Cudahy City Council
July 16, 2024

AGENDA

A REGULAR MEETING

OF THE CUDAHY CITY COUNCIL
and JOINT MEETING of the
CITY OF CUDAHY AS SUCCESSOR AGENCY and HOUSING SUCCESSOR AGENCY

TO THE CUDAHY DEVELOPMENT COMMISSION
Tuesday, July 16, 2024 – 6:30 P.M.

Written materials distributed to the City Council within 72 hours of the City Council meeting shall be available for public inspection at www.cityofcudahy.com In compliance with the Americans with Disabilities Act (ADA) if you need special assistance to participate in this meeting, you should contact the City Clerk’s Office at (323) 773-5143 at least 72 hours in advance of the meeting.

Rules of Decorum
Under the Government Code, the City Council may regulate disruptive behavior that impedes the City Council Meeting.

Disruptive conduct may include, but is not limited to:
• Screaming or yelling during another audience member’s public comments period; • Profane language directed at individuals in the meeting room; • Throwing objects at other individuals in the meeting room; • Verbal altercations with other individuals in the meeting room; and • Going beyond the allotted three-minute public comment period granted.

When a person’s or group’s conduct disrupts the meeting, the Mayor or presiding officer will request that the person or group stop the disruptive behavior and WARN the person or group that they will be asked to leave the meeting room if the behavior continues.

If the person or group refuses to stop the disruptive behavior, the Mayor or presiding officer may order the person or group to leave the meeting room and may request that those persons be escorted from the meeting room. Any person who, without authority of law, willfully disturbs or breaks up a City Council meeting is guilty of a misdemeanor. (Pen. Code, § 403.)
Jose R. Gonzalez, Mayor
Elizabeth Alcantar, Vice Mayor
Martin U. Fuentes, Council Member
Cynthia Gonzalez, Council Member
Daisy Lomelí, Council Member
This meeting will be conducted in
person, telephonically, and
electronically.

Council Chambers/Bedwell Hall
5240 Santa Ana Street
Cudahy, CA 90201
Teleconference Phone Number:
1 (669) 900-6833
Meeting ID: 869 3953 7746
https://us06web.zoom.us/j/86939537746

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
July 16, 2024, at 6:30 P.M.

1. CALL TO ORDER

2. ROLL CALL
Council / Agency Member Fuentes
Council / Agency Member Gonzalez
Council / Agency Member Lomelí
Vice Mayor / Vice Chair Alcantar
Mayor / Chair Gonzalez

3. APPROVAL OF AGENDA

4. PLEDGE OF ALLEGIANCE

5. LAND ACKNOWLEDGMENT
We would like to acknowledge that the land we inhabit today was once known as Tovangaar, the home of the Gabrieleño-Tongva people. We show our respects to the Gabrieleño-Tongva people, as well as all Indigenous people, past, present, and future, and honor their labor as original caretakers of this land. We commit to uplifting the Gabrieleño-Tongva people, invite you to acknowledge the history, and join us in caring for this land.

6. PRESENTATIONS
A. Finance Department Annual Update

7. PUBLIC COMMENTS
(Each member of the public may provide a public comment in person, telephonically or electronically.

In person participants must submit one comment card if they wish to address the City Council. Only speakers that submit a comment card within the first 20 minutes of the meeting will be permitted to speak. Remote participants may provide public comment by clicking the hand icon on Zoom or pressing star (*) nine (9) on the telephone, if they wish to address the City Council. Members of the public are permitted to speak for three (3) minutes concerning items under the City Council’s jurisdiction, including items on the council agenda.)
(Any person who, without authority of law, willfully disturbs or breaks up a City Council meeting is guilty of a misdemeanor. (Pen. Code, § 403).)

8. CITY COUNCIL COMMENTS / REQUESTS FOR AGENDA ITEMS (Each Council Member is limited to three minutes.)
(This is the time for the City Council / Agency to comment on any topics related to “City Business,” including announcements, reflections on city / regional events, response to public comments,

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
July 16, 2024, at 6:30 P.M.

suggested discussion topics for future council meetings, general concerns about particular city matters, questions to the staff, and directives to the staff (subject to approval / consent of the City Council majority members present, regarding staff directives). Each Council / Agency Member will be allowed to speak for a period not to exceed three (3) minutes. Notwithstanding the foregoing, the City Council Members shall not use this comment period for serial discussions or debate between members on City business matters not properly agendized. The City Attorney shall be responsible for regulating this aspect of the proceeding.)

9. CITY MANAGER REPORT (information only)

10. REPORTS REGARDING AD HOC, ADVISORY, STANDING, OR OTHER COMMITTEE

MEETINGS

11. WAIVER OF FULL READING OF RESOLUTIONS AND ORDINANCES (Consideration to waive full text reading of all Resolutions and Ordinances by single motion made at the start of each meeting, subject to the ability of the City Council / Agency to read the full text of selected resolutions and ordinances when the item is addressed by subsequent motion.) (COUNCIL / AGENCY)
Recommendation: Approve the Waiver of Full Reading of Resolutions and Ordinances.

12. CONSENT CALENDAR
(Items under the Consent Calendar are considered routine and will be enacted by one motion, prior to the vote to approve the Consent Calendar, each Council Member shall have a maximum of three (3) minutes to comment on the Consent Calendar as a whole. There will be no separate discussion of these items unless a Council / Agency Member so requests specific item(s) be removed from the Consent Calendar for separate action. Items may only be considered as a separate action if either (1) a Council Member must recuse themselves due to a conflict of interest or (2) a Council Member has specific questions for City Staff. Items called for separate discussion will be heard as the next order of business.) A. Consideration to Review and Approve the Draft Minutes of July 2, 2024, for the Regular Meeting of the City Council and the Joint Meeting of the City of Cudahy as Successor Agency and Housing Successor Agency to the Cudahy Development Commission (page 11) Presented by the City Clerk
Recommendation: The City Council is requested to review and approve the City Council / Successor Agency Draft Minutes for July 2, 2024.

B. Approval of the Local Agency Investment Fund (LAIF) for the Month of June 2024 (page 25) Presented by the Finance Director

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
July 16, 2024, at 6:30 P.M.

Recommendation: The City Council is requested to approve the Local Agency Investment Fund (LAIF) Report for the month of June 2024 in the amount of $12,864,594.90.

C. Approval of the City Demands and Payroll Including Statement of Investment for the Month of June 2024 (page 29)
Presented by the Finance Director
Recommendation: The City Council is requested to approve the Demands and Payroll in the amount of $1,906,635.54 including the Statement of Investments for the month of June 2024.

13. PUBLIC HEARING
A. Introduction and Adoption by First Reading of Ordinance No. 750 repealing Ordinance No. 689, terminating Development Agreement No. 18-017C between the City of Cudahy and Nyce Guys, LLC (page 41)
Presented by the Senior Planner
Recommendation: City staff recommends that the City Council take the following action(s):

1. Open the public hearing and receive public comment and testimony; and

2. Make a determination that Nyce Guys, LLC (“Operator”) is not in compliance with the terms and conditions of Development Agreement (“DA”) No. 18-017C and find that the Operator is in default of contractual obligations set forth in the DA; and

3. Introduce and adopt by first reading Ordinance No. 750 repealing Ordinance No. 689 terminating DA No. 18-017C, between the City of Cudahy and Nyce Guys, LLC; and

4. Schedule the second reading of Ordinance No. 750 at the next regularly scheduled meeting on August 20, 2024; and

5. Determine that these actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15321 (Enforcement Actions by Regulatory Agencies).

B. Introduction and Adoption by First Reading of Ordinance No. 751 Repealing Ordinance No. 698, Terminating Development Agreement No. 18-001C between the City of Cudahy and VM Evergreen, LLC (page 603)
Presented by the Senior Planner

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
July 16, 2024, at 6:30 P.M.

Recommendation: City staff recommends that the City Council take the following action(s):

1. Open the public hearing and receive public comment and testimony; and

2. Make a determination that VM Evergreen, LLC (“Operator”) is not in compliance with the terms and conditions of Development Agreement (“DA”) No. 18-001C with the City and find that the Operator is in default of contractual obligations set forth in the DA; and

3. Introduce and adopt by first reading Ordinance No. 751 repealing Ordinance No. 698 terminating DA No. 18-001C, between the City of Cudahy and VM Evergreen, LLC; and Schedule the second reading of Ordinance No. 751 at the next regularly scheduled meeting on August 20, 2024; and

4. Determine that these actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15321 (Enforcement Actions by Regulatory Agencies).

C. Introduction and Adoption by First Reading of Ordinance No. 752 repealing Ordinance No. 676, terminating Development Agreement No. 18-019C between the City of Cudahy and Cuper Development, LLC (page 1795)
Presented by the Senior Planner
Recommendation: City staff recommends that the City Council take the following action(s):

1. Open the public hearing and receive public comments and testimony; and

2. Make a determination that Cuper Development, LLC (“Operator”) is not in compliance with the terms and conditions of Development Agreement (“DA”) No. 18- 019C and find that the Operator is in default of contractual obligations set forth in the DA; and

3. Introduce and adopt by first reading Ordinance No. 752 repealing Ordinance No. 676 terminating DA No. 18-019C, between the City of Cudahy and Cuper Development, LLC; and Schedule the second reading of Ordinance No. 752 at the next regularly scheduled meeting on August 20, 2024; and

4. Determine that these actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15321 (Enforcement Actions by Regulatory Agencies).

D. Introduction and Adoption by First Reading of Ordinance No. 753 repealing Ordinance No. 677, terminating Development Agreement No. 18-012C, between the City of Cudahy and 420 Club, LLC (page 2413)

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
July 16, 2024, at 6:30 P.M.

Presented by the Assistant Planner
Recommendation: City staff recommends that the City Council take the following action(s):

1. Open the public hearing and receive comments and testimony; and

2. Make a determination that 420 Club, LLC (“Operator”) is not in compliance with the terms and conditions of Development Agreement (“DA”) No. 18-012C and find that the Operator is in default of contractual obligations set forth in the DA; and

3. Introduce and adopt by first reading Ordinance No. 753 repealing Ordinance No. 677 terminating DA No. 18-012C, between the City of Cudahy (“City”) and 420 Club, LLC; and

4. Schedule the second reading of Ordinance No. 753 at the next regularly scheduled meeting on August 20, 2024; and

5. Determine that these actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15321 (Enforcement Actions by Regulatory Agencies).

E. Introduction and Adoption by First Reading of Ordinance No. 754 repealing Ordinance No. 701, terminating Development Agreement No. 18-014C between the City of Cudahy and Starcraft, LLC (page 2751)
Presented by the Assistant Planner
Recommendation: City staff recommends that the City Council take the following action(s):

1. Open the public hearing and receive public comment and testimony; and

2. Make a determination that Starcraft, LLC (“Operator”) is not in compliance with the terms and conditions of Development Agreement (“DA”) No. 18-014C and find that the Operator is in default of contractual obligations set forth in the DA; and

3. Introduce and adopt by first reading Ordinance No. 754 repealing Ordinance No. 701 terminating DA No. 18-014C between the City and Starcraft, LLC; and

4. Schedule the second reading of Ordinance No. 754 at the next regularly scheduled meeting on August 20, 2024; and

5. Determine that these actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15321 (Enforcement Actions by Regulatory Agencies).

F. Introduction and Adoption by First Reading of Ordinance No. 755 Repealing Ordinance No. 700,

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
July 16, 2024, at 6:30 P.M.

Terminating Development Agreement No. 18-015C between the City of Cudahy and Staple Room, LLC. (page 2903)
Presented by the Assistant Planner
Recommendation: City staff recommends that the City Council take the following action(s):

1. Open the public hearing and receive public comment and testimony; and

2. Make a determination that Staple Room, LLC (“Operator”) is not in compliance with the terms and conditions of Development Agreement (“DA”) No. 18-015C with the City and find that the Operator is in default of contractual obligations set forth in the DA; and

3. Introduce and adopt by first reading Ordinance No. 755 repealing Ordinance No. 700 terminating DA No. 18-015C between the City and Staple Room, LLC; and

4. Schedule the second reading of Ordinance No. 755 at the next regularly scheduled meeting on August 20, 2024; and

5. Determine that these actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15321 (Enforcement Actions by Regulatory Agencies).

