Agenda packet — Covina City Council, July 15, 2025 (part 8 of 8)

notification requirements to the SCAQMD, a formal demolition plan and permit must be obtained from the Building and Safety Division. SCAQMD Headquarters; 21865 Copley Drive, Diamond Bar, CA, (909) 396-2381

4. Provide an additional digital copy (pdf preferred) of the building floor plan, elevations, and site plan to be submitted to the LA County Assessor. This copy should be in sufficient detail to allow the assessor to determine the square footage of the buildings and, in the case of residential buildings, the intended use of each room. For additional information, please contact the LA County Assessor, Public Service Desk at 888-807- 2111.

5. Construction activity within 500 feet of a residential zone is prohibited between the hours of 6:00 pm and 7:00 am on Monday through Friday and between 5 pm and 8 am on Saturday and all day on Sunday and Holidays unless otherwise permitted.

E. LOS ANGELES COUNTY FIRE DEPARTMENT – FIRE PREVENTION

DIVISION

1. Business will need to complete and obtain approval of a special business application Form 30 C before opening to the public.

F. COVINA POLICE DEPARTMENT

1. Owners, operators, develop a plan to ensure that all exterior locations are adequately and safely illuminated during hours of darkness. Install LED lighting, can be motion sensor lighting, to increase visibility regarding any activity taking place near or inside the enclosure.

2. Detailed plans to show compliance shall be submitted to Police Department and Planning Division for review and approval, prior to issuance of permit and prior to installation. The condition of approval shall be accomplished on or before opening.

LED lighting that will be installed can be depicted on exterior elevations.

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CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. PH 4
Meeting: July 15, 2025
Title: Proposal for a 4,600 square-foot Cannabis Microbusiness Retail Establishment Presented by: Eduardo Lomeli, Assistant Planner
Recommendation: City Council consideration of the following:

1. City Council Adoption of Resolution CC 2025-86, conditionally approving:

Conditional Use Permit (CUP) 25-001 and Site Plan Review (SPR) 25-026, and making a determination of exemption from CEQA, to approve a cannabis microbusiness retail establishment (“STIIIZY”), in conjunction with a manufacturing and distribution use, on a 4,600 square-foot commercial tenant space and associated interior tenant improvements, within the PCD (Planned Community Development) / M-1 (Light Manufacturing) zone, located at 754 E Arrow Hwy, Covina, Ca, 91722 (APN: 8405-003- 032), and making a finding of exemption under CEQA; and

2. Waive full reading, read by title only, and introduce Ordinance 25-06 entitled, “An Ordinance of the City of Covina approving a Development Agreement between STIIIZY Covina Inc, and the City of Covina, related to the approval of a 4,600 square foot cannabis microbusiness retail establishment within the PCD (Planned Community Development) / M-1 (Light Manufacturing) Zone, located at 754 East Arrow Highway (APN: 8405-003-032); and making a finding of exemption under CEQA.” EXECUTIVE SUMMARY:

On June 24, 2025 the Planning Commission of the City of Covina conducted a duly noticed public hearing to consider a proposal for a four thousand-six hundred (4,600) square-foot tenant improvement to allow a cannabis microbusiness retail establishment to operate in the M-1 Light Manufacturing Zone at 754 E Arrow Highway, Covina, California 91722.

The Planning Commission concluded said hearing on June 24, 2025 and adopted Planning Commission 2025- 011 and 012 PC by a 3-0-2 vote, recommending the City Council adopt the following items; Approving Conditional Use Permit (CUP) 25-001, Site Plan Review (SPR) 25-026, Development Agreement 25-003 and making a determination of exemption from the California Environmental Quality Act (CEQA) to allow the operations of a 4,600 square-foot cannabis microbusiness retail establishment located at 754 E Arrow Highway (APN: 8405-003-032).

Prior to commencement of any commercial cannabis activities, the applicant must enter into a development agreement with the city. This agreement is a prerequisite for obtaining a conditional use permit and will outline the terms and conditions under which the cannabis business will operate, in addition to the requirements specified in this chapter. The conditions of the agreement shall include, but are not limited to:
a) Public outreach and education.
b) Payment of community benefit fees and any other charges agreed upon by both parties. c) Approval of architectural plans, which should include the site plan, floor plan, and elevation. d) Provisions for terminating the agreement or invalidating or revoking the conditional use permit.

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e) Indemnification of the city and all its officials and employees from actions by third parties. This includes, but is not limited to, enforcement issues arising from conflicts between state and federal law or challenges to the issuance of a permit for the cannabis business. f) Any other terms and conditions that will protect and promote the public health, safety, and welfare of all residents in the city.

A copy of the development agreement is attached. (Attachment B) Government Code section 65867 requires both the planning commission and by the city council to hold a public hearing to consider adoption of a development agreement. The development agreement contains all required terms and provisions consistent with state law as further detailed below.

BACKGROUND:

On February 2, 2025, the applicant submitted a request for a Conditional Use Permit and Site Plan Review to establish a cannabis microbusiness retail store named “STIIIZY.” The proposed facility will occupy an area of 4,600 square feet and will include sections designated for manufacturing and distribution. A comprehensive review and analysis of the project were presented to the Planning Commission on June 24, 2025, and can be referenced in Attachment A.

The store is scheduled to operate daily from 9:00 am to 9:00 pm, with deliveries arranged during these hours. The business anticipates employing approximately 50 to 60 individuals. During morning hours, around 8 employees will work in the retail section, increasing to 12 during peak hours. The distribution team will consist of 2 on-site employees and 1 delivery employee, totaling 4 personnel. The manufacturing section is expected to have 2 to 3 employees working concurrently.

Security measures for STIIIZY will include two-armed security guards and a video surveillance system. All entrances to the facility will be secured and locked, with non-public areas accessible only via electronic access panels. Devices known as "mosquitos" will be installed to deter vandalism, and a third-party monitoring company will oversee the facility after hours. The building will also feature gates and an alarm system, while nighttime security service patrols will occur.

The interior design will feature a modern aesthetic with an open sales floor. The 1,500-square-foot retail area will include shelves for vendor products and high-definition televisions for product displays. The retail space will accommodate a maximum of 25 customers at any given time, and security personnel will manage the customer check-in process. City staff expressed concerns regarding the check-in procedure and recommended to the Planning Commission that STIIIZY also provide a reception/lobby check-in area, as indicated in their initial proposal to the Cannabis Committee. Condition of Approval B.37 was added to require a reception/lobby checkin area, and supported by the Planning Commission as part of their recommendation to the City Council.

The proposed Commercial Cannabis Business is required to obtain three land use entitlements from the City: (1) a Conditional Use Permit (CUP 25-001), (2) Site Plan Review (SPR 25-026), and (3) a Development Agreement (DA 25-003). In conjunction with the consideration of these three land use entitlements, a determination is also required to be made pursuant to the California Environmental Quality Act. Separately from the land use entitlement process, a Cannabis Business Permit is required for the proposed business as required by the Covina Municipal Code. The facts and findings supporting the approval of all three land use entitlements (CUP 25-001, SPR 25-026 and DA 25-003) are contained in the June 24, 2025 Staff Report for the Planning Commission’s consideration of these applications, which Staff Report is attached as Attachment A to this Report. The facts and findings contained in that Report, together with the additional information in this Report, provide and contain the basis for the findings and approval of these land use applications by the City Council.

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In addition, thereto, the Development Agreement contains the terms and conditions required by the City, agreed upon by the applicant and is compliant with state law. Specifically, the Agreement provides for a term of 15 years, subject to extension by mutual agreement of the City and STIIIZY (Section 3.5). It provides for the permitted uses of the property, intensity of use, the size of the operation and does not require dedication of land for public purposes (Section 4) The agreement also contains terms for operation by reference to the “Development Approvals” that STIIIZY must comply with in connection with the Project (Section 3.1.10 and Section 4). The Agreement also provides terms for consideration of future approvals. (Section 4.11). Various specific requirements are imposed on the operation of the commercial cannabis business that is permitted to operate pursuant to the Development Approvals and the Agreement, including the requirement for a Community Benefit Fee, provisions for job and wage creation and defense and indemnification.

FISCAL IMPACT:

The adoption of a Development Agreement will enable the City to collect a community benefit fee of five percent (5%) of gross receipts plus an additional one percent (1%) of gross receipts that the applicants committed to provide in their application. This measure is intended to facilitate improvements and upgrades within the City and create employment opportunities for Covina residents. Additionally, this adoption will enable the cannabis business to collaborate with the City in establishing and implementing public outreach and education programs.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

The proposed project is exempt from the requirements of California Environmental Quality Act (CEQA) Guidelines under the Class 32 exemption under state CEQA Guidelines Section 15332, which is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicant zoning designation and regulations. The proposed developments are within city limits on a project site of no more than five acres of substantially surrounded by urban uses. Since the location is within an existing commercial center, the project site has no value as habitat for endangered, rare or threatened species. Approval of this project would not result in any significant effects relating to traffic, noise quality, or water quality. The site can be adequately served by all required utilities and public services.

Respectfully submitted,
______________________________
Eduardo Lomeli
Assistant Planner

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Planning Commission Regular Meeting

STAFF REPORT
ITEM NO. PH 3
Meeting: Planning Commission Regular Meeting of Tuesday, June 24, 2025 Title: Proposal for a 4,600 square-foot Cannabis Microbusiness Retail Establishment Title Description: Recommendation to the City Council regarding Conditional Use Permit (CUP) 25- 001, Site Plan Review (SPR) 25-026, Development Agreement, and determination of exemption from CEQA: A request to approve a cannabis microbusiness retail establishment (“STIIIZY”), in conjunction with a manufacturing and distribution use, on a 4,600 square-foot commercial tenant space and associated interior tenant improvements, within the PCD (Planned Community Development) / M-1 (Light Manufacturing) zone, located at 754 E Arrow Hwy, Covina, Ca, 91722 (APN: 8405-003-032), and making a determination of exemption of the California Environmental Act (CEQA) guidelines.

Presented by: Eduardo Lomeli, Assistant Planner

PROJECT SITE INFORMATION
A. Project Information:

Request: Conditional Use Permit (CUP) 25-001
Site Plan Review (SPR) 25-026
Development Agreement
Applicant/Authorized Agent: Andrew McIntyre
Property Owner: City of Covina
Location: 754 E Arrow Hwy
Assessor Parcel Map No’s: 8405-003-032
B. Site and Surrounding Land Uses:

The following table provides the General Plan designation, Zoning, and existing uses of the site and surrounding areas:

Table 1: Site and Surrounding Land Uses
General Plan Zoning Existing Uses
Site GC- General
Commercial
Planned Community
Development (PCD) /
Light Manufacturing (M-1)
Multi-Commercial
Uses
North City of Glendora City of Glendora Commercial

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ATTACHMENT A
South GI - General
Industrial
Planned Community
Development (PCD) /
Light Manufacturing (M-1)
Multi-Industrial
Uses
East GI - General
Industrial
Planned Community
Development (PCD) /
Light Manufacturing (M-1)
Multi-Commercial
Uses
West GI - General
Industrial
Planned Community
Development (PCD) /
Light Manufacturing (M-1)
Laboratory and
Medical Office
C. Site Characteristics:

The project site is approximately 2.12 acres and features an existing one-story commercial center that spans 34,324 square feet. This center accommodates multiple tenants and is divided into 12 individual tenant spaces, with varied commercial uses that include brewery, barber shop, professional office, restaurant, etc.

There are two main entrances to the commercial center, both accessible from Arrow Grand Circle, while the building itself faces Arrow Highway. Off-street parking is available on Arrow Grand Circle, with a total of 98 parking spaces, including 4 designated handicap stalls. Additionally, there are four (4) trash enclosure areas designated for this location.

BACKGROUND / PROJECT ANALYSIS
In September 2023, the City issued a Request for Proposals (RFP) inviting qualified individuals or companies to operate a cannabis business or a cannabis microbusiness within the city limits. The deadline for submitting proposals was December 20, 2023. The RFP outlined the criteria for qualification, which were reviewed by the Cannabis Committee, which consisted of the City Manager, Deputy City Manager, Chief of Police, and the Deputy City Manager/Community Development Director. The committee evaluated and scored the candidates based on the criteria specified in the RFP.

Candidates who met the requirements were invited to the next phase of review by the City Council. A City Council meeting was held to review the candidate submissions. Ultimately, the council is authorized to issue no more than three (3) Cannabis Business Permits, with one permit granted for every 15,000 residents, rounding down for any fraction, in accordance with Covina Municipal Code (CMC) Section 5.80.080. The entire vetting process took approximately 6 to 9 months. Those individuals or companies selected through this Request for Proposals (RFP) would then advance to the formal phases of obtaining a Cannabis Business Permit and a Conditional Use Permit (CUP).

On February 2, 2025, the applicant submitted applications for a Conditional Use Permit (CUP) and Site Plan Review (SPR) to allow for a cannabis microbusiness retail establishment (“STIIIZY”), in conjunction with a manufacturing and distribution use, on a 4,600 square-foot commercial tenant space and associated interior tenant improvements.

Business Operation:

The hours of operation will be Monday through Sunday 9:00 am to 9:00 pm with deliveries reflecting the same hours. Online delivery orders will not be accepted after 8:00 pm to ensure that all orders are fulfilled by 9:00 pm.

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During the initial opening, the applicant will hire approximately 50 to 60 employees for facility operations.

For the morning shift, approximately 8 employees will be on-site for the retail component of the business.

During peak hours of operation, typically from 4 to 6 pm, the number of retail employees will increase to approximately 12. A total of 40 retail employees are expected to be staffed for the grand opening. For the distribution component, there will be 2 employees on-site, while 1 employee will be out on delivery routes to dispensaries. A total of 4 distribution employees will be present for the grand opening. For the manufacturing component, there will be 2 to 3 employees on-site at any given time, with a total of up to 5 employees on the payroll.

Security:

During business hours, STIIIZY Covina will employ two-armed security guards, in addition to a continuously recording video surveillance system. All entrances will remain locked and will be controlled by either a STIIIZY Covina employee or a security guard. Non-public entrances will have electronic access panels for employees and guards to use. There will also be electronic access panels that connect the front of the house to the back, for each office, and for the Secured Inventory Storage area. These panels allow for different tiers of access and log who accessed each room and at what time. As specified in Covina Municipal Code (CMC) Section 17.84.080(A)(17), high-frequency devices, commonly referred to as "mosquitos," will be installed to deter vandalism and loitering.

Beyond the video surveillance system and "mosquitos," STIIIZY will also employ a third-party monitoring company, along with its own internal video monitoring department, to oversee the facility for any inappropriate activity after hours. The building will also be secured with scissor gates with shackless locks, located on the inside of the building along the windows. Motion-detecting lighting will also be installed throughout the interior and exterior of the facility to enhance video surveillance. Furthermore, an alarm system will be activated once employees have exited the building for the day. Lastly, a thirdparty security service will provide vehicle patrols during after-hours.

Design:

The proposed cannabis microbusiness will feature interior improvements with a modern design aesthetic.

The sales floor will utilize an open floor-concept layout. The 1,500-square-foot retail area will have counters positioned around the perimeter, leaving the central space largely open for customers to enjoy the visual experience and to form lines.

The walls will be equipped with vendor shelving to display empty product packages, highlighting the items sold by the vendors. Additionally, high-definition TVs will be mounted on the walls to showcase the products and enhance the store's overall visual appeal.

The existing flooring will be replaced with black-and-white marble-effect epoxy flooring, while lit glass display counters will be used to house the products for sale. This design concept prioritizes maximum visibility and aligns with a modern, state-of-the-art “art gallery” atmosphere. Recessed LED lighting fixtures will be installed throughout the sales floor to ensure proper illumination for both staff and customers.

Per Building and Safety occupancy limits, a maximum of 25 customers are allowed in the 1,500 square foot retail sales area at any given time for check-in and assistance. The line for check-in will extend outside along the western side of the building and will not obstruct access to adjacent businesses. Long lines are anticipated on and during the first months of their Grand Opening Day. Security personnel will monitor the line to ensure the safety of customers. The entrance will remain locked at all times and will be managed

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by an employee or licensed security professional. Access to the sales floor will be restricted, and only those who have checked in at reception will be allowed entry into the retail sales area.

The proposed floor plan submitted to city staff does not include a reception/lobby check-in area. City staff expressed concerns regarding check-ins at the door, citing public safety concerns and the potential for long lines outside the building. The applicant explained that STIIIZY's business model allows for checkins at the door to facilitate a quick and efficient flow of customers entering and exiting the premises.

In May 2025, Planning staff visited STIIIZY’s Pomona location and confirmed that there was indeed a reception/lobby check-in area at that site. Additionally, during city staff's visits to various cannabis retail establishments in Santa Ana, all observed locations included a reception/lobby check-in area. No ID verifications were conducted outside or at the door. As a result, Condition of Approval No. B.37 has been added, requiring STIIIZY to modify their floor plan to include a reception/lobby check-in area. Please refer to Attachment D for the floor plan layout.

No exterior modifications are proposed, other than updating signage and pressure washing the building exterior to brighten the exterior façade.

Lighting:

The project site will be well-lit to enhance public safety and visibility. The applicant will install exterior security lighting that provides and maintains at least 1.5 foot-candles of uniform, white LED lighting around the perimeter of the building and at access points. For standalone cannabis businesses, it is essential that the exterior of the building and parking lot areas have sufficient lighting to ensure the safe movement of vehicles and pedestrians. Both the Planning Division and the Covina Police Department reviewed the photometric lighting plan and are satisfied with their proposal.

Parking:

Under CMC Section 17.84.090, a cannabis microbusiness is required to provide one parking space for each employee on the maximum working shift, or at least one parking space for every 500 square feet of gross floor area, whichever is greater. As presented, the proposed use would require a total of 24 parking spaces. The existing commercial center provides 98 parking spaces.

Please note that Assembly Bill 2097 (AB 2097) is a recent law in California that prohibits public agencies and cities from imposing minimum automobile parking requirements on most development projects situated within a half-mile radius of a major transit stop. This project is approximately 0.20 miles from a high-frequency bus stop. Overall, staff has determined there is sufficient parking available within the site.

Table - 1
Minimum Required Off-Street
Commercial Parking Space(s)
Parking Spaces
Required
Parking Spaces Provided
Cannabis microbusiness - one parking
spot for each employee on the maximum
working shift, or not less than one parking
spot for each 500 square feet of gross
floor area, whichever amount is greater,
unless otherwise determined by the
4,600/500 = 9.2
parking stalls
(15) Employees =
15 parking stalls
Commercial center provides 98
parking spaces on site.

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director pursuant to a traffic and parking
study.

Total: 24 parking spaces 98 parking spaces
Conditional Use Permit:

Under Chapter 17.84 (“Cannabis Prohibitions and Regulations”) of the CMC, any proposal for cannabis microbusiness must include a development agreement and a conditional use permit. Additionally, the proposal must comply with the standards outlined within the chapter, as well as the requirements of the underlying zoning district. For this property, the relevant zoning district requirements typically pertain to the “M-1 / Light Manufacturing” zone and CMC Chapter 17.84. As previously described, all proposed modifications to accommodate such use are interior tenant improvements. No exterior modifications are proposed.

Cannabis Business Permit:

Upon receiving the planning commission's recommendation for approval to the City Council, the applicant must begin the Cannabis Business Permit approval process with the Code Enforcement Division. This division will handle the permit application and oversee the annual cannabis renewal permit in collaboration with the Covina Police Department, as well as the Planning and Building & Safety Divisions. Once the City Council formally approves the project and all documentation approval requirements are met, a Cannabis Business Permit will be issued.

Business License:

All applicants who wish to establish, maintain, operate, or conduct a cannabis business in the city must obtain a business license. To secure a Cannabis Business Permit, a business license is necessary.

State License:

All applicants who proposes to establish, maintain, operate, or conduct a cannabis business in the city and every property for which a cannabis business is proposed to be established, maintained, operated, or conducted shall obtain all state licenses for the activity to be conducted. The applicant must cooperate with other public agencies to secure all necessary state license(s) prior to obtaining a Cannabis Business Permit through Code Enforcement.

Development Agreement:

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a) Public outreach and education.
b) Payment of community benefit fees and any other charges agreed upon by both parties. c) Approval of architectural plans, which should include the site plan, floor plan, and elevation. d) Provisions for terminating the agreement or invalidating or revoking the conditional use permit. e) Indemnification of the city and all its officials and employees from actions by third parties. This includes, but is not limited to, enforcement issues arising from conflicts between state and federal law or challenges to the issuance of a permit for the cannabis business. f) Any other terms and conditions that will protect and promote the public health, safety, and welfare of all residents in the city.

