situation in detail at Tuesday’s council meeting.
Stocktonia reached out to all four nonprofits the city rejected for partnership in seeking the state money. Friends Outside didn’t return a request for comment by deadline, and a spokesperson for Community Medical Centers said the organization had no comment.
When asked for his view, Vernell Hill Jr., the CEO of Service First of Northern California, said, “I don’t want to get involved in anything like that.”
Main Street Youth & Family Services
For his part, Main Street Youth & Family Services CEO Tony Yadon said his organization had applied for the city’s support for a proposal to transform a privately-owned building on American Street in downtown Stockton into a peer respite center.
The nonprofit’s proposal was rejected, along with those of the other four applicants.
“It’s a little bittersweet for us,” he said. The project would’ve been close to the nonprofit’s headquarters and “would really be a cool addition to our neighborhood.”
Yadon’s organization wasn’t offered the Teen Impact Center, or any other public property, to support its bid for the state behavioral health money, he said.
“I would’ve been very interested. I mean, I love that,” he told Stocktonia by phone Monday.
“It wasn’t even on my radar to look at something like the Teen Center to do this,” he added.
According to the report included in the City Council agenda, if Hollywood Cares successfully receives the state funding, they want Yadon’s organization to operate the resulting peer housing facility.
Main Street has been communicating with Hollywood Cares for about a year about possibly partnering on a youth project, Yadon said. But the CEO has little information about the proposal for Main Street to operate Hollywood Cares’ facility if it gets built, he said.
“From my side, it’s just been discussed. We haven’t signed on to anything,” Yadon said. “I think the reason we’re in the mix is because we’re the nonprofit that is Med-Cal certified, so we’re able to bill for medical mental health services.”
Ethics laws
When the City Council votes on whether to support Hollywood Cares’ project Tuesday night, Lee plans to recuse himself, the vice mayor told Stocktonia Friday.
“While I will be recusing myself from the vote, I have full faith that my colleagues will see the same promise this project holds for our community’s future,” he said in a statement.
California’s political ethics laws require that officials take no part in decisions that could significantly impact their financial interests. In his statement, Lee didn’t directly answer Stocktonia’s question about whether he holds a financial stake in Hollywood Cares.
To fully steer clear of conflicts of interest, officials must not only recuse themselves, but also take no part in “making, or attempting in any way to use the official’s official position to influence the decision,” according to the Fair Political Practices Commission.
It remains to be seen how the City Council will receive city staff’s proposal to partner with Hollywood Cares.
“I am looking forward to learning more about the proposal,” Mayor Christina Fugazi said via email Monday. “Hopefully my questions regarding the proposal will be answered so that we can all make an informed decision.”
Councilmember Michael Blower said he’d support the proposal “if I think it makes sense.”
Councilmembers Mario Enríquez, Michele Padilla, Mariela Ponce and Brando Villapudua sent no response to questions by deadline.
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