Plans for health clinic at old DMV site run into roadblock

Nov. 8—STOCKTON — Plans for a health clinic on East Pine Street in Lodi may not move forward after San Joaquin County staff said they do not meet a state requirement.

"We've selected a site, there's a letter of intent kind of negotiated between the developer and the prior CEO of San Joaquin Health that was never signed," interim San Joaquin Health CEO Greg Diederich told the San Joaquin County Board of Supervisors Tuesday.

"But (the project) was not competitively bid," he added. "I think the prior CEO thought (the property) would be bought by San Joaquin Health rather than the county. I think (the buyer) has to be the county, because there's a procurement process we have to follow."

Diederich was responding to Supervisor Steve Ding, who provided an update on the potential of building a new clinic at 700 E. Pine St. and urged county staff to move forward.

"Everybody is in support of this project, everybody understands the need to put a clinic — something you can touch, something you can feel — on the east side of Lodi," Ding said. "East Lodi is an under-served neighborhood that has been lacking attention from the county for decades."

The site in question is the former location of the Lodi Department of Motor Vehicles branch, which has been unoccupied for more than a decade.

Ding said he met with the Lodi Chamber of Commerce and local building partners to find an appropriate site for a Lodi clinic earlier this year.

Once the site was determined, Ding said he urged Lodi Memorial Hospital Foundation board member Steve Diede, owner of Diede Construction, to purchase the site and make necessary improvements. According to Diederich, the project's budget assumptions were that San Joaquin Health would lease the site back from Diede, with the intent to ultimately purchase the property.

But, Diederich maintained the county should purchase the property, not San Joaquin Health, which is a nonprofit organization that broke away from San Joaquin General Hospital.

Ding said escrow on the site is set to expire Nov. 11, and if the project doesn't move, the property would be lost.

"Everybody is in agreement that this needs to be done," Ding said. "I know I'm not doing this the normal county way. But I want this done officially, and I want it done now."

Aside from the project not being competitively bid, Diederich said he had cost concerns associated with opening another clinic.

He said San Joaquin Health's current Manteca clinic has 17 exam rooms, but only one doctor on site. In the first four months of 2023, he said the clinic lost 6,000 visits due to the staff shortage, which equals an average general revenue loss of $5.2 million.

Estimated costs for a Lodi clinic would be $6.2 million, he said.

"Clinics just aren't viable, financially," Diederich said. "I would love to get to Lodi. But right now, I've got compliance concerns. Can we get the money? Can we staff it? Can we physically operate it?"

Currently, there are no specific plans for the clinic, but the Lodi Planning Commission approved rezoning the site last month, although neighbors raised concerns about increased traffic and limited parking in the neighborhood.

John Della Monica, Lodi's community development director, told planning commissioners that San Joaquin Health would reach out to neighbors and provide specific plans once the rezone was approved.

Supervisors directed Diederich to reach out to Diede and try to extend the escrow on the site so the county can possibly move forward on the project.

Diederich will return to supervisors at future meeting with an update.