G. Adoption by First Reading of Ordinance No. 741 Amending Cudahy Municipal Code Section

10.04.020 (Vehicle Weight Limits) by adding Patata Street to the list of streets where vehicles exceeding 6,000 pounds are prohibited. (page 3457)
Presented by the Community Development Director
Recommendation: Staff recommends that the City Council take the following actions:

1. Open the public hearing and receive comments; and

2. Adopt by first reading Ordinance No. 741 (Attachment A), an amendment to the Cudahy Municipal Code (“CMC”) Section

10.04.020 (Vehicle Weight Limits) by adding Patata Street to the list of streets where vehicles exceeding 6,000 pounds are prohibited; and

3. Schedule a second reading of Ordinance No. 741 at the next regularly scheduled City Council meeting on August 20, 2024; and

4. Find the Project exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061(b)(3).

H. Adoption of Resolution No. 24-28 Memorializing a Public Hearing and Levying the Annual Assessment to Maintain the City of Cudahy Street Lighting District and Direct Staff to Forward the

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
July 16, 2024, at 6:30 P.M.

Resolution to the Los Angeles County Assessor (page 3475) Presented by the Finance Director
Recommendation: The City Council is requested to:

1. Open the public hearing and receive comments; and

2. Adopt Resolution No. 24-28; memorializing a Public Hearing and Levying the Annual Assessment to maintain the City of Cudahy Street Lighting District for Fiscal Year (FY) 2024/25; and

3. Direct staff to forward Resolution No. 24-28 to the Los Angeles County Assessor before the August 10, 2024, deadline.

14. BUSINESS SESSION
A. Request for Authorization to Execute LS-1 Option E Agreement and all Relevant Forms, with Southern California Edison to Replace High Pressure Sodium Vapor Street Lights with LightEmitting Diode Street Lights District-Wide (page 3525) Presented by the Building Official
Recommendation: Staff recommends that the City Council of the City of Cudahy (the “City”) take the following actions:

1. Adopt Resolution No. 24-29 (Attachment A) to Execute an LS-1 Option E authorization with SCE to replace high pressure sodium vapor (HPSV) streetlights with light-emitting diode (LED) street lights; and

2. Authorize the City Manager to sign the agreement authorization and relevant form(s).

B. Consideration and Approval of Resolution No. 24-27, (1) Giving Notice of the Submission to the Qualified Voters for the City Of Cudahy of an Ordinance Relating to the Modification of Term Limits For the Council Members in the City of Cudahy; (2) Requesting The Board Of Supervisors of the County of Los Angeles Grant the City’s Request For Consolidation of Said General Municipal Election with the November 5, 2024 Statewide General Election Administered by the RegistrarRecorder/County Clerk of the County of Los Angeles; (3) Requesting the County Clerk Provide Specific Election Administration Services in Connection with the City’s General Municipal Election; and (4) Setting Rules and Deadlines For Arguments and Rebuttals For and Against the Ordinance (page 3537)

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
July 16, 2024, at 6:30 P.M.

Presented by the City Attorney
Recommendation: The City Council is requested to adopt proposed Resolution No. 24-27, giving notice of the submission to the Qualified Voters for the City of Cudahy of an Ordinance relating to the Modification of Term Limits For the Council Members in the City of Cudahy; (2) Requesting The Board of Supervisors of the County of Los Angeles Grant the City’s Request For Consolidation of Said General Municipal Election with the November 5, 2024 Statewide General Election Administered by the RegistrarRecorder/County Clerk of the County of Los Angeles; (3) Requesting the County Clerk Provide Specific Election Administration Services in Connection with the City’s General Municipal Election; and (4) Setting Rules and Deadlines For Arguments and Rebuttals For and Against the Ordinance.

C. Consideration and Discussion Regarding a letter opposing SB 549 (Newman) (page 3555) Presented by the City Clerk
Recommendation: The City Council is recommended to discuss the possible approval of a letter opposing SB 549 (Newman).

15. COUNCIL DISCUSSION – NONE

16. CLOSED SESSION
A. Closed Session Pursuant to Government Code Section 54957 – Public Employee Performance Evaluation
Title of Employee: City Manager

Closed Session Pursuant to Government Code Section 54957.6 – Conference with Labor Negotiator
City’s Designated Representative: Stephanie Arechiga, City Attorney Unrepresented Employee: City Manager

17. CLOSED SESSION ANNOUNCEMENT

18. ADJOURNMENT

City of Cudahy
City Council and Successor Agency
Regular Meeting Agenda
July 16, 2024, at 6:30 P.M.

I, Richard Iglesias, hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the City’s Website, City Hall, Clara Park, and Lugo Park not less than 72 hours prior to the meeting. A copy of said Agenda is on file in the City Clerk’sOffice.

Dated this 11th day of July 2024
Richard Iglesias
City Clerk

“Serving the People” "Sirviendo A La Comunidad"
Staff Report
07/16/2024 Page 1 of 2

STAFF REPORT
Date: July 16, 2024
To: Honorable Mayor/Chair and City Council/Agency Members From: Alfonso Noyola, City Manager/Executive Director
By: Richard Iglesias, City Clerk
Subject: Consideration to Review and Approve the Draft Minutes of July 2, 2024, for the Regular Meeting of the City Council and the Joint Meeting of the City of Cudahy as Successor Agency and Housing Successor Agency to the Cudahy Development Commission

RECOMMENDATION
The City Council is requested to review and approve the City Council / Successor Agency Draft Minutes for July 2, 2024.

BACKGROUND / ANALYSIS
On December 12, 2016, the City Council of the City of Cudahy adopted Resolution No. 16-38, approving the use of summary action minutes, meant to allow the City Clerk's Office to write the minutes in brief, assuring a record of Council's actions, due to having a recording of the full Council Meeting on the City’s website.

Historically
The Municipal Clerk is one of the oldest professions in government, dating back to 1272 A.D., originating in England. The record keeper then was called Remembrancer, an English official whose job was to remind the Lord Treasurer and Barons of Court, of business pending.

Years later, in the 1600s, when early colonists came to America, the office of the Clerk was one of the first offices to be established. Over the years, the City Clerk’s office has become the core for local government, and the liaison to the residents of the Community. The Municipal Clerk (City Clerk) is the record keeper of a City’s recorded history.

Item Number
12A

“Serving the People” "Sirviendo A La Comunidad"
Staff Report
07/16/2024 Page 2 of 2
William Bennett Munro, a Canadian historian, and political scientist, who taught at Harvard University and the California Institute of Technology, stated in one of his first textbooks written: “No other office in municipal service has so many contacts. It serves the Mayor, the City Council, the City Manager (when there is one), and all administrative departments, without exception. All of them call upon it, almost daily, for some service or information. Its work is not spectacular, but it demands versatility, alertness, accuracy, and no end of patience.

The public does not realize how many loose ends of city administration this office pulls together.”
Moving forward to the present time, the City Clerk’s office today is generally responsible for keeping a record of City Council meetings; agreements; recordings of official documents; legal advertisements; municipal elections; commissions and committees current files; claims against the city; and other legal or official documents.

City Clerks are required to keep record of the proceedings (minutes) of Council meetings (Government Code Sections 36814 and 40801). Minutes are the official record of a meeting which provides a history of the Council’s decisions and actions.

CONCLUSION
The City Council is requested to approve the attached City Council / Agency Draft Minutes of the proceedings of July 2, 2024.

STRATEGIC PLAN CORRELATION
No correlation to the strategic plan.

FINANCIAL IMPACT
No Financial Impact.

ATTACHMENT
A. July 2, 2024, Draft Minutes
B. Resolution No. 16-38, approving the City Clerk’s use of Summary Action Minutes as the Official Record of the City Council proceedings.

City Council/Successor Agency Minutes of 7/2/2024 Page 1 of 9

MINUTES
CUDAHY CITY COUNCIL REGULAR MEETING and
CITY OF CUDAHY AS SUCCESSOR AGENCY and

HOUSING SUCCESSOR AGENCY TO THE CUDAHY

DEVELOPMENT COMMISSION JOINT MEETING
July 2, 2024, 6:30 P.M.

1. CALL TO ORDER
Mayor / Chair J. Gonzalez called the meeting to order at 6:43 p.m.

2. ROLL CALL
PRESENT: Council / Agency Member Martin Fuentes
Council / Agency Member Daisy Lomelí (arrived at 6:53 p.m.) Vice Mayor / Vice Chair Elizabeth Alcantar
Mayor / Chair Jose R. Gonzalez
ABSENT: Council / Agency Member Cynthia Gonzalez
ALSO PRESENT: City Attorney, Stephanie Arechiga, Assistant City Attorney, Paloma McEvoy, Assistant City Clerk, Estefania Zamora, Community Development Director, Juan Arauz, Finance Director, Joshua Calhoun, Community Services Director, Brenda Rodriguez, Building Official, Raul Diaz, Human Resources Manager, Hector Murua, and Administrative Analyst, Lisette Gonzalez.

3. APPROVAL OF AGENDA
Motion: Vice Mayor Alcantar motioned to approve agenda as is, seconded by Council Member Fuentes. Motion passed 3-0-2 by the following roll call vote:

AYES: Fuentes, Alcantar, and J. Gonzalez
NOES: None
ABSENT: C. Gonzalez, and Lomelí
ABSTAIN: None

4. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Council Member Fuentes.

5. LAND ACKNOWLEDGEMENT
The Land Acknowledgment was led by Council Member Alcantar.

Attachment A Page 13 of 3559
City Council/Successor Agency Minutes of 7/2/2024 Page 2 of 9 We would like to acknowledge that the land we inhabit today was once known as Tovangaar, the home of the Gabrieleño-Tongva people. We show our respects to the Gabrieleño-Tongva people, as well as all Indigenous people, past, present, and future, and honor their labor as original caretakers of this land. We commit to uplifting the Gabrieleño-Tongva people, invite you to acknowledge the history, and join us in caring for this land.

6. PRESENTATIONS
A. Proclamation to Transtech Engineers, Inc 35-year Anniversary B. Proclamation declaring July 7th as Cudahy Rent Stabilization Day At 6:52 p.m., Mayor J. Gonzalez called for a recess.

At 6:56 p.m. Mayor J. Gonzalez reconvened the meeting.

7. PUBLIC COMMENTS
Leticia Vasquez shared information about Central Basin Municipal Water District, mentioned they recently redistricted and now represent the City of Cudahy.

Leonel Sandoval commented on the parking pass of $150 a year is too expensive and other cities charging less, asked what the procedure is to lower the amount.

Edwin Gonzalez commented on the implementation of rent control, and shared his concerns on City of Bell and shared his disappointed for endorsing Ali Saleh.

8. CITY COUNCIL COMMENTS / REQUESTS FOR AGENDA ITEMS
Council Member Fuentes congratulated and thanked Transtech for all their work, shared his participation at the Chinese Elected Officials installation dinner, NALEO, Coffee with a Cop, SELA pride and looking forward to our Sister City.

Council Member Lomelí apologize for being late, thanked Transtech for their collaboration, shared her attendance at NALEO, Young Elected Officials national convening, pride festival and thanked staff for all the events occurring during the summer for the youth, also announced Cudahy Youth Foundation has a scholarship deadline July 15th.

Vice Mayor Alcantar shared her attendance at NALEO, participated at YEO network, mentioned coffee with a cop not being well attended and suggested having hosts, thanked public comment speaker for sharing his concerns and addressed the cost of overnight parking.

City Council/Successor Agency Minutes of 7/2/2024 Page 3 of 9 Mayor J. Gonzalez announced 3rd of July event will also include Sister City program with San Miguel el Alto, Jalisco, shared his attendance at NALEO, gave kudos to the team, shared the idea of giving a stipend to coordinators hosting Coffee with a Sheriff.

