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 August 15, 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 development, infrastructure, capital improvements, including expansion and/or improvement to existing facilities or other physical improvements that provide a benefit to the community, support of holiday and special community events, and support of local public service, public safety, litigation defense, and special social and community organizations. This community benefits program may be implemented by the City. The City may invite public participation in the decision-making process for identifying and prioritizing community needs and benefits and identifying appropriate projects to be funded by the entity implementing this community benefits program. All projects under the community benefits program must be approved by the City.
Operator agrees, as a business expense, to pay the City the yearly sum of $10,000 (calculated as $2 per sq. ft.). Unless initialed below by the City Manager, this yearly sum shall be deposited in full into a dedicated account set up by the City in order to create, fund and impl�ment a City-approved community benefits program. The community benefits program funds shall be spent only as directed by the City Council and shall be separately accounted for within the City's General Fund.
c. Designation of Community Relations Liaison. Pursuant to Ordinance No. 977-2021, at the time of this Agreement, Operator's day,..to-day operations manager, Michael Wilhoit, will be responsible for community inquiries and complaints and on-site management during normal business hours.
d. Interface with Barstow Police Department/ Inspections. Operator's day-to- day operations manager, and/or the Operator's Community Relations Liaison, Michael Wilhoit, will interface with the Barstow Police Department's assigned designee to ensure its operation complies with state and local laws and regulations. The City Manager, or designee, or the Barstow Police Department's assigned designee acting at the City Manager's request and per his specific and limiting instructions, shall have the right to enter all Premises from time to time unannounced during hours of operation for the purpose of making reasonable inspections to observe and enforce compliance with this Agreement and state and local laws and regulations, without the requirement of a search warrant, subpoena, or court order, and subject to appropriate cost recovery fees set forth in this Agreement, or adopted by the City. e. Local Recruitment, Hiring, and Training Programs. Operator is committed to making a good-faith effort to recruit, hire, and train City residents for employment by Operator. A goodfaith effort means Operator shall take the following or similar actions to recruit and employ City residents: 1) Contact local recruitment sources to identify qualified individuals who are City residents, 2) Advertise for qualified City residents in trade papers and newspapers of general circulation in the area, and 3) Develop a written plan to recruit and employ City residents as a part of its workforce. At a minimum, the Operator commits to a good faith local annual hiring goal of 40% of total work hours for permanent and apprentice employees. This goal shall apply horizontally, across all departments and managerial positions. The Operator shall not be penalized or deemed in default under this Agreement if it is unable to achieve such a goal. "Local" is defined as within a 3-mile radius of the boundaries of the City's boundaries. The purpose of the hiring policy is to facilitate the training and employment of local and disadvantaged job applicants for jobs within the City's jurisdiction, and 3-mile radius of City boundaries. The Operator shall report on compliance with the local hiring goals as part of its annual audit report.
12 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 3) Replace or require the replacement of certificates, policies and endorsements for any insurance required herein expiring prior the termination of this Agreement. 4) Maintain all insurance required herein from the Effective Date of this Agreement to the earlier of the expiration of the term or the mutual written termination of this Agreement. 5) Place all insurance required herein with insurers licensed to do business in California with a current Best's Key Rating Guide reasonably acceptable to City. f. Indemnity. Operator agrees to indemnify, defend, and hold City, and its elected and appointed council, boards, commissions, officers, agents, employees, contractors, consultants and representatives, harmless from any and all claims costs and liability for any personal injury or property damage which may arise as a result of any actions or negligent omissions by Operator or Operator's contractors, subcontractors, agents, or employees in connection with the construction, improvement, or operation of the Project.
11. Terminatjon
a. Termination Upon End of Term. This Agreement shall terminate upon the expiration of the term unless it is terminated earlier pursuant to the terms of this Agreement. Upon termination of this Agreement, City shall record a notice of such termination and this Agreement shall be of no further force or effect except as otherwise set forth in this Agreement. b. Effect of Termination on Operator's Obligations. Termination of this Agreement shall eliminate any further obligation of Operator to comply with this Agreement, or some portion thereof, if such termination relates to only part of the Site or Project. Termination of this Agreement, in whole or in part, shall not, however, eliminate the rights ofOperator to seek any applicable and available remedies or damages based upon acts or omissions occurring before termination.
c. Effect ofTermination on City's Obligations. Termination of this Agreement shall eliminate any further obligation of City to comply with this Agreement, or some portion thereof.
Termination of this Agreement shall not, however, eliminate the rights of City to seek any applicable and available remedies or damages based upon acts or omissions occurring before termination.
d. Survival After Termination. The rights and obligations of the Parties set forth in Article 15, Article 21, and Section 9, Section 23(e), Section 23(f), and Section 23(h), and any right or obligation of the Parties in this Agreement which, by its express terms or nature and context is intended to survive termination of this Agreement, will survive any such termination. e. Termination Upon Failure to Perform. The Operator shall have two years after the Effective Date to commence operation of the commercial cannabis facility contemplated by this Agreement. Failure of the Operator to commence commercial cannabis operations within that two-year time period may constitute a default and City shall have the right, but not the 19 f. Failure to Conduct Review. City's failure to conduct a periodic review of this Agreement shall not constitute a breach of this Agreement.
g. Cost of Review. The costs incurred by City in connection with the periodic reviews shall be borne by Operator.
