RESOLUTION NO -
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMMERCE, CALIFORNIA APPROVING THE REJECTION OF COMMERCIAL CANNABIS PERMIT APPLICANT NO. 18-010 WHEREAS, the State of California enacted California Government Code Sections 65864 et seq. (“Development Agreement Statutes”) to authorize municipalities to enter into development agreements with those having an interest in real property to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development in connection with the development of real property within their jurisdiction; WHEREAS, the purpose of the Development Agreement Statutes is to authorize municipalities, in their discretion, to establish certain development rights in real property for a period of years regardless of intervening changes in land use regulations and to meet certain public purposes of the local government; WHEREAS, as authorized by the Development Agreement Statutes, the City has adopted Resolution No. 18-50 (“A Resolution of the City Council of the City of Commerce Approving Procedures and Requirements for the Processing of Development Agreements”) establishing the procedures and requirements for the consideration of development agreements with the City; WHEREAS, on September 4 2018, City Council adopted Ordinance No. 700, concerning commercial cannabis regulations, which added new Chapter 5.61 “Commercial Cannabis Activities”, of Title 5, “Business Regulations and Licensing”, of the Commerce Municipal Code, and became effective October 4, 2018; WHEREAS, the purpose and intent of Ordinance No. 700 is to regulate the cultivation, manufacturing, testing, distribution, non-storefront retailer-delivery only, and microbusinesses, of medicinal and adult-use cannabis and cannabis products, and the ancillary transportation and delivery of same, in a responsible manner to protect the health, safety, and welfare of the residents of City of Commerce and to enforce rules and regulations consistent with the California Medicinal and Adult-Use Cannabis Regulation and Safety Act, and related laws, regulations, and policies issued by the State of California; WHEREAS, in October 2018, Commerce Cannabis Company applied to this City for a Commercial Cannabis Permit (hereinafter "CCP”) to conduct Commercial Cannabis Activities. No such activities are allowed or authorized without a Development Agreement, a Commercial Cannabis Permit, and all requirements pursuant to City Ordinance No. 700, including all requirements pursuant to Commerce Municipal Code Section 5.61.060; WHEREAS, on November 16, 2018, Commerce Cannabis Company received a “Notice of Selection” and were notified that the issuance of a Notice of Selection is conditional and contingent on selected applicants fulfilling and completing the requirements pursuant to Ordinance No. 700 to lawfully establish a commercial cannabis business in the City of Commerce. Furthermore, all applicants were reminded that the City reserved the right to reject any application, at any time, including for any of the enumerated reasons listed in Commerce Municipal Code Section 5.61.090(c), as adopted by ordinance No. 700; WHEREAS, Commerce Cannabis Company first appeared before the Planning Commission for a recommendation of approval to the City Council for a development agreement on January 1, 2019, with the location on 2645 Yates Avenue and the proposed owner, Arsen Kazanchian; WHEREAS, on May 7, 2019, the City Council approved 21 development agreements, including Development Agreement No. 710 for Commerce Cannabis Company. The approval of the development agreements was legally challenged via a lawsuit alleging the approval of the 21 development agreements was invalid due to a procedural defect related to the second reading. In its ruling, the court ruled on behalf of the petitioner and found that the 21 development agreements were invalid; WHEREAS, as a result of the ruling, the City must now treat the aforementioned development agreements as applicants, until their second reading is performed to address the procedural defect, or they submit a new Development Agreement application if they are unable to comply with all the terms of the original development agreement. To date, the City has been able to cure the defective reading for a majority of these aforementioned development agreements. However, Commerce Cannabis Company is among the businesses impacted that has not worked with the City to correct the second reading defect. As a result, the City considers Commerce Cannabis Company an applicant; WHEREAS, on March 12, 2023, City staff sent a notice to Arsen Kazanchian, related to the rejection of application No. 18-010. The letter stipulated that it had been five years since the application process began, and there had been no good-faith effort to move forward with proceeding with a second reading. Additionally, City staff requested that the owner, Arsen Kazanchian, must commit to a business location and provide the City with sufficient evidence of the legal right to occupy and use the proposed location to operate a commercial cannabis business; WHEREAS, on August 3, 2023, City staff sent a second letter to the owner of the application Kazanchian regarding a final notice to reject application 18-010 due to no good faith effort to move forward with an application. Pursuant to Commerce Municipal Code Section 5.61.09(c)(3), the City has the authority to prepare to reject an application based on failure to provide a complete application. Additionally, the letter stipulated that in accordance with Section 5.61.290, the City Manager or his/her designee is authorized to reject an application if an operator fails to perform on their second reading and fails to provide a complete application more than 30 days after the first reading. The City adopted an administrative policy to this effect on October 10, 2022; WHEREAS, pursuant to Commerce Municipal Code Section 5.61.090(c)(3), City staff requests the City Council to reject Application No. 18-053 for failure to submit a complete application for the consideration of a development agreement approval by the City Council; WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COMMERCE DOES HEREBY RESOLVE, DECLARE AND DETERMINE AS FOLLOWS:
Section 1. That based upon staff reports, presentations, public testimony, and all other matters presented during the public hearing on this item, the City Council hereby finds and declares that the foregoing recitals are true and correct and incorporates them herein as findings and as a substantive part of this Resolution.
Section 2. The City Council of the City of Commerce hereby rejects Commercial Cannabis Permit Applicant No. 18-010.
Section 3. If any section, subsection, line, sentence, clause, phrase, word, part, provision, or portion of this Resolution, or its application to any individual, entity, or circumstance, for any reason, is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Resolution, and shall continue in full force and effect. To this end, any section, subsection, line, sentence, clause, phrase, word, part, provision, or portion of this Resolution is severable. The City Council of the City of Commerce declares that this Resolution would have been adopted by the City Council regardless of the fact that any section, subsection, line, sentence, clause, phrase, word, part, provision, or portion thereof, might be declared to be invalid or unconstitutional.
Section 4. The City Clerk shall attest and certify to the passage and adoption of this Resolution, and enter it into the book of original resolutions.
PASSED, APPROVED and ADOPTED this 26th day of September 2023. _________________________________
Hugo A. Argumedo, Mayor
ATTEST:
Lena Shumway
City Clerk
City Council Resolution No.
September 26, 2023Page 2