9. CITY MANAGER REPORT (information only)

10. REPORTS REGARDING AD HOC, ADVISORY, STANDING OR OTHER COMMITTEE MEETINGS – NONE

11. WAIVER OF FULL READING OF RESOLUTIONS AND ORDINANCES Motion: Vice Mayor Alcantar motioned to waive full reading of resolutions and ordinances, seconded by Council Member Lomelí. Motion passed 4-0-1 by the following roll call vote:

AYES: Fuentes, Lomelí, Alcantar, and J. Gonzalez
NOES: None
ABSENT: C. Gonzalez
ABSTAIN: None

12. CONSENT CALENDAR
A. Consideration to Review and Approve the Draft Minutes of June 4, 2024, for the Regular Meeting and the Draft Minutes of June 11, 2024, for the Special Meeting of the City Council and the Joint Meeting of the City of Cudahy as Successor Agency and Housing Successor Agency to the Cudahy Development Commission Presented by the City Clerk
Recommendation: The City Council is requested to review and approve the City Council / Successor Agency Draft Minutes for June 4, 2024, and June 11, 2024.

B. Approval of the Local Agency Investment Fund (LAIF) for the Month of May 2024 Presented by the Finance Director
Recommendation: The City Council is requested to approve the Local Agency Investment Fund (LAIF) Report for the month of May 2024 in the amount of $12,864,594.90.

City Council/Successor Agency Minutes of 7/2/2024 Page 4 of 9 C. Approval of the City Demands and Payroll Including Statement of Investment for the Month of May 2024
Presented by the Finance Director
Recommendation: The Council is requested to approve the Demands and Payroll in the amount of $1,090,538.63 including the Statement of Investments for the month of May 2024.

H. Adoption of Resolution 24-23 Approving the Local Streets and Road Funding Program Project List for Fiscal Year (FY) 2024-25 to comply with the Road Repair and Accountability Act of 2017 (SB1 BEALL)
Presented by the Interim Public Works Director
Recommendation: The City Council is requested to adopt Resolution 24-23, approving the Local Streets and Road Funding Program Project List for Fiscal Year (FY) 2024-25 to comply with the Road Repair and Accountability Act of 2017 (SB1 Beall).

I. Adoption of Resolution No. 24-24 Approving the Street Lighting Assessment Report for Fiscal Year (FY) 2024-25 and Declaring the Intention of the City Council to Hold a Public Hearing and Levy the Annual Assessment to Maintain the City of Cudahy Street Lighting District
Presented by the Finance Director
Recommendation: The City Council is requested to: Adopt Resolution No. 24-24, approving the Street Lighting Assessment Report for Fiscal Year (FY) 2024-25; and Declare the intention of the City Council to hold a Public Hearing and levy the annual assessment to maintain the City of Cudahy Street Lighting District and direct staff to publish the Resolution and Notice of Public Hearing for the July 16, 2024, City Council meeting.

Motion: Council Member Fuentes motioned to approve the Consent Calendar with the exception of 12D, 12E, 12F, and 12G, seconded by Vice Mayor Alcantar. Motion passed 4-0-1 by the following roll call vote:

AYES: Fuentes, Lomelí, Alcantar, and J. Gonzalez
NOES: None
ABSENT: C. Gonzalez
ABSTAIN: None

City Council/Successor Agency Minutes of 7/2/2024 Page 5 of 9 D. Adoption by second reading of Ordinance No. 746 Repealing Ordinance No. 681 terminating Development Agreement No. 18-021C, between the City of Cudahy and Davina, LLC
Presented by the Community Development Director
Recommendation: City staff recommends that the City Council take the following action(s): Adopt by second reading Ordinance No. 746 repealing Ordinance No. 681 terminating DA No. 18-021C, between the City of Cudahy and Davina, LLC.

Motion: Council Member Lomelí motioned to adopt by second reading Ordinance No. 746 repealing Ordinance No. 681 terminating DA No. 18-021C, between the City of Cudahy and Davina, LLC, seconded by Vice Mayor Alcantar. Motion passed 3-0-1 by the following roll call vote:

AYES: Fuentes, Lomelí, and Alcantar
NOES: None
ABSENT: C. Gonzalez
ABSTAIN: J. Gonzalez
E. Adoption by second reading of Ordinance No. 747 Repealing Ordinance No. 678 terminating Development Agreement No. 18-016C, between the City of Cudahy and Genius Distribution, LLC
Presented by the Community Development Director
Recommendation: City staff recommends that the City Council take the following action(s): Adopt by second reading Ordinance No. 747 repealing Ordinance No. 678 terminating DA No. 18-016C, between the City of Cudahy and Genius Distribution, LLC.

Motion: Council Member Lomelí motioned to adopt second reading Ordinance No. 747 repealing Ordinance No. 678 terminating DA No. 18-016C, between the City of Cudahy and Genius Distribution, LLC, seconded by Vice Mayor Alcantar. Motion passed 3-0-1 by the following roll call vote:

AYES: Fuentes, Lomelí, and Alcantar
NOES: None
ABSENT: C. Gonzalez
ABSTAIN: J. Gonzalez

City Council/Successor Agency Minutes of 7/2/2024 Page 6 of 9 F. Adoption by second reading of Ordinance No. 748 repealing Ordinance No. 682 terminating Development Agreement No. 18-022C, between the City of Cudahy and Herbal Dragon, LLC
Presented by the Community Development Director
Recommendation: City staff recommends that the City Council take the following action(s): Adopt by second reading, Ordinance No. 748 repealing Ordinance No. 682 terminating DA No. 18-022C, between the City of Cudahy (“City”) and Herbal Dragon, LLC (“Operator”).

Motion: Vice Mayor Alcantar motioned to adopt second reading, Ordinance No. 748 repealing Ordinance No. 682 terminating DA No. 18-022C, between the City of Cudahy (“City”) and Herbal Dragon, LLC (“Operator”), seconded by Council Member Lomelí.

Motion passed 3-0-1 by the following roll call vote:

AYES: Fuentes, Lomelí, and Alcantar
NOES: None
ABSENT: C. Gonzalez
ABSTAIN: J. Gonzalez
G. Adoption by second reading of Ordinance No. 749 repealing Ordinance No. 680, terminating Development Agreement No. 18-020C, between the City of Cudahy and Daniel and Goliath, LLC
Presented by the Community Development Director
Recommendation: City staff recommends that the City Council take the following action(s): Adopt by second reading Ordinance No. 749 repealing Ordinance No. 680 terminating DA No. 18-020C, between the City of Cudahy and Daniel and Goliath, LLC Motion: Council Member Lomelí motioned to adopt second reading Ordinance No. 747 repealing Ordinance No. 678 terminating DA No. 18-016C, between the City of Cudahy and Genius Distribution, LLC, seconded by Vice Mayor Alcantar. Motion passed 3-0-1 by the following roll call vote:

AYES: Fuentes, Lomelí, and Alcantar
NOES: None
ABSENT: C. Gonzalez
ABSTAIN: J. Gonzalez

City Council/Successor Agency Minutes of 7/2/2024 Page 7 of 9

13. PUBLIC HEARING
A. Public Hearing Regarding Increased Fees for the Handling of Solid Waste and Recyclable Materials for Residential and Commercial Properties within the City and Adoption of proposed Resolution No. 24-25 levying fees for the handling of solid waste and recyclable materials
Presented by the Finance Director
Recommendation: The City Council is requested to: Receive and file the request from Republic Services to increase fees for the handling of solid waste and recyclable materials against residential properties by 5.00% or $1.23 per dwelling unit per month from $24.69 to $25.92 per month and commercial/industrial customers within the City by

5.83% to be applied to commercial and roll-off service rates; and Adopt proposed Resolution No. 24-25 levying fees for handling solid waste and recyclable materials, also known as rubbish collection charge, against residential properties within the City.

At 7:28 p.m. Mayor J. Gonzalez opened public comment, there being none, closed public hearing.

Motion: Council Member Fuentes motioned to receive and file the request from Republic Services to increase fees for the handling of solid waste and recyclable materials against residential properties by 5.00% or $1.23 per dwelling unit per month from $24.69 to $25.92 per month and commercial/industrial customers within the City by 5.83% to be applied to commercial and roll-off service rates; and Adopt proposed Resolution No. 24- 25 levying fees for handling solid waste and recyclable materials, also known as rubbish collection charge, against residential properties within the City, seconded by Council Member Lomelí. Motion passed 4-0-1 by the following roll call vote:

AYES: Fuentes, Lomelí, Alcantar, and J. Gonzalez
NOES: None
ABSENT: C. Gonzalez
ABSTAIN: None

14. BUSINESS SESSION
A. Adoption of a Proposed Resolution No. 24-26 Augmenting the City of Cudahy Fiscal Year (FY) 2023-2024 City Budget to Fund Contractually Obligated Lump Sum Compensation to City Employees
Presented by the Finance Director
Recommendation: The City Council is requested to adopt proposed Resolution No. 24- 26 augmenting the City of Cudahy Fiscal Year (FY) 2023-2024 City Budget to Fund Contractually Obligated Lump Sum Compensation to City Employees.

City Council/Successor Agency Minutes of 7/2/2024 Page 8 of 9 Motion: Vice Mayor Alcantar motioned to adopt proposed Resolution No. 24-26 augmenting the City of Cudahy Fiscal Year (FY) 2023-2024 City Budget to Fund Contractually Obligated Lump Sum Compensation to City Employees, seconded by Council Member Lomelí. Motion passed 4-0-1 by the following roll call vote:

AYES: Fuentes, Lomelí, Alcantar, and J. Gonzalez
NOES: None
ABSENT: C. Gonzalez
ABSTAIN: None
B. Consideration and Approval of Resolution No. 24-27, (1) Giving Notice of the Submission to the Qualified Voters for the City Of Cudahy of an Ordinance Relating to the Modification of Term Limits For the Council Members in the City of Cudahy; (2) Requesting The Board Of Supervisors of the County of Los Angeles Grant the City’s Request For Consolidation of Said General Municipal Election with the November 5, 2024 Statewide General Election Administered by the Registrar-Recorder/County Clerk of the County of Los Angeles; (3) Requesting the County Clerk Provide Specific Election Administration Services in Connection with the City’s General Municipal Election; and (4) Setting Rules and Deadlines For Arguments and Rebuttals For and Against the Ordinance
Presented by the City Attorney
Recommendation: The City Council is requested to adopt proposed Resolution No. 24- 27, giving notice of the submission to the Qualified Voters for the City of Cudahy of an Ordinance relating to the Modification of Term Limits For the Council Members in the City of Cudahy; (2) Requesting The Board of Supervisors of the County of Los Angeles Grant the City’s Request For Consolidation of Said General Municipal Election with the November 5, 2024 Statewide General Election Administered by the RegistrarRecorder/County Clerk of the County of Los Angeles; (3) Requesting the County Clerk Provide Specific Election Administration Services in Connection with the City’s General Municipal Election; and (4) Setting Rules and Deadlines For Arguments and Rebuttals For and Against the Ordinance.

Motion: Vice Mayor Alcantar motioned to table item 14B to the next meeting, seconded by Council Member Lomelí. Motion passed 4-0-1 by the following roll call vote:

AYES: Fuentes, Lomelí, Alcantar, and J. Gonzalez,
NOES: None
ABSENT: C. Gonzalez
ABSTAIN: None

15. COUNCIL DISCUSSION – NONE
At 7:33 p.m., City Attorney, Stephanie Arechiga recessed to closed session.

City Council/Successor Agency Minutes of 7/2/2024 Page 9 of 9

16. CLOSED SESSION
A. Conference with Legal Counsel Anticipated Litigation - Significant Exposure to Litigation Pursuant to Government Code Section 54956.9 subdivision (d)(4) (One Matter)
At 7:43 p.m., Mayor J. Gonzalez, reconvene to open session.

17. CLOSED SESSION ANNOUNCEMENT
City Attorney Stephanie Arechiga announced all four council members were present and no further reportable action at this time.

