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AUTHORIZE THE ACQUISITION OF REAL PROPERTY LOCATED AT 1661 WEST FREMONT STREET AND APPROPRIATION OF FUNDS FOR THE ACQUISITION
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution:
1. Authorizing the appropriation of $400,000 from the Police Department’s Pet Overpopulation Donation Accounts to be used for property acquisition and related costs of 1661 West Fremont Street for the Stockton Animal Shelter;
2. Authorizing the acquisition of real property located at 1661 West Fremont Street, Stockton, California, APN 135-110-14 (Property) from Andrew J. Frey and Debra D. Frey, Trustees of the Andrew and Debra Frey Revocable Trust dated May 24, 2023 (Seller) in the amount of up to $3,200,000;
3. Authorizing the filing of Notice of Exemption No. 27-25 under the California Environmental Quality Act (CEQA) for the acquisition of real property located at 1661 West Fremont Street, Stockton, California, APN 135-110-14; and
4. Authorizing the City Manager to execute a purchase and sale agreement substantially similar in form to Exhibit 1 attached to the resolution within 45 days of the date of this action, and to take any and all actions necessary and appropriate to carry out the purpose and intent of this resolution, including the execution of documents.
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Summary
The Stockton Police Department (SPD) manages and operates the Stockton Animal Shelter (SAS), which provides essential community services such as animal care, adoption, and public education for responsible pet care. A new facility is being constructed to replace the currently inadequate facility; however, with the animal overpopulation crisis, it will still not fully meet the needs of the community. Therefore, SPD initiated the process with the Economic Development Department (EDD) to acquire the Stockton Veterinary Specialty Center at 1661 West Fremont Street to fully serve the needs of the animals of the community during the transition and in the years to come.
DISCUSSION
Background
SAS has been a vital part of the community, providing essential services such as animal care, adoption, and public education for responsible pet care. The current facilities are inadequate in meeting animal care standards; thus, the City is expanding the facility to include a new reception area, community clinic, staff office space, and a cattery. Although the newly expanded facility will ease the current strain on resources, it is not expected to fully meet the increasing needs of the community. SPD identified an opportunity to enhance veterinary services, increase adoption capacity, and create a dedicated space for community outreach and education when the owner of the Stockton Veterinary Specialty Center shared an intent to sell the Property. Thereafter, SPD engaged EDD to initiate the process to acquire the Property.
In October of 2024, EDD requested and received approval to start the acquisition process for the Property (Attachment A - Vicinity Map and Attachment B - Aerial Map) on behalf of SPD. The Property’s current use as a veterinary clinic is consistent with SPD’s proposed use for SAS; therefore, it will require minimal modifications to begin operations, as opposed to acquiring a property without veterinary facilities. SPD’s acquisition of the Property will allow SAS to provide enhanced medical and adoption services while the expanded facility is under construction, minimizing disruption of services and providing the safest environment for the animals during this time. Once construction of the new facility is complete, the Property will continue to provide services given the pet overpopulation crisis in the City.
In December 2024, in anticipation of the acquisition, City Council authorized an appropriation of $2.8 million for the Property, through Resolution No. 2024-12-03-1504 (Attachment C - Resolution 2024-12-03-1504). The Property is ideally suited for the specific needs of SAS as it includes both boarding and medical facilities for animals and is client-friendly due to the customer-facing spaces and on-site parking. There are no other veterinary clinics for sale, nor have any recently been sold in the City. Staff evaluated comparable properties in other markets through an appraisal. Given the available information in the market and the inclusion of the medical equipment, the $3.2 million purchase price is justified and necessitates an additional $400,000 appropriation under the proposed resolution.
Proposed Purchase and Sale Agreement
With City Manager approval, EDD staff began exclusive negotiations with the Property owner, subsequently presented an offer to purchase and negotiated a Purchase and Sale Agreement (PSA) with transaction support from their real estate and property services consultant, Propertyworx LLC, who will continue to support the City through the close of escrow.
EDD staff and their consultant obtained and reviewed a preliminary title report prepared by Chicago Title Company to determine that the Property’s title condition was acceptable. Of note, the Deed for the Property, as well as the Deed for the adjacent property, memorialize an access easement for the Property. Additionally, Public Works staff visited and inspected the property on April 25, 2025. Based on their assessment of the Property, and their review of available records regarding a prior cleanup on the adjacent parcel, they did not recommend commissioning any physical due diligence prior to the close of escrow. Therefore, the PSA includes a one-year period where the Seller indemnifies the City for up to $320,000 should hazardous materials be discovered.
Should Council proceed with the recommended actions, the PSA will be executed by the City Manager within 45 days. After the PSA is effectuated through the City Manager’s signature, the parties will have up to 60 days to close escrow.
Environmental
The Community Development Department has determined that this action/project is exempt from the requirements of the California Environmental Quality Act (CEQA) and has been granted a “Categorical Exemption” under Article 19, and specifically section 15061(B)(3) of the State CEQA Guidelines (Exhibit 2). In accordance with section 65402 of the Government Code, the Community Development Department further determined that this action/project conforms to the City’s General Plan designation for the site and with the General Plan Policy Document, as amended.
FINANCIAL SUMMARY
Under the PSA, earnest money in the amount of $320,000 is required to be provided by the City to Chicago Title Company within 10 business days after the PSA is effective. The remaining $2,880,000 of the purchase price would not be transferred into escrow until closing. The funds used will be a combination of the remainder of the December 2024 appropriation and the additional appropriation proposed to Council as part of this action. Funding to support this action will include $400,000 from the Police Department’s Pet Overpopulation Donation Accounts, and a total of $2.8 million appropriated to this project through Resolution No. 2024-12-03-1504.
Attachment A - Vicinity Map
Attachment B - Aerial Map
Attachment C - Resolution 2024-12-03-1504