A copy of the development agreement is attached. (Attachment No. F) Government Code section 65867 requires both the planning commission and by the city council to hold a public hearing to consider adoption of a development agreement.

Operation and Management Plan:

City staff, comprising the Planning Division, Code Enforcement, and the Covina Police, met with our counterparts from the City of Santa Ana to gain a better understanding of cannabis business operations.

To further enhance our knowledge, Santa Ana staff conducted detailed site visits to various cannabis retail establishments to observe their day-to-day operations and management practices. Following these visits, City staff reviewed the application for the proposed operation and management plan and found no concerns and are satisfied with the proposal presented.

Signage:

In accordance with CMC 17.84.090.C, no cannabis or cannabis products, nor graphics depicting cannabis or cannabis products, will be visible from the exterior of the business or on any vehicles owned or used by the business.

No outdoor storage of cannabis or cannabis products is permitted at any time. According to CMC

17.84.070.H.7, STIIIZY will notify all patrons of the following through conspicuous signage posted throughout the premises, including within the lobby and in view of the point of sale area:
▪ The secondary sale, barter, or distribution of cannabis is a crime and can lead to arrest. ▪ Loitering on and around the cannabis business is prohibited by California Penal Code Section 647(e).
▪ Patrons may be subject to prosecution under federal cannabis laws. ▪ The use of cannabis may impair a person's ability to drive a motor vehicle or operate machinery.

STIIIZY will post a clearly legible sign in a prominent location outside the building, near the entrance to the premises, indicating that the following actions are prohibited on the premises:
▪ Smoking, ingesting, or consuming cannabis, marijuana, or alcohol ▪ Possessing deadly weapons, including concealed firearms, even if licensed ▪ Allowing persons under the age of 21 on the premises
▪ Wearing hats, sunglasses, hoodies, or other accessories that obscure identity ▪ Bringing personal bags, backpacks, duffel bags, large purses, or other containers

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The commercial center has an existing Sign Program the applicant must follow. All signage submitted by the applicant will be reviewed as a separate sign permit application, and related plans will be required to demonstrate compliance with the City’s cannabis sign ordinance for the property.

FINDINGS OF FACTS
CMC Section 17.62.120 provides that the Planning Commission, in approving a Conditional Use Permit shall find as follows:

A. Findings for Conditional Use Permit (CMC Section 17.62.120)

1. The site for the proposed use is adequate in size and shape to accommodate the use and all yards, spaces, walls and fences, parking, loading, landscaping, and other features required by this title to adjust the use with land and uses in the neighborhood.

Facts: The overall 34,324-square-foot building has existed on the subject site since 1986, with no known issues pertaining to appurtenant commercial activities. The 4,600 square feet interior space in which the proposed cannabis microbusiness would operate appears to have sufficient physical dimensions to support the use of retail, manufacturing, and distributing, in addition, as noted under project analysis, the proposed parking lot configuration would accommodate the parking needs of the business. The subject site is located within the Planned Community Development (PCD) / Light Manufacturing (M-1) zone. Part of the scope of work is providing exterior lighting for visibility and to safely illuminate the premises. City staff surveyed and inspected the proposed cannabis business location, as measured in a straight line 600 feet from the property line, to the nearest property line of a school, day care center, youth center and park and determined the proposed location is not within 600 feet of a sensitive use and, therefore complies with this provision. Therefore, as proposed, this criterion has been met.

2. That the site for the proposed use relates to streets and highways adequate in width and pavement type to carry the quantity and kind of traffic generated by the proposed use.

Facts: The site is situated within an established development and integrates well with the surrounding neighborhood infrastructure and support services. It has convenient access to major streets, the freeway system, and retail services. The proposed use is for a cannabis microbusiness that includes manufacturing and distribution, which is expected to generate a negligible increase in traffic. There are multiple access points on the site, which will help prevent congestion. The City Traffic Engineer has reviewed the proposal and confirmed that Arrow Hwy and Arrow Grand Circle have sufficient widths and capacity to accommodate this use. Therefore, this criterion has been met as proposed.

3. The proposed use will have no adverse effects on the abutting properties or the permitted use thereof.

Facts: As noted under the first finding, the appurtenant commercial building has existed for many years. Relative to the current building and supporting improvements on the project site, the changes would constitute a refinement of the interior and its appurtenances. No potentially negative impacts relative to the cannabis microbusiness. In addition, the approval of conditions would provide the city with adequate requirements for ensuring the project and use compatibility with the surroundings, and the proposed Cannabis microbusiness would not become a nuisance for adjacent businesses. The proposed cannabis microbusiness meets the cannabis regulations under CMC Section 17.84.070.

Therefore, as proposed, this criterion has been met.

4. That the conditions stated in the decision are deemed necessary to protect public health, safety, and general welfare. Such conditions include regulation of use, regulation of signs, requiring

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maintenance of grounds, regulation of noise, vibrations, odors, etc., regulation of time for certain activities, duration of use, and any such other conditions as will make possible the development of the city in an orderly and efficient manner and conformity with the intent and purposes set forth in this title.

Facts: The operation of a cannabis microbusiness is conditionally permitted within the Light Manufacturing (M-1) zone. All activities associated with the business will be conducted in a manner that will meet the provisions of Chapter 9.40 (Noise - which seeks to prevent unusual noises and vibrations). Approval of these applications will expire 2 year from the date of Project approval if building permits are not issued unless otherwise extended pursuant to applicable laws. Conditions of approval have been formulated to ensure that the proposed improvements for cannabis microbusiness establishment with will operate in a manner consistent with the Covina Municipal Code and will not negatively affect the public health, safety, and general welfare of the community. Conditions of approval will ensure that the site maintains mitigates noise level and operate within the approved business hours. No major public health or safety-related impacts have been identified during the project review. The Development Review Committee, comprised of Building and Safety, Environmental Services, Los Angeles County Fire, Covina Police Department, and Planning and Engineering, were provided with the opportunity to review and comment on the project application.

In addition, the proposed use has been conditioned to ensure that no potential issues would arise during operations. The staff’s comments confirm that the proposed use would operate in a manner consistent with the Covina Municipal Code and would not negatively affect the public health, safety, and general welfare of the community. Therefore, as conditioned, this criterion has been met.

B. Findings for Site Plan Review (CMC Section 17.64.070) In order to approve the Site Plan Review (SPR) application, the Planning Commission must make the findings as listed below:

1. All provisions of Title of the CMC are complied with; Facts: As described in detail within the "Project Analysis," the proposed operation of a cannabis microbusiness within the Planned Community Development (PCD) / Light Manufacturing M-1 zone.

Conditions of approval will ensure that the site conforms with all the requirements from maintenance to mitigating the odor within the site. The site is located within an established area characterized by existing streets, sidewalks, walls, existing structures, and uses that conform well to surrounding commercial infrastructure, circulation, and support services. The project would have no negative impacts on existing streets and sidewalks in that the proposed project is a minor tenant improvement with minimal impact on existing and surrounding traffic conditions with the proximity to public transit, and other forms of accessible transportation options (i.e., Uber, walking, cycling, etc.) With the overall improvements, and recommended conditions of approval, the proposed use will have no adverse effect on surrounding properties. Therefore, as conditioned, this criterion has been met.

2. The design and layout of the proposed development are consistent with the general plan, zoning code, development standards of the applicable zoning district, specific plans, design guidelines and objective design standards;
Facts: The proposed scope of work is consistent and conforms to the City of Covina’s General Plan Goals in that the establishment of a cannabis microbusiness “Encourage the revitalization or upgrading of deteriorating commercial and industrial structures through City, private development, and/or other efforts.” The proposed cannabis microbusiness conforms to the City’s design guidelines for said use, as reviewed and determined by planning staff. As such, the proposed scope of work satisfies all applicable guidelines to the project, as outlined under the Covina Municipal Code, Planned

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Community Development (PCD) / Light Manufacturing (M-1) Development Standards, the Covina Design Guidelines, and General Plan Therefore, as conditioned, this criterion has been met.

3. The design of the proposed development or the alterations to existing structures will not interfere with the use and enjoyment of existing neighborhood and future development, and will not create traffic or pedestrian hazards;
Facts: As described in detail within the ‘Project Analysis’ and illustrated on attached architectural plans dated April 21, 2025 (Attachment D), the proposed project complies with all required development standards (i.e. size, shape, setbacks, walls, fences, parking, loading, landscaping) for the establishment of cannabis microbusiness and other associated improvements. The subject site is located within the Planned Community Development (PCD) / Light Manufacturing (M-1) zone with a blend of fabrication, manufacturing, assembly or processing of materials which will be compatible and not interfere with any of the business surrounding the site. The subject site is within an established area characterized by industrial uses, connecting well to existing neighborhood infrastructure and support services. Proposed improvements to the site are aesthetically pleasing, functional, and visually compatible with neighboring structures and the area within which it is proposed to be located and follow the Covina Municipal Code. Staff assesses all applications in the City for the suitability of the space and its proposed uses. Any cannabis microbusiness is reviewed for the location of the retail area, loading spaces, queuing line, bathroom facilities, mechanical/electrical/plumbing improvements, security, landscape, and sales floor area ensure that they are operating as stated. The project site is approximately 92,347 square feet (2.12 acres) in land area and developed with a 34,324 square foot existing commercial building occupied by multiple tenants. Therefore, this criterion has been met.

4. The proposed development has been reviewed in compliance with the provisions of the California Environmental Quality Act (CEQA);
Facts: The proposed Project is designed and in conformance with development standards consistent with the character, appearance, and features described within the Planned Community Development (PCD) / Light Manufacturing (M-1) zone thereby facilitating the desired sustainability and stability adequate for its environment, the neighborhood, and the community it will serve. The project involves minor interior improvements along with upgrades to accommodate a cannabis microbusiness within an existing 4,600 square feet space involving partition, mechanical, plumbing and electrical conveyances. No structural additions are proposed. Staff has determined that the project is exempt from the requirements of California Environmental Quality Act (CEQA) Guidelines under the Class 1 exemption under state CEQA Guidelines Section 15332, which is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicant zoning designation and regulations. The proposed developments are within city limits on a project site of no more than five acres of substantially surrounded by urban uses. Since the location is within an existing commercial center, the project site has no value as habitat for endangered, rare or threatened species.

Approval of this project would not result in any significant effects relating to traffic, noise quality, or water quality. The site can be adequately served by all required utilities and public services.

Therefore, this criterion has been met.

5. The proposed development will not be detrimental to the public health, safety or welfare or materially injurious to the properties or improvements in the vicinity; Facts: Construction activities during the tenant improvements are not likely to cause serious public health problems. All potentially hazardous materials used during project construction will be disposed of in accordance with manufacturers’ specifications and instructions, thereby reducing the risk of hazardous materials use. In addition, the Project would comply with all applicable federal, state, and local requirements concerning the use, storage, and management of hazardous materials, including

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but not limited to the Resource Conservation and Recovery Act, California Hazardous Waste Control Law, federal and state Occupational Safety and Health Acts, SCAQMD rules, and permits and associated conditions issued by the Building and Safety Division. Therefore, as conditioned, this criterion has been met.

6. The development complies with the provisions for dedications, public improvements and undergrounding utilities pursuant to CMC 17.64.140 and congestion management and transportation demand management requirements pursuant to CMC 17.64.150; Facts: All new utility service lines that are installed to serve the tenant space shall be placed underground. The Applicant shall comply with any other utility and/or street improvements required by the Department of Public Works (Engineering, Traffic, and Environmental Services). Therefore, as conditioned, this condition has been met.

C. Findings for Development Agreement (Government Code Section 65867.5) A development agreement shall not be approved unless the legislative body finds that the provisions of the agreement are consistent with the general plan and any applicable specific plan.

PUBLIC HEARING NOTICE AND NOTIFICATION
All property owners within a radius of at least 300 feet from the overall project site were mailed notices of the Planning Commission public hearing a minimum of ten (10) days before the hearing as required by law. In addition, the public hearing notice for June 24, 2025 was published in the San Gabriel Valley Examiner newspaper on June 12, 2025.

ENVIRONMENTAL DETERMINATION
Staff has determined that the project is exempt from the requirements of California Environmental Quality Act (CEQA) Guidelines under the Class 32 exemption under state CEQA Guidelines Section 15332, which is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicant zoning designation and regulations. The proposed developments are within city limits on a project site of no more than five acres of substantially surrounded by urban uses. Since the location is within an existing commercial center, the project site has no value as habitat for endangered, rare or threatened species. Approval of this project would not result in any significant effects relating to traffic, noise quality, or water quality. The site can be adequately served by all required utilities and public services.

STAFF RECOMMENDATION
Staff recommends that the Planning Commission adopt Resolution No. 2025-011 recommending that the City Council approve Conditional Use Permit (CUP) 25-001 and Site Plan Review (SPR) 25-026, with the attached Conditions of Approval, and make a determination of exemption from California Environmental Quality Act (CEQA) ; and Resolution No. 2025-012 recommending that the City Council adopt Development Agreement XX and make a determination of exemption from CEQA.

Prepared by: Approved By:
______________________________
Eduardo Lomeli
Assistant Planner

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EXHIBITS
A. City Application
B. Cannabis Zoning Verification Letter
C. 300-feet radius map | address label
D. Project Plans
E. Resolution No. 2025-011 PC - (CUP)25-001 and (SPR)25-026, w/ Conditions of Approval F. Resolution No. 2025-012 PC - Development Agreement

1. Exhibit A – Ordinance No. XXX

2. Development Agreement

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ATTACHMENT A
City Application

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ATTACHMENT B
Cannabis Zoning Verification Letter

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CITY OF COVINA www.covinaca.gov
125 East College Street Covina, CA 91723-2199 (626) 384-5450 January 25, 2024
Tak Sato
STIIZY Covina LLC
754 Arrow Hwy Ste D,E,F
Covina, CA, 91722
SUBJECT: Approval of Cannabis Zoning Verification Clearance Letter for 754 Arrow Hwy, Covina, CA 91723 (APN: 8405-003-032)
Tak Sato:

The purpose of this letter is to respond to your request made to the City of Covina Community Development Department, Planning Division on November 14th, 2023, requesting a Cannabis Zoning Verification Clearance Letter, concerning the property located at 754 Arrow Hwy, (APN:
8405-003-032). In accordance with your request, the information provided in this Zoning Verification Clearance Letter addresses the pertinent information requested, under the provisions of Covina Municipal Code (CMC) Chapter 17.84 Cannabis Prohibitions and Regulations. The Covina Municipal Code (CMC) can be accessed online at www.codepublishing.com/CA/Covina, and the Zoning Code can be found under Title 17 of the CMC.

1. General Plan Use and Zoning Designation. The property is designated on the Covina General Plan and Land Use Map as “GI – General Industrial”. The site zoning designation is PCD/M-1 “Planned Community Development / Industrial Zone (Light Manufacturing)” and as described under CMC Section 17.54.020 Permitted Uses and Section 17.54.030 - Uses Permitted Subject to Conditional Use Permit. A “Cannabis Microbusiness” land use is a conditionally permitted use, requiring approval by the Planning Commission.

2. Proximity to Sensitive Uses for Cannabis Businesses. The establishment of a cannabis business shall comply with all applicable city zoning site development standards of the zone in which the cannabis business is located. No cannabis business shall be established or located within 600 feet of a school providing instruction in kindergarten or any grades one through 12, day care center, youth center, or park, as described in detail under Chapter 17.84 (Cannabis Prohibitions and Regulations) of the Covina Municipal Code (CMC).

It is the responsibility of the owners and/or operators of any cannabis business within the city to ensure that they operate in a manner compliance with CMC Chapter 17.84, all applicable state and local law, and any other regulations.

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On 1/9/2024, city staff surveyed and inspected the proposed cannabis business location, as measured in a straight line 600 feet from the property line, to the nearest property line of a school, day care center, youth center and park and determined the proposed location is not within 600 feet of a sensitive use and therefore complies with this provision:

Note: There is no sensitive use within the 600-foot buffer

Please reference the entire code section under Chapter 17.84 (https://www.codepublishing.com/CA/Covina/#!/Covina17/Covina1784.html#17.84) for all other cannabis-related provisions on the City of Covina website at www.covinaca.gov. The Zoning Verification phase of your application request has been completed and may now proceed with Phase II of your formal application review. Please contact [email protected] for further information or questions on your application submittal.

Finally, as a reminder, it is the responsibility of the applicant to demonstrate that at least one (1) member of the application team for a Cannabis Application has attended the Mandatory City of Covina Cannabis Workshop held on October 5th 2023. As part of your submitted application package, you will need to identify the person(s) who attended the aforementioned Mandatory City of Covina Cannabis Workshop.

Sincerely,
Eduardo Lomeli
Planning Technician
Attachments: GIS Aerial Map (Site Address and Proximity to Sensitive Uses) cc: Brian K. Lee, Community Development Director
Mercenia Lugo, Planning Manager
600 Foot Buffer
Proposed Site

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ATTACHMENT C
300-feet Radius Map & Address Label

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ATTACHMENT D
Project Plans

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PROPOSED PROJECT SUITE 4,600-SF
18'-0"
9'-0"
23'-8"
24'-6"
10'-0"
23'-10"

ARROW HWY
ARROW GRAND CIR 48 46 8'-7" ADJACENT SUITES NOT IN SCOPE

CALIFORNIA HOSPICE CARE
1800 SF
U.S. DEPT. OF

AGRICULTURE
1680 SF

ARROW LODGE BREWING
2500 SF ADJACENT SUITES NOT IN SCOPE ADJACENT SUITES NOT IN SCOPE MAIN CUSTOMER ENTRANCE / EXIT EMPLOYEE ONLY ENTRANCE / EXIT 35'-10" 55'-0" 32'-7" 98'-8" LOADING / UNLOADING AREA
69'-0" 22'-9"

ARROW GRAND CIR
RESERVED 1 1 1 2 2 2 2 1 1 1 3 4 4 5 5 6TYP. 7 7 7 8 9 1012 4 6 11TYP. 5 9 3 13 13 15TYP. 15TYP. 12TYP. 8 14 16 12TYP. 17 18 9'-5" (NOT IN SCOPE)

VACANT SUITE
760 SF

VACANT SUITE
950 SF

BROOKDALE HOME HEALTH
2600 SF

PIE TRAP PIZZA
460 SF

SERIOUS INK TATTOO
720 SF
(NOT IN SCOPE)
(NOT IN SCOPE)
(NOT IN SCOPE)
(NOT IN SCOPE)
(NOT IN SCOPE)
(NOT IN SCOPE)
(NOT IN SCOPE) ADJACENT SUITES NOT IN SCOPE

VACANT SUITE
1450 SF
(NOT IN SCOPE)

VACANT SUITE
2200 SF
(NOT IN SCOPE)

UNIQUE PRINTING
4231 SF
(NOT IN SCOPE) 5 Seal Plan Check Number: Consultant
754 ARROW HWY, STES D-F,
COVINA, CA. 91722 H I D E N O R I I W A G A M I CUP NUMBER: 3 PETERS CANYON RD. IRVINE, CA. 92606 D
G ESI N | A R C H I T EC T U R E H E S T I A A T E L I E R CUP PLANS 11/29/2023 STIIIZY COVINA LLC N SITE PLAN 3/64"=1'-0" 1
Extra PC Apr/21/2025 1:50 PM dwg last saved: by: S H E E T sheet plotted:
drawing file name:

Apr/21/2025 @ 4:32 PM w:\projects\stiiizy\covina 754 arrow hwy\design\cup\sp1.0 site plan.dwg EX SP 1.0
SITE PLAN PROJECT INFORMATION KEYNOTES 1234567910 EXISTING ADA PARKING TO REMAIN EXISTING DRIVE AISLE TO REMAIN 11 EXISTING TRASH ENCLOSURE TO REMAIN EXISTING BUILDING SIDEWALK TO REMAIN EXISTING PARKING TO REMAIN EXISTING ADA LOADING ZONE TO REMAIN VICINITY MAP - ALL EXISTING LANDSCAPE AND SETBACKS ARE TO REMAIN 8 EXISTING ADA RAMP TO REMAIN APN: 8405-003-032 ADDRESS: 754 ARROW HWY COVINA, CA. 90250 LOT SIZE: 90,473 SF (2.1 ACRES) OCCUPANCY GROUP: M & F1 PROJECT BUILDING SF: 34,324 SF GENERAL PLAN: GENERAL INDUSTRIAL (GI) CONSTRUCTION TYPE: V-B PROJECT SUITE SF: 4,600 SF EXISTING PUBLIC SIDEWALK TO REMAIN EXISTING DRIVEWAY TO REMAIN EXISTING GAS METER BANK TO REMAIN EXISTING BOLLARD TO REMAIN ZONING: PCD/M-1 PLANNED COMMUNITY DEVELOPMENT / INDUSTRIAL ZONE (LIGHT MANUFACTURING) 12 EXISTING COLUMN TO REMAIN 13 EXISTING EXTERIOR DOOR TO BE INFILLED 14 EXISTING TRANSFORMER TO REMAIN 15 NEW DRIVE AISLE ARROWS OCCUPANT LOAD: MERCANTILE - 2,389 / 60 = 40 OCCUPANTS MANUFACTURING AND DISTRIBUTION - 1,797 / 500 = 4 OCCUPANTS NOTE: THERE WILL BE NO CHANGES TO THE EXISTING WATER METER SIZE, AND NO CHANGE TO THE EXISTING SEWER LATERAL SIZE AND LOCATION. 16 PROPOSED DELIVERY VEHICLE PARKING HOURS OF OPERATION: 17 PROPOSED QUEUING PATH NOTE: EACH ENTRANCE TO A CANNABIS BUSINESS SHALL BE VISIBLY POSTED WITH A CLEAR AND LEGIBLY NOTICE INDICATING THAT SMOKING, INGESTING, OR OTHERWISE CONSUMING CANNABIS ON THE PREMISES OR IN THE AREAS ADJACENT TO THE CANNABIS BUSINESS IS PROHIBITED. 18 SECURITY GUARD TO BE STATIONED AT ENTRY DOOR DURING OPERATING HOURS FOR ID VERIFICATION. AN ADDITIONAL SECURITY GUARD WILL BE PRESENT ON SITE FOR PERIMETER CONTROL. TOTAL PARKING STALLS REQUIRED : 121 TOTAL PARKING STALLS PROVIDED: 94 TOTAL ACCESSIBLE PARKING STALLS REQUIRED: 4 TOTAL ACCESSIBLE PARKING STALLS PROVIDED: 4 UNIT # NAME OF TENANT USE AREA PARKING RATIO STALLS REQUIRED 706A&B GUN SHOP ALLSTATE SERIOUS INK TATTOO POLANS OFFICE PIE TRAP PIZZA PARKING TABULATION LEGEND # NUMBER OF PARKING SPACES EXISTING PROPERTY LINE TO REMAIN EXISTING LANDSCAPE 706C 706D 706E 720A 720C 720D 720E 720F 720G 720H 740A 740C 740D 745A 745C 745D 745E 745F ARROW LODGE BREWING VACANT SUITE VACANT SUITE VACANT SUITE APNCOT OFFICE UNIQUE PRINTING STIIIZY (PROPOSED PROJECT SUITE) RETAIL RETAIL PROFESSIONAL OFFICE PROFESSIONAL OFFICE PROFESSIONAL OFFICE PROFESSIONAL OFFICE PROFESSIONAL OFFICE 2,600 SF 950 SF 720 SF 760 SF 460 SF 2,500 SF 1,800 SF 1,680 SF 1,450 SF 2,200 SF 4,231 SF 4,600 SF 1 / 250 SF 1 / 250 SF 1 / 250 SF 1 / 250 SF 1 / 250 SF 3.8 3.1 6.7 5.8 8.8 1 / 100 SF 1 / 100 SF 1 / 200 SF 1 / 250 SF 1 / 200 SF 1 / 250 SF 1 / 200 SF PLUS 1 PER EMPLOYEE 13.0 2.88 4.6 7.2 16.9 23.0 25.0 MANUFACTURING & DISTRIBUTION: 9:00 AM - 9:00 PM ( MON - FRI ) RETAIL & DELIVERY: 9:00 AM - 9:00 PM ( DAILY ) RETAIL PROFESSIONAL OFFICE RESTAURANT RESTAURANT PROFESSIONAL OFFICE Page 1295 of 1383 PROPOSED PROJECT SUITE 4,600-SF

ARROW HWY

ARROW GRAND CIR EMPLOYEE ONLY ENTRANCE / EXIT LOADING / UNLOADING AREA

ARROW GRAND CIR

RESERVED CUSTOMER ENTRANCE / EXIT ADJACENT SUITES NOT IN SCOPE

CALIFORNIA HOSPICE CARE
1800 SF
U.S. DEPT. OF

AGRICULTURE
1680 SF

ARROW LODGE BREWING
2500 SF ADJACENT SUITES NOT IN SCOPE ADJACENT SUITES NOT IN SCOPE (NOT IN SCOPE)

VACANT SUITE
760 SF

VACANT SUITE
950 SF

BROOKDALE HOME HEALTH
2600 SF

PIE TRAP PIZZA
460 SF

SERIOUS INK TATTOO
720 SF
(NOT IN SCOPE)
(NOT IN SCOPE)
(NOT IN SCOPE)
(NOT IN SCOPE)
(NOT IN SCOPE)
(NOT IN SCOPE)
(NOT IN SCOPE) ADJACENT SUITES NOT IN SCOPE

VACANT SUITE
1450 SF
(NOT IN SCOPE)

VACANT SUITE
2200 SF
(NOT IN SCOPE)

UNIQUE PRINTING
4231 SF
(NOT IN SCOPE) 2 2 30.3 0.3 0.2 0.2 0.5 0.7 0.5 0.3 1.3 1.0 0.6 0.2 1.5 1.9 0.1 1.7 0.7 6.3 6.4 4.5 3.1 1.0 0.2 0.0 0.1 0.30.30.50.3 0.6 0.2 0.5 0.0 0.2 0.6 0.2 0.1 0.5 0.1 0.0 0.00.1 4.5 1.6 0.1 0.0 0.4 0.3 0.2 0.0 0.0 0.00.00.0 0.0 3 3 1 1 4 4 3 N EXISTING LIGHTING PLAN 3/64"=1'-0" 1 Extra PC Apr/1/2025 8:44 AM dwg last saved: by: S H E E T sheet plotted:
drawing file name:

Apr/18/2025 @ 4:26 PM w:\projects\stiiizy\covina 754 arrow hwy\design\cup\sp1.2 lighting plan.dwg EX SP1.2

EXISTING LIGHTING
PLAN KEYNOTES 123 EXISTING WALL PACK TO REMAIN EXISTING BUILDING OVERHANG TO REMAIN EXISTING DOWN LIGHT TO REMAIN LEGEND EXISTING PROPERTY LINE TO REMAIN EXISTING LANDSCAPE Seal Plan Check Number: Consultant 754 ARROW HWY, STES D-F,
COVINA, CA. 91722 H I D E N O R I I W A G A M I CUP NUMBER: 3 PETERS CANYON RD. IRVINE, CA. 92606 D
G ESI N | A R C H I T EC T U R E H E S T I A A T E L I E R CUP PLANS 11/29/2023 STIIIZY COVINA LLC 4 EXISTING STREET LIGHT TO REMAIN Page 1296 of 1383

PROPOSED

PROJECT
SUITE
4,600-SF

ARROW HWY

ARROW GRAND CIR

EMPLOYEE ONLY

ENTRANCE / EXIT

LOADING / UNLOADING

AREA ARROW GRAND CIR RESERVED

CUSTOMER

ENTRANCE / EXIT

ADJACENT SUITES NOT
IN SCOPE CALIFORNIA HOSPICE CARE 1800 SF U.S. DEPT. OF AGRICULTURE 1680 SF ARROW LODGE BREWING 2500 SF

ADJACENT SUITES NOT

IN SCOPE

ADJACENT SUITES NOT

IN SCOPE
(NOT IN SCOPE) VACANT SUITE 760 SF VACANT SUITE 950 SF BROOKDALE HOME HEALTH 2600 SF PIE TRAP PIZZA 460 SF SERIOUS INK TATTOO 720 SF (NOT IN SCOPE) (NOT IN SCOPE) (NOT IN SCOPE) (NOT IN SCOPE) (NOT IN SCOPE) (NOT IN SCOPE)
(NOT IN SCOPE)

ADJACENT SUITES NOT
IN SCOPE VACANT SUITE 1450 SF (NOT IN SCOPE) VACANT SUITE 2200 SF (NOT IN SCOPE) UNIQUE PRINTING 4231 SF (NOT IN SCOPE) 2 2 3 5'-6" 11'-4" 32'-6" 24'-6" 32'-6" 24'-3 5'-6" 1 23'-4 2" 12" 5'-6" 1 4 4 5 5 5 5 5 5 5 5 5 3 3 13 N PROPOSED LIGHTING PLAN 3/64"=1'-0" 1 Extra PC Apr/1/2025 8:44 AM dwg last saved: by:

S H E E T
sheet plotted:drawing file name:

Apr/18/2025 @ 4:27 PM w:\projects\stiiizy\covina 754 arrow hwy\design\cup\sp1.2 lighting plan.dwg
SP1.3PROPOSED LIGHTING PLAN
KEYNOTES 123

EXISTING WALL PACK TO REMAIN

EXISTING BUILDING OVERHANG TO REMAIN

EXISTING DOWN LIGHT TO REMAIN
LEGEND

EXISTING PROPERTY LINE TO REMAIN

EXISTING LANDSCAPE
Seal
Plan Check Number:

Consultant
754 ARROW HWY, STES D-F,
COVINA, CA. 91722 H I D E N O R I I W A G A M I
CUP NUMBER:
3 PETERS CANYON RD.

IRVINE, CA. 92606 D G ESI N | A R C H I T EC T U R E H E S T I A A T E L I E R CUP PLANS 11/29/2023 STIIIZY COVINA LLC 4 EXISTING STREET LIGHT TO REMAIN 5 NEW TCP LED NON-CUTOFF WALL PACK, MOUNTED AT 11'-0" A.F.F. (SEE SPEC. BELOW)

LIGHTING SPEC

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ADJACENT TENANT (NOT IN SCOPE) 16'-8" OVERALL PROJECT SCOPE 104'-2" 2 1 2 (E) E.P. REF +36" ADA COUNTER
ATM
ATM
ATM 9'-5" 18'-10" 4'-11" 10'-2" 9'-0" 35'-112"
OVERALL PROJECT SCOPE 53'-7"
32'-712"
20'-412" 21'-5" 1 1 1 3 4 6 6 6 6 6 6 6 6 6 7 12 6 12 1211'-912" 8 DVR SEC PANEL SAFE

ADMINISTRATION

RECORD STORAGE
DOOR CONTR.

SURVELLIANCE STORAGE CANNABIS WASTE STORAGE CANNABIS WASTE STORAGE 16'-8" 19'-5" 12'-0" 5'-112" 20'-712" 30'-1" SCISSOR SECURITY DOORS TO BE INSTALLED IN INTERIOR OF STOREFRONT POS POS POS POS POS POS POS POS POS 10'-0" 11'-312" 9'-712"
10'-612"
10'-612" 3'-11" 9'-0" 3'-4"
3'-812"
5'-812" 8'-4" 8'-9"
15'-4"
2'-512"
22'-812" 14'-8" 18'-7" 13'-10" 22'-4" 13'-10"
11'-412"
3'-1012"
5'-412"
7'-1112" BACKUP GENERATOR MAIN CUSTOMER ENTRANCE / EXIT EMPLOYEE ONLY ENTRANCE / EXIT LOADING / UNLOADING AREA - 185 SF 10'-412" 3 1 1 1 12'-012" 9 TYP. 5 10TYP. 11 14 13 DISTRIBUTION 260 SF NON-CANNABIS STORAGE 95 SF BREAKROOM 194 SF RESTROOM 100 SF RESTROOM 107 SF MANUFACTURING 303 SF CORRIDOR 447 SF DELIVERY 348 SF OFFICE 167 SF SECURED INVENTORY 300 SF VOID RETAIL / CUSTOMER SALES 1,500 SF SALES (RESTRICTED ACCESS) (DELIVERIES TO BE FREQUENT AND LOW-QUANTITY) LOADING / UNLOADING DOOR 15 16 17 17 19 18 PROPOSED FLOOR PLAN 3/16"=1'-0" 1 Extra PC Apr/21/2025 1:59 PM dwg last saved: by: S H E E T sheet plotted:
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Apr/21/2025 @ 4:31 PM w:\projects\stiiizy\covina 754 arrow hwy\design\cup\a2.0 floor plan.dwg A2.0
PREMISES DIAGRAM LEGEND EXISTING TILT-UP CONCRETE WALL TO REMAIN EXISTING INTERIOR WALL TO REMAIN PROPOSED INTERIOR NON-BEARING WALL EXISTING DEMISING WALL TO REMAIN KEYNOTES 12 N 345 EXISTING ELECTRICAL PANEL TO REMAIN EXISTING STOREFRONT GLAZING TO REMAIN EXISTING EXTERIOR DOOR TO REMAIN PROPOSED WATER FOUNTAIN 6 PROPOSED INTERIOR DOOR ODOR CONTROL PROPOSED MOP SINK Seal Plan Check Number: Consultant 754 ARROW HWY, STES D-F,
COVINA, CA. 91722 H I D E N O R I I W A G A M I CUP NUMBER: 3 PETERS CANYON RD. IRVINE, CA. 92606 D
G ESI N | A R C H I T EC T U R E H E S T I A A T E L I E R CUP PLANS 11/29/2023 STIIIZY COVINA LLC 7 EXISTING EXTERIOR DOOR TO BE INFILLED PROPOSED STANCHION 89 EXISTING STEEL COLUMN TO REMAIN PROPOSED ATM 10 ODOR CONTROL SYSTEM ABOVE CEILING, SEE MANUFACTURERS SPEC BELOW 11 PROPOSED QUEUING PATH 1213 SECURITY GUARD TO BE STATIONED AT ENTRY DOOR FOR ID VERIFICATION DURING ALL OPERATING HOURS 14 NEW SIGNAGE TO READ: "RESTROOM AVAILABLE FOR CUSTOMER USE UPON REQUEST." NOTE: EACH ENTRANCE TO A CANNABIS BUSINESS SHALL BE VISIBLY POSTED WITH A CLEAR AND LEGIBLY NOTICE INDICATING THAT SMOKING, INGESTING, OR OTHERWISE CONSUMING CANNABIS ON THE PREMISES OR IN THE AREAS ADJACENT TO THE CANNABIS BUSINESS IS PROHIBITED. PROPOSED INTERIOR PONY WALL SECURITY GUARD TO BE STATIONED ON RETAIL SALES FLOOR DURING ALL OPERATING HOURS 15 SECURITY GUARD TO BE STATIONED OUTSIDE MANUFACTURING & DISTRIBUTION ROOMS DURING ALL OPERATING HOURS 1617 PROPOSED SWING DOORS TO PREVENT CUSTOMER ENTRY INTO POS AREA 18 INGRESS POINT FOR CUSTOMERS 19 INGRESS POINT FOR EMPLOYEES Page 1298 of 1383

ADJACENT TENANT (NOT IN SCOPE)

EVACUATION

MEETING POINTS
(E) E.P. REF +36" ADA COUNTER
ATM
ATM

ATM EVACUATION MEETING POINTS

EVACUATION

MEETING POINTS
POS
POS
POS
POS
POS
POS
POS
POS
POS DISTRIBUTION 260 SF NON-CANNABIS STORAGE 95 SF BREAKROOM 194 SF RESTROOM 100 SF RESTROOM 107 SF MANUFACTURING 303 SF CORRIDOR 477 SF DELIVERY 348 SF OFFICE 167 SF SECURED INVENTORY 300 SF VOID RETAIL / CUSTOMER SALES 1,500 SF SALES (RESTRICTED ACCESS) EXIT TACTILE 'EXIT' SIGN REFER TO 18/A0.2 INTERNATIONAL SYMBOL OF ACCESSIBILITY SIGNAGE, REFER TO 17/A0.2 EXIT ACCESS TRAVEL DISTANCE: 57'-0" (200' MAX. ALLOWED) EXIT ACCESS TRAVEL DISTANCE: 45'-2" (200' MAX. ALLOWED) EXIT ACCESS TRAVEL DISTANCE: 56'-2" (200' MAX. ALLOWED) EXIT ACCESS TRAVEL DISTANCE: 45'-6" (200' MAX. ALLOWED) EXIT ACCESS TRAVEL DISTANCE: 44'-0" (200' MAX. ALLOWED) EXIT ACCESS TRAVEL DISTANCE: 61'-6" (200' MAX. ALLOWED) EXIT ACCESS TRAVEL DISTANCE: 37'-0" (200' MAX. ALLOWED) EXIT ACCESS TRAVEL DISTANCE: 45'-6" (200' MAX. ALLOWED) EXIT ACCESS TRAVEL DISTANCE: 42'-6" (200' MAX. ALLOWED) EXIT ACCESS TRAVEL DISTANCE: 38'-0" (200' MAX. ALLOWED) EXIT ACCESS TRAVEL DISTANCE: 53'-0" (200' MAX. ALLOWED) EXIT ACCESS TRAVEL DISTANCE: 27'-0" (200' MAX. ALLOWED) 16 OCCUPANTS @ THIS EXIT 20 OCCUPANTS @ THIS EXIT TOTAL OCCUPANT LOAD = 48 11 OCCUPANTS @ THIS EXIT 5 OCCUPANTS 5 OCCUPANTS 1 OCCUPANTS 11 OCCUPANTS 2 OCCUPANTS 1 OCCUPANT 2 OCCUPANTS 20 OCCUPANTS EXIT ACCESS TRAVEL DISTANCE: 50'-0" (200' MAX. ALLOWED) EXIT
EXIT LOADING / UNLOADING AREA - 185 SF POINT OF INGRESS / EGRESS POINT OF INGRESS / EGRESS POINT OF INGRESS / EGRESS EGRESS PLAN (FIRE, LIFE AND SAFETY) 3/16"=1'-0" 1 Extra PC Apr/21/2025 1:59 PM dwg last saved: by: S H E E T sheet plotted:
drawing file name:

Apr/21/2025 @ 4:31 PM w:\projects\stiiizy\covina 754 arrow hwy\design\cup\a2.0 floor plan.dwg A2.1

EGRESS PLAN
(FIRE, LIFE AND SAFETY) LEGEND EXISTING TILT-UP CONCRETE WALL TO REMAIN EXISTING INTERIOR WALL TO REMAIN PROPOSED INTERIOR NON-BEARING WALL EXISTING DEMISING WALL TO REMAIN N Seal Plan Check Number: Consultant 754 ARROW HWY, STES D-F,
COVINA, CA. 91722 H I D E N O R I I W A G A M I CUP NUMBER: 3 PETERS CANYON RD. IRVINE, CA. 92606 D
G ESI N | A R C H I T EC T U R E H E S T I A A T E L I E R CUP PLANS 11/29/2023 STIIIZY COVINA LLC EGRESS ACCESS EXIT SIGN FIRE EXTINGUISHER EXIT PROPOSED INTERIOR PONY WALL Page 1299 of 1383 +36" ADA COUNTER
ATM
ATM
ATM 3 2 4
Extra PC Apr/21/2025 1:59 PM dwg last saved: by: S H E E T sheet plotted:
drawing file name:

Apr/21/2025 @ 4:30 PM w:\projects\stiiizy\covina 754 arrow hwy\design\cup\a2.0 floor plan.dwg A2.2
INTERIOR RENDERINGS Seal Plan Check Number: Consultant
754 ARROW HWY, STES D-F,
COVINA, CA. 91722 H I D E N O R I I W A G A M I CUP NUMBER: 3 PETERS CANYON RD. IRVINE, CA. 92606 D
G ESI N | A R C H I T EC T U R E H E S T I A A T E L I E R CUP PLANS 11/29/2023 STIIIZY COVINA LLC INTERIOR RENDERING NTS 3 INTERIOR RENDERING NTS 2 INTERIOR RENDERING NTS 4 INTERIOR FINISH SCHEDULE KEY PLAN NTS 1 KEYNOTES 12453 SYMBOL MFG. MODEL PT01 SHERWIN WILLIAMS EMERALD INTERIOR ACRYLIC LATEX; SATIN FINISH #K37, EXTRA WHITE BASE EXTRA WHITE SW7006; WALLS DESCRIPTION FLAME SPREAD CLASS A SHERWIN WILLIAMS PRO-INDUSTRIAL WATERBORNE ACRYLIC DRY FALL; FLAT FINISH #B42 ULTRADEEP BASE TRICORN BLACK SW6258; CEILINGS >12'-0" A.F.F. CLASS A PT 02C PAINT (REFER TO EXTERIOR FOR EXTERIOR FINISHES) FL01 COLOR: NIMBUS; SALES AREA CONCRETE FLOOR. REQUIRED VENDOR IN BOX NOTE BELOW CLASS A FLOORING VB01 JOHNSONITE CB-40 BLACK VINYL BASE BASE MISC. ACT 01 ARMSTRONG FINE FISSURED: 1729 "TECH BLACK" ACT: 2x2 CEILING GRID AND TILES CLASS A DUR-A-FLEX DUR-A-FLEX REFLEXIONS -EPOXY FLOOR SYSTEM NEW SUSPENDED STRIP LIGHT (VENDOR: LITHONIA LIGHTING 4FT-8FT LED - STATIC LUMENS 2300LM, 4500LM, 8200LM, 9000LM SUSPENDED) NEW 6" COMPACT LED RECESSED DOWN LIGHT NEW CUSTOM CASEWORK TO BE INSTALLED BY CASEWORK VENDOR NEW DISPLAY SCREENS / CUSTOM GRAPHIC LIGHT BOXES NEW ATM FL01 FL01 1 2 1 2 2 1 ACT 01 ACT PT 01 02C ACT 01 PT 02C VB015 3 3 3 FL01 ACT 01 PT 02C 3 3 3 3 4 4 4 4 PT01 PT01 6 NEW CUSTOM WALLPAPER 6 6 6 6 6 Page 1300 of 1383

ARROW HWY
ARROW GRAND CIR ARROW GRAND CIR 2 1
VIEW 1 NTS 1
VIEW 2 NTS 2 Darla Rocha Nov/28/2023 12:04 PM dwg last saved: by:

S H E E T
sheet plotted:drawing file name:

Mar/21/2025 @ 2:59 PM w:\projects\stiiizy\covina 754 arrow hwy\design\cup\a5.0proposed exterior renderings.dwg EXTERIOR RENDERINGS A3.0
Seal
Plan Check Number:

Consultant
754 ARROW HWY, STES D-F,
COVINA, CA. 91722 H I D E N O R I I W A G A M I
CUP NUMBER:
3 PETERS CANYON RD.