18. ADJOURNMENT
The City Council / Agency meeting adjourned at 7:47 p.m.

Jose R. Gonzalez
Mayor
ATTEST:

Richard Iglesias
City Clerk

Attachment
B

Blank Page

“Serving The People” "Sirviendo A La Comunidad"
Staff Report
07/16/2024 Page 1 of 2

STAFF REPORT
Date: July 16, 2024
To: Honorable Mayor/Chair and City Council/Agency Members From: Alfonso Noyola, City Manager/Executive Director
By: Joshua Calhoun, Finance Director
Subject: Approval of the Local Agency Investment Fund (LAIF) for the Month of June 2024

RECOMMENDATION
The City Council is requested to approve the Local Agency Investment Fund (LAIF) Report for the month of June 2024 in the amount of $12,864,594.90.

BACKGROUND

1. In 1955, the Pooled Money Investment Account (PMIA) started. LAIF became part of the PMIA. The oversight is provided by the Pooled Money Investment Board (PMIB) and an inhouse Investment Committee. The PMIB members consist of the State Treasurer, Director of Finance, and State Controller.

2. In 1977, LAIF was created as a voluntary program by Section 16429.1 et seq. of the California Government Code. The program was intended to be used as an investment alternative for California's local governments and special districts. The LAIF continues today under State Treasurer, Fiona Ma's administration.

3. On June 1, 2024, the balance in LAIF was $12,864,594.90 (See Attachment).

4. On June 30, 2024, the balance in LAIF was $12,864,594.90 (See Attachment).

ANALYSIS
The voluntary program offers local agencies the opportunity to participate in a major portfolio, which invests hundreds of millions of dollars, using the investment expertise of the State Item Number
12B

“Serving The People” "Sirviendo A La Comunidad"
Staff Report
07/16/2024 Page 2 of 2

Treasurer’s Office investment staff at no additional cost to the taxpayer.

All securities are purchased under the authority of Government Code Section 16430 and 16480.4. The State Treasurer's Office takes delivery of all securities purchased on a delivery versus payment basis using a third-party custodian.

Cudahy Municipal Code Section 3.04.080 indicates, "Except as otherwise provided, no warrant shall be drawn or evidence of indebtedness issued unless there shall be at the time sufficient money in the treasury legally applicable to the payment of the same."

CONCLUSION
Once the City Council approves the current LAIF, this balance may be relied upon when determining if the City has sufficient funds available to pay demands and payroll as required by Cudahy Municipal Code Section 3.04.080.

STRATEGIC PLAN CORRELATION
Strategy #2. Provide regular updates to the City Council and community about the city’s finances.

FINANCIAL IMPACT
None

ATTACHMENT
A. Local Agency Investment Fund (LAIF) Balance

LOCAL AGENCY INVESTMENT FUND
General Account - City #98-19-225
Beginning Balance as of June 01, 2024 $12,864,994.90
LAIF Interest earned 0
Transfer from City operating account 0
Transfer to City operating account 0
Ending Balance as of June 30, 2024 $12,864,594.90
Attachment A Page 27 of 3559
Blank Page

“Serving The People” "Sirviendo A La Comunidad"
Staff Report
07/16/2024 Page 1 of 2

STAFF REPORT
Date: July 16, 2024
To: Honorable Mayor/Chair and City Council/Agency Members From: Alfonso Noyola, City Manager/Executive Director
By: Joshua Calhoun, Finance Director
Subject: Approval of the City Demands and Payroll Including Statement of Investment for the Month of June 2024

RECOMMENDATION
The City Council is requested to approve the Demands and Payroll in the amount of $1,906,635.54 including the Statement of Investments for the month of June 2024.

BACKGROUND

1. On December 13, 1993, Ordinance 476 was adopted and codified as Cudahy Municipal Code Section 3.04.080 indicating, "Except as otherwise provided, no warrant shall be drawn, or evidence of indebtedness issued unless there shall be at the time sufficient money in the treasury legally applicable to the payment of the same."

2. During the month, the Finance Department have completed the following demands and payroll:

A/P Demands $1,457,110.10
Payroll $449,425.44
Total: $1,906,535.54
Attachment A
Attachment B
Item Number
12C

“Serving The People” "Sirviendo A La Comunidad"
Staff Report
07/16/2024 Page 2 of 2

ANALYSIS
The Check Register Report (Attachment A), Payroll Warrants including payroll taxes and insurance premiums (Attachment B), Statement of Investment (Attachment C) indicate that the cash and investment balance was sufficient for disbursements for the month, a summary of cash received and disbursed by month during Fiscal Year (FY) 2023-24 (Attachment D), and a summary of cash received and disbursed by month during FY 2022-23 (Attachment E).

Cudahy Municipal Code Section 3.04.070 indicates, "Budgeted demands paid by warrant prior to audit by the council shall be presented to the council for ratification and approval..."

CONCLUSION
The Finance Director certifies the accuracy and availability of funds for payment. A Demand/Warrant Register has been submitted to the City Council for approval in accordance with Cudahy Municipal Code Section 3.04.070.

STRATEGIC PLAN CORRELATION
Goal (Financial Stability and Transparency)
• Provide regular updates to the City Council and Community about the City’s finances.

FINANCIAL IMPACT
The Statement of Investments Report (Attachment C) indicates that there are sufficient funds within the City’s holdings to meet the City’s cash flow requirements.

ATTACHMENTS
A. Accounts Payable Check Register Report.

B. Payroll Warrants including payroll taxes and insurance premiums.

C. Statement of Investments
D. Summary of Cash Receipt / Disbursement by Month FY 2023-24 E. Summary of Cash Receipt / Disbursement by Month FY 2022-23 F. Credit Card Payment Detail

7/1/2024 9:27:29 AM Page 1 of 3
My Check Report
City of Cudahy, CA By Check Number
Date Range: 06/01/2024 - 06/30/2024
Vendor Number Vendor Name Payment Date Discount Amount Payment Type Payment Amount Number Bank Code: WF Checking-WF Checking
2378-3 8330 ATLANTIC AVE INC 06/05/2024 Regular 0.00 1,311.99 55642 5147 ABEL GLASS & SCREEN INC. 06/05/2024 Regular 0.00 576.14 55643 1778 ALL CITY MANAGEMENT INC 06/05/2024 Regular 0.00 14,821.45 55644 10680 AMERICAN PRIDE BUILDERS 06/05/2024 Regular 0.00 17,900.00 55645 10990 Ashley Valdovinos 06/05/2024 Regular 0.00 750.00 55646 10133 AVANT-GARDE, INC. 06/05/2024 Regular 0.00 1,501.25 55647 10991 Beacon Athletics, LLC 06/05/2024 Regular 0.00 3,526.90 55648 10906 City Fabrick 06/05/2024 Regular 0.00 15,242.51 55649 0136 CITY OF SOUTH GATE 06/05/2024 Regular 0.00 75.00 55650 10711 CLEARNETWORK, INC. 06/05/2024 Regular 0.00 395.84 55651 10872 CSLM Construction, Inc. 06/05/2024 Regular 0.00 1,290.00 55652 5552 CUDAHY AUTO CENTER INC 06/05/2024 Regular 0.00 123.39 55653 2378-1 CUDAHY FUEL STOP 06/05/2024 Regular 0.00 49.32 55654 10723 DIONICIO SALAZAR 06/05/2024 Regular 0.00 850.00 55655 10616 EDISON FIRE EXTINGUISHER CO IN DBA: EDISON 06/05/2024 Regular 0.00 349.50 55656 10485 ENTERPRISE FM TRUST 06/05/2024 Regular 0.00 7,164.70 55657 6086 EWING INC 06/05/2024 Regular 0.00 319.91 55658
6087 FIRST AMERICAN DATA TREE 06/05/2024 Regular 0.00 99.00 55659 10097 FUENTES MARTIN 06/05/2024 Regular 0.00 162.00 55660 10588 GLENN WARD CALSADA 06/05/2024 Regular 0.00 12,375.00 55661 10956 Johncito Peraza-Romero 06/05/2024 Regular 0.00 113.50 55662 10989 Jose Ponce 06/05/2024 Regular 0.00 1,600.00 55663 0197 LA COUNTY SHERIFF'S DEPARTMENT 06/05/2024 Regular 0.00 761,285.40 55664 10868 Language Network, Inc. 06/05/2024 Regular 0.00 2,360.00 55665 10598 LEAF 06/05/2024 Regular 0.00 422.70 55666
10920 LHH Recruitment Solutions 06/05/2024 Regular 0.00 374.40 55667 10618 LOMELI, DAISY 06/05/2024 Regular 0.00 168.17 55668 10655 LUIS AGUILAR 06/05/2024 Regular 0.00 375.00 55669 10947 Maria Rios 06/05/2024 Regular 0.00 200.00 55670
10992 Mobile-Score, LLC. 06/05/2024 Regular 0.00 2,097.00 55671 7014 NATIONWIDE ENVIRONMENTAL SERVICES INC 06/05/2024 Regular 0.00 9,985.52 55672 10919 Polytechnique Environmental, Inc. 06/05/2024 Regular 0.00 41,608.98 55673 2802 SAM'S CLUB 06/05/2024 Regular 0.00 4,911.57 55674
5617 SHEILA'S GIFT & FLOWERS 06/05/2024 Regular 0.00 837.31 55675 9991 TRANSTECH ENGINEERING, INC. 06/05/2024 Regular 0.00 29,778.50 55676 2859 UNDERGROUND SERVICE ALERT-SC SOUTHERN 06/05/2024 Regular 0.00 48.50 55677 9951 WILLDAN 06/05/2024 Regular 0.00 27,966.73 55678
10805 World Trip, Inc. 06/05/2024 Regular 0.00 1,925.00 55679 10735 YUNEX, LLC. 06/05/2024 Regular 0.00 18,677.36 55680 **Void** 06/05/2024 Regular 0.00 0.00 55681
2378-3 8330 ATLANTIC AVE INC 06/18/2024 Regular 0.00 1,984.49 55682 10680 AMERICAN PRIDE BUILDERS 06/18/2024 Regular 0.00 5,850.00 55683 10990 Ashley Valdovinos 06/18/2024 Regular 0.00 2,100.00 55684 0057-4 AT & T 06/18/2024 Regular 0.00 371.34 55685
9966 AT & T LONG DISTANCE SERVICE 06/18/2024 Regular 0.00 46.23 55686 10998 Barnum Stage Rental, LLC 06/18/2024 Regular 0.00 2,500.00 55687 10777 Bureau Veritas Technical Assessments LLC. 06/18/2024 Regular 0.00 48,548.00 55688 7019 BUSINESS CARD 06/18/2024 Regular 0.00 71.80 55689
10490 CHARTER COMMUNICATIONS 06/18/2024 Regular 0.00 975.00 55690 10502 CINDY'S JUMPERS, LLC 06/18/2024 Regular 0.00 5,823.24 55691 1206 COUNTY OF LOS ANGELES IND WAST DEPT OF P 06/18/2024 Regular 0.00 679.95 55692 5552 CUDAHY AUTO CENTER INC 06/18/2024 Regular 0.00 124.16 55693 10997 Dasyi Lopez 06/18/2024 Regular 0.00 100.00 55694
10072 DEPARTMENT OF TOXIC SUBSTANCES 06/18/2024 Regular 0.00 3,537.86 55695 Attachment A Page 31 of 3559
My Check Report Date Range: 06/01/2024 - 06/30/2024
7/1/2024 9:27:29 AM Page 2 of 3
Vendor Number Vendor Name Payment Date Discount Amount Payment Type Payment Amount Number 10723 DIONICIO SALAZAR 06/18/2024 Regular 0.00 400.00 55696 10744 EDDIE C. TORRES JR. 06/18/2024 Regular 0.00 4,050.00 55697 10485 ENTERPRISE FM TRUST 06/18/2024 Regular 0.00 6,865.99 55698 6086 EWING INC 06/18/2024 Regular 0.00 170.87 55699
10617 GONZALEZ JOSE R 06/18/2024 Regular 0.00 168.17 55700 2139 HINDERLITER DELLAMAS & ASST 06/18/2024 Regular 0.00 1,808.87 55701 10996 Jorge Sosa 06/18/2024 Regular 0.00 200.00 55702
11000 Karol Bala 06/18/2024 Regular 0.00 6,000.00 55703 10893 Katie Helen Hume 06/18/2024 Regular 0.00 1,350.00 55704 10868 Language Network, Inc. 06/18/2024 Regular 0.00 700.00 55705 10924 Lisette Gonzalez 06/18/2024 Regular 0.00 1,000.00 55706 10904 Los Angeles County Public Works 06/18/2024 Regular 0.00 2,460.20 55707 10999 Los Angeles Neighbrohood Land Trust 06/18/2024 Regular 0.00 193,406.58 55708 10655 LUIS AGUILAR 06/18/2024 Regular 0.00 398.00 55709 10995 Maria Claudia Pizano 06/18/2024 Regular 0.00 100.00 55710 10567 MCA DIRECT 06/18/2024 Regular 0.00 690.41 55711
10900 National Recreation & Park Association 06/18/2024 Regular 0.00 180.00 55712 10201-1 OLIVAREZ MADRUGA LAW ORGANIZATION, LLP 06/18/2024 Regular 0.00 1,471.50 55713 0095 PETTY CASH 06/18/2024 Regular 0.00 233.17 55714
10824 PlaceWorks, Inc. 06/18/2024 Regular 0.00 26,073.20 55715 10994 Property Health, Inc. 06/18/2024 Regular 0.00 1,940.00 55716 10717 PUBLIC AGENCY RETIREMENT SERV 06/18/2024 Regular 0.00 10,000.00 55717 10750 RUGAMAS CREATIVE SOLUTIONS 06/18/2024 Regular 0.00 371.88 55718 10497 SOUTHEAST RIO VISTA YMCA 06/18/2024 Regular 0.00 12,600.00 55719 10483-1 SOUTHERN CALIFORNIA NEWS GROUP 06/18/2024 Regular 0.00 6,175.05 55720 10827 Teslarian, Inc. 06/18/2024 Regular 0.00 3,200.00 55721 10662 UNEXPECTED ATTRACTIONS 06/18/2024 Regular 0.00 2,800.00 55722 9951 WILLDAN 06/18/2024 Regular 0.00 29,487.05 55723
10603 ADVANCED IMAGING SOLUTIONS 06/05/2024 Bank Draft 0.00 95.57 DFT0000493 10603 ADVANCED IMAGING SOLUTIONS 06/05/2024 Bank Draft 0.00 494.39 DFT0000494 10640 AMAZON CAPITAL SERVICES, INC. 06/05/2024 Bank Draft 0.00 3,932.63 DFT0000495 10490 CHARTER COMMUNICATIONS 06/05/2024 Bank Draft 0.00 229.98 DFT0000496 0126-1 GOLDEN STATE WATER COMPANY 06/05/2024 Bank Draft 0.00 1,488.65 DFT0000497 10053 HAULAWAY STORAGE CONTAINERS 06/05/2024 Bank Draft 0.00 89.04 DFT0000498 2724 HOME DEPOT CREDIT SERVICES 06/05/2024 Bank Draft 0.00 9,155.65 DFT0000499 10081-2 QUADIENT FINANCE USA, INC. 06/05/2024 Bank Draft 0.00 751.00 DFT0000500 0070 SOUTHERN CALIFORNIA EDISON 06/05/2024 Bank Draft 0.00 758.19 DFT0000501 10643 STATE COMPENSATION INS FUND 06/05/2024 Bank Draft 0.00 28,074.94 DFT0000502 10643 STATE COMPENSATION INS FUND 06/05/2024 Bank Draft 0.00 -28,074.94 DFT0000502 10490 CHARTER COMMUNICATIONS 06/18/2024 Bank Draft 0.00 229.98 DFT0000511 0071-1 SO CAL GAS 06/18/2024 Bank Draft 0.00 62.63 DFT0000512 0071-1 SO CAL GAS 06/18/2024 Bank Draft 0.00 47.92 DFT0000513 0071-1 SO CAL GAS 06/18/2024 Bank Draft 0.00 56.49 DFT0000514 0070 SOUTHERN CALIFORNIA EDISON 06/18/2024 Bank Draft 0.00 4,553.23 DFT0000515 0070 SOUTHERN CALIFORNIA EDISON 06/18/2024 Bank Draft 0.00 16.11 DFT0000516 0070 SOUTHERN CALIFORNIA EDISON 06/18/2024 Bank Draft 0.00 18,041.59 DFT0000517 10729 WELLSONE COMMERCIAL CARD 06/18/2024 Bank Draft 0.00 46,474.50 DFT0000518 Regular Checks
Manual Checks
Voided Checks
Discount
Payment
Payment Type Count
Bank Code WF Checking Summary
Bank Drafts
EFT's
81 0
1 19
0 0.00

