WHEREAS, After conducting a duly noticed hearing on May 23, 2022, in conjunction with the City's applicable ordinances and resolutions, the Planning Commission of the City reviewed, considered and approved environmental clearance and recommended approval of the execution of this Agreement to the City Council. The Planning Commission found the Project:
consistent with the objectives, policies, general land uses and programs specified in the general plan; compatible with the uses authorized in the City's zoning laws; in conformity with the public necessity, public convenience, general welfare and good land use practices; will not be detrimental to the health, safety and general welfare of the city; will not adversely affect the orderly development of property or the preservation of property values; and will have a positive fiscal impact on the City;
WHEREAS, after conducting a duly noticed hearing on June 20, 2022, in conjunction with the City's applicable ordinances and resolutions, and after independent review and consideration, the City Council approved the execution of this Agreement by adopting the Enabling Ordinance, the ordinance that approves this development agreement. The City Council found the Project: consistent with the objectives, policies, general land uses and programs specified in the general plan; compatible with the uses authorized in the City's zoning laws; in confonnity with good land use practices; will not be detrimental to the health, safety and general welfare of the City; and is in the best interest of the City of Barstow and its residents.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows:
1. Government Code and Municipal Code Required Elements a. Description of Property. Land situated in the City of Barstow, County of San Bernardino, State of California; whose street address is 2989 Lenwood Rd,, Suite 1, City of Barstow, State of California (the "Site"). The Site includes Assessor's Parcel Number: 0421-313-55-0000 and 0421-313-58-0000.
b. Owner and Other Person with Legal or Equitable Interest.
Owner: Qiaomin Hu/ American Quartz Group, Inc.
Nature of Interest: Owner in fee simple.
Operator: Michael Wilhoit/Quality Life Inc.
Nature of Interest: 5-year lease with 3, 5 year options to renew If Owner is not the fee simple owner of the Site, check box below:
[ x] Operator represents and warrants that the prope1ty owner has consented in writing to the execution and recordation of this Agreement against the Site. c. Permitted Uses. The subject property may be used for a commercial cannabis cultivation, manufacturing and distribution as presently authorized W1der City Ordinance No. 977-2021, 5 As used herein, "Premises" means the designated structure or structures and land specified in the application that is owned, leased, or otherwise held under the control of the Commercial Cannabis Permittee applicant orCommercial Cannabis Permittee where the Commercial Cannabis Activity will be or is conducted. The parties stipulate and agree that the square footage for the Premises upon the Effective Date of this Agreement is and shall be during the term ofthis Agreement: approximately 5,000 square feet.
As used herein, "Commercial Cannabis Activities" means all permitted activities: e.g., cultivation, possession, manufacture, processing, storing, packaging, labeling, transportation, or distribution of Cannabis and/or Cannabis Products.
As used herein, "Gross receipts" shall mean the total amoW1t actually received or receivable in the course of business in a calendar year or calendar month from sales or the performance of acts or services for which charge is made or credit allowed. "Gross receipts" include, without limitation, all receipts, cash, credit, property received in lieu of cash, and any other valuable consideration taken in exchange for goods, services, or other valuable consideration.
As used herein, "Production Space" means the area on or within the Premises intended for Commercial Cannabis Activities excluding non-operational common areas such as restrooms, cafeterias, break rooms, hallways, corridors, vestibules, parking structures or surface street lots.
The parties stipulate and agree that the square footage for the Production Space shall be determined by the City Manager in his sole and complete discretion as the Project is completed.
The City Manager is specifically authorized to set and adjust the square footage for the Production Space and to determine the corresponding operating fee as the Project is completed.
Operator, or Owner if Owner and Operator are the same entity, agrees to pay to City, in order to enable City to promote, protect, and enhance the healthy, safety, and welfare of the community and its residents and its quality of life, the greater of the following fees if holding a Cannabis Cultivation Permit or Cannabis Manufacturing Permit:
1) a yearly operating fee of Five Dollars ($5) per square foot x total square footage of the "Premises" until Operator is operating on the Premises and selling product under its City CCP and State License(s). Once Operator is operational and generating revenue, the yearly operating fee is Five Dollars ($5) per square foot x total square footage of the Premises. Fees shall be paid on December 31st of every year. Failure to pay the fee within 30 days after the due date shall result in an additional penalty for nonpayment in a sum equal to 25 percent of the total amount due.
Holders of Cannabis Non-Storefront Retail Delivery Permit of Cannabis Storefront Retail Permit shall pay:
2) a monthly operating fee(s) of:
3% (three percent) of Gross Receipts for operations from the Cannabis NonStorefront Retail Delivery Permits and Cannabis Storefront Retail Permits, to be paid monthly. Fees shall be due to the City on 1st of the month. 14 Failure to pay the fee within 30 days after the due date shall result in an additional penalty for nonpayment in a sum equal to 25 percent of the total amount due.
Facilities with multiple licenses must not commingle respective sales proceeds, and blend percentage rate of Gross Receipts.
d. Operator, or Owner if Owner and Operator are the same entity, understands and agrees that the fees set forth above shall be paid in a manner and in accordance with a payment schedule set or modified by City. The cultivation, manufacturing and distribution space to which the fee applies is as identified on the attached floor plan.
e. If Operator makes any changes to the interior layout of the facility that increases the amount of space allocated to those uses to which the per-square- foot fee applies, Operator shall notify City of such changes at least fourteen (14) calendar days prior to making such changes, and the per-square-foot fee shall be modified accordingly. If Operator fails to give City notice as required herein, Operator shall be responsible for paying to City a per-square-foot fee based on any increase in the amount of space allocated to those uses to which the per-square- foot fee applies retroactive to the date the Regulatory Permit became effective.
8. Cost Recovery Fee
In addition to the applicable application fees, community benefits payment, and City operating fees, Operator agrees to pay, and City shall assess to Operator, or Owner if Owner and Operator are the same entity, fees to recover City's reasonable processing and monitoring costs relating to Operator's business upon issuance of Operator's Manufacturing, Cultivation and Distribution and/or Microbusiness Permits or any Additional Permits (hereinafter "CRF"). CRFs are separate and apart from any operating fees set forth in Article 7. The Operator, or Owner if Owner and Operator are the same entity, shall pay all such fees per the cannabis fee scheduled as adopted by the City Council by Resolution.
a. Processing Fees. Processing fees for the Application are based upon the direct and indirect costs that City incurs in reviewing the Application. The processing fees for the Application shall be based only on costs that are reasonably necessary for processing the Application and implementing the Ordinance, including staff time, legal fees, and consultant fees.
b. Annual Regulatory and Monitoring Fees. Annual Regulatory and Monitoring fees for the Manufacturing, Cultivation and Distribution Permits are based upon the direct and indirect costs City incurs in confirming the use of the Property in accordance with the municipal code, the Ordinance, this Agreement, and the Application. The monitoring fees shall be based only on costs that are reasonably necessary for conducting these reviews. c. Billing and Payment. The City may elect to bill the Operator, or Owner if Owner and Operator are the same entity, the Initial CRF on the first day of the month following the Effective Date of this Agreement. Thereafter, City shall bill Operator, or Owner if Owner and Operator are the same entity, the CRF on the first day of each Quarter with an invoice providing the time 15