IRVINE, CA. 92606 D G ESI N | A R C H I T EC T U R E H E S T I A A T E L I E R CUP PLANS 11/29/2023 STIIIZY COVINA LLC
KEY PLAN NTS 1 N

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754 ARROW HWY. SUITE F-H
COVINA, CA 91722 CUP Number: Plan Check Number: Seal Consultant v6.5
D
G ESI N | A R C H I T EC T U R E H E S T I A A T E L I E R CUP25-1 3 PETERS CANYON RD. SUITE 110 IRVINE, CA. 92606 2025-02-14 1st P.C. SUBMITTAL - -- Sight Review: SPR25-26 ELECTRICAL EXTERIOR PHOTOMETRIC PLAN E-PH ELECTRICAL EXTERIOR PHOTOMETRIC PLAN Page 1302 of 1383

ATTACHMENT E
Resolution 2025-011 PC

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RESOLUTION NO. 2025-011 PC

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY

OF COVINA, CALIFORNIA, RECOMMENDING THAT THE CITY
COUNCIL APPROVE A CONDITIONAL USE PERMIT (CUP) 25-001,
AND SITE PLAN REVIEW (SPR) 25-026, TO ALLOW A 4,600 SQUAREFEET TENANT IMPROVEMENT TO PERMIT THE

ESTABLISHMENT OF A CANNABIS MICROBUSINESS RETAIL

STORE WITHIN THE PCD (PLANNED COMMUNITY
DEVELOPMENT) / M-1 (LIGHT MANUFACTURING) ZONE,
LOCATED AT 754 E ARROW HWY, COVINA, CA, 91722 (APN: 8405- 003-032), AND MAKE A DETERMINATION OF EXEMPTION OF THE

CALIFORNIA ENVIRONMENTAL ACT (CEQA) GUIDELINES
WHEREAS, on February 21, 2023, the City Council of the City of Covina adopted Ordinance 23-01 and a Mitigated Negative Declaration (MND) to allow cannabis retailers and microbusinesses to conduct business in the City of Covina and WHEREAS, as part of operating a cannabis retail establishment within the City of Covina, City Council, as part of the selection process, requires all selected applicants to apply for a Conditional Use Permit.

WHEREAS, Property owner, Andrew McIntyre, through authorized applicant, Andrew De La Garza, has filed a Conditional Use Permit (CUP) 25-001 and Site Plan Review (SPR) 25-026 a request to approve a cannabis microbusiness retail establishment (“Stiiizy”), in conjunction with a manufacturing and distribution use, on a 4,600 square-foot commercial tenant space and associated interior tenant improvements, within the PCD (Planned Community Development) / M-1 (Light Manufacturing) zone, located at 754 E. Arrow Highway, (Property); and WHEREAS, CMC Section 17.84.060 requires the Planning Commission to hold a hearing and make a recommendation to the City Council on a cannabis use conditional use permit; and WHEREAS, CMC Section 17.64.040.B requires that the Planning Commission make a recommendation on site plan review when the application is processed concurrently, and final action is to be taken by the City Council; and
WHEREAS, Government Code Section 65867 requires the Planning Commission hold a hearing on an application for a development agreement; and WHEREAS, on June 24, 2025 at the regular meeting the Planning Commission conducted a duly noticed public hearing at which time oral and written comments received prior to or at the meeting, together with a recommendation from the Planning Division, was presented to the Planning Commission. The Planning Commission concluded said hearing on that date; and WHEREAS, all legal perquisites prior to the adoption of this Resolution have occurred.

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NOW, THEREFORE, THE PLANNING COMMISSION OF THE CITY OF
COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. The foregoing recitals are true and correct and are incorporated herein and made an operative part of this Resolution.

SECTION 2. Based upon the entire record made available at the June 24, 2025 meeting, the staff report, the oral presentation, and related documents submitted to the Planning Commission prior to and at the meeting, the Planning Commission hereby finds and determines as follows:

A. Findings for Conditional Use Permit (CMC Section 17.62.120)

2. That the site for the proposed use relates to streets and highways adequate in width and pavement type to carry the quantity and kind of traffic generated by the proposed use.

3. The proposed use will have no adverse effects on the abutting properties or the permitted use thereof.

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In addition, the approval of conditions would provide the city with adequate requirements for ensuring the project and use compatibility with the surroundings, and the proposed Cannabis microbusiness would not become a nuisance for adjacent businesses. The proposed cannabis microbusiness meets the cannabis regulations under CMC Section 17.84.070. Therefore, as proposed, this criterion has been met.

4. That the conditions stated in the decision are deemed necessary to protect public health, safety, and general welfare. Such conditions include regulation of use, regulation of signs, requiring maintenance of grounds, regulation of noise, vibrations, odors, etc., regulation of time for certain activities, duration of use, and any such other conditions as will make possible the development of the city in an orderly and efficient manner and conformity with the intent and purposes set forth in this title.

Facts: The operation of a cannabis microbusiness is conditionally permitted within the Light Manufacturing (M-1) zone. All activities associated with the business will be conducted in a manner that will meet the provisions of Chapter 9.40 (Noise - which seeks to prevent unusual noises and vibrations). f Conditions of approval have been formulated to ensure that the proposed improvements for cannabis microbusiness establishment with will operate in a manner consistent with the Covina Municipal Code and will not negatively affect the public health, safety, and general welfare of the community. Conditions of approval will ensure that the site maintains mitigates noise level and operate within the approved business hours. No major public health or safetyrelated impacts have been identified during the project review. The Development Review Committee, comprised of Building and Safety, Environmental Services, Los Angeles County Fire, Covina Police Department, and Planning and Engineering, were provided with the opportunity to review and comment on the project application. In addition, the proposed use has been conditioned to ensure that no potential issues would arise during operations. The staff’s comments confirm that the proposed use would operate in a manner consistent with the Covina Municipal Code and would not negatively affect the public health, safety, and general welfare of the community.

Therefore, as conditioned, this criterion has been met.

B. Findings for Site Plan Review (CMC Section 17.64.070)

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in that the proposed project is a minor tenant improvement with minimal impact on existing and surrounding traffic conditions with the proximity to public transit, and other forms of accessible transportation options (i.e., Uber, walking, cycling, etc.) With the overall improvements, and recommended conditions of approval, the proposed use will have no adverse effect on surrounding properties. Therefore, as conditioned, this criterion has been met.

2. The design and layout of the proposed development are consistent with the general plan, zoning code, development standards of the applicable zoning district, specific plans, design guidelines and objective design standards; Facts: The proposed scope of work is consistent and conforms to the City of Covina’s General Plan Goals in that the establishment of a cannabis microbusiness “Encourage the revitalization or upgrading of deteriorating commercial and industrial structures through City, private development, and/or other efforts.” The proposed cannabis microbusiness conforms to the City’s design guidelines for said use, as reviewed and determined by planning staff. As such, the proposed scope of work satisfies all applicable guidelines to the project, as outlined under the Covina Municipal Code, Planned Community Development (PCD) / Light Manufacturing (M-1) Development Standards, the Covina Design Guidelines, and General Plan Therefore, as conditioned, this criterion has been met.

3. The design of the proposed development or the alterations to existing structures will not interfere with the use and enjoyment of existing neighborhood and future development, and will not create traffic or pedestrian hazards; Facts: The proposed project complies with all required development standards (i.e. size, shape, setbacks, walls, fences, parking, loading, landscaping) for the establishment of cannabis microbusiness and other associated improvements. The subject site is located within the Planned Community Development (PCD) / Light Manufacturing (M-1) zone with a blend of fabrication, manufacturing, assembly or processing of materials which will be compatible and not interfere with any of the business surrounding the site. The subject site is within an established area characterized by industrial uses, connecting well to existing neighborhood infrastructure and support services. Proposed improvements to the site are aesthetically pleasing, functional, and visually compatible with neighboring structures and the area within which it is proposed to be located and follow the Covina Municipal Code. Staff assesses all applications in the City for the suitability of the space and its proposed uses. Any cannabis microbusiness is reviewed for the location of the retail area, loading spaces, queuing line, bathroom facilities, mechanical/electrical/plumbing improvements, security, landscape, and sales floor area ensure that they are operating as stated. The project site is approximately 92,347 square feet (2.12 acres) in land area and developed with a 34,324 square foot existing commercial building occupied by multiple tenants. Therefore, this criterion has been met.

4. The proposed development has been reviewed in compliance with the provisions of the California Environmental Quality Act (CEQA);

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Facts: The proposed Project is designed and in conformance with development standards consistent with the character, appearance, and features described within the Planned Community Development (PCD) / Light Manufacturing (M-1) zone thereby facilitating the desired sustainability and stability adequate for its environment, the neighborhood, and the community it will serve. The project involves minor interior improvements along with upgrades to accommodate a cannabis microbusiness within an existing 4,600 square feet space involving partition, mechanical, plumbing and electrical conveyances. No structural additions are proposed. Staff has determined that the project is exempt from the requirements of California Environmental Quality Act (CEQA) Guidelines under the Class 1 exemption under state CEQA Guidelines Section 15332, which is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicant zoning designation and regulations. The proposed developments are within city limits on a project site of no more than five acres of substantially surrounded by urban uses. Since the location is within an existing commercial center, the project site has no value as habitat for endangered, rare or threatened species. Approval of this project would not result in any significant effects relating to traffic, noise quality, or water quality. The site can be adequately served by all required utilities and public services. Therefore, this criterion has been met.

Therefore, as conditioned, this criterion has been met.

6. The development complies with the provisions for dedications, public improvements and undergrounding utilities pursuant to CMC 17.64.140 and congestion management and transportation demand management requirements pursuant to CMC 17.64.150;
Facts: All new utility service lines that are installed to serve the tenant space shall be placed underground. The Applicant shall comply with any other utility and/or street improvements required by the Department of Public Works (Engineering, Traffic, and Environmental Services). Therefore, as conditioned, this condition has been met.

SECTION 3. The Planning Commission, based on its own independent judgment, has determined that this Project is categorically exempt pursuant to CEQA Guidelines Section 15332, the project is exempt from environmental review because it meets the criteria under Class 32. The project aligns with the applicable general plan designation and all relevant policies, as well as with

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the zoning regulations of the applicant. The proposed development is situated within city limits on a site of no more than five acres, which is largely surrounded by urban uses. Because the location is part of an existing commercial center, the project site does not provide habitat for endangered, rare, or threatened species. Approving this project would not lead to any significant impacts related to traffic, noise, or water quality, as the proposed uses are consistent with similar uses already established in the industrial commercial center. Additionally, the site can be adequately served by all necessary utilities and public services. Furthermore, the Planning Commission recommends that the City Council find the project exempt from CEQA for the same reasons.

SECTION 4. Based upon findings and conclusion set forth in Sections 1, 2 and 3 above, the Planning Commission hereby recommends that the City Council approves the application:

A. The Planning Commission hereby recommends that the City Council approve Conditional Use Permit (CUP) 25-001 and Site Plan Review (SPR) 25-026, subject to the conditions of approval set forth in the written record before the Commission incorporated here and attached hereto as Exhibit “A.”
B. The Secretary of the Planning Commission is directed to serve, by first-class mail, a written notice of this decision to the Applicant within five (5) days.

SECTION 5. This Resolution shall become effective immediately upon its adoption, SECTION 6. The Secretary shall certify the adoption of this Resolution.

APPROVED AND ADOPTED by the members of the Planning Commission of Covina this 24th day of June, 2025.

ROSIE RICHARDSON, CHAIRPERSON

CITY OF COVINA PLANNING COMMISSION
I hereby certify that the foregoing is a true copy of a resolution adopted by the Planning Commission of the City of Covina at a regular meeting thereof held on the 24 th day of June, 2025,
by the following vote of the Planning Commission:

AYES:

NOES:

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ABSENT:

ABSTAIN:

COVINA PLANNING COMMISSION SECRETARY

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EXHIBIT A
CONDITIONAL USE PERMIT (CUP) 25-001 AND
SITE PLAN REVIEW (SPR) 25-026
APN: 8405-003-032

CONDITIONS OF APPROVAL
The Conditional Use Permit (CUP) 25-001 and Site Plan Review (SPR) 25-026, shall allow for a 4,600 square-feet tenant improvement to allow the establishment of a cannabis microbusiness in conjunction with retail, distribution and manufacturing in the PCD (Planned Community Development) / M-1 (Light Manufacturing) Zone zone at 754 E Arrow Hwy, Covina, CA, 91724 (APN 8405-003-032).

ALL OF THE FOLLOWING CONDITIONS APPLY TO THE PROJECT
A. TIME LIMITS:

1. Conditional Use Permit (CUP) 25-001 and Site Plan Review (SPR) 25-026: Approval of this application will expire two years from the date of Project approval if building permits are not issued unless otherwise extended pursuant to applicable laws. The applicant may apply to extend the expiration date for a maximum period of one year upon written request to the Director of Community Development a minimum of thirty (30) days prior to expiration. The request must be approved by the Planning Commission prior to expiration of the approved CUP and SPR applications.

B. GENERAL REQUIREMENTS:

1. This CUP may be suspended or revoked by the city manager for any violation of any state or local law, the Covina Municipal Code (“CMC”), rules, standards, policies, procedures, regulations, or conditions of approval related to cannabis in the CMC, any other related CMC section, and/or any violation of any conditions of approval of this land use entitlement.

2. This CUP is non-transferable and cannot be sold or transferred to another operator.

3. Any attempt to transfer a cannabis business permit either directly or indirectly in violation of CMC Section 5.80.190 is hereby declared a violation of the permit and such a purported transfer shall be deemed a ground for revocation of the permit.

4. Applicant shall operate the business in compliance with all State of California laws, local laws, and any regulations promulgated thereunder, including but not limited to the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”)

5. Prior to the start of operations, the applicant shall provide the City Manager and Planning Department a copy of the State License authorizing the applicant to operate said business.

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6. Suspension of a license issued by the state of California, or by any of its departments or divisions, shall immediately suspend the applicant’s ability to operate within the city until the state of California or its respective department or division reinstates or reissues the state license per CMC Section 5.80.170.

7. The applicant must notify the City Manager and Planning Department within 48 hours of suspension of its license by the state of California, or by any of its departments or divisions. Failure to do so is a violation of these Conditions of Approval for the CUP and may be grounds for revocation of this CUP as determined by the City Manager per the CMC.

8. Proof of reinstatement of rights to the applicant by the state of California, or by any of its departments or divisions must be provided to the City Manager and Planning Department prior to the recommencement of any on-site and/or delivery operations.

9. This CUP is valid for use only at the proposed business address located 754 E Arrow Hwy.

10. Prior to the start of Operations, the applicant is required to obtain a City of Covina Cannabis Business and/or Microbusiness (if applicable) Business License per CMC Section 5.80.120 Issuance of a cannabis business permit.

11. A cannabis business permit shall be exercised by the cannabis business within six months of issuance. Exercised shall be when the permitted use commences on the site.

12. A cannabis business permit issued pursuant to chapter 5.80 shall expire 12 months after the date of issuance. The date of issuance shall be the date that the city manager and/or chief of police, or their designee (collectively “Auditor”) has inspected the cannabis business site and determined the cannabis business complies with the security requirements set forth in CMC Chapters 5.80 and 17.84.

13. An application for renewal of a cannabis business permit shall be filed with the city manager at least 60 calendar days prior to the expiration date of the current permit per CMC 5.80.150.

14. A cannabis business permit may be suspended or revoked by the city manager for any violation of any state or local laws, this municipal code, rules, standards, policies, procedures, regulations, or conditions of approval related to cannabis in this chapter or adopted pursuant to this chapter, and any violation of any conditions of approval of this land use entitlement.

15. Prior to the start of Operations, the applicant is required to enter into a fully executed Development Agreement with the City. Pursuant to CMC Section 17.84.040.E the Development Agreement shall set forth the terms and conditions under which

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the cannabis business will operate that is in addition to the requirements of Chapter 17.84 of the CMC.

16. Within 30 days of issuance of this CUP, if the applicant will have 10 or more employees, the applicant shall provide a copy of the business’s labor and peace agreement, as defined in Business and Professions Code Section 26001(aa) to the City Manager and Planning Department.

17. The approved hours of operations for on-site retail sales are 9 a.m. to 9 p.m., Monday to Sunday.

18. The approved hours of operations for retail deliveries are 9 a.m. to 9 p.m., Monday to Sunday. Applicant will not accept order for delivery after 8:00 pm to ensure all deliveries will conclude by 9:00 pm

19. Prior to the opening of the business operation, a site inspection audit will be completed by city staff, the Covina Police Department, and/or a city designee (collectively “Auditor”) to ensure compliance with all representations in the CUP application. A site inspection audit fee equal to $822.50 (…or “per the city fee schedule”, and then we need to amend the fee schedule) will be required from the applicant prior to the audit taking place. If the audit satisfies that the business operation is compliant with the CUP application, the Auditor will issue an Operational Certification to the business owner and the file.

20. If the Auditor finds that the business operation is not compliant with the representations made in the CUP application, the Auditor will provide a written list of the deficiencies to the Applicant, and the Applicant must affect corrective actions and have the premises reaudited prior to the opening of the business operation. This process will be repeated until the Auditor issues an Operational Certification to the business owner.

21. For the first year of business operation, the applicant shall pay for a site inspection audit of all operations on a quarterly basis (4 site inspection audits in the first year) by the Auditor to ensure compliance with all representations in the CUP application. A site inspection audit fee equal to $822.50 (…or “per the city fee schedule”, and then we need to amend the fee schedule) will be required from the applicant prior to each audit taking place. This process will be repeated until the Auditor issues an Operational Certification to the business owner and the file.

22. After the first year of business operation, the applicant shall pay for a site inspection audit of all operations on a semi-annual basis (2 site inspection audits per year) throughout the life of the business operation by the Auditor to ensure compliance with all representations in the CUP application. A site inspection audit fee equal to $822.50 (…or “per the city fee schedule”, and then we need to amend the fee schedule) will be required from the applicant prior to each audit taking place. This process will be repeated until the Auditor issues an Operational Certification to the business owner and the file.