0.00 0.00

0.00 0.00
101 0.00
Payment
1,370,632.55

0.00 0.00
86,477.55

0.00 1,457,110.10
Payable
Count
133
0 0
18 0
151

My Check Report Date Range: 06/01/2024 - 06/30/2024
7/1/2024 9:27:29 AM Page 3 of 3
All Bank Codes Check Summary
Payment Type Discount
Payment
Count Payment
Payable
Count
Regular Checks
Manual Checks
Voided Checks
Bank Drafts
EFT's
81 0
1 19
0 0.00

0.00 0.00

0.00 0.00
101 0.00
1,370,632.55

0.00 0.00
86,477.55

0.00 1,457,110.10
133
0 0
18 0
151
Fund Name Period Amount
Fund Summary
998 Pooled Cash 6/2024 1,457,110.10
1,457,110.10

06/17/24 06/30/24 Total
(a) Direct Deposits 127,832.47 130,848.37 258,680.84
(b) ICMA & Union Dues 2,655.00 2,655.00 5,310.00
(c) CalPERS Ret & 457 Plan 23,360.74 23,220.97 46,581.71 (d) Payroll taxes 27,408.34 28,119.52 55,527.86
(e) CalPERS Medical 74,759.99 74,759.99
(f) Medical 3,591.94 4,973.10 8,565.04
Total Amount 255,876.77 189,956.73 449,425.44
(a) Employees / Council Members / Commissioners
(b) ICMA & Union Dues
(c) CalPERS Retirement & 457 Plan
(d) Federal / State payroll taxes and unemployment
(e) CalPERS Medical (active and retired)
(f) Medical Insurance - Active and Retired employees

CITY OF CUDAHY
Payroll - including payroll taxes and insurance premiums:

Attachment B Page 34 of 3559
Type Issuer Amount % of Total
Deposit - 4588 Wells Fargo 4,329,578.93 18.86%
Successor Agency - 0688 Wells Fargo 4,743,763.01 20.67% Checking - 7128 Wells Fargo 558,827.14 2.43%
Payroll - 4570 Wells Fargo 110,194.28 0.48%
Savings - 4752 Wells Fargo 332,802.35 1.45%
Money Market Account Bank of New York (BNY) (a) 10,763.01 0.05% Pooled Savings State Local Agency 12,864,594.90 56.05%
Investment Fund (LAIF)
Total 22,950,523.62 100.00%
Pursuant to California Government Code Section 53646(b), I hereby certify that all investments held by the Authority are in compliance with state law and the agency's Statement of Investment Policy, and that there are sufficient funds within the agency's investment holdings to meet the Authority's cash flow requirements for the next six (6) months.

Respectfully submitted,
Joshua Calhoun
Joshua Calboun
Finance Director

CITY OF CUDAHY
Statement of Investments
June 30, 2024
Attachment C Page 35 of 3559
Month
Receipts Disbursement
July 2023 $ 1,698,263.55 $ 2,043,188.80 (a)
August 2023 1,570,904.87 3,148,357.16 (b)
September 2023 1,125,855.21 1,693,834.27
October 2023 1,259,614.45 848,009.43
November 2023 1,061,252.71 1,514,985.44
December 2023 770,294.89 1,120,942.42
January 2024 3,400,198.28 (c) 2,880,738.20 (d)
February 2024 1,189,496.91 1,382,500.65
March 2024 846,479.31 1,818,213.76 (e)
April 2024 1,764,923.25 1,399,214.40
May 2024 2,994,309.17 (f) 1,090,538.63
June 2024 1,114,305.30 1,906,535.54
Total: $ 18,795,897.90 20,847,058.70
Note (a) - City liab. & workers comp insurance, and PERS unfunded pension liab.

Note (b) - Includes $1,893,444 to Siemens Industries
Note (c) - Includes $1,786,952 in Motor Vehicle In-lieu fees Note (d) - Includes $1,141,928 paid to LA County Sheriff - 3 invoices Note (e) - Includes $158,445 paid to National Auto Fleet - vehicle Note (f) - Includes $1,786,952 in Motor Vehicle In-lieu receipt Month
Cash Receipts Disbursement
July 2023 $ 913,951.26 $ 1,604,912.00 (1)
August 2023 1,069,666.17 2,784,467.93 (2)
September 2023 797,120.38 1,543,754.51
October 2023 759,320.17 710,945.37
November 2023 632,862.51 1,244,543.67
December 2023 526,471.62 679,307.44
January 2024 2,671,465.70 (3) 2,421,667.28 (4)
February 2024 740,080.40 1,107,319.93
March 2024 563,376.03 1,261,506.18
April 2024 1,187,411.21 1,169,015.14
May 2024 2,640,204.13 (5) 567,429.42
June 2024 872,580.09 1,373,988.45
Total: $ 13,374,509.67 $ 16,468,857.32
Note (1) - City liab. & workers comp insurance, and PERS unfunded pension liab.

Note (2) - Includes $1,893,444 to Siemens Industries
Note (3) - Includes $1,786,952 in Motor Vehicle In-lieu fees Note (4) - Includes $158,445 paid to National Auto Fleet - vehicle Note (4) - Includes $1,786,952 in Motor Vehicle In-lieu receipt.

All Funds
General Fund
City of Cudahy
Summary of Cash Receipt/Disbursement by Month - FY 2023-2024 Attachment D Page 36 of 3559
Month
Cash Receipts Disbursement
July 2022 $ 4,033,647.40 (a) 1,789,957.16 $
August 2022 1,686,604.16 1,750,512.85
September 2022 823,969.03 2,318,824.72 (b)
October 2022 1,991,064.32 3,914,418.49 (c)
November 2022 1,086,868.12 869,692.56
December 2022 1,406,231.74 1,395,830.23
January 2023 2,714,262.24 (d) 1,463,847.38
February 2023 739,588.01 1,006,801.94
March 2023 1,120,658.63 1,991,169.04
April 2023 1,196,447.59 1,257,126.86
May 2023 3,260,684.11 (e) 1,984,309.07
June 2023 2,011,618.48 1,230,025.68
Total: $ 22,071,643.83 20,972,515.98
Note (a) - Includes $2.819 M received from American Rescue Plan Act, Fund 530 Note (b) - Includes $949K paid to Siemens
Note (c) - Includes $1,230,610 deposited into an Escrow fund for the Seimens Project Note (d) - Includes $1,628,225 in Motor Vehicle In-Lieu tax Note (e) - Includes $1,625,225 in Motor Vehicle In-lieu tax Month
Cash Receipts Disbursement
July 2022 $ 845,547.28 $ 1,589,154.35 (1)
August 2022 1,012,769.79 1,077,279.74
September 2022 541,456.74 2,140,117.92 (2)
October 2022 1,628,965.30 834,689.66
November 2022 802,869.63 598,974.94
December 2022 774,144.70 976,007.61
January 2023 2,377,440.36 (3) 1,266,258.83
February 2023 489,780.43 829,217.41
March 2023 620,900.31 1,602,710.73 (4)
April 2023 969,432.86 710,177.71
May 2023 2,843,131.44 (5) 1,675,594.30 (6)
June 2023 435,137.76 945,268.74
Total: $ 13,341,576.60 $ 14,245,451.94
Note (1) - City liab. & workers comp insurance, and PERS unfunded pension liab.

