CITY OF COMMERCE AGENDA REPORT
Item No.
TO: Honorable City Council
FROM: Assistant City Manager
SUBJECT: Introduction and First Reading of Ordinances to Repeal Ordinance Nos. 782 and 795, respectively, to revoke Development Agreement Nos. 782 and 795 related to Commercial Cannabis Permit Applications MEETING DATE: July 18, 2023
APPLICATION REQUEST(S):
Consideration of Ordinances to repeal Ordinance Nos. 782 and 795, thereby revoking related development agreements between the City of Commerce and a) Green Leaf 26 Corporation (DA No. 782/Application 18-006) and b) NotStan LA, Inc. (DA 795/Application 18-064), for the reasons outlined in the Analysis section of this report.
RECOMMENDATION:
Staff recommends that the City Council:
Make a determination whether to waive Full Reading and Introduce for First Reading by Title only a proposed Uncodified Ordinance to repeal Ordinance No. 782, which was recommended for City Council approval by the Planning Commission.
Make a determination whether to waive Full Reading and Introduce for First Reading by Title only a proposed Uncodified Ordinance to repeal Ordinance No. 795, which was recommended for City Council approval by the Planning Commission.
Make a determination regarding Denial or Approval by Introduction and First Reading of Uncodified Ordinances finding that they are exempt from further CEQA review pursuant to Administrative Code, Title 14, Chapter 3, Section 15321 [Class 21, “Enforcement Actions by Regulatory Agencies”]). This section specifically applies to actions by regulatory agencies to enforce or revoke a lease, permit, license, certificate, or other entitlement for use issued, adopted, or prescribed by the regulatory agency or enforcement of a law, general rule, standard, or objective, administered or adopted by the regulatory agency. In this case, the action is to repeal Ordinances related to Commercial Cannabis Permit Applications; and Direct staff to assign a number for the adopted Ordinances.
PUBLIC HEARING NOTICE:
A notice related to this action was published in Los Cerritos News on July 7, 2023. Notices were also mailed out to property owners located within 500 feet of the subject properties, in accordance with City of Commerce Municipal Code.
BACKGROUND AND ANALYSIS:
Pursuant to Ordinance No. 700, which established Commercial Cannabis regulations for the City of Commerce, the City commenced the development agreement process at the beginning of October 2018. Per the Development Agreement, the City of Commerce has the authority to disqualify applications for failure to make the required payments, or should an operator or applicant be willing to release themselves from legally obtaining a commercial cannabis license in the City of Commerce. Green Leaf 26 Corporation and NotStan LA, Inc. formally provided written notification to CCP staff that they are no longer seeking to conduct cannabis operations in the City of Commerce and requested that Staff proceed with repealing their respective development agreements. Both operators have been previously informed that their respective development agreements will be revoked and have been made aware of this hearing for repeal.
On June 21, 2023, the Planning Commission adopted resolutions recommending that the City Council adopt Ordinances to repeal Ordinance Nos. 782 and 795, thereby revoking related development agreements between the City of Commerce and a) Green Leaf 26 Corporation (DA No. 782/Application 18-006) and b) NotStanLA, Inc. (DA 795/Application 18-064).
Green Leaf 26 Corporation
On December 7, 2021, City Council approved Ordinance 782 related to Development Agreement No. 782, which allowed for Green Leaf 26 Corporation to conduct Commercial Cannabis activity at 6400 Fleet Street, in the City of Commerce. The operator executed its development agreement on January 20, 2022, and since its execution, Green Leaf 26 Corporation has not provided plans to commence its plan check process. Additionally, in their financial report, the operator has not provided the minimum Community Benefit Fee payment of $21,000. Staff has made multiple attempts to remind them of their financial obligation, but to date, payment has not been received.
On May 30, 2023, Babak Zarabian, owner of Green Leaf 26 Corporation sent an email to CCP staff stating he is formally relinquishing his cannabis license due to personal reasons (See Attachment B). On June 5, 2023, staff sent a response to Babak Zarabian agreeing to pursue a recommendation to repeal his ordinance (See Attachment B).
NotStan LA, Inc.
On May 7, 2019, City Council approved Ordinance No. 725 for NotStan LA Inc. to conduct legal cannabis operations in the City of Commerce. However, development agreement No. 725 along with 20 other development agreements were legally challenged via a lawsuit due to a procedural defect. In its ruling, the court ruled on behalf of the petitioner and found that the 21 development agreements were invalid due to a procedural defect. To address the procedural defect, City Council approved NotStan LA, Inc’s second reading of Ordinance No. 795 on May 10, 2022, and related development agreement No. 795 to allow for the Manufacturing and Distribution of cannabis products at 2620 South Malt Ave in the City’s heavy industrial zoning district (M-2). Notstan LA, Inc. executed its new development agreement on July 19, 2022.
Prior to their new execution, NotStan LA Inc. had received their CCP license from the City to conduct legal cannabis operations on November 24, 2020. Since they received their CCP license, the operator has reported zero in every quarterly Cannabis Gross Tax Report.
On March 8, 2023, NotStan LA’s owner, Carlos Camara, emailed staff that they are no longer operating in the City of Commerce (See Attachment B). A follow-up email was sent to the owner confirming the statement; however, an email bounce message informed that the email of Carlos Camara was deactivated. A letter was written and sent on April 18, 2023, to the owner and their attorney (See Attachment B) where staff confirmed the Owner’s statement and stated the intent to proceed with repealing their ordinance.
CEQA COMPLIANCE AND CATEGORICAL EXEMPTIONS:
The California Environmental Quality Act (“CEQA”) requires public agencies to analyze and consider the impacts a “project” may have on the environment. A project is only subject to CEQA if the project requires a discretionary decision by the public agency. The required level of review depends on the probability and intensity of project related impacts. Additionally, a project may be exempt from CEQA review if the project qualifies for a categorical exemption.
The request for the approval of ordinances to repeal Ordinance Nos. 782 and 795 have been determined to be exempt from environmental review pursuant to the guidelines of the California Environmental Quality Act (Pub. Res. Code, § 21080, subd. (b)(9); Cal. Code Regs., tit. 14, Ch. 3, § 15321 [Class 21, “Enforcement Actions by Regulatory Agencies”]). This section specifically applies to actions by regulatory agencies to enforce or revoke a lease, permit, license, certificate, or other entitlement for use issued, adopted, or prescribed by the regulatory agency or enforcement of a law, general rule, standard, or objective, administered or adopted by the regulatory agency. In this case, the action is to repeal ordinances related to Commercial Cannabis Permit Applications.
CONCLUSION:
Staff recommends that the City Council - after independent review, consideration, analysis of staff’s report and the information presented, oral and written testimony by all parties and persons of the public, and the record as a whole – make a determination on ordinances repealing Ordinance Nos. 782 and 795 as specifically outlined in the Recommendation section on page one of this report.
Prepared by: CCP Staff
Reviewed by: Vilko Domic, Assistant City Manager
Approved as to form by: Noel Tapia, City Attorney
ATTACHMENTS:
Planning Commission Resolution
Operator Correspondence
Proposed Ordinances to Repeal Ordinance Nos. 782 and 795 Ordinance Nos. 782 and 795 – For Reference Only