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23. If at any time a nuisance complaint about the business operation is filed with the City against the business and those allegations are investigated and substantiated by the Auditor, the City will issue a written Demand for Corrective Action to the applicant. The applicant will have 30-days to effect the required corrective actions, subject to review and verification by the City and/or it’s designee.

24. If the City is not satisfied with the applicants Corrective Actions, the City may suspend the applicant’s business license and hold a public hearing as soon as is practical as determined by the City Manager, to review and amend this CUP approval, or to rescind this approval and revoke the CUP and Business License of the Applicant.

25. Each owner and operator of a cannabis business shall maintain accurate books and records in an electronic format, detailing all of the revenues and expenses of the business, and all of its assets and liabilities. On no less than an annual basis (at or before the time of the renewal of a permit issued pursuant to this chapter), or at any time upon reasonable request of the city, each cannabis business shall file a sworn statement detailing the number and amount of sales by the cannabis business during the previous 12-month period (or shorter period based upon the timing of the request), provided on a per-month basis. The statement shall also include gross sales for each month, and all applicable taxes and fees paid or due to be paid. On an annual basis, each owner and operator shall submit to the city a financial audit of the business’s operations conducted by an independent certified public accountant. Each permittee shall be subject to a regulatory compliance review and a gross receipts financial audit, where applicable, as determined by the city.

26. Each owner and operator of a cannabis business shall maintain a current register of the names and the contact information (including the name, address, and telephone number) of anyone owning or holding an interest in the cannabis business, and separately of all the officers, managers, employees, agents, and volunteers currently employed or otherwise engaged by the cannabis business. The register required by this paragraph shall be provided to the city manager upon a reasonable request.

27. All cannabis businesses shall maintain an inventory control and reporting system that accurately documents the present location, amounts, and descriptions of all cannabis and cannabis products for sale, and all stages of the growing and production or manufacturing, laboratory testing processes until purchase as set forth in the MAUCRSA.

28. Any person who is an owner, employee or who otherwise works for the cannabis business within the City of Covina must be legally authorized to do so under applicable state law.

29. Cannabis business owners, operators, investors, managers, and employees shall be required to submit to a criminal background check in compliance with CMC Section

5.80.060 for themselves and all persons in their employment and must be found to be in compliance with CMC Section 5.80.070 prior to the start of initial business operations.

30. After the initial opening of the business, any new employees hired to work on the premises of the business within the City of Covina are required to submit to a criminal background

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check in compliance with CMC Section 5.80.060 to the Covina Police Department and Planning Department and must be found in compliance with CMC Section 5.80.070 prior to the start of work within said premises, or they cannot work at the subject business.

31. After the issuance of a cannabis business permit, if any owner or employee is found to violate subsection (C) of CMC Section 5.80.060, this shall be grounds for suspension or revocation of the cannabis business permit pursuant to the procedures set forth in CMC Section 5.80.160.

32. All security measures incorporated into the CUP Application and Site Operations and Management Plan shall be in place and operational at all times, subject to inspection and audit as authorized in this approval, or as deemed necessary to insure the public health, safety, and welfare of the community, and in accordance with CMC Chapter 17.84.

33. If the applicant is using a private security firm, the applicant shall provide proof of a Covina Private Patrol Operator Permit (PPO) to the Covina Police Department and the Covina Planning Department prior to the initial patrol.

34. If the applicant changes from one security provider to another, the applicant shall provide proof of a Covina Private Patrol Operator Permit (“PPO”) for the new provider to the Covina Police Department and the Covina Planning Department prior to the initial patrol by the new service provider.

35. All cannabis sales and other related sales associated with the business shall be conducted in accordance with CMC Chapter 17.84 and applicable state law.

36. Use City standard Signage Condition, modified to the Cannabis Section - Signage for the business operation shall be compliant with CMC Chapter 17.84.

37. Cannabis Retail Business shall verify the age and all necessary documentation of each customer to ensure the customer is not under the age of 18 years and that the potential customer has a valid doctor's recommendation. Adult use retailers shall verify the age of all customers to ensure persons under the age of 21 are not permitted on the premises.

The applicant shall be required to verify customers at the lobby or reception area prior to entering the retail floor. All cannabis retail businesses shall be required to install a lobby or reception area to ensure safety, efficiency and procedures.

38. Every quarter of the year all cannabis business shall be eligible to apply for an Administrative Conditional Use Permit (ACUP). The administrative conditional use permit allows for a maximum of four (4) four sales, promotional or other business-related events per year.

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specifically including attorneys’ fees, ("Liabilities"), arising in any way out of City’s approval of the Project or the Applications (including but not limited to any permit or entitlements for the Development of the Property, including any and all Conditions of Approval, subject to approval or issuance by the City in connection with Development and operation of the Property and including the Conditional Use Permit, Cannabis Business License, Site Plan Review, Conceptual Plan Review, Security Plan, and the Development Agreement). Applicant’s indemnification obligation shall include, but not be limited to, actions to attack, set aside, void, or annul the City’s approval of the Applications, and Liabilities premised on, related to or invoking CEQA, including those arising out of City’s decisions related to the Project’s CEQA documents. City shall promptly notify Applicant of any such claim, action or proceeding, and shall cooperate fully in the defense of such claim, action, or proceeding. Applicant’s indemnification obligations shall not be limited to the amount of insurance coverage that may be available to Applicant, and shall not otherwise be restricted or confined by the presence or absence of any policy of insurance held by City or Applicant. Applicant's obligations, as set forth above, shall survive the completion or abandonment of the Project or the issuance of a certificate of occupancy with respect thereto. However, Applicant’s obligations after the issuance of a certificate of compliance for the Project shall be limited to indemnifying and defending the Indemnified Parties from legal challenges filed to set aside any part of the Project or its related components. The provisions of this condition are intended by the Parties to be interpreted and construed to provide the fullest protection possible under the law to the City. Further, all obligations and Liabilities under this Condition are to be paid by the Applicant as they are incurred. Applicant's obligations to indemnify under this Condition shall include the obligation of the Applicant to defend City with legal counsel of City's own choosing.

40. Pursuant to CMC Section 17.84.110, the applicant shall:
a. Execute an agreement indemnifying the city from any claims, damages, injuries, or liabilities of any kind associated with the operation of the cannabis business, issuance of a permit to a cannabis business, or the prosecution of the cannabis business or its owners, managers, directors, officers, employees, or its qualified patients or primary caregivers for violation of federal or state laws; b. Maintain insurance in the amounts and of the types that are acceptable to the city council or designee; and
c. Reimburse the city for all costs and expenses, including but not limited to legal fees and costs and court costs, which the city may be required to pay as a result of any legal challenge related to the city’s approval of the conditional use permit or cannabis business permit or related to the city’s approval of a cannabis activity. The city, at its sole discretion, may participate at its own expense in the defense of any such action, but such participation shall not relieve the applicant of any of the obligations imposed hereunder.

C. SITE DEVELOPMENT

1. The Project Site shall be developed and maintained in accordance the approved plans on file with the Community Development Department, all representations of record made by

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the Applicant(s), the conditions contained herein, the Covina Municipal Code, and the Covina Design Guidelines.

2. Final plans incorporating all conditions of approval and any plan-related changes required in the approval process shall be submitted for the Director or his designee for review and approval, prior to submittal for Plan Check process.

3. Copies of the signed Resolution No. 2025-011 PC shall be included on the plans (full size) for submittal of plan check.

4. All site, precise grading landscape, and irrigation, and street improvement-plans shall be coordinated for consistency, prior to issuance of any building permits.

5. All ground mounted utility appurtenances such as transformers, AC condensers, etc. shall be adequately screened using a combination of concrete or masonry walls, and or landscaping to the reasonable satisfaction of the Director or his/her designee.

6. A complete exterior lighting plan, including photometric printout, shall be submitted for review and approval, prior to issuance of building permits for any production units. The plan shall illustrate light fixture features, locations, height, and the compliance with applicable City Code provisions on illumination, design, and lighting orientation/glare prevention and the minimum one-foot candle standard where applicable.

7. All building and site improvements shall be installed in accordance with approved plans and information on file with the Planning, Building, and Engineering Divisions, and the irrigation systems must be fully operational upon issuance of certificates of occupancy.

Furthermore, during construction, all on-site landscaped areas must be maintained reasonably free of weeds and debris.

8. The Project Site must be clean and reasonably free of trash and construction debris, and all construction equipment must be removed from the Project Site prior to issuance of the last certificate of occupancy for the production units.

D. BUILDING AND SAFETY DIVISION

1. Submit 4 (Four) sets of complete plans including any proposed utilities and earthwork/grading. The Project must comply with the 2022 California Building Code and Standards. 2 (Two) sets each of any structural, soils reports, and energy calculations shall be submitted with the above-mentioned plans. All calculations must bear an original signature from the documented author. (Electronic submittal and plan review maybe available)

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building department, it is important to obtain CASp inspection services after your movein because unintended access barriers and violations can be created, such as placing your furniture and equipment in areas required to be maintained clear of obstructions. For planned alterations, a CASp can review your improvement plans and provide an access compliance evaluation of your facility’s public accommodation areas that may not be part of the alteration.

3. Demolition activities require an asbestos containing materials (ACM) survey. (SCAQMD RULE 1403). The ACM report shall be prepared by an accredited testing laboratory in accordance with applicable SCAQMD rules and regulations. Proof of notification to the South Coast Air Quality Management District (SCAQMD), Office of Operations, shall be submitted to the Building Division with the relevant permit application for all demolition activities. Contact the SCAQMD at the address or number below for more information.

Once any demolition activity has adhered to the applicable notification requirements to the SCAQMD, a formal demolition plan and permit must be obtained from the Building and Safety Division. SCAQMD Headquarters; 21865 Copley Drive, Diamond Bar, CA, (909) 396-2381

E. LOS ANGELES COUNTY FIRE DEPARTMENT – FIRE PREVENTION DIVISION

1. Business will need to complete and obtain approval of a special business application Form 30 C before opening to the public.

F. COVINA POLICE DEPARTMENT

LED lighting that will be installed can be depicted on exterior elevations.

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1 ATTACHMENT F
Resolution 2025-012 PC

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RESOLUTION NO. 2025-012 PC

A RESOLUTION OF THE PLANNING COMMISSION OF THE

CITY OF COVINA, CALIFORNIA, RECOMMENDING TO THE

CITY COUNCIL THE APPROVAL AND ADOPTION OF A

DEVELOPMENT AGREEMENT BETWEEN STIIIZY COVINA
INC (“STIIIZY”) AND THE CITY OF COVINA, RELATED TO A
PROPOSAL TO APPROVE A 4,600 CANNABIS MICROBUSINESS

RETAIL ESTABLISHMENT WITHIN THE PCD (PLANNED
COMMUNITY DEVELOPMENT) / M-1 (LIGHT
MANUFACTURING) ZONE, LOCATED AT 754 EAST ARROW
HIGHWAY, (APN: 8405-003-032).

WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic risk of development, the Legislature of the State of California adopted Government Code Sections 65864 et seq. (the Development Agreement Statute) which authorizes cities to enter into agreements for the development of real property in order to establish certain development rights in such property; and WHEREAS, pursuant to Government Code Section 65865 the City has adopted rules and regulations establishing procedures and requirements for consideration of development agreements; and
WHEREAS, Stiiizy, Covina, Inc – (“STIIIZY”) c/o Tak Sato, James Kim, Stephanie Uy, Mike Touhey, and Jasmine Szameit (“Co-Owners”), co-owners of the cannabis microbusiness located 754 E. Arrow Highway. The business owners proposing a cannabis microbusiness retail establishment (“Stiiizy”), in conjunction with a manufacturing and distribution use, on a 4,600 square-foot commercial tenant space and associated interior tenant improvements, within the PCD (Planned Community Development) / M-1 (Light Manufacturing) zone, located at 754 E Arrow Hwy, Covina, Ca, 91722 (APN: 8405-003-032).

WHEREAS, a copy of the proposed Ordinance adopting the Development Agreement is attached hereto and incorporated herein as Exhibit “A” to this Resolution; and WHEREAS, pursuant to the Development Agreement Statute, the Planning Commission held a duly noticed public hearing on June 24, 2025 on the proposed Project and WHEREAS, all legal prerequisites prior to adoption of this Resolution have occurred.

NOW, THEREFORE, THE PLANNING COMMISSION OF THE CITY OF
COVINA DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. Based on the full record of these proceedings, the Planning Commission hereby finds the Development Agreement:

1. Is consistent with the General Plan and the City Council finds that the proposed project as conditioned, complies with all applicable provisions of the General Plan;

2. Is in conformity with public conveniences and good land use practices as the project approvals, mitigation monitoring program and development agreement will guarantee adequate infrastructure for the development and land uses that are compatible with their

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surroundings;

3. Will not be detrimental to the health, safety and general welfare as the project approvals, mitigation monitoring program and development agreement will guarantee adequate infrastructure, safety measures and public services such as police, fire, utilities, and sanitation;

4. Will not adversely affect the orderly development of property or the preservation of property values because the proposed development is conditioned to be consistent with the General Plan and compatible with surrounding land uses; and

5. Is consistent with the provisions of Government Code 65864 through 65869. 5.

SECTION 2. Based upon the aforementioned findings, the Planning Commission hereby recommends the City Council adopt Ordinance No. 2025-XXX approving and adopting the Development Agreement between Stiiizy, Covina, Inc. c/o Tak Sato, James Kim, Stephanie Uy, Mike Touhey, and Jasmine Szameit (“Co-Owners”), co-owners of the cannabis microbusiness and the City of Covina in the form attached to this Resolution as Exhibit" A" and incorporated herein by reference.

SECTION 3. The documents and materials that constitute the record of proceedings on which these findings and this Resolution are based are located at the City Clerk’s Office or Community Development Department, Planning Division, located at 125 E. College Street, Covina, CA 91723, or at http://covinaca.gov/pc/page/projects-under-review. The custodian of these records is the City Clerk.

SECTION 4. The Secretary shall certify the adoption of this Resolution.

PASSED, APPROVED AND ADOPTED, by the members of the Planning Commission of Covina this 24th day of June 2025.
____________________________________________

ROSIE RICHARDSON, CHAIR

CITY OF COVINA PLANNING COMMISSION
I hereby certify that the foregoing is a true copy of a Resolution adopted by the Planning Commission of the City of Covina at a regular meeting thereof held on the 24hday of June, 2025, by the following vote of the Planning Commission:

AYES:

NOES:

ABSENT:

ABSTAIN:
____________________________________________

COVINA PLANNING COMMISSION SECRETARY
EXHIBIT “A”

DRAFT ORDINANCE ADOPTING DEVELOPMENT AGREEMENT

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1 ATTACHMENT F.1
EXHIBIT “A”
Ordinance No. XXX

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EXHIBIT “A”
ORDINANCE NO. 2025-XXX

AN ORDINANCE OF THE CITY OF COVINA APPROVING AND

ADOPTING A DEVELOPMENT AGREEMENT BETWEEN STIIIZY
COVINA INC, (“STIIIZY”) AND THE CITY OF COVINA, RELATED TO APPROVE A 4,600 CANNABIS MICROBUSINESS RETAIL

ESTABLISHMENT WITHIN THE PCD (PLANNED COMMUNITY
DEVELOPMENT) / M-1 (LIGHT MANUFACTURING) ZONE, LOCATED
AT 754 EAST ARROW HIGHWAY (APN: 8405-003-032).

WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic risk of development, the Legislature of the State of California adopted Government Code Sections 65864 et seq. (the Development Agreement Statute) which authorizes cities to enter into agreements for the development of real property in order to establish certain development rights in such property; and WHEREAS, pursuant to Government Code Section 65865 the City has adopted rules and regulations establishing procedures and requirements for consideration of development agreements; and
WHEREAS, Zen GW Cali Partners LLC. c/o Tak Sato, James Kim, Stephanie Uy, Mike Touhey, and Jasmine Szameit, co-owners of the cannabis retail microbusiness located 754 East Arrow Highway. The business owners proposing a Cannabis Microbusiness Retail Establishment (“Stiiizy”), a 4,600 square-foot commercial tenant space and associated interior tenant improvements, within the PCD (Planned Community Development) / M-1 (Light Manufacturing) zone, located at 754 E Arrow Hwy, Covina, Ca, 91722 (APN: 8405-003-032).

WHEREAS, a copy of the proposed Development Agreement is attached hereto and incorporated herein as Exhibit “A” to this Ordinance; and WHEREAS, the project is categorically exempt pursuant to CEQA Guidelines 15303 (3), which consist of the construction and location of limited numbers of new, small facilities or structures, which in urbanized areas include commercial buildings not exceeding 10,000 square feet in floor area on sites zoned for such use if not involving the use of significant amounts of hazardous substances where all necessary public services and facilities are available and the surrounding area is not environmentally sensitive. The project involves interior improvements and upgrades. Additionally, the site can be adequately served by all necessary utilities and public services.

WHEREAS, pursuant to the Development Agreement Statute, the Planning Commission held a duly noticed public hearing on June 24, 2025, on the proposed Project and has found that the proposed Development
WHEREAS, pursuant to the Development Agreement Statute, the Planning Commission held a duly noticed public hearing on June 24, 2025, on the proposed Project and has found that the proposed Development Agreement is consistent with objectives of the General Plan, compatible with the uses authorized for the project area, in conformity with public convenience and beneficial to the public welfare, and will not adversely impact the orderly development of

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property; and
WHEREAS, the City Council, after published notice, held a public hearing on ________, 2025 concerning the proposed Project, and has considered the reports and documents presented by City staff, the Planning Commission’s recommendation, and the written and oral comments presented at the public hearing.

WHEREAS, on ________2025, the City Council of the City of Covina held a noticed public hearing to review the Project pursuant to the California Environmental Quality Act, Cal.

Pub. Res. Code § 21000 et seq. (" CEQA"), and the State CEQA Guidelines, 14 C. C.R. 15000 et seq. and considered information presented by City staff, the Planning Commission' s recommendation, and the written and oral comments presented at the public hearing.

WHEREAS, on ________, 2025, the City Council of the City of Covina considered the proposed Project including Conditional Use Permit (CUP) 25-001 and Site Plan Review (SPR) 25- 026 at a duly noticed public hearing at which time all interested persons had an opportunity to and did testify either in support or in opposition to this matter. The City Council considered all the testimony and any comments received regarding the proposed Project prior to and at the public hearing.

WHEREAS, all legal prerequisites prior to adoption of this Ordinance have occurred.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA DOES ORDAIN AS FOLLOWS:

SECTION 1. Based on the full record of these proceedings, the City Council hereby finds the Development Agreement:

1. Is consistent with the General Plan and the City Council finds that the proposed project as conditioned, complies with all applicable provisions of the General Plan;

5. Is consistent with the provisions of Government Code 65864 through 65869. 5.

SECTION 2. Based upon the aforementioned findings, the City Council hereby approves the Development Agreement between STIIIZY Covina Inc. c/o Tak Sato, James Kim, Stephanie Uy, Mike Touhey, and Jasmine Szameit, co-owners of the cannabis retail business and the City of Covina attached hereto as Exhibit" A" and incorporated herein by reference.

SECTION 3. CEQA. The proposed project involves a 4,600 square feet tenant

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improvement along with electrical, plumbing and mechanical upgrades. Planning Department Staff has determined that the Project is exempt from the requirements of the California Environmental Quality Act (CEQA) and the City’s CEQA Guidelines pursuant to CEQA Guidelines Section 15303 – (New Construction or Conversion of Small Structures - Class 3 Categorical Exemption) The City Council has reviewed the Planning Department Staff’s determination of exemption, and concur in Staff’s determination that the Project is exempt from CEQA.

SECTION 4. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The Mayor is authorized to execute the Development Agreement on behalf of the City once this Ordinance is effective. The executed development agreement shall be recorded against the title to the property.

SECTION 5. Custodian of Records. The documents and materials that constitute the record of proceedings on which these findings and this Ordinance are based are located at the City Clerk' s office located at 125 E. College Street, Covina, CA 91723. The custodian of these records is the City Clerk.

SECTION 6. Severability. If any section, sentence, clause or phrase of this Ordinance or the application thereof to any entity, person or circumstance is held for any reason to be invalid or unconstitutional, such invalidity or unconstitutionality shall not affect other provisions or applications of this Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this Ordinance are severable. The People of the City of Covina hereby declare that they would have adopted this ordinance and each section, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsections, sentences, clauses or phrases be declared invalid or unconstitutional.