City pre-payment option of PERS unfunded pension liability saved 3.5% interest ($12k) than paying on a monthly basis.

Note (2) - Includes $949K paid to Siemens
Note (3) - Includes $1,628,225 in Motor Vehicle In-Lieu tax Note (4) - Includes 2 Sheriff payments
Note (5) - Includes $1,628,225 in Motor Vehicle In-lieu tax Note (6) - Includes 2 Sheriff payments
City of Cudahy
Summary of Cash Receipt/Disbursement by Month - FY 2022-2023 All Funds
General Fund
Attachment E Page 37 of 3559
Supplier - Name Amount G/L Account
Renaissance Hotels Pal 6,048.44 Mayor attended California Contract Cities Annual Municipal Seminar.

United Rentals #15618 Portable AC unit rental for Clara Park 5,928.85 Sq *bell Chamber Of Comme Chamber Gala sponsorship 3,500.00 Societyforhumanresource 2,559.75 Attending SHRM Conference, HR Manager Los Angeles Rams 2,155.00 Community Excursion - L.A. Rams vs Cowboys, Aug 11, 2024.

Nrpa Operating 1,560.00 National Recreational Park Conference Registration American Air 1,495.92 Vice Mayor - YEO Network National Convening 2024.

Full Source, Llc Parks and Recreation Uniforms. 1,412.86 Bellagio - Adv Dep 1,185.96 Council Member Daisy Lomeli - NALEO 2024 Annual Conference.

Z Abrasives Inc Sand for sandblasting and pressure washer nozzle part. 1,134.49 Hotelscom7205522749254 1,105.95 SHRM Conference 2024 for HR Manager Gih*globalindustrialeq New roof hatch for clara park. 1,090.32 Southwes 1,037.91 Flight for Cynthia Gonzalez- NALEO Conference in Las Vegas.

Sp Triad Sports Group Soccer goals for youth soccer season. 1,014.91 Expedia 72829424627011 CM Hotel Reservation: Travel to Washington DC 977.82 Paypal Registration: Contra 875.00 ct Cities 2024 Annual Municipal Seminar Marriott Desert Spring 870.34 Hotel, Martin U. Fuentes - SCAG Regional Conference Yeonetwork.Org 750.00 Elizabeth Alcantar to the YEO Network National Convening 2024.

Fredpryor Careertrack Staff Training Seminar Subscription 747.00 Hotelscom7283488655204 686.66 Mayor Jose R. Gonzalez- Washington DC meeting and white house tour.

Ruff Ruff Poop Bags Doggy bags. 672.26
Adobe *adobe Monthly Adobe Subscription 671.72
Msft * E0300s40id Microsoft 365 Subscription 662.70
Homedepot.Com Items for street department. 558.97
Staples Inc 541.37 General Supply Order
Vivint Inc/Us Alarm company 522.18
Gaucho Grill Downey Travel and meetings 403.68
Walters Wholesale Elec#20 Street Maintenance supplies 360.30 Lilly Juice Bar Senior Activities 353.60
Msft * E0300s3yi4 Subscription 334.66
Delta Air Travel and meetings 328.10
Fedex Offic10200010249 Advertising 323.31
Sq *agua Y Salud Office Supplies 306.00
Lees Bbq & Boba Office Supplies 285.55
Amzn Mktp Us Building Materials 284.08
Golden Bowl 17 Office Supplies 252.77
Anaheim Lawnmower Sh Park Maintenance & Supplies 237.59 Amazon Prime Subscription 229.00
Lafctticketing Excursions 200.00
Party City Bopis Senior Activities 194.36
Www.Gomsa.Net Training and Education 185.40
Sams Club Renewal Office Supplies 170.89
Hp *instant Ink Office Supplies 163.04
Business.Apple.Com Subscription 140.53
76 - Rocket 117 Travel and meetings 134.37
Samsclub.Com Office Supplies 122.89
Ramcast Ornamental Suppl Park Maintenance & Supplies 115.56 Wingstop 717 Travel and meetings 106.52
Mr Hose Inc Park Maintenance & Supplies 100.65
Postermywall Premium Advertising 99.95
Amazon.Com*3i15w3d63 Building Materials 89.07
The Ups Store 5391 Employee Physical 77.00
Credit Card Payment Detail
May 01, 2024 to May 31, 2024, paid June 08, 2024

Attachment F Page 38 of 3559

ATTACHMENT F
Supplier - Name Amount G/L Account
Credit Card Payment Detail
May 01, 2024 to May 31, 2024, paid June 08, 2024
Facebk* Tg2jt386e2 Special Events July 4th 75.00
Facebk* Uk42y446e2 Advertising 74.97
Flickr.Com Special Events July 4th 72.99
Oreilly 2959 Vehicle Maintenance 69.50
El Pescador 7 Travel and meetings 62.75
Cvs/Pharmacy #08858 Special Events July 4th 61.81
Facebk* Suycj4g6e2 Special Events July 4th 50.00
The Marketplace Grill Caf Travel and meetings 46.81
Contractors Wh #703 46.11 Building Materials
Idrive.Com* Overuse Ch 45.54 Subscription
Cudahy 44.97 Vehicle Maintenance
Zoom.Us 888-799-9666 40.00 Subscription
Starbucks Store 67663 39.57 Office Supplies
Norms - Downey 37.29 Travel and meetings
Portos Bakery Downeycl 32.95 Travel and meetings
Msft * E0300s41tp 32.00 Subscription
Jims Burgers #2 27.44 Travel and meetings
Allianz Travel Ins 27.00 Travel and meetings
Tst* Eureka Restaurant Gr 26.28 Travel and meetings
Smart And Final 319 26.24 Senior Activities
Target 00001909 23.14 Travel and meetings
Starbucks 800-782-7282 22.00 Office Supplies
Ferguson Ent #2758 19.68 Building Materials
Staples 00113670 16.53 Advertising
Autozone #5371 14.31 Vehicle Maintenance
Digitalspace 14.00 Telephone
Superior Super Whse 12.22 Employee Recognition
Tst* Nothing Bundt Cakes 12.00 Office Supplies
Msft * E0300s3xiq 8.00 Subscription
Dollartree 6.89 Office Supplies
Sprouts Farmers Mar 5.69 Travel and meetings
Bargain World #1 5.58 Employee Recognition
Msft * E0300s40ie 5.00 Subscription
Apple.Com/Bill 4.99 Subscription
46,474.50

Blank Page

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STAFF REPORT
Date: July 16, 2024
To: Honorable Mayor and Council Members
From: Alfonso Noyola, City Manager
By: Juan Arauz, AICP, Community Development Director
Prepared By: Jessica Guillen, Assistant Planner
Reviewed by: Cecilia Madrigal-Gonzalez, Senior Planner and Paloma McEvoy, Assistant City Attorney
Subject: Introduction and Adoption by First Reading of Ordinance No. 750 repealing Ordinance No. 689, terminating Development Agreement No. 18-017C between the City of Cudahy and Nyce Guys, LLC.

RECOMMENDATION
City staff recommends that the City Council take the following action(s):

1. Open the public hearing and receive public comment and testimony; and

2. Make a determination that Nyce Guys, LLC (“Operator”) is not in compliance with the terms and conditions of Development Agreement (“DA”) No. 18-017C and find that the Operator is in default of contractual obligations set forth in the DA; and

3. Introduce and adopt by first reading Ordinance No. 750 (Attachment A) repealing Ordinance No. 689 terminating DA No. 18-017C, between the City of Cudahy and Nyce Guys, LLC; and

4. Schedule the second reading of Ordinance No. 750 at the next regularly scheduled meeting on August 20, 2024; and

5. Determine that these actions are exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15321 (Enforcement Actions by Regulatory Agencies).

SUMMARY
Pursuant to the terms and conditions of DA No. 18-017C and Commercial Cannabis Permit Item Number
13A

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(“CCP”) No. 18-0017, it is the City’s purpose and intent to regulate cannabis activities within the City in a responsible manner to protect the health, safety, and welfare of the residents of Cudahy and to enforce rules and regulations consistent with California’s cannabis laws. Cannabis operators with development agreements are obligated to comply with all provisions of the Cudahy Municipal Code (“CMC”), obligations of the DA, and conditions of approval under the CCP, and applicable state and local laws and related regulations. This report provides a summary of the unrefuted evidence offered at an administrative review hearing; a decision by a thirdparty hearing officer (“Hearing Officer”) finding the Operator in default of the DA and out of compliance with the CCP; the public hearing by the Planning Commission determining that the Operator has failed to comply with the terms and conditions of its DA, despite being provided with ample notice and several opportunities to achieve compliance, thereby recommending to the City Council that it repeal Ordinance No. 689 and terminate DA No. 18-017C through the adoption of Planning Commission Resolution No. 2024-13. Therefore, City staff recommends the City Council adopt Ordinance No. 750 repealing Ordinance No. 689 terminating DA No. 18-017C.

BACKGROUND

1. On September 11, 2017, the City adopted Ordinance No. 673 (Attachment B) establishing the City’s commercial cannabis production activity regulations codified in Chapter 5.20 of the Cudahy Municipal Code (“CMC”). CMC Section 5.20.040 authorizes medicinal commercial cannabis activities within a designated overlay zone, pursuant to a development agreement adopted in accordance with the Development Agreement Law (Govt. Code Section 65864 et seq.) and Chapter 20.28 of the CMC.

2. On June 25, 2018, the Planning Commission recommended approval of CCP No. 18-0017 (Attachment F, pp. 59-71) for cannabis cultivation, manufacturing, and distribution activities at 4907 Cecilia Street (“Subject Site”), as illustrated in Figure 1 and 2, below. As discussed in further detail below, the conditions of approval of CCP No. 18-0017 require the Operator to make timely payments of the fees due under the Development Agreement among other requirements.

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Figure 1 – Aerial of the Subject Site

3. On July 17, 2018, the City Council adopted Resolution No. 18-37 (Attachment C) approving the issuance of CCP No. 18-0014 with conditions of approval to the Operator, subject to the execution of a development agreement with the City.

4. On August 7, 2018, the City Council adopted Ordinance No. 689 (Attachment D) approving DA No. 18-017C by and between the Operator and the City authorizing commercial cannabis cultivation, manufacturing, and distribution activities at the Site as illustrated in Figures 2 and 3, below (See also, Attachment F, pp. 142 and 143). The DA requires the Operator to make timely payments for Community Benefit Fees; Cost Recovery Fees; and Non-Operating Fees.1
1 As used herein, the term Non-Operating Fees and Operating Fees are used interchangeably.

Site
4907 Cecilia Street

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Figure 2 – Floor Plan
Figure 3 – Site Plan

5. On October 2, 2019, the City provided the Operator with a Notice of Delinquency (Attachment F, pp. 161) due to failure to pay the various fees due under CCP No. 18-0017 and DA No. 18-017C, prior to placing the Operator in default status due to payment noncompliance with the DA, inclusive of the non-payment of Community Benefit Fees, Cost Recovery Fees, and Non-Operating Fees in the amount of $97,720.74. The Operator was given no later than October 17, 2019, to cure the amount, however, the delinquency was not timely cured.

6. On April 15, 2021, the Building and Safety Division issued Permit No. 8221 (Attachment F, pp. 168-169) for the installation of a perimeter fence.

7. On May 4, 2021, the City provided the Operator with a Notice of Default (Attachment F, pp. 163-164) due to non-compliance with the payment of fees (Community Benefit Fees, Cost Recovery Fees, and Non-Operating Fees) and associated penalties in the amount of $291,333.54. The Operator was given no later than 30 days to cure the default, however, the default was not timely cured.

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8. On September 2, 2021, the City notified the Operator of their failure to sign the DA (Attachment F, pp. 166).

9. During November 2022, the City’s Building & Safety Division received the plan check submittal for interior tenant improvements as demonstrated in Figures 4 and 5, below (See also Attachment F, pp. 171-203). The plans did not conform to the floor plans or site plan approved and incorporated with DA-18-017C as shown in Figures 2 and 3, above.

