CITY OF COMMERCE AGENDA REPORT
Item No.
TO: Honorable City Council
FROM: City Manager
SUBJECT: Adoption and Second Reading of an Ordinance to Approve Development Agreement No. ### Related to Commercial Cannabis Permit Application No. 18-047 MEETING DATE: October 22, 2024
REQUEST(S):
Consideration of an Ordinance to approve a new Development Agreement for Commercial Cannabis Permit (CCP) Application No. 18-047 to allow commercial cannabis operations at 3019 Vail Avenue, Commerce CA, for the reasons outlined in the Analysis section of this report.
RECOMMENDATION:
Staff recommends that the City Council:
Waive Full Reading, Adopt and Conduct Second Reading by Title only a proposed Uncodified Ordinance related to application No. 18-047 approving a development agreement for the operation of commercial cannabis activities, which was recommended for City Council approval by the Planning Commission; and Adoption and Second Reading of Uncodified Ordinance finding the development agreement is exempt from further CEQA review pursuant to Administrative Code, Title 14, Chapter 3, Section 15301(a), Class 1, Existing Facilities because the development agreement includes a project that consists of small additions, expansions or alterations to existing structures where there will be negligible or no expansion of the existing structures and/or uses; and pursuant to said findings, direct staff to prepare and file corresponding Notice of Exemption; and Adoption and Second Reading of an Uncodified Ordinance approving the findings consistent with, and pursuant to, Government Code Section 65867.5; and Approve the Conditions of Approval (as also incorporated into the Development Agreement); and Direct staff to assign a number for the adopted Ordinance and Development Agreement.
PUBLIC HEARING NOTICE:
A notice related to this action was published in Los Cerritos News on September 13, 2024. Notices were also mailed out to property owners located within 500 feet of the subject properties, in accordance with the City of Commerce Municipal Code.
APPLICATION REQUEST
Pursuant to Ordinance 700, which established Commercial Cannabis regulations for the City of Commerce, the City commenced the development agreement process at the beginning of October 2018.
CCP Application #
Applicant
Address and Zone
Uses
18-047
Long Beach Exchange, LLC,
3019 Vail Ave.; M2 (Heavy Industrial Zone)
Non-Storefront Retail/ Distribution/
Manufacturing
BACKGROUND
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. Ordinance 700 included a process for operators to amend their respective development agreements.
On May 7, 2019, the City Council approved 21 development agreements. The approval of the development agreements was legally challenged via a lawsuit. The lawsuit alleged the approval of the 21 development agreements was invalid 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.
Similarly, a citizen-sponsored referendum resulted in 11 development agreements and development agreement amendments being invalidated.
Due to the invalidations of the development agreements and development agreement amendments, all operators were required to either request a second reading or resubmit a development agreement application for approval by the City Council.
Many applicants have resubmitted applications for development agreements. Applicants have also filed an application to amend their original proposed development agreement.
Application No. 18-047 (Summit Manufacturing) was impacted by both the litigation and the referendum. Summit Manufacturing requested and the City Council approved an amendment to their original development agreement. The original development agreement was invalidated by the litigation and the amendment was invalidated by the referendum.
Summit Manufacturing was one of two remaining applicants who had not resubmitted a development agreement application. In June 2024, Application No. 18-047 requested a new development agreement. On August 21, 2024, the Planning Commission recommended approval of a development agreement for Applicant No. 18-047 to conduct commercial cannabis operations for manufacturing, distribution, and non-storefront retail at 3019 Vail Avenue. The proposed applicant for Application No. 18-047 is Long Beach Exchange, LLC. Specific information about this proposal is included in the analysis section below.
ANALYSIS
On May 7, 2019, the City Council adopted twenty-one ordinances, one of which was ordinance No. 720, which allowed Applicant No. 18-047 to legally conduct commercial cannabis operations on 3019 Vail Avenue, in the City of Commerce for manufacturing and distribution of cannabis products. The approved owner was Sachin Gulaya. At the time of approval, Summit Manufacturing held a legal interest in real property being considered. After receiving approval, Summit Manufacturing received a business license from the City on November 01, 2019.
Summit Manufacturing filed an application for an amendment to their development agreement to allow for additional cannabis license use. On January 7, 2020, the City Council approved Ordinance No. 740, which authorized distribution, manufacturing, and cultivation uses at 3019 Vail Ave.
However, the amendment was challenged by a citizen-sponsored referendum. The voters rejected the approval of the amendment on November 3, 2020. On April 21, 2020, the City Council accepted the certification results of the eleven (11) petitions, which included Ordinance No. 740.
As noted above, Summit Manufacturing’s underlying development agreement was invalidated as a result of a court ruling that the second reading of the ordinances was defective.
During the time City staff was waiting to receive an application request from Summit Manufacturing to determine how Summit Manufacturing intended to proceed, the City Council approved a development agreement to allow a change of location for GE United Technologies to occupy 3019 Vail Avenue on July 20, 2021. 3019 Vail Avenue was previously occupied by Summit Manufacturing. The staff report stated that the site would be distinctively and respectively partitioned.
On March 16, 2023, CCP staff sent a notice to Summit Manufacturing regarding its pending application that had remained at a standstill for over three years. Staff requested that the applicant submit a new development agreement application with a business location and provide the City sufficient evidence of the legal right to occupy and use the proposed location to operate a commercial cannabis business.
On May 30, 2024, CCP staff received a complete application from Application No. 18-047 requesting a new development agreement for 3019 Vail Ave. They requested to add a non-storefront retail license type, manufacturing, and distribution, name two new co-owners who will each share 50% ownership, and a business name change.
The application provided all the necessary information for CCP staff to review and accept as a complete application. Additionally, the application currently holds a legal interest in the property located at 3019 Vail Ave., in the City of Commerce.
The applicants will be required to comply fully with the terms of the development agreement and conditions of approval, including, but not limited to, façade improvements and compliance with all state and local ordinances.
Attached Exhibit A provides the zoning analysis. The zoning analysis includes the following information:
1. General Plan Designation
2. Zoning Designation
3. Applicable Zoning Regulation
4. Environmental Assessment
5. Project Description
CEQA COMPLIANCE AND CATEGORICAL EXEMPTIONS:
A Notice of Exemption from CEQA for the development agreement will be prepared pursuant to CEQA (Public Resources Code §21000 et seq.) and the State CEQA Guidelines (Title 14, California Code of Regulations, Division 6, Chapter 3, §15000 et seq.) prior to the City Council’s consideration for approval. The subject development agreement is a “project” that is subject to environmental review.
City staff anticipates that the Notice of Exemption will find that the project contemplated by the development agreement is exempt from environmental review pursuant to the guidelines of the California Environmental Quality Act (Public Resources Code § 21080(b)(9); Administrative Code, Title 14, Chapter 3, § 15301(a), Class 1, Existing Facilities). This section specifically applies to small additions, expansions, or alterations to existing structures where there is negligible or no expansion of the use. For this project, the applicant will limit the construction to interior tenant improvements, electrical, plumbing, and façade improvements.
CONCLUSION:
Staff recommends that the City Council - after independent review, consideration, and 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 – approve a development agreement related to Application No. 18-047 as specifically outlined in the recommendation section on page one of this report.
Prepared by: CCP Staff
Reviewed by: Ernie Hernandez, City Manager
Approved as to form by: Noel Tapia, City Attorney
ATTACHMENTS:
Planning Commission Resolution
Development Agreement No. ###
Proposed Ordinance