SECTION 7. Effective Date. This Ordinance shall become effective within thirty (30) days after its adoption.

SECTION 8. Publication. The City Clerk shall certify to the adoption of this Ordinance.

Not later than fifteen (15) days following the passage of this Ordinance, the City Clerk shall cause to be published once the Ordinance, or a summary of thereof, along with the names of the City Council members voting for and against the Ordinance, shall be published in a newspaper of general circulation in the City of Covina.

SECTION 9. Certification. The City Clerk shall certify to the passage and adoption of this Ordinance and shall enter the same in the Book of Original Ordinances.

PASSED, APPROVED, and ADOPTED this ____ day of _________, 2025. ____________________________________

VICTOR LINARES, MAYOR
ATTEST:

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FABIAN VELEZ, CHIEF DEPUTY CITY CLERK
APPROVED AS TO FORM:

____________________________________
City Attorney

CERTIFICATION
I, Fabian Velez, Chief Deputy City Clerk of the City of Covina, do hereby certify that Ordinance No. ________ was introduced for first reading at a special meeting on the ____ day of ___________, 2025. Thereafter, said Ordinance was duly approved and adopted at a regular meeting of said City Council on the ____ day of ___________, 2025, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

Dated:

FABIAN VELEZ

CHIEF DEPUTY CITY CLERK

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-1-
12923-0001\2789444v8.doc
ATTACHMENT F.2
Development Agreement

Page 1327 of 1383 ends

-2-
12923-0001\2789444v8.doc

PLEASE RECORD AND WHEN RECORDED
RETURN TO:

City Clerk
City of Covina
125 East College Street
Covina, California 91723
______________________________________________________________________________ Space above this line for Recorder’s use only
No recording fee under Government Code Section 27383

DEVELOPMENT AGREEMENT

BY AND BETWEEN

THE CITY OF COVINA AND STIIIZY COVINA LLC
ARTICLE 1. PARTIES AND DATE.

This Government Code Statutory Development Agreement (“Agreement”) is dated July XX, 2025 for references purposes only and is entered into between (i) the City of Covina (“City”), a California municipal corporation, and (ii) Tak Sato, James Kim, Stephanie Uy, Mike Touhey, and Jasmine Szameit (“Co-Owners”). This Agreement shall become effective on the Effective Date defined in Section 3.1.12 below.

ARTICLE 2. RECITALS.

2.1 WHEREAS, the City and Owner wish to enter into Statutory Development Agreement pursuant to the Government Code and Covina Municipal Code to facilitate the development of the Property for commercial cannabis activities compliant with all applicable state and local laws, and any regulations promulgated thereunder (collectively, the “Project”); and

2.2 WHEREAS, the City is authorized pursuant to Government Code Section 65864 et seq. to enter into binding development agreements with persons having legal or equitable interests in real property for the development of such property; and

2.3 WHEREAS, Owner has an equitable interest in all of the real property (“Property”) described on Exhibit Document No. 1 and depicted on Exhibit Document No. 2.

2.4 WHEREAS, Owner commenced its efforts to obtain approvals and clearances to conduct a commercial cannabis business in the City; and at that time the City determined that the uses authorized in this Agreement were lawfully permitted and authorized to occur on Owner’s Property, subject to Owner’s acquisition of various entitlements, as discussed herein; and

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2.5 WHEREAS, Covina Municipal Code Section 17.84.040.E requires applicants for authorized commercial cannabis activity to enter into a development agreement with the City setting forth the terms and conditions under which the cannabis business will operate; and

2.6 WHEREAS, Condition of Approval (15) of Conditional Use Permit 25-001 requires Owner to enter into a development agreement with the City setting forth the terms and conditions under which the cannabis business will operate; and

2.7 WHEREAS, Owner and City intend for this Agreement to satisfy the development agreement requirements of Covina Municipal Code Section 17.84.040.E and Conditional Use Permit 25-001; and

2.8 WHEREAS, Owner voluntarily enters into this Agreement and after extensive negotiations and proceedings have been taken in accordance with the rules and regulations of the City, Owner has elected to execute this Agreement as it provides Owner with important economic and development benefits; and

2.9 WHEREAS, this Agreement and the Project are consistent with the City’s General Plan and Zoning Code and applicable provisions of the City’s applicable Zoning Map and the Covina Municipal Code as of the Agreement Date; and

2.10 WHEREAS, all actions taken and approvals given by the City have been duly taken or approved in accordance with all applicable legal requirements for notice, public hearings, findings, votes, and other procedural matters; and

2.11 WHEREAS, this Agreement will eliminate uncertainty in planning and provide for the orderly development of the Project and/or Property, and provide for public services appropriate to the development of the Project; and

2.12 WHEREAS, in implementation of the promulgated state policy to promote private participation in comprehensive planning and to strengthen the public planning process and to reduce the economic risk of development, the City deems the implementation of this Agreement to be in the public interest and intends that the adoption of this Agreement be considered an exercise of the City’s police powers to regulate the development of the Property during the Term of this Agreement; and

2.13 WHEREAS, this Agreement is consistent with the public health, safety and welfare needs of the residents of the City and the surrounding region and the City has specifically considered and approved the impact and benefits of the development of the Property in accordance with this Agreement upon the welfare of the region; and

2.14 WHEREAS, Owner intends to develop a cannabis microbusiness pursuant to the Covina Municipal Code Chapters 5.80 and 17.84 and all applicable state and City laws, rules, and regulations; and

2.15 WHEREAS, on [June 24th, 2025], the Planning Commission of the City held a dulynoticed public hearing on Owner’s application for approval of this Agreement, made certain findings and determinations with respect thereto, and recommended to the City Council that this

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Agreement be approved. On [July XX, 2025], the City Council also held a duly-noticed public hearing on Owner’s application for approval of this Agreement (as well as the other Development Approvals), considered the recommendations of the Planning Commission, and found that this Agreement (and the other Development Approvals) are consistent with and helps to implement City’s General Plan. On March 7, 2023 the City Council adopted Ordinance No. 23-01, enacting this Agreement (“DA Ordinance”); and

2.16 WHEREAS, concurrently with execution of this Agreement, City acknowledges that Owner has been authorized to [operate a cannabis microbusiness].

ARTICLE 3. GENERAL TERMS.

3.1 Definitions and Exhibits. The following terms when used in this Agreement shall be defined as follows:

3.1.1 “Agreement” means this Statutory Development Agreement pursuant to Government Code Section 65864 et seq.

3.1.2 “CEQA Determination” means the process required by State of California Public Resources Code 21000 – 21189.57 by the Lead Agency of evaluating the potential environmental impacts and/or physical changes to the environment that may or may not occur because of a particular project; and, subsequently the decision by the Lead Agency if the potential environmental impacts and/or physical changes that will or will not result, will fall within one of three (3) thresholds defining the significance of the environmental effects caused by the project. For the purposes of this Development Agreement, the CEQA Determination will be a Section 15301 - Class 1 Exemption (Existing Facilities).

3.1.3 “City” means the City of Covina, a California municipal corporation.

3.1.4 “City Council” means the City Council of the City.

3.1.5 “CMC” means the City of Covina Municipal Code.

3.1.6 “Commercial Cannabis Business” means a cannabis microbusiness that manufacturers cannabis products, cultivates cannabis on less than 10,000 square feet, distributes cannabis, and sells cannabis and cannabis products through delivery and/or in person sales.

3.1.7 “Conditions of Approval” mean those conditions of approval, if any, which are not set forth in this Agreement and which are otherwise imposed by the City in connection with City’s approval of the Development Approvals.

3.1.8 “Days” mean calendar days unless otherwise specified.

3.1.9 “Development”, if applicable, includes grading, construction or installation of public and private facilities and the right to maintain, repair or reconstruct any private building, structure, improvement or facility after the construction and completion thereof;

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provided, however, that such maintenance, repair, or reconstruction take place within the Term of this Agreement on the Property.

3.1.10 “Development Approvals” means a conditional use permit and other entitlements for the Development of the Property, including any and all Conditions of Approval, subject to approval or issuance by the City in connection with Development and operation of the Property. “Development Approvals” also include both the Existing Development Approvals and the Subsequent Development Approvals approved or issued by the City that are consistent with this Agreement. Development Approvals include:
a. Conditional Use Permit (“CUP”) 25-1;
b. Cannabis Business Permit XX;
c. Business License XX;
d. Site Plan SPR 25-26;
e. Operation and Management Plan;
f. Security Plan; and
g. This Agreement (“DA”) XX.

3.1.11 “Development Plan”, if applicable, means the Existing Development Approvals and the Existing Land Use Regulations applicable to development of the Property for the Project, as modified and supplemented by Subsequent Development Approvals.

3.1.12 “Effective Date” means the day on which all of the following are true:
(i) thirty (30) days have elapsed since the second reading of the DA Ordinance; (ii) this Agreement is executed by the Mayor of the City of Covina and persons authorized to execute the Agreement on behalf of Owner; (iii) all Exhibits to this Agreement are finalized; provided, however, that if these conditions have not been fully satisfied by the Owner the Effective Date may not thereafter occur and this Agreement may not thereafter become effective.

3.1.13 “Existing Development Approvals”, if applicable, means all Development Approvals approved or issued prior to or on the Effective Date. Existing Development Approvals include the approvals set forth in Section 3.1.10 and all other approvals which are a matter of public record prior to or on the Effective Date.

3.1.14 “Existing Land Use Regulations” if and where applicable, means all Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations include all regulations that are a matter of public record on the Effective Date as they may be modified by the Existing Development Approvals.

3.1.15 “Gross Revenues” means the total of all revenue, income, compensation, sales proceeds or other monies of whatever kind or nature received by the Commercial Cannabis Business without deduction or offset of any kind.

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3.1.16 “Land Use Regulations” if and where applicable means all ordinances, resolutions and codes adopted by the City governing the development and use of land, including the permitted use of land, the density or intensity of use, subdivision requirements, the maximum height and size of proposed buildings, the provisions for reservation or dedication of land for public purposes, and the design, improvement and construction and initial occupancy standards and specifications applicable to the Development of the Property. “Land Use Regulations” does not include any City ordinance, resolution, code, rule, regulation or official policy, governing:
(a) the conduct of businesses, professions, and occupations; (b) taxes and assessments;
(c) the control and abatement of nuisances;
(d) the granting of encroachment permits and the conveyance of rights and interests which provide for the use of or the entry upon public property; and/or (e) the exercise of the power of eminent domain.

3.1.17 “Owner” means Tak Sato, James Kim, Stephanie Uy, Mike Touhey, and Jasmine Szameit (Co-Owners).

3.1.18 “Processing Fees” means all application, inspection and other regulatory processing fees and charges required by City that are adopted for the purpose of defraying City’s actual costs incurred or to be incurred in the processing and administration of any form of regulatory permit, license, land use entitlement or other approval, which are applied uniformly to all development related activity within City, including fees for land use applications. Processing Fees are not vested under this Agreement.

3.1.19 “Project”, if applicable means the Development of the Property contemplated by the Development Plan, as such Development Plan may be further defined, enhanced, or modified pursuant to the provisions of this Agreement. The Project shall consist of this Agreement, the Development Plans, the application any and all entitlements licenses, and permits related to the Project.

3.1.20 “Property” means the real property described in Owner’s application and incorporated herein by this reference, as described and depicted in Exhibit Documents 1 and 2.

3.1.21 “Reasonable” means using due diligence to accomplish a stated objective that the subject party is capable of performing or providing under the circumstances in a manner that is consistent with the intent and objectives of the Agreement.

3.1.22 “Reservations of Authority” means the rights and authority excepted from the assurances and rights provided to Owner under this Agreement and reserved to the City as described in Section 4.7.

3.1.23 “Subsequent Development Approvals” if applicable, means all future discretionary approvals and all ministerial Development Approvals required subsequent to the

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Effective Date in connection with development of the Property, including without limitation, subdivision improvement Agreements that require the provision of bonds or other securities.

Subsequent Development Approvals include, but are not limited to, all excavation, grading, building, construction, demolition, encroachment or street improvement permits, occupancy certificates, utility connection authorizations, or other permits or approvals necessary, convenient or appropriate for the grading, construction, marketing, use and occupancy of the Project within the Property at such times and in such sequences as Owner may choose consistent with the Development Plan and this Agreement.

3.1.24 “Subsequent Land Use Regulations”. If applicable, means any Land Use Regulations defined in Section 3.1.16 that are adopted and effective after the Effective Date of this Agreement, as further defined in Section 4.7.

3.2 Exhibit Documents. The following documents, by this reference, are made part of this Agreement:

No. 1 - Legal Description of the Property;
No. 2 - Map showing Property and its location;
No. 3 - Operations Plan (in reference to the RFP);
No. 4 - Conceptual Plans – For final plans refer to the approved tenant improvement plan checks by Building and Safety Division (BLD 25-XXXX); and No. 5 - Labor Peace Agreement; or applicable Notarized Statement of Intent.

3.3 Binding Effect of Agreement. The Property is hereby made subject to this Agreement. Subject to Owner’s receipt of all Development Approvals relative thereto, the Development of the Property is hereby authorized and shall, except as otherwise provided in this Agreement, be carried out only in accordance with the terms of this Agreement.

3.4 Ownership of Property. Owner represents and covenants that it has a legal or equitable interest in the Property, which has an Assessor’s Parcel Number(s) of 8405-003-032 and is more particularly described in the application and Exhibit Document No. 1 in Section 3.2 and incorporated herein.

3.5 Term. The parties agree that the Term of this Agreement shall be 15 years commencing on the Effective Date subject to the written extension and early termination provisions described in this Agreement. Upon termination of this Agreement, this Agreementshall be deemed terminated and of no further force and effect, except terms that are expressly stated in this Agreement to survive termination without the need of further documentation from the parties hereto. The Agreement’s Community Benefit Fee(s) are subject to renegotiation after the first five years, and every five years thereafter. If the parties are unable to re-negotiate the Community Benefit Fee, then the Community Benefit Fee set forth in this Agreement shall continue to apply.

3.5.1 Term Extension. This Agreement may be extended by mutual written Agreement of City and Owner in writing and signed by Owner and the Mayor of Covina. If the

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Mayor of Covina does not sign the Agreement or renegotiated Agreement, any such Agreement or renegotiated Agreement is null and void.

3.6 Immediate Termination.

3.6.1 Automatic and Immediate Termination. This Agreement shall automatically and immediately terminate (without any hearing or opportunity to be heard) upon the occurrence of any of the following events:
(i) Expiration of the Term of this Agreement as set forth in Section 3.5. (ii) Termination or revocation of Conditional Use Permit 25-001 or applicable Cannabis Business Permit.

3.6.2 Discretionary Immediate Termination. This Agreement shall, at the discretion of the City, immediately terminate (without any hearing or opportunity to be heard) upon the occurrence of any of the following events:
(i) Failure to timely pay any fees or monies to the City. If fees or monies due to the City pursuant to this Agreement, including but not limited to Community Benefit Fee payments, are not paid on time pursuant to this Agreement, the City may, at the election of the City, terminate this Agreement without any need for a hearing and without any opportunity to be heard by anyone. Accordingly, Article 8 “Defaults and Remedies” does not apply to a failure to pay fees because the City may terminate immediately and automatically for failure to pay fees and no opportunity to cure and no opportunity to be heard is available for failure to pay fees. (ii) Failure to obtain a Certificate of Occupancy and operate the business within six (6) months from the date the Mayor signs this Agreement. The permitted uses must be commenced within six (6) months of issuance of the cannabis business permit. If Owner fails to move forward in a timely way to obtain a Certificate of Occupancy and commence the permitted use then the City may seek to revoke the commercial cannabis permit and the conditional use permit, and seek to terminate this Agreement.

3.6.3 Delay Not Attributable to Owner. Regulatory and/or bureaucratic delays, meaning delays attributable solely to the City, Department of Cannabis Control, or other applicable regulatory authority, and not attributable to the Owner, will not trigger the automatic termination in this Section.

3.6.4 Effect of Termination. Termination of this Agreement shall constitute termination of all land use entitlements and permits approved for the Owner and/or Property. Upon the termination of this Agreement, no party shall have any further right or obligation hereunder except with respect to any obligation to have been performed prior to such termination, or with respect to any default in the performance of the provisions of this Agreement which has occurred prior to such termination, or with respect to any obligations which are specifically and expressly set forth as surviving this Agreement.

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3.7 Notices.

3.7.1 Notice Defined. As used in this Agreement, notice includes, without limitation, the communication of notice, request, demand, approval, statement, report, acceptance, consent, waiver, appointment, or other communication required or permitted hereunder.

3.7.2 Written Notice and Delivery. All notices shall be in writing and shall be considered given:
(i) when delivered in person to the recipient named below; or (ii) five (5) days after deposit in the United States mail, postage prepaid, addressed to the recipient named below; or
(iii) on the date of personal delivery shown in the records of the delivery company after delivery to the recipient named below; or (iv) on the date of delivery by facsimile transmission to the recipient named below if a hard copy of the notice is deposited in the United States mail, postage prepaid, addressed to the recipient named below. All notices shall be addressed as follows:

If to the City: City of Covina Community Development Department ATTN: Community Development Director
125 E College St, Covina, CA 91723
(tel) (626) 384-5460
(email) [email protected]
With courtesy copy: City of Covina City Attorney’s Office ATTN: City Attorney
125 E College St, Covina, CA 91723.
(tel) (213) 626-8484
(email) [email protected]
If to the Owner: Covina STIIIZY LLC
ATTN: Tak Sato
3562 Kelton Ave,
Los Angeles, CA, 90034
(tel) (310) 488-5707
(email) [email protected]
With courtesy copy: Covina STIIIZY LLC
ATTN: Stephanie Uy
250 N Kenmore Ave Unit 2
Los Angeles, CA, 90004
(tel) (213) 809-9156

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(email) [email protected]
With courtesy copy: Covina STIIIZY LLC
ATTN: Michael Touhey
135 E Badillo St Unit 302
Covina, CA, 91723
(tel) (626) 825-5099
(email) [email protected]
With courtesy copy: Covina STIIIZY LLC
ATTN: Jasmine Szameit
4040 Harlan Ave
Baldwin Park, CA, 91706
(tel) (626) 463-3093
(email) [email protected]

3.7.3 Address Changes. Either party may, by notice given at any time, require subsequent notices to be given to another person or entity, whether a party or an officer or representative of a party or to a different address, or both. Notices given before actual receipt of notice of change shall not be invalidated by the change.

3.8 Validity of this Agreement. Owner and the City each acknowledge that neither party has made any representations to the other concerning the enforceability or validity of any one or more provisions of this Agreement. The parties acknowledge and agree that neither party shall allege in any administrative or judicial proceeding that the entering into or the performance of any obligations created in this Agreement violates federal or state law, with respect to all federal, state, and local statutes, ordinances, or regulations in effect as of the Effective Date.

3.9 Fee. Fee means the amount(s) set by the City or negotiated with or by the Owner, to provide City commensurate benefit based on a private benefit conferred upon Owner. Fee shall include City’s cost to research cannabis and cannabis laws and regulations, conduct public meetings, draft and negotiate this Agreement, process applications, and any other acts taken by the City in furtherance of medical and adult commercial use of cannabis in the City.

ARTICLE 4. DEVELOPMENT OF THE PROPERTY.

4.1 Right to Develop. Owner shall, subject to the terms of this Agreement, develop the Property with a Commercial Cannabis Business in accordance with the Development Plan. The Property shall remain subject to all Subsequent Development Approvals required to complete the Project as contemplated by the Development Plan.

4.2 Conditional Use Permit. Pursuant to CMC Section 17.84.040.A, Owner shall not engage in the permitted uses set forth above pertaining to the Project on the Property without first obtaining and maintaining the Conditional Use Permit for the conduct of cannabis business activities.

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4.3 Cannabis Business Permit. Pursuant to CMC Chapter 5.80 and Section

17.84.040.B, no person may engage in commercial cannabis activity in the City without obtaining a cannabis business permit issued by the City.

4.4 State Cannabis Licenses. Pursuant to California Cannabis Laws, Owner shall not engage in the permitted uses set forth above pertaining to the Project on the Property without first obtaining a State Cannabis License to conduct cannabis business activities on the Property.