Condition of Approval No. 49 of CCP18-0017 (Attachment F, pp. 59-71) requires the Operator to obtain a Zoning Clearance prior to commencing construction.

Figure 4 - Non-Conforming Floor Plan
Figure 5 - Non-Conforming Site Plan

10. On November 29, 2021, the City’s Building & Safety Division issued a Plumbing Permit for the installation of floor drains, trench drains, and rough plumbing (Attachment F, p. 169).

11. On December 13, 2022, the City’s third-party plan check consultant approved the submitted plans.

12. Pursuant to City Council direction, on December 7, 2022, the City Manager offered a Deferment and Payment Program (Attachment F, pp. 205-206) to assist cannabis

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operators with accumulated Community Benefits, Cost Recovery and Non-Operating Fees by deferring and providing additional time for payment without penalty. Under the program:
a. Unpaid Non-Operating Fees would be deferred (without penalty) until six (6) months after the Operator was issued a Certificate of Occupancy, and then repay already accumulated Non-Operating Fees within twelve (12) months; and b. Operators would continue to be responsible for the timely payment of Community Benefit Fees and Cost Recovery Fees, as they accumulated; and c. Previously incurred Community Benefit Fees and Cost Recovery Fees would be subject to a payment plan and require timely payments.

All cannabis operators that were interested in participating in the program were given no later than January 31, 2023, to execute an agreement and participate in the Deferment and Payment Program (Attachment F, pp. 205-206). The City received interest from the Operator and due to the good faith negotiations between both parties, the City extended the opportunity for the Operator to participate.

13. Under Article 5(d) of DA18-015C the City Manager, his/her designee(s), and the Sheriff’s Department designee have the right to enter the Site from time to time unannounced for the purpose of making reasonable inspections to observe and enforce compliance with the Development Agreement and state and local laws and regulations without the requirement of a search warrant, subpoena, or court order. Condition of Approval 47 also permits the City Building Official, City Cannabis Enforcement staff, and Planning Department staff the authority to conduct periodic site inspections to ensure compliance with CCP conditions (Attachment F, p. 69).

14. On March 8, 2023, City staff conducted an inspection of the Subject Site. During this inspection several violations of City’s Building, Electrical, and Mechanical Codes were observed (Attachment F, pp. 207-210). The unpermitted construction and improvements consisted of the demolition of existing interior walls; the installation of fire sprinklers; insulated panel walls; interior framing walls with mezzanine; electrical wiring; recessed lighting, and HVAC ducts. The site inspection resulted in a determination that the unpermitted construction and improvements resulted in an unsafe and dangerous structure and further required all building violations to be remedied before people could reenter or occupy the structure, more commonly known as “red-tagging” (Attachment F, pp. 212-225). Correspondence from the City also reminded the Operator that it was currently under “default” status. The City has no record of the Operator submitting applications for building permits for unpermitted work.

15. On April 10, 2023, the City presented the Operator with a Letter Agreement agreeing to the Deferment and Payment Program to forbear the outstanding payments due (“Letter Agreement”) (Attachment F, pp. 227-234). The Operator accepted the proposed terms and executed the Letter Agreement on April 13, 2023, and agreed to commence payments on May 1, 2023. The Letter Agreement stated that the Operator had an

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outstanding balance of $570,785.55 in past due fees. By signing the Letter Agreement, the Operator also acknowledged and agreed “that the past due amounts stated are true and correct and are in fact presently due and owing. The parties agree that the Operator is in ‘default status’ on its obligations under the Development Agreement with the City… [and would] remain in ‘default status’ on its Development Agreement until all past due fees set forth in [the] Letter Agreement have been paid and Operator is in full compliance with all terms of its Development Agreement” (Attachment F, p. 230).

Pursuant to the terms of the Letter Agreement, the Operator agreed to maintain current payments for Community Benefits Fees and Cost Recovery Fees as they become due under the Development Agreement, effective May 1, 2023, and to commence a 12-month payment schedule for past-due Community Benefits Fees and Cost Recovery Fees beginning April 1, 2023. As stated above, all past due and accruing Non-Operating Fees were deferred until six months after the Operator was first issued a Temporary Certificate of Occupancy.

16. Operator made payments on April 13, 2023, for February and March 2023 totaling $15,145.80 as agreed upon in the Letter Agreement. However, the Operator failed to make the May and June 2023 payments. Between May and June 2023, the City provided the Operator with two Notices of Delinquency (Attachment F, pp. 236-245) and provided an opportunity for the Operator to cure outstanding payments due. However, the default on the Letter Agreement was not timely cured and therefore was terminated and no longer in full force and effect as of June 16, 2023. Accordingly, the total of all past due amounts at the time the Letter Agreement was terminated and an amount of $619,182.74 was due and owed.

17. On April 25, 2023, the Operator requested assistance to remedy the red tag status of the Subject Site. The City’s Building and Safety Division provided a permit fee breakdown on May 4, 2023, with an assessed construction valuation of $420,000.00, including investigation fees, plan check fees, and penalty fees for construction without proper permits, totaling $34,013.20 (Attachment F, pp. 247-279). This amount was to be paid by the Operator to obtain all necessary permits and remove the red tag from the building.

The Operator did not agree with the construction valuation of $420,000.00 assessed by the City’s Building and Safety Division and thus City staff provided an alternative option to retain a third-party appraiser to make an independent building valuation assessment (Attachment F, pp. 247-279). The Operator did not entertain this option and failed to remediate the red tag status. The Operator has not remedied the red tag since its issuance of citations on March 8, 2023, the structure continues to maintain its red tag status as of the writing of this report.

18. On June 23, 2023, the City sent a Final Demand Letter (Attachment E) demanding Operator to respond to the following demands: 1) Payment for the total past due amounts under the CCP and DA; 2) Payment of a $34,013.20 citation to remove “red tag” status from building; 3) Contact City staff for a meeting to revise CCP’s Schedule of Performance and for further information to become compliant with DA and CCP. The total amount past due as of June 1, 2023, was $606,616.42. The Operator did not respond in a

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timely manner and has failed to make any attempt to cure the defaults. As of the writing of this report, the City has received minimal payment of fees due under DA18-017C since the Development Agreement has been in effect.

19. On August 9, 2023, the City issued an Escrow Account Letter (Attachment F, pp. 286-287) requiring all cannabis operators to open an escrow account by September 15, 2023, to ensure payment of Cost Recovery Fees. As of the writing of this report, the Operator has not opened an escrow account nor made any payments into the account.

20. On October 10, 2023, City staff conducted an inspection of the Subject Site and entered areas that were not accessible during the March 8, 2023, site inspection. Further violations were observed, including the unpermitted installation of non-structural walls in the rear of the facility and an unpermitted welding business (Vazquez Iron Work). A violation notice was issued by the City’s Code Enforcement Division with the following corrective steps required: 1) Contact the Planning Department, 2) Obtain necessary approval and inspection from the Planning Department, 3) Submit Zoning Clearance (Attachment F, pp. 289-297). As of the writing of this report, the violations in this notice have not been corrected.

21. On October 17, 2023, the Operator’s legal counsel submitted correspondence to dispute:
(1) the legality of the fees assessed and due under DA18-107C and CCP18-0017; and (2) the legality of the Building and Safety Division’s issuance of building citations at the Site. (Attachment F, pp. 299-301). The City Council directed the City Attorney to respond to the Operator’s legal counsel as to the reasons why legal counsel’s arguments were not supported by the law (Attachment F, pp. 302-313).

22. On October 24, 2023, the City issued a letter (Attachment F, pp. 315-316) updating the Operator on their payment and fees related to the DA by correcting the amount due to an error in the total amount billed. The City provided a credit in the amount of $14,950.50, which was applied to the Operator’s outstanding balance of $656,116.19 as of October 1, 2023.

23. As of December 1, 2023, Operator owed the City $682.331.88. The Operator has continued to fail to make payments (Attachment F, pp. 315-316). Community Benefit Fees, Cost-Recovery and Non-Operating Fees plus penalties continue to accrue.

24. On November 27, 2023, the City issued the Operator a Notice of Review Hearing (Attachment F, pp. 318-319) with the date, time, and place. The notice informed the Operator that the Review Hearing was being held pursuant to Article 19 of DA No. 18- 017C, requesting the Operator to timely submit evidence of compliance and submit payment for the estimated cost.2
2 Pursuant to Article 19(a) of the DA, Operators must submit an annual review and administration fee deposit based on the City’s estimated cost, upon the City’s reasonable notice in advance of the review. The City provided well over 30 days’ notice of the estimated cost.

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25. On December 29, 2023, the City sent a follow-up notice to the Notice of Review (“Follow Up Notice”) to the Operator confirming that it had not received any communication from the Operator confirming attendance at the Review Hearing and that the ability to present before the hearing officer had been waived (Attachment H). The City did not receive a timely response from the Operator.

26. On January 8, 2024, the duly appointed third-party Hearing Officer, Steve Napolitano, conducted a Review Hearing as authorized under the CMC Section 5.20.080(7) and Section 19 of the DA No. 18-017C to hear and consider information and evidence submitted by City staff through an Administrative Record (Attachment F) and the Operator. No representation from the Operator was present at the hearing nor did the Operator submit any information or evidence for consideration.

27. On February 15, 2024, the Hearing Officer issued a written decision and order (the “Decision”) (Attachment G) finding evidence showing the Operator, despite considerable notice and opportunities to cure outstanding issues, has breached the terms and conditions of the DA and CCP and recommends the Planning Commission and City Council repeal Ordinance No. 689 terminating DA No. 18-017C and revoke the related interest in CCP No. 18-0017.

28. On May 14, 2024, pursuant to State law and the CMC, the Planning Commission held a duly noticed public hearing to consider the Hearing Officer’s recommendation to repeal Ordinance No. 689 and terminate DA No. 18-017C. The Planning Commission considered all public comments received before and during the public hearing, the presentation by City staff, the relevant staff report, administrative record, and all other pertinent documents. No representation from the Operator was present at the hearing. After closing the public hearing, the Planning Commission adopted Resolution No. 2024-13 (Attachment K), recommending the City Council repeal Ordinance No. 689 and terminate related DA No. 18-017C.

29. As of the writing of this report, Operator has continuously failed to make payments and as of June 13, 2024, owes $767,969.24 (Attachment I).

DISCUSSION/ANALYSIS
During a review of the Operator’s compliance with the Development Agreement, the burden is upon the Operator to demonstrate good faith compliance with the terms of the Development Agreement under Article 19. Pursuant to Government Code Section 65868.1 and Articles 19 and 19(d) of the Development Agreement, if the City Council determines, based on substantial evidence, that the Operator has not complied in good faith with the terms of the conditions of the Development Agreement, the City Council may terminate the Development Agreement, or alternatively may choose to modify and impose conditions reasonably necessary to protect the interests of the City. Conversely, if the Operator is found to be in compliance with the Development Agreement, the Operator may request the City to issue a Certificate of Compliance pursuant to Article 19(c). Any decision to terminate a development agreement must be reviewed

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by the Planning Commission prior to review by the City Council (Gov. Code § 65867). Under Article 19(d), the decision to terminate a development agreement by the City Council is final and only subject to appeal pursuant to Civil Code Section 1094.5.

As it relates to the CCP, pursuant to CMC Sections 5.20.080(6) and 5.20.080(7), any material violations of Chapter 5.20, any other relevant city law or state law, condition of approval, or any other required agreement or covenant, such as a development agreement, by a cannabis permittee, or cannabis permittee’s agent, is ground for suspending or revoking the relevant cannabis permit. The decision to suspend or revoke a cannabis permit is with the City Manager or his designee. Furthermore, pursuant to CMC Section 5.20.080, any decision regarding the suspension or revocation may be appealed to the City Council.

