Joint Special Council/BFPD
04/17/23 06:00 PM
Building
Christopher Heldreth
Amendment
Doc ID: 5331
AGENDA ITEM
AGENDA MATTER:
CONSIDERATION OF AMENDING DEVELOPMENT AGREEMENT WITH QUALITY LIFE INC. TO
REDUCE ANNUAL PAYMENT TO CITY AS PART OF COMMUNITY BENEFITS PROGRAM EXECUTIVE SUMMARY:
Staff is requesting the City Council review Quality Life Inc.’s Development Agreement, as set forth by the original agreement. Quality Life Inc. has requested to reduce its annual payment to the City as part of the Development Agreement’s Community Benefits Program from $65,000 to $10,000.
DISCUSSION:
All cannabis businesses must enter into a development agreement with the City that is subject to City Council approval through the adoption of an ordinance under Government Code Section 65865. The City Council considered and approved a development agreement with Quality Life Inc. at its January 3, 2022 meeting.
Each development agreement contains, among other fees, a fee, set by the Council at $65,000 per retail dispensary, to fund a Community Benefits Program. This annual cannabis community benefits fee is separately accounted for within the City’s General Fund, and is separate from the other fees as required to be paid by each dispensary per their development agreements.
Proposed Revision
Quality Life Inc. is requesting a reduction in their annual payment to the City’s Community Benefits Program from $65,000 to $10,000 for the upcoming annual renewal. This request is being made due to Quality Life Inc.’s revenue amounts being significantly lower than its original projections, amid a shifting cannabis marketplace.
The development agreement states the City Council shall review this Agreement annually, on or before each anniversary of the Effective Date, in order to ascertain Operator’s good faith compliance with this Agreement. The operator shall have the right to offer oral and written testimony and staff expects the Owner to provide additional information supporting their request.
FISCAL IMPACT:
Reduction to the Community Benefits Program of $55,000 on an annual basis than initially approved.
RECOMMENDED ACTION:
Staff recommends the City Council consider whether to approve the amendment to Quality Life Inc.’s Cannabis Development Agreement based on the company’s reported revenue the company to the City.
At this time, only Quality Life has asked for a fee reduction. If approved for Quality Life, the other dispensaries may come forward with similar requests. However, whether to accept this request and if so, at what level of reduction, is a policy decision for the City Council.