4.5 Effect of Agreement on Land Use Regulations. Except as otherwise provided by this Agreement, the Development Plan shall establish the rules, regulations and official policies and conditions of approval governing permitted uses of the Property, the density and intensity of use of the Property, the maximum height and size of proposed buildings, and the design, improvement, occupancy and construction standards and specifications applicable to development of the Property. Provided, however, that in approving tentative subdivision maps, if any, the City may impose ordinary and necessary dedications for rights-of-way or easements for public access, utilities, water, sewers, and drainage, having a nexus with the particular subdivision; provided, further, that the City may impose and will require normal and customary subdivision improvement Agreements and commensurate security to secure performance of Owner’s obligations thereunder.

4.6 Changes to Project. The parties acknowledge that changes to the Project or Development Approvals may be appropriate and mutually desirable. The City shall act on such applications, if any, in accordance with the Existing Land Use Regulations, subject to the Reservations of Authority, or except as otherwise provided by this Agreement. If approved in writing by the City Council, any such change in the Existing Development Approvals shall be considered an additional Existing Development Approval.

4.7 Reservations of Authority. Any other provision of this Agreement to the contrary notwithstanding, the Development of the Property shall be subject to subsequently adopted ordinances, resolutions (“Subsequent Land Use Regulations” or sometimes referred to as “Reservation of Authority”) only on the following topics:
(i) Processing Fees imposed by the City to cover the estimated or actual costs to the City of processing applications for Development Approvals or for monitoring compliance with any Development Approvals granted or issued, which fees are charged to reimburse the City’s lawful expenses attributable to such applications, processing, permitting, review, and inspection and which are in force and effect on a general basis at such time as said approvals, permits, review, inspection, or entitlement are granted or conducted by the City. (ii) Procedural regulations relating to hearing bodies, petitions, applications, notices, findings, records, hearings, reports, recommendations, appeals and any other matter of procedure.
(iii) Regulations governing engineering and construction standards and specifications including, any and all uniform codes adopted by the State of California and subsequently adopted by the City.

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(iv) Regulations which may be in conflict with the Development Plan but which are reasonably necessary to protect the public health and safety; provided, however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied and construed so as to provide Owner with the rights and assurances provided in this Agreement; (b) That such regulations apply uniformly to all new development projects of the same uses within the City; and
(v) Regulations that do not conflict with the Development Plan. The term “do not conflict” means new rules, regulations, and policies which: (a) do not modify the Development Plan, including, without limitation, the permitted land uses, the density or intensity of use, the phasing or timing of Development of the Project, the maximum height and size of proposed buildings on the Property, provisions for dedication of land for public purposes and development exactions, except as expressly permitted elsewhere in this Agreement, and standards for design, development and construction of the Project; (b) do not prevent Owner from obtaining any Subsequent Development Approvals, including, without limitation, all necessary approvals, permits, certificates, and the like, at such dates and under such circumstances as Owner would otherwise be entitled by the Development Plan; or (c) do not prevent Owner from commencing, prosecuting, and finishing grading of the land, constructing public and private improvements, and occupying the Property, or any portion thereof, all at such dates and schedules as Owner would otherwise be entitled to do so by the Development Plan. (vi) Contemplated City Rules and Guidelines for Commercial Cannabis Businesses. The City anticipates issuing rules and administrative guidelines associated with the implementation of Ordinance No. 23-01. City may establish requirements that are identical to or place a higher standard of care as existing provisions of California Cannabis Laws, State Cannabis Regulations, or any amendments thereto. City reserves the right to adopt additional categories of rules or guidelines not listed in this Section as part of the City’s commercial cannabis regulatory program. Owner shall comply with any and all administrative guidelines adopted by the City that govern or pertain to the City’s commercial cannabis regulatory program. Nothing this Agreement shall be construed as limiting the City to amend the CMC or issue guidelines following the effective Date of this Agreement that Developer is required to adhere to. (vii) The City shall not be prohibited from applying Subsequent Land Use Regulations that do not affect permitted uses of the land, density, design, public improvements (including construction standards and specifications) or the rate of development of the Development, nor shall the City be prohibited from denying or conditionally approving any Subsequent Development applications on the basis of such Subsequent Land Use Regulations.

4.8 Other Public Agencies. It is acknowledged by the parties that other public agencies not within the control of the City possess authority to regulate aspects of the Commercial Cannabis Business and development of the Property separately from or jointly with the City, and this Agreement does not limit the authority of such other public agencies. The City and Owner shall reasonably cooperate with other public agencies processing approvals or State licenses for the Project.

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4.9 Tentative Subdivision Map and Development Approvals Lifespan. The term of any tentative subdivision map approved as a part of the project, if any, shall be in effect for the Term of this Agreement, and may be extended pursuant to the provisions of the California Subdivision Map Act (Government Code §§ 66410 et seq.).

4.10 Satisfaction of Conditions of Approval. Owner shall comply with all county and state laws and City ordinances and regulations and any and all conditions of approval for any entitlement, permit, or license it receives from the City, state, county, and Health and Fire Departments.

4.11 Subsequent Entitlements. Prior to commencement of construction of the Project, Owner shall be required to submit applications for any and all subsequent entitlements, if any, consistent with the terms and conditions set forth in this Agreement.

4.12 City Records Inspection. Owner acknowledges and agrees that the City is empowered to examine Owner’s books and records, including tax returns. The City has the power and authority to examine such books and records at any reasonable time, including but not limited to, during normal business hours. If the City wishes to inspect the areas of the Property where the cannabis is being manufactured or cultivated, if applicable, City may do so at any time with 24 hours prior notice to Owner except in exigent circumstances or when the City reasonably believes a crime is being committed on the premises. If there are exigent circumstances or the City reasonably believes a crime is being committed on the premises, then the City may inspect with no notice whatsoever. In addition, City agrees that all of its employees or agents which enter the manufacturing or cultivation areas shall follow all of the policies and guidelines imposed on Owner’s employees, including without limitation, the wearing of any clothing or equipment to insure that no pests or impurities shall enter the manufacturing and cultivation areas.

4.13 Inspections. The City may conduct non-record inspections as set forth in Section

7.7. 4.14 Initiatives and Referenda. If any City ordinance, rule, regulation, or addition to the CMC is enacted or imposed by a citizen-sponsored initiative or referendum after the Effective Date that would conflict with this Agreement or any associated Development Approval, such CMC changes shall not be applied to the Site or the Project; provided, however, the parties acknowledge the City’s approval of this Agreement is a legislative action subject to referendum.

ARTICLE 5. ARTICLE 5. PUBLIC BENEFITS.

5.1 Intent. The parties acknowledge and agree that development of the Property will result in substantial public needs and adverse effects which will not be fully met by the Development Plan and further acknowledge and agree that this Agreement confers substantial private benefits on Owner which should be balanced by commensurate public benefits.

Accordingly, the parties intend to provide consideration to the public to balance the negative impacts on the City, and private benefits conferred on Owner by providing more fully for the satisfaction of the public needs resulting from the Project.

5.2 Community Benefits Fee(s). In addition to the benefits provided by the operation of the business, the City’s primary benefit and its primary consideration for entering into this

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Agreement is the agreement and covenant of the Owner to pay to the City an annual amount equal to five percent (5%) of the annual Gross Revenues of the Commercial Cannabis Business, referred to herein as the Community Benefit Fee.

5.2.1 Installment Payments. As used herein, the term Owner shall make quarterly installments towards the annual amount of the Community Benefit Fee payment, based upon the Commercial Cannabis Business’ Gross Revenue as reflected in its quarterly financial reports. Such installment payments shall be made at the time and in the manner as directed by the City Manager. However, the Parties agree that the amount of the total Community Benefit Fee payment made for the full fiscal year shall be adjusted to reflect the Gross Revenues as reflected in Owner’s annual audited financial statement, a copy of which shall be provided by Owner’s auditor directly to the City. Such audited financial report shall be produced within ninety (90) days of the end of the fiscal year. If the audited annual financial statement is not provided to the City within that time frame, the City may initiate an audit at Owner’s sole expense, and may continue said audit even if the independent audited financial statement is subsequently provided.

5.2.2 Accounting. Owner agrees to maintain its books and records in a manner consistent with standard accounting procedures and good practices, and to fairly report all monies received by the Commercial Cannabis Business. during the relevant period. As provided in Section 4.12, the City shall have the right to conduct audits of the books and records, and the operational procedures, of Owner as they relate to the Commercial Cannabis Business. Such audits shall not unreasonably interfere with the operation of the Commercial Cannabis Business either as to frequency or procedure, but may take such audit steps as is necessary to achieve a real evaluation of the accuracy of the Commercial Cannabis Business’s accounting records and the amounts of Community Benefit Fee payment owed to the City.

5.2.3 Audits. Owner agrees to pay the costs of not more than two (2) audits of its records per year (not including any year-end audit occasioned by a failure of Owner to produce an audited annual financial report within the required ninety (90) day period, which shall also be at Owner’s expense), whether conducted by the City’s in-house staff, based upon comparable labor and other costs to private organizations, or by private accounting or audit firms. The costs of such audits shall be reasonable given the purpose and scope of the audit. The City may undertake additional audits if it has a reasonable concern that the Community Benefit Fee payments are not being made in the correct amount. Such additional audits shall be at the cost of the City, except that if an audit determines that the amount of Gross Revenue received by the Commercial Cannabis Business for the relevant audit period has been understated by seven percent (7%) or more, Owner shall reimburse the City for the full costs of the audit. If any audit of the Commercial Cannabis Business as permitted under this Agreement demonstrates that Owner has underpaid the annual Community Benefit Fee payment, Owner shall, within ten (10) days of receiving the results of the audit, make payment to the City of any shortfall in the Community Benefit Fee payment, together with interest thereon from the date each portion of the shortfall should have been paid until it is in fact paid, at the annual rate of seven percent (7%). If the amount of the shortfall exceeds the amount actually paid by seven percent (7%) or more, Owner shall also pay to the City, as compensation for its efforts in enforcing the payment provisions of this Agreement and not as a penalty, an amount equal to ten percent (10%) of the shortfall (including interest).

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5.2.4 Preferred Payment for Community Benefit Fee. The preferred method of payments made by Owner to City under the terms of this Agreement shall be made by check, money order or wire transfer.

5.3 Future Revenue Mechanisms. During the term of this Agreement, if the City imposes (by citizen initiative or otherwise) an alternative revenue mechanism specifically related to cannabis operations (e.g., a cannabis tax), the parties agrees to renegotiate in good faith the terms of this Agreement so as to comply with an alternative revenue mechanism. As used in this section, “alternative revenue mechanism” does not include generally applicable taxes, fees, or assessments levied on or collected from both cannabis and non-cannabis operations.

5.4 Public Outreach and Education. Owner shall coordinate and cooperate with the City and other Owners of Commercial Cannabis Business located within City of Covina in the establishment and implementation of appropriate public outreach and education programs. The public outreach and education programs shall be approved by City.

5.5 Labor Peace Agreement. If the Owner has ten (10) or more employees, the Owner shall enter into a Labor Peace Agreement, as defined by Business and Profession’s Code Section 26001(aa), within sixty (60) days of employing its tenth (10th) employee, and abide by the terms of such Labor Peace Agreement. If Owner has less than ten (10) employees at the time of this Agreement’s signing, such Owner shall in good faith provide a notarized Statement of Intent to the City no later than this Agreement’s signing indicating that within thirty (30) days of issuance of the Cannabis Business Permit the Owner will enter into and abide by the terms of a Labor Peace Agreement with any labor organization. Attached as Exhibit Document No. 5 and incorporated herein is a true and correct copy of the actual Labor Peace Agreement; or applicable Notarized Statement of Intent. Owner shall abide by the terms of the Labor Peace Agreement if and when so adopted in accordance with this Subsection. If Owner fails to comply with the Labor Peace Agreement requirement in accordance with this Subsection, such failure shall constitute a default of this Agreement.

5.6 Jobs and Wage Creation.

5.6.1 Local Outreach. Owner agrees to use its reasonable efforts to market employment opportunities at the Project to Covina residents. Job announcements shall be posted at City Hall, along with proof that the job announcements were advertised in at least two (2) newspapers published, printed, or distributed in the City and on various social media sites accessible to the general public. In addition, Owner shall make a good faith effort to advertise job announcements at local job fairs, on local radio and through public agencies and organizations.

5.6.2 Full-time work. Owner shall make its best efforts to fill every position with a full-time employee. However, at no time shall Owner have a labor force that is composed of less than 50% full-time employees within its labor force, and Owner shall make a good faith effort to maintain a full-time employee level of seventy five percent (75%). Owner agrees to provide to its eligible employees leave benefits, health and wellness benefits and other employee benefits to the extent such benefits are required to be paid for by Owner under applicable state and federal employment laws.

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5.6.3 Living Wage. Owner shall provide a living wage to employees. “Living Wage” means one hundred fifty percent (150%) more than the applicable amount of the hourly minimum wage mandated by California state or federal law, whichever is greater.

5.7 Development Agreement Administrative Fee Deposit. Owner shall be responsible for all of the City’s actual costs associated with processing Development Approvals for the Project including, but not limited to, costs associated with the City’s review and processing of the Project, including but not limited to reviewing the Project’s entitlements, including all environmental clearance documents, permits, licenses and all documents evidencing compliance with state and local law. Upon approval of the Agreement, within five business days of approval, Owner must deposit twenty thousand dollars ($20,000) with the City for the purpose of reimbursing the City for any associated costs with processing the Project, as detailed above, and reimbursing the City for its actual costs incurred in drafting and processing this Agreement. Owner will be liable for the City’s actual costs incurred in processing future Development Approval applications. City acknowledges and agrees that this payment is not merely a deposit, but is a cap on the amount of the City’s actual costs incurred in processing this Agreement.

ARTICLE 6. DISTRIBUTION AND TRANSPORTATION

6.1 Transportation of Cannabis. All pickups and drop offs of cannabis and cannabis products into and out of the City of Covina shall be by a licensed distributor. Owner shall not, on its own or through any person or entity, arrange for pickups or drop offs of cannabis or cannabis products into or out of the City of Covina for any purpose, except by a licensed distributor. This provision shall not apply if the Owners is a license microbusiness that includes distribution as part of its business.

6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis products only through a licensed distributor. Owner shall cooperate fully with the distributor regarding the accounting for product, revenue, and tax collection.

6.3 Distributor Fees. Owner and any licensed distributor shall reach their own Agreement regarding fees for the distributor’s services.

ARTICLE 7. REVIEW FOR COMPLIANCE.

7.1 Periodic Review. The City may review this Agreement annually, on or before each anniversary of the Effective Date, in order to ascertain Owner’s good faith compliance with this Agreement. During the periodic review, Owner shall be required to demonstrate compliance with all the terms of the Agreement. The review shall be conducted by the Director of Community Development. In connection with this periodic review, Owner shall demonstrate good faith compliance with the terms of this Agreement. If, as a result of the review, the City finds and determines that Owner has not complied in good faith with the terms and conditions of this Agreement, the City may serve on Owner a notice to cure setting forth in detail the nature of Owner’s non-compliance with this Agreement. If Owner fails to cure the non-compliance within sixty (60) days of the date of the notice or, if such cure cannot be effected within such sixty (60) day period and Owner fails to commence and proceed in good faith in an effort to cure such nonPage 1342 of 1383 -17-
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compliance within such sixty (60) day period, City may, by written notice to Owner, terminate this Agreement.

7.2 Special Review. The City may order a special review of compliance with this Agreement at any time, if the City reasonably believes that Owner is in breach of this Agreement.

If the City finds that Owner has not complied in good faith with the terms or conditions of this Agreement, the City may terminate this Agreement notwithstanding any other provision of this Agreement to the contrary, or modify this Agreement and impose such conditions as are reasonably necessary to protect the interests of the City.

7.3 The termination provision in Sections 7.1 and 7.2 do not apply to restrict the termination provisions in Section 3.6 regarding failure to pay fees and failure to move forward in a timely way to get all necessary permits, licenses, and a Certificate of Occupancy.

7.4 Certificate of Compliance. If, at the conclusion of a periodic or special review, the City determines that Owner is in compliance with this Agreement, upon request of the Owner the City shall issue a Certificate of Compliance (“Certificate”) to Owner stating that after the most recent periodic or special review, and based upon the information known or made known to the City, that (i) this Agreement remains in effect and (ii) Owner is not in default. The City shall not be bound by a Certificate if a default existed at the time of the periodic or special review, but was concealed from or otherwise not known to the City, regardless of whether or not the Certificate is relied upon by Owner.

7.5 Failure to Conduct Review. The City’s failure to conduct a periodic review of this Agreement shall not constitute a breach of this Agreement.

7.6 Cost of Review. The costs incurred by City in connection with the periodic or special reviews shall be borne by the City. The Owner is not liable for any costs associated with any City periodic or special review of this Agreement. The Owner is not liable for costs incurred for reviews.

7.7 Inspections. The City has the right to inspect the premises at any time with 24 hours’ notice to Owner in writing. Exception to 24 hours’ notice: In case of exigent circumstances or if the City reasonable believes a crime is being committed, no notice whatsoever is required.

Failure of the Owner to allow access to its facilities when the City requests an inspection, subject to the notice provisions described in the Section, is a violation of this Agreement.

ARTICLE 8. DEFAULTS AND REMEDIES.

8.1 Remedies in of City after Default. In the event of a Default by Owner, City may terminate this Agreement and shall otherwise have hereunder all legal and equitable remedies as provided by law. Before City may terminate this Agreement or take action to obtain judicial relief, the City shall comply with the notice and cure provisions of Section 8.3.

Owner hereby agrees to waive and/or release the City of Covina for any claim or claims or cause of action, not specifically and expressly reserved herein, which Owner may have at the time of execution of Agreement relating to any application to the City of Covina including but not limited

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to, any application for any type of Commercial Cannabis Business license or conditional use permit from the City of Covina.

CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this Agreement is intended to include in its effect, a waiver without limitation, of all claims or causes of actions which have arisen and of which each side knows or does not know, should have known, had reason to know or suspects to exist in their respective favor at the time of execution hereof, that this Agreement contemplates the extinguishment of any such Claim or Claims. The Owner specifically acknowledges and waives and releases the rights granted to Owner under California Civil Code Section 1542, which states as follows:
“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”
By expressly waiving the rights granted to Owner under California Civil Code Section 1542, the Owner represents that they understand and acknowledge that if they have suffered any injury, damage as a result of the application for or request for any permit from the City of Covina and (i) they are not presently aware of any damage or injury, or (ii) any damage or injury has not yet manifested itself, any claims for any such damage or injury are forever released and discharged.

Nothing contained herein shall modify or abridge Owner’s rights or remedies (including its rights for damages, if any) resulting from the exercise by the City of its power of eminent domain.

Nothing contained herein shall modify or abridge Owner’s rights or remedies (including its rights for damages, if any) resulting from the grossly negligent or malicious acts of the City and its officials, officers, agents, and employees. Nothing herein shall modify or abridge any defenses or immunities available to the City and its employees pursuant to the Government Tort Liability Act and all other applicable statutes and decisional law.

Except as set forth in the preceding paragraph relating to eminent domain, Owner’s remedies shall be limited to those set forth in this Section 8.1, Section 8.2, and Section 8.3 except for those in Section 3.6.

8.2 Specific Performance. The nature of a development agreement under the Development Agreement Law is a very unusual contract involving promoting a development project facing many complex issues including but not limited to environmental, financial, market, regulatory and other constantly evolving factors over an extremely long time frame. The high level of uncertainty and risk involved justify the extraordinary commitments made to Owner by City. The parties acknowledge that City would not have entered into this Agreement had it been exposed to monetary damages claims from Owner for any termination, or Default hereunder. As such, the parties agree that in no event shall Owner be entitled to recover monetary damages of any amount or of any kind against City for City’s termination or Default under this Agreement.

For purposes of enforcement, therefore, Owner’s sole remedy for any Default of this Agreement shall be the remedy of specific performance. Before Owner takes action to obtain a judicial order

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for specific performance against City, Owner shall comply with the notice and cure provisions of Section 8.3.