The City has appointed a Hearing Officer to conduct a review of the Operator’s compliance with CCP No. 18-0017 and DA No. 18-017C. The findings and determinations made by the Hearing Officer inform any subsequent action to terminate or modify the Development Agreement and suspension or revocation of the CCP. As stated above, and further described in Attachment G, the Hearing Officer issued a written decision making several findings of fact and conclusions and determined that Nyce Guys, LLC breached the terms and conditions pursuant to DA No. 18-017C and CCP No. 18-0017, based on a preponderance of the evidence, in the following material aspects:

1. Violation #1: Breach of Payment Obligations. Pursuant to the terms of the DA, the Operator is responsible for timely payment of Community Benefit Fees (Article 5(b)); Cost Recovery Fees (Article 8); and Operating Fees (Article 7(c). The Operator is also obligated to make the fees due under the DA pursuant to CCP Condition of Approval No. 45; and timely payment for non-operating fees pursuant to Condition of Approval No. 8, 13, and 37 (Attachment F, pp. 59-71). Conditions of Approval 1(a) and 1(b) require the Operator to pay all City-issued invoices within 30 days of receipt. Pursuant to the terms of the DA, Operators that are more than 30 days past due with Operating Fees are subject to a penalty equal to twenty-five percent (25%). In addition, a ten percent (10%) penalty shall be added to the first day of each calendar month following the imposition of the initial 25% penalty, if the fee remains unpaid in whole or in part, up to a maximum of the one hundred percent (100%) of the payable fee.

The Operator’s duty to comply with the CCP conditions of approval are incorporated into the DA No. 18-015C under Section 18.3 Conditions 1(a) and 1(b) require the Operator to pay all City-issued invoices within 30 days of receipt. Conditions 3, 13, and 37 all require timely payment of fees due under the Development Agreement. The City has regularly sent monthly invoices for Community Benefits Fees, Cost Recovery Fees, Non-Operating Fees, and appliable late penalties since 2019 (Attachment F, pp. 336-449).

The City executed a Letter Agreement to grant the Operator relief in the form of deferred payment obligations of the Operating Fees and a payment schedule for past-due 3 Section 18 of DA No. 18-017C states “Owner shall comply with all conditions of approval of the Regulatory Permit approved by City Council.” The Regulatory Permit is CCP No. 18-0017.

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Community Benefit Fees and Cost Recovery Fees; and an obligation to remain current on recurring fees under the DA. The Operator did not make any timely payments in the months that followed the execution of the Letter Agreement in May and June 2023. As of December 1, 2023, the City reported that the Operator is past due in the amount of $682,331.88 and past-due payments continue to accumulate, including late payment penalties. The Operator continues to fail to make payments and as of June 13, 2024, $767,969.24 is due and owing (Attachment I).

Table 1. Summary of Past and Current Amounts Due as of June 13, 2024 Fee Type Payment Amount Due
Community Benefit Program $356,001.88
Cost Recovery Fees $105,591.14
Non-Operating Fees $236,488.56
Penalties (Late Payments) $69,887.66
TOTAL $767,969.24
Based on the evidence submitted by the City, the Hearing Officer found that “based on the unrefuted evidence presented by the City...a preponderance of the evidence shows that [Operator] breached multiple conditions of the DA and CCP. Despite multiple attempts and notices by the City to gain compliance, the evidence shows that [Operator] failed to comply with their payment obligations, which constitutes the necessary grounds for termination of the DA and revocation of the CCP under the CMC” (Attachment G).

The Hearing Officer’s determination was ratified by the Planning Commission through the adoption of Resolution No. 2024-13 which recommends that the City Council find that Operator is in default of the terms set forth in DA No. 18-017C and repeal Ordinance No. 689 and terminate the related DA.

2. Violation #2: Breach of Condition of Approval No. 51 (Time Limits). Failure to Implement the Project Under Prescribed Time Limits under CCP No. 19-0017. The Operator’s duty to comply with the CCP’s conditions of approval are incorporated into DA No. 18-017C under Section 18. CCP Condition of Approval No. 51(A)(i) sets a 90-day time frame in which the Operator needs to obtain a Zoning Clearance. Condition of Approval No. 51(A)(ii) sets a 90-day time frame in which the Operator must complete construction of Phase I of the Project. CCP Condition of Approval 51(A)(iii) sets a 180-day time limitation from the effective date of the CCP to complete all tenant improvements, construction and obtain a certificate of occupancy from the Building Department. Failure to obtain a Zoning Clearance within 90 days of the effective date of the CCP, renders the CCP to “expire and become null and void” (Attachment F, p. 73). The City Manager’s ability to grant an extension of time for a Zoning Clearance if the Operator has made diligent efforts to implement the project is stated in Conditions of Approval 30(A)(i), (ii), and (iii).

The Operator was given a notice of default and opportunity to cure pursuant to the City’s

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Final Demand Letter to the Operator (Attachment E), with no response from the Operator.

The Operator has failed to provide any evidence that it has obtained a Zoning Clearance, completed construction of Phase I, or completed the tenant improvements, obtained a certificate of occupancy, or otherwise complete Phase II within the prescribed time periods. Nor does the City have any record of any request by the Operator for an extension of time to the City Manager and there is no evidence to demonstrate the Operator has made substantial progress, such as submitting an application for a Zoning Clearance or following through with building permit plan check.

Based on the evidence submitted by the City, the Hearing Officer found that, “the [Operator] has not provided the City with any evidence it has obtained a Zoning Clearance, completed construction of Phase I, completed all Tenants Improvements, or obtained a Certificate of Occupancy for the Site….without an extension, the deadlines expired in late 2018 and early 2019. The City has no record of any request by the [Operator] to the City Manager for an extension of time, nor is there evidence the Respondent has made diligent efforts to comply, such as submitting for a zoning clearance nor applying for building permits. Despite the [Operator] submitting for building plan check the [Operator] remains in breach of its conditions of approval by failing to implement the Project within the time limits…” (Attachment G).

The Hearing Officer’s determination was ratified by the Planning Commission through the adoption of Resolution No. 2024-13 which recommends that the City Council find that Operator is in default of the terms set forth in DA No. 18-017C and repeal Ordinance No. 689 and terminate the related DA.

3. Violation #3: Breach of Condition of Approval No. 49 (Construction Activities) under CCP 18-0017. The Operator’s duty to comply with the CCP’s conditions of approval are incorporated into DA No. 18-017C under Section 18. Condition of Approval No. 49 “states that prior to any construction, the [Operator] shall obtain a Zoning Clearance for construction from the Planning Division and a Building Permit from the Building and Safety Division.” The City has no record of any requisite applications, approvals, inclusive of a Zoning Clearance, for permits obtained by the Operator for some limited work described above. Additionally, the City contacted the Los Angeles Fire Department, Special Occupancy Inspection Unit and no building permits record were found for the fire sprinklers (Attachment F, pp. 451-452). In accordance with the DA, the Owner shall not operate any facility, and no permit, license, or other approval issued by City shall be valid unless and until the Los Angeles County Fire Department has approved Owner’s site plan, floor plan, safety plan, and any other plans that require its approval.

Based on the evidence submitted by the City, the Hearing Officer found that “[t]he [Operator] failed to obtain any requisite approvals, inclusive of a Zoning Clearance, and permits from the City Planning Division and Building & Safety Division prior to the installation of fire sprinklers, electrical wiring, recessed lighting, interior framing walls with mezzanine, and HVAC ducts. Therefore, the [Operator] breached [Condition of Approval No. 49] (Attachment G).”

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The Hearing Officer’s determination was ratified by the Planning Commission through the adoption of Resolution No. 2024-13 which recommends that the City Council find that Operator is in default of the terms set forth in DA No. 18-017C and repeal Ordinance No. 689 and terminate the related DA.

4. Violation #4: Noncompliance with State Law. Failure to Obtain State-Issued Cannabis Licenses for Cultivation, Manufacturing, and Distribution. Recital I of the DA states the Owner has applied for three (3) licenses: 1) Cultivation; 2) Manufacturing; and 3) Distribution. Section 21 of the DA states that the facility shall not operate unless the Owner is the holder of a State-issued Cannabis license for the type of commercial cannabis facility or business operation that is the subject of the DA. The Owner has breached the DA because the Owner has not obtained a State-issued Cannabis license for the facility. As of December 18, 2023, search of the term “Nyce Guys” on the Department of Cannabis Control’s website shows that the Operator’s had no record of an active cannabis license issued by the state (Attachment F, p. 321).

Based on the evidence submitted to the City, the Hearing Officer found that “[b]ased on a preponderance of the evidence presented by the City as noted above, [Operator] has failed to maintain all its necessary licenses to operate under the DA, which constitutes a breach of Article 21 of the DA (Attachment G).”
The Hearing Officer’s determination was ratified by the Planning Commission through the adoption of Resolution No. 2024-13 which recommends that the City Council find that Operator is in default of the terms set forth in DA No. 18-017C and repeal Ordinance No. 689 and terminate the related DA.

5. Violation #5: Breach of Conditions of Approval No. 48 (Commercial Cannabis Permit Modifications) under CCP 18-0017. CCP18-0017 Condition of Approval No. 48 states “prior to undertaking any operational or construction-related activity which is not expressly described in the CCP conditions, the [Operator] shall first contact the City Manager, or his designee, to determine if the proposed activity requires a modification of the CCP. The City Manager may, at his sole discretion, requires the Operator to file a written and/or mapped description of the proposed activity in order to determine if a permit modification is required.”
On November 18, 2021, the Operator submitted building permit plans for interior tenant improvements at the Subject Site to the City’s plan check consultants without first obtaining a Zoning Clearance from the Planning Division and payment of the required fees. Furthermore, the plans submitted by the Operator to the City’s Plan Check Consultants do not conform to the original site plan and floor plans approved by the City in the Operator’s CCP and DA. The Operator never filed a written or mapped description of the design changes made to the facility plans nor made the City Manager aware that such changes would be made. The City Manager has not approved any changes to the facility that do not conform to the original Site Plan and Floor Plan approved by the City

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in the Operator’s CCP and DA.

Based on the evidence submitted by the City, the Hearing Officer found that the “[Operator] breached its conditions of approval for CCP18- 0017 by failing to receive City Manager approval for the design changes made to the facility set forth in Condition of Approval No. 48 (Attachment G).”
The Hearing Officer’s determination was ratified by the Planning Commission through the adoption of Resolution No. 2024-13 which recommends that the City Council find that Operator is in default of the terms set forth in DA No. 18-017C and repeal Ordinance No. 689 and terminate the related DA.

PUBLIC NOTICE AND COMMENTS
This item was noticed in accordance with the City’s public notice requirements, which involved mailed notices to property owners and tenants within 300 feet of the Subject Site and publication in the local newspaper (Attachment J). As of the writing of this report, City staff have not received any public comments.

ENVIRONMENTAL ANALYSIS
The action(s) have been assessed in accordance with the California Environmental Quality Act (“CEQA”) (Pub. Res. Code § 21000 et seq.), CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) and the environmental regulations of the City. The Project is categorically exempt from the requirements of CEQA pursuant to CEQA Guidelines Section 15321 - Class 21 (Enforcement Actions by Regulatory Agencies). This exemption applies to “[a]ctions by regulatory agencies to enforce or revoke a lease, permit, license, certificate, or other entitlement for use issues, adopted, or prescribed by the regulatory agency or enforcement or a law, general rule, standard, or objective, administered or adopted by the regulatory agency.” If the City Council adopts Ordinance No. 750 to repeal Ordinance No. 689 and terminate DA No 18-017C., it would be an enforcement action. Therefore, the action(s) are categorically exempt from the provisions of CEQA.

CONCLUSION
As discussed above and based on the preponderance of unrefuted evidence offered at the administrative review hearing; the public hearing by the Planning Commission finding that the Operator has failed to comply with the terms and conditions of its DA, despite being provided with ample notice and several opportunities to achieve compliance, thereby recommending to the City Council that it repeal Ordinance No. 689 and DA No. 18-017C through the adoption of Planning Commission Resolution No. 2024-13. As stated above, the Operator has failed to comply with their obligations under the DA, despite being provided with ample notice and several opportunities to achieve compliance. Therefore, City staff recommends the City Council adopt Ordinance No. 