20. Assignment
Assignment by Operator. Operator shall not transfer, delegate, sublet or assign its interest, rights, duties, and obligations under this Agreement without the prior written consent of City Council, which consent shall not be unreasonably withheld. Operator shall submit a transfer application to the City Manager or City Manager's designee and pay any applicable transfer fee. The proposed transferee must show proof of lawful transfer of possession of the applicable location as may be acceptable to the City. Operator is aware it may take the City approximately six (6) months to process a transfer application.
Any assignment, delegation, subletting or assignment without the prior written consent of City shall be null and void. Any transfer, delegation, subletting or assignment by Operator as authorized herein shall be effective only if and upon the party to whom such transfer, delegation, subletting, or assignment is made is issued a Commercial Cannabis Permit as required under the Barstow Municipal Code.
21. Operating Commercial Cannabis Facility
Any party to this Agreement, or successor in interest thereto, shall not operate a commercial cannabis facility authorized under the municipal code unless:
a. It is the holder of a valid Commercial Cannabis Permit issued by City in accordance with the procedures and requirements or the Enabling Ordinance, and Chapter 19 .27 of the Barstow Municipal Code; and,
b. It is the holder of a valid license issued by the State of California to operate a commercial cannabis business.
22. Notice
Any notice or communication required hereunder between City and Operator must be in writing, and may be given either personally, by registered or certified mail (return receipt requested), or by Federal Express, UPS or other similar couriers providing overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the Party to whom it is addressed. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of (i) actual receipt by any of the addressees designated below as the party to whom notices are to be sent, or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or 26 EXHIBIT D
RESERVATION OR DEDICATION OF LAND FOR PUBLIC PURPOSES
(NOT APPLICABLE)
EXHIBIT E
OPERATIONAL AND ADDITIONAL BUSINESS STANDARDS
(NOT APPLICABLE)
EXHIBIT F
INDEMNIFICATION AGREEMENT
220 E Mountain View St. Ste A • Barstow, CA 92311 • (760) 255-5161 • https://www.barstowca.org/home
COMMERCIAL CANNABIS BUSINESS PERMIT APPLICANT
INDEMNIFICATION AGREEMENT
The Applicant(s) (hereinafter collectively referred to as “Applicant”), as consideration for applying to the City of Barstow and as consideration in the grant of a City of Barstow commercial cannabis permit, commercial cannabis development agreement, and related permit applications under Barstow Municipal Code Chapter
19.27, hereby expressly agree to each and every one of the following terms and conditions:
1. Parties
For the purposes of this Agreement, the term City shall include the City of Barstow, the City of Barstow City Council, City Manager, and/or any City of Barstow elected officials, agencies, departments, commissions, officers, contractors, consultants, attorneys, employees, and agents. For the purposes of this Agreement, the term Applicant shall include all parties applying for approval of the Application for the commercial cannabis permit, commercial cannabis development agreement, and related permit applications, including but not limited to the owner or owners of the property or properties upon which the commercial cannabis business will be sited and the Applicant(s) who intend to operate the proposed commercial cannabis business and who applied for the commercial cannabis permit, commercial cannabis development agreement, and related permit applications.
2. Indemnification and Defense by Applicant
a. Applicant shall defend, indemnify, and hold harmless the City from and against any and all claims, damages, demands, suits and/or proceedings of any kind brought by anyone challenging the validity and/or legality of the Application, or the process followed. Applicant shall further defend, indemnify, and hold harmless the City from and against any and all claims, damages, demands, suits, and/or proceedings of any kind brought by anyone challenging the validity and/or legality of the Applicant’s commercial cannabis business that is the subject of the Application. Applicant shall defend, indemnify, and hold harmless the City from and against any and all liability whatsoever that arises out of or relates in any way to the commercial cannabis business that is the subject of the Application and/or arising out of the acts or omissions of Applicant in the operation of a commercial cannabis business that is the subject of the Application and any City of Barstow commercial cannabis permit or related entitlement issued upon approval of the Application.
b. Applicant further agrees, as part of and in connection with the Application, to defend, indemnify, and hold harmless the City from any and all claim(s), action(s), or proceeding(s) (collectively referred to as "proceeding") brought against City to challenge, attack, set aside, void, or annul any action taken to provide related environmental clearance for the Application under the California Environmental Quality Act of 1970, as amended ("CEQA") by City's advisory agencies, boards or commissions; appeals boards or commissions; Planning Commission, or City Council.
c. Applicant further agrees to defend, indemnify and hold harmless the City from and for all costs and fees incurred in additional investigation or study of, or for supplementing, redrafting, revising, or amending, any document if made necessary by said proceeding and if Applicant desires to pursue such City REV 1/5/2022 Cannabis License Application Page 51 of 68
EXHIBIT G
STANDARDS AND CONDITIONS FOR CONSTRUCTION
(NOT APPLICABLE)