A partnership with a nonprofit founded by Vice Mayor Jason Lee was rejected by Stockton City Council in applying for a state grant to renovate the Teen Impact Center into youth housing.
The decision to not apply for the $58 million state funding grant came after over an hour of discussion during the Tuesday meeting where council members cited concerns over Lee’s potential conflicts of interest, the application process and the project’s readiness.
The vote was 3-2, with Councilmembers Michele Padilla, Brando Villapudua, and Mayor Christina Fugazi voting no, and Councilmembers Michael Blower and Mario Enriquez voting yes.
Councilmember Mariela Ponce was absent.
Lee recused himself due to his ties and as founder of one of the partnering organizations, the Hollywood Cares Foundation.
The grant would have been provided through the Behavioral Health Continuum Infrastructure Program (BHCIP) a state initiative funded by Proposition 1, a voter-approved measure providing up to $6.4 billion in bonds for mental health and homelessness services.
During closing comments, Lee expressed disappointment, characterizing the rejection as a blow to community youth.
“This is the last BHCIP grant, just so we’re clear, so there is no more funding availability,” Lee said. “You didn’t do this to hurt me, you did this to let down the kids of this community.”
The vice mayor walked out of the meeting before the council adjourned, while council members gave their closing comments.
Round 1 of the program, dubbed “Launch Ready,” awarded $3.3 billion earlier this year for shovel-ready projects. The phase Round 2, “Unmet Needs,” offers over $800 million to construct, acquire, or rehabilitate facilities addressing gaps in behavioral health care, such as community residential beds and crisis settings.
The $58 million grant would have been provided through the Round 2 phase.
The city needed to submit its request for up to $58 million in state funding by Oct. 28, and contribute 10% of the cost (about $5.8 million). Stockton intended to use the Teen Impact Center property as the required 10% down payment on the project, estimated at around $6.4 million, instead of cash.
The Teen Impact Center has remained vacant since 2021 and in disrepair, with recent estimates of needed repairs at $10 million to $12 million — exceeding a 2017 assessment of $4.2 million.
Jordan Peterson, deputy director of the Economic Development Department, presented the proposal and aimed to repurpose the site without straining the general fund.
The city would apply as a co-applicant alongside the Hollywood Cares Foundation, which partnered with San Joaquin County Behavioral Health Services and Main Street Youth & Family Services (formerly Parents by Choice) to turn the Teen Impact Center into the “I Am Ready Stockton Youth Center.”
Amelia Williamson, managing director of Hollywood Cares, outlined the vision for the center as a hub for transition-age youth (18-25), particularly those from foster care, or underserved minority and LGBTQIA+ communities facing homelessness, trauma, or mental health challenges.
“This project directly expands the continuum of care in San Joaquin County, bridging prevention, crisis stabilization, and long-term recovery,” Williamson said.
Council questions focused on the application’s origins and transparency, with council members Padilla and Villapudua scrutinizing Lee’s involvement with Hollywood Cares.
Villapudua expressed concerns that the vote was not safe, focusing on Lee’s involvement with Hollywood Cares. He stated that Lee is listed as a high-ranking official under his given name.
“You’re saying the vice mayor is just a board member, correct?” Villapudua asked Williamson. “But when I see ‘principal officer, Jason L. Johnson’ listed, what does that mean if he’s a board member and not the principal?”
Williamson explained that Lee is a non-profit board member where no money is exchanged and he is not in charge of anything at the foundation.
Villapudua turned to Peterson, asking for specifics on Lee’s involvement.
“Was there any communication, direct or indirect between the vice mayor and the city staff or the Economic Development Department about including Hollywood cares and the BHCIP proposal?” Villapudua asked.
Villapudua reiterated his question three times, as Peterson did not answer directly.
“Not to the extent where (communication with the vice mayor) was dictating stuff,” Peterson said.
Economic Development Director Tina McCarty stepped in to explain communication with Lee did not result in a specific direction for the foundation.
“The vice mayor certainly was aware of the BHCIP grant funding prop one,” McCarty said. “The idea of, ‘how do we go about applying for this (grant)’ was a conversation. The Conversation started back, my best recollection is late February or early March. So there were a lot of brainstorming conversations that the vice mayor was definitely involved in with leadership at the time, as to, how might we go forward.”
California political ethics laws dictate that officials take no part in decisions that could significantly impact their financial interests. To avoid conflicts of interest, officials must recuse themselves and have 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.
In his statement to Stocktonia, Lee did not directly answer if he holds a financial stake in Hollywood Cares.
Padilla expressed frustration over the rushed timeline and deviations from standard procedures.
“This is not about questioning anyone’s intentions, we all agree we need behavioral health facilities here in Stockton,” Padilla said. “Normally, with a process like this, we have a timeframe where (Request for Qualifications) RFQs are issued, and all of us get a chance to review those applicants to ensure there’s no favoritism. We need full transparency.”
She pressed Peterson and McCarty on why the RFQ wasn’t reopened to allow original applicants to use the property equity match.
“I don’t like that we’re presented with this decision now, with the Oct. 28 deadline less than two weeks away. I feel slammed, to be honest,” Padilla said. “Why couldn’t we have entertained offering the property equity to the other applicants?”
McCarty explained that the RFQ was initially for partner identification without plans for property equity, and Hollywood Cares’ post-closure proposal emerged as a viable option.
Fugazi said Lee’s conflict of interest presented too many issues.
“It causes me pause, especially hearing, unfortunately, hearing that over a year ago, before any of us were here or not, that these discussions were being had,” Fugazi said. “Another discussion was had, and it doesn’t necessarily pass the smell test. “
Blower suggested applying for the grant and the worst-case scenario would not be an issue because the council will decide what to do with the money.
“I don’t see why we wouldn’t want to roll the dice and see if we can get that $58 million,” Blower said. “Best case scenario we get the $58 million, we are going to make the decisions all the way through, so we as a council will have that. Let’s say, four or five years from now, the situation changes, (Hollywood Cares) goes bankrupt, we still own this building that’s all fixed up, and at that point, because of the deed restrictions, we would just find another operator.”
The motion to approve the resolution was rejected.
“While I believe politics played a role in this outcome, this decision doesn’t hurt me — it hurts Stockton,” Lee said in a statement to Stocktonia News. “I’ll continue fighting to bring innovation, opportunity, and investment to our city, even when others don’t share the same vision.”
“Tonight’s presentation was a chance for Stockton to secure critical resources for our youth, create good-paying jobs for our residents, and provide 20 beds for homeless youth in need of respite. It was an opportunity to collaborate with the county, activate an underutilized city-owned property, and demonstrate real leadership — and the council failed.”
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