8.3 Notice and Opportunity to Cure. A non-Defaulting Party in its discretion may elect to declare a Default under this Agreement in accordance with the procedures hereinafter set forth for any alleged Default of the other party (“Defaulting Party”). However, the non-Defaulting Party must provide written notice to the Defaulting Party setting forth the nature of the breach or failure and the actions, if any, required by the Defaulting Party to cure such breach or failure. The Defaulting Party shall be deemed in Default under this Agreement, if the breach or failure can be cured, but the Defaulting Party has failed to take such actions and cure such Default within sixty (60) days after the date of such notice. However, if such Default cannot be cured within such sixty (60) day period, and if the Defaulting Party does each of the following:

1. Notifies the non-Defaulting Party in writing with a reasonable explanation as to the reasons the asserted Default is not curable within the sixty (60) day period;

2. Notifies the non-Defaulting Party of the Defaulting Party’s proposed cause of action to cure the Default;

3. Promptly commences to cure the Default within the sixty (60) day period;

4. Makes periodic reports to the non-Defaulting Party as to the progress of the program of cure; and

5. Diligently prosecutes such cure to timely completion, then:

The Defaulting Party shall not be deemed in Default of this Agreement once the Default has been timely cured.

8.4 Termination Notice. Upon receiving a Default Notice, should the Defaulting Party fail to timely cure any Default, or fail to diligently pursue such cure as prescribed above, the nonDefaulting Party may, in its discretion, provide the Defaulting Party with a written notice of intent to terminate this Agreement (“Termination Notice”). The Termination Notice shall state that the non-Defaulting Party will elect to terminate the Agreement within sixty (60) days and state the reasons therefor (including a copy of any specific charges of Default) and a description of the evidence upon which the decision to terminate is based. Once the Termination Notice has been issued, the non-Defaulting Party’s election to terminate this Agreement shall only be rescinded (i) if the Defaulting Party fully and completely cures all Defaults prior to the date of termination, or (ii) if the non-Defaulting Party elects to revoke the Termination Notice.

8.5 Waiver of Breach. By not filing a legal challenge to City’s action to approve or issue any Development Approval within the period established by applicable law, Owner shall be deemed to have waived any claim that any condition of approval attached to said Development Approval is improper or that the action, as approved, constitutes a breach of the provisions of this Agreement. By recordation of a final subdivision map on any portion of the Property, Owner shall be deemed to have waived any claim that any Condition of Approval of such final subdivision map is improper or that the Condition of Approval constitutes a breach of the provisions of this Agreement.

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8.6 Attorney’s Fees. In the event either party to this Agreement is forced to bring legal action to enforce its rights under this Agreement, and notwithstanding the limitation of the parties’ remedies under Section 8.2, the prevailing party in any such action shall be entitled to recover its reasonable attorney’s fees and costs of suit.

ARTICLE 9. THIRD PARTY LITIGATION.

9.1 Non-liability of Parties. As set forth above, City has determined that this Agreement is consistent with the General Plan and meets all of the legal requirements of State law.

The parties acknowledge that:

A. In the future there may be challenges to the legality, validity and adequacy of the Development Approvals, the CEQA Determination, and/or this Agreement; and B. If successful, such challenges could delay or prevent the performance of this Agreement and the Development of the Property.

C. In addition to the other provisions of this Agreement, including, without limitation, the provisions of this Article 9, neither party shall have liability under this Agreement for any failure of either party to perform its respective obligations under this Agreement under this Agreement as the direct result of a judicial determination resulting from any claim or litigation that on the Effective Date, or at any time thereafter, the Land Use Regulations, the Development Approvals, or any related CEQA Determination for the Project, this Agreement, or portions thereof, are invalid or inadequate or not in compliance with law.

9.2 Revision of Land Use Regulations. If, for any reason, the Land Use Regulations, the Development Approvals (including, without limitation, this Agreement), the CEQA Determination or any part thereof is hereafter judicially determined, as provided above, to not be in compliance with applicable laws or regulations and, if such noncompliance can be cured by an appropriate action otherwise conforming to the provisions of this Agreement, then this Agreement shall remain in full force and effect to the extent permitted by law. If required by a judicial decision, City shall process any of Owner’s applications for amendments to any of the Development Approvals, the CEQA Determination, and this Agreement, as necessary in response to such judicial decision. The Parties understand and agree that no promise can be made as to any future approval, however, because land use regulations involve the exercise of City’s police power and it is settled California law that government may not contract away its right to exercise its police power in the future. Avco Community Developers Inc. v. South Coast Regional Com., 17 Cal.3d 785, 800 (1976); City of Glendale v. Superior Court, 18 Cal.App.4th 1768 (1993).

9.3 Participation in Litigation: Indemnity. To the full extent permitted by law, Owner agrees to and shall fully indemnify, hold harmless, and defend, City and its respective elected and appointed officials, officers, members, agents, employees, and representatives (each an “Agent” and collectively “Agents”) from any and all claims, suits, causes of action, fines, penalties, proceedings, damages, injuries or losses of any name, kind or description, specifically including attorneys’ fees (collectively, “Claim(s)”), arising in any way out of or challenging the validity of this Agreement, any of the other Development Approvals, or the CEQA Determination. Owner’s indemnification obligation shall include, but not be limited to, actions to attack, set aside, void, or

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annul any approval, should it occur, related to this Agreement, any of the other Development Approvals, or the CEQA Determination, including actions invoking Planning and Zoning Law or CEQA, and shall also include actions related to enforcement of conflicts between State and Federal law. Owner shall reimburse City for any court costs and attorneys’ fees that City may be required by a court to pay as a result of such Claim(s). City may, at its sole and absolute discretion, participate in the defense of any such Claim(s) undertaken by Owner, or (b) retain separate counsel whose attorneys’ fees and costs shall be paid by Owner. Such participation in the defense of such Claim(s) or the retention of separate counsel by City shall not relieve Owner of its obligations under this Agreement.

9.4 City shall promptly provide written notice to Owner of any Claim(s). City shall take all necessary and reasonable steps to provide such notice to Owner in a timely fashion and in a manner that will not result in any substantial prejudice to Owner’s ability to defend the relevant Claim(s). Such notice shall contain a copy of any relevant pleadings filed in connection with the relevant Claim(s). City acknowledges that Owner desires to provide the defense of any Claim(s) in a cost efficient manner. City and Owner shall coordinate and cooperate in their defense activities, whether City is participating in defense undertaken by Owner or is retaining separate counsel. As used in this Agreement, cooperation does not include City having to take any action or make any decision that City does not believe, in the exercise of its good faith judgment, is in its own best interest. Unless expressly provided to the contrary, nothing in this Agreement shall be construed in a manner that requires City to exercise its discretion in a particular manner.

9.5 Owner may not resolve such Claim(s) without City’s prior written consent. In all events, City shall have the right to resolve any such Claim(s) in any manner, in its discretion, provided, however, Owner’s consent shall be required (and may be granted or withheld in Owner’s discretion) if the resolution of the Claim(s) shall require a payment by Owner or limit Owner’s rights under the Development Approvals, including, without limitation, this Agreement. Owner’s obligation to pay the cost of any such Claim(s), including judgment, post-judgment motions, and any and all appeals, shall extend until any Claim is completely concluded, judgment is entered and completely satisfied.

9.6 In the event Owner fails or refuses to reimburse City for its cost to defend any Claim(s), City shall have the right to terminate this Agreement, subject to the notice and cure requirements of Section 8.3 above. Additionally, in the event of any such Claim(s), the Term of this Agreement shall be tolled for the period during which such Claim(s) are proceeding until fully and finally resolved

9.7 In order to ensure compliance with this Article 9, within twenty (20) days after notification by City of the receipt of any Claim(s), Owner shall deposit with City cash or other security in the amount of one hundred thousand dollars ($100,000), satisfactory in form to the City Attorney, guaranteeing indemnification or reimbursement to City of all costs and fees related to any action triggering the obligations of this Article 9. If City is required to draw on that cash or security to indemnify or reimburse itself for such costs or fees, Owner shall restore the deposit to its original amount within fifteen (15) days after notice from City that replenishment is required.

Additionally, if at any time the City Attorney determines that an additional deposit or additional security in an amount not to exceed an additional fifty thousand dollars ($50,000) is necessary to

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secure the obligations of this Article 9, Owner shall provide such additional payment or security within fifteen (15) days of notice from the City Attorney.

9.8 Hold Harmless: Owner’s Construction and Other Activities. Owner shall indemnify, defend, save and hold City and its Agents, as defined in this Article 9 above, and shall hold and save them and each of them harmless from any and all claims, damages of any kind and litigation which may arise from Owner’s or Owner’s agents, contractors, subcontractors, agents, or employees’ operations under this Agreement, whether such operations be by Owner or by any of Owner’s agents, contractors or subcontractors or by any one or more persons directly or indirectly employed by or acting as agent for Owner or any of Owner’s agents, contractors or subcontractors. Notwithstanding anything to the contrary in this Section 9.8, nothing herein shall make Owner liable for the negligence or willful misconduct of City’s Agent(s).

9.9 Survival of Indemnity Obligations. All indemnity provisions set forth in this Agreement shall survive termination of this Agreement for any reason other than City’s Default as provided herein and shall continue to be the liability and obligation of Owner, binding upon Owner, until the final resolution of all Claims, and shall survive the completion, partial completion, or abandonment of the Project.

9.10 Environmental Contamination. Owner shall indemnify and hold the City, its officers, agents, and employees free and harmless from any liability, based or asserted, upon any act or omission of the Owner, its officers, agents, employees, subcontractors, predecessors in interest, successors, assigns and independent contractors, excepting any acts or omissions of City as successor to any portions of the Property dedicated or transferred to City by Owner, for any violation of any federal, state or local law, ordinance or regulation relating to industrial hygiene or to environmental conditions on, under or about the Property, including, but not limited to, soil and groundwater conditions, and Owner shall defend, at its expense, including attorneys’ fees, the City, its officers, agents and employees in any action based or asserted upon any such alleged act or omission. The City may in its discretion participate in the defense of any such claim, action or proceeding. The provisions of this Section 9.10 do not apply to environmental conditions that predate Owner’s ownership or control of the Property or applicable portion; provided, however, that the foregoing limitation shall not operate to bar, limit, or modify any of Owner’s statutory or equitable obligations as an owner or seller of the Property.

ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.

10.1 Encumbrances. The parties hereto agree that this Agreement shall not prevent or limit Owner, in any manner, at Owner’s sole discretion, from encumbering the Property or any portion thereof or any improvement thereon by any mortgage, deed of trust or other security device securing financing with respect to the Property.

10.2 Lender Requested Modification/Interpretation. The City acknowledges that the lenders providing such financing may request certain interpretations and modifications of this Agreement and agrees upon request, from time to time, to meet with Owner and representatives of such lenders to negotiate in good faith any such request for interpretation or modification. The City will not unreasonably withhold its consent to any such requested interpretation or modification provided such interpretation or modification is consistent with the intent and

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purposes of this Agreement and as long as such requests do not minimize, reduce, curtail, negate or in any way limit City’s rights under this Agreement.

10.3 Assignment/Transfer/Sale. No assignment, transfer or sale of the rights or obligations of the Owner under this Agreement is permitted. Any sale, transfer, or assignment without City Council approval is a breach of this Agreement.

ARTICLE 11. MISCELLANEOUS PROVISIONS.

11.1 Penalty.

11.1.1 Owner acknowledges that to ensure proper compliance with the terms of this Agreement and any applicable laws, City must engage in costly compliance review, inspections, and if necessary enforcement actions to protect health, safety, and welfare of its residents. Penalty and interest provisions are necessary to assist City in compliance review and enforcement actions. If Owner fails to make any payment due, as required by this Agreement, including the Public Benefit Fee(s) in Article 5, City may impose a “Non-Performance Penalty.” A “Non-Performance Penalty” of ten percent (10%) shall be applied to all past due payments.

Payment of Non-Performance Penalty shall be in a single installment due on or before fifteen (15) days following delivery of a notice of non-performance penalty by the City to the Owner. This provision shall survive the termination of this Agreement.

11.1.2 If Owner fails to pay the Non-Performance Penalty, then, in addition to the principal amount of the Non-Performance Penalty, Owner shall pay City interest at the rate of eighteen percent (18%) per annum, computed on the principal amount of the Non-Performance Penalty, from fifteen (15) days following delivery of a notice of Non-Performance Penalty. This provision shall survive the termination of this Agreement.

11.2 Entire Agreement. This Agreement sets forth and contains the entire understanding and Agreement of the parties, and there are no oral or written representations, understandings or ancillary covenants, undertakings or Agreements that are not contained or expressly contained herein. No testimony or evidence of any such representations, understandings or covenants shall be admissible in any proceeding of any kind or nature to interpret or determine the terms or conditions of this Agreement, provided, however, City at its option may rely on statements by Owner’s agents at the public hearings leading to the City’s approval of the project or on written documents by Owner’s agents that are a part of the public record.

11.3 Severability. If any term, provision, covenant, or condition of this Agreement shall be determined invalid, void, or unenforceable, by a court of competent jurisdiction, the remainder of this Agreement shall not be affected thereby to the extent such remaining provisions are not rendered impractical to perform taking into consideration the purposes of this Agreement. The foregoing notwithstanding, the provision of the public benefits set forth in Article 5, including the payment of the fees set forth therein, are essential elements of this Agreement and the City would not have entered into this Agreement but for such provisions, and therefore in the event that any portion of such provisions are determined to be invalid, void, or unenforceable, at the City’s option this entire Agreement shall terminate and from that point on be null and void and of no force and effect whatsoever. The foregoing notwithstanding, the development rights set forth in Article 4 of

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this Agreement are essential elements of this Agreement and Owner would not have entered into this Agreement but for such provisions, and therefore in the event that any portion of such provisions are determined to be invalid, void or unenforceable, at Owner’s option this entire Agreement shall terminate and from that point on be null and void and of no force and effect whatsoever.

11.4 Interpretation and Governing Law. This Agreement and any dispute arising hereunder shall be governed and interpreted in accordance with the laws of the State of California without regard to principles of conflicts of laws. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the parties hereto, and the rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Agreement, since all parties were represented by counsel in the negotiation and preparation hereof.

11.5 Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement.

11.6 Singular and Plural; Gender, and Person. Except where the context requires otherwise, the singular of any word shall include the plural and vice versa, and pronouns inferring the masculine gender shall include the feminine gender and neuter, and vice versa, and a reference to “person” shall include, in addition to a natural person, any governmental entity and any partnership, corporation, joint venture or any other form of business entity.

11.7 Time of Essence. Time is of the essence in the performance of the provisions of this Agreement as to which time is an element.

11.8 Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party’s right to insist and demand strict compliance by the other party with the terms of this Agreement thereafter.

11.9 No Third Party Beneficiaries. The only parties to this Agreement are Owner and the City. This Agreement is made and entered into for the sole protection and benefit of the parties and their successors and assigns. There are no third party beneficiaries and this Agreement is not intended, and shall not be construed, to benefit, or be enforceable by any other person whatsoever.

11.10 Supersedes Previous Agreements. This Agreement when signed and executed by Owner and the Mayor of Covina supersedes any previous Agreements and renders them null and void.

11.11 Mutual Covenants. The covenants contained herein are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the party benefited thereby of the covenants to be performed hereunder by such benefited party.

11.12 Counterparts. This Agreement may be executed by the parties in counterparts, which counterparts shall be construed together and have the same effect as if all of the parties had executed the same instrument.

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11.13 Jurisdiction and Venue. Any action at law or in equity arising under this Agreement or brought by a party hereto for the purpose of enforcing, construing or determining the validity of any provision of this Agreement shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of California, and the parties hereto waive all provisions of federal or state law or judicial decision providing for the filing, removal or change of venue to any other state or federal court, including, without limitation, Code of Civil Procedure Section 394.

11.14 Project as a Private Undertaking. It is specifically understood and agreed by and between the parties hereto that the development of the Project is a private development, that neither party is acting as the agent of the other in any respect hereunder, and that each party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement. No partnership, joint venture or other association of any kind is formed by this Agreement. The only relationship between the City and Owner is that of a government entity regulating the development of private property and the owner of such property.

11.15 Further Actions and Instruments. Each of the parties shall cooperate with and provide reasonable assistance to the other to the extent contemplated hereunder in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement.

Upon the request of either party at any time, the other party shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement.

11.16 Eminent Domain. No provision of this Agreement shall be construed to limit or restrict the exercise by the City of its power of eminent domain.

11.17 Agent for Service of Process. In the event Owner is not a resident of the State of California or it is an association, partnership or joint venture without a member, partner or joint venturer, resident of the State of California, or if it is a foreign corporation, then Owner shall file, upon its execution of this Agreement, with the Chief Executive Officer or his or her designee, upon its execution of this Agreement, a designation of a natural person residing in the State of California, giving his or her name, residence and business addresses, as its agent for the purpose of service of process in any court action arising out of or based upon this Agreement, and the delivery to such agent of a copy of any process in any such action shall constitute valid service upon Owner. If for any reason service of such process upon such agent is not feasible, then in such event Owner may be personally served with such process out of the County of Los Angeles and such service shall constitute valid service upon Owner. Owner is amenable to the process so described, submits to the jurisdiction of the Court so obtained, and waives any and all objections and protests thereto.

11.18 Authority to Execute. The person or persons executing this Agreement on behalf of Owner warrants and represents that he/she/they have the authority to execute this Agreement on behalf of his/her/their corporation, partnership or business entity and warrants and represents that he/she/they has/have the authority to bind Owner to the performance of its obligations hereunder. Owner shall each deliver to City on execution of this Agreement a certified copy of a resolution and or minute order of their respective board of directors or appropriate governing body authorizing the execution of this Agreement and naming the officers that are authorized to execute

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this Agreement on its behalf. Each individual executing this Agreement on behalf of his or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this Agreement on behalf of that company or entity in accordance with a duly adopted resolution of the company’s board of directors or appropriate governing body and in accordance with that company’s or entity’s articles of incorporation or charter and bylaws or applicable formation documents; and (ii) This Agreement is binding on that company or entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing company or entity in good standing; and
(iv) The execution and delivery of this Agreement by that company or entity shall not result in any breach of or constitute a default under any mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or other contract or instrument to which that company or entity is party or by which that company or entity may be bound.

11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees imposed are in fact reasonable and related to the mitigation of the negative impacts of the business on the City and consents to, and waives any rights it may have now or in the future to challenge the legal validity of, the conditions, requirements, policies or programs set forth in this Agreement including, without limitation, any claim that the terms in this Agreement constitute an abuse of the police power, violate substantive due process, deny equal protection of the laws, effect a taking of property without payment of just compensation, and/or impose an unlawful tax.

11.20 No Money Damages Relief Against the City. The parties acknowledge that the City would not have entered into this Agreement had it been exposed to damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof. As such, the parties agree that in no event shall Owner, or Owners’ partners, or anyone acting on behalf of Owner be entitled to recover money damages against City for breach of this Agreement.

11.21 Laws. Owner agrees to comply with all applicable state, regional, and local laws, regulations, polices and rules. In addition, Owner further agrees to comply with all issued entitlements, permits, licenses, including any and all applicable development standards.

Specifically, Owner agrees to comply with all applicable provisions of CMC.

11.22 Compliance with Conditions of Approval. Owner agrees to comply with and fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it receives from the City. All conditions of approval for all entitlements, permits and/or licenses are attached hereto and incorporated herein by this reference.

11.23 Consistency with Applicable Commercial Cannabis Regulation. The City and Owner acknowledge that this Agreement shall be read consistent with any statewide or national regulation of commercial cannabis that is promulgated in the future, either by legislative action or voter approval.

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(SIGNATURES FOLLOW ON NEXT PAGE)

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the dates written above.

CITY OF COVINA
By:
_____________________, Mayor
OWNER
By:

Its: ______
Date: _____________________________ Date: ______
ATTEST:

By:

Fabian Velez, Chief Deputy City Clerk
Date: ______
By:

Its:

Date: ______
(Two signatures of corporate officers
required unless corporate documents
authorize only one person to sign the
agreement on behalf of the corporation)
APPROVED AS TO FORM:

By:

Candice Lee, City Attorney
Date:

APPROVED AS TO FORM:

By:

Legal Counsel for _____________________
Date: ______

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State of California )
County of Los Angeles )
On ___________________, 202__, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

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State of California )
County of Los Angeles )
On ___________________, 202__, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

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List of Exhibit Documents
No. 1 - Legal Description of the Property
No. 2 - Map showing Property and its location
No. 3 - Operations and Management Plan (refer to the RFP) No. 4 - Conceptual Plans - For final plans refer to the approved tenant improvement plan check by Building and Safety Division (BLD 25-XXXX) No. 5 - Labor Peace Agreement; or applicable Notarized Statement of Intent

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Exhibit Document No. 1
Legal Description of the Property