Nonprofit breaks ground on health campus at long-vacant south Sacramento complex
WellSpace Health broke ground on a Stockton Boulevard campus Tuesday, promising new mental health services for the region and filling a large office complex that has remained vacant since its construction more than 15 years ago.
The first portion of the project will be a planned 32-bed inpatient center for patients with serious mental illness.
“We see the mental health and drug addiction crisis on our streets every day,” said Sacramento Councilmember Eric Guerra. “You need to have a place to call, a person to come and help, and a place to go. This is a place to go.”
Construction on the inpatient facility will be completed in late 2026, and it is expected to open in 2027, said WellSpace CEO Jonathan Porteus. Operated by a third party, it will primarily serve patients who are insured through Medi-Cal, California’s Medicaid program.
The new services, officials said, would fill an urgent need.
A study commissioned by Sacramento County found that the area has a shortage of beds for patients who are at the end of a hospital stay but are not ready to live independently, said Ryan Quist, the county’s behavioral health director, during a groundbreaking event Tuesday. Health care providers regularly transfer those patients elsewhere, competing for spaces in other counties.
Sacramento-based WellSpace, which operates a network of safety-net health centers, also plans to build a communications center on the property for 988, the nationwide suicide and crisis line. It plans to establish outpatient services and a 200-bed residential program for patients with substance use disorders.
And over the longer term, WellSpace plans to add other medical and dental services at the site, at the corner of Stockton Boulevard and Riza Avenue in Sacramento’s Little Saigon District.
A struggling property
In the early 2000s, the property in south Sacramento, just inside city limits, was imagined as an “office condo” complex, where business owners would buy, rather than rent, individual units.
It was built in 2009 and went into foreclosure during the Great Recession, The Sacramento Bee previously reported.
New owners took over, officials said, but other plans never came to fruition.
“It never had a single tenant,” Guerra said.
Guerra said the owners were determined to see the property become a commercial site, though he saw similar properties struggling up and down Stockton Boulevard. He brokered a meeting with Porteus and the property owners, and WellSpace acquired the site.
A one-story building was demolished to make way for the planned, three-story inpatient center, Porteus said. A portion of the property is temporarily being used for a tiny home community. The other buildings will be renovated.
“This was a piece of land that had so much promise,” Porteus said. “We’re all looking forward to there being lights on, 24/7.”
The future of Stockton Boulevard
Local officials view the WellSpace development as a key part of their efforts to bring new investment to the Stockton Boulevard corridor.
City Council passed an ordinance in 2019 banning new mini-storage facilities and auto service shops on a section of Stockton Boulevard.
Guerra has talked about establishing a special taxing district, stretching from Broadway to Florin Road, that would use expected increases in property taxes to fund infrastructure improvements.
Guerra said Tuesday that the city is studying the economics of creating such a district. Staff are also evaluating the potential for a similar taxing district for part of North Sacramento, advanced by Councilmember Roger Dickinson.
Sacramento has established just two other special taxing districts of this kind before, for the Aggie Square life sciences district and Sacramento Republic FC’s planned stadium in the Railyards. Those were each based around a single, major development rather than large commercial corridors with small and midsize businesses.
Success, Guerra said, will depend in part on whether the county will contribute its portion of the property tax increases, and on officials’ ability to attract new, for-profit businesses to the area.
Once the WellSpace complex is built out, Guerra said, the area will be bookended to the north by UC Davis Medical Center and Aggie Square, and to the south by WellSpace. The campus will employ health care workers, bringing new foot traffic to the area each day.
“They have to eat somewhere. They have to do their dry cleaning,” Guerra said.
Frank Louie, executive director of the Stockton Boulevard Partnership, said the project is game-changing.
“This is crucial, for not only the Little Saigon District, but for future generations,” Louie said. “These services are critical.”
This story was originally published April 8, 2026 at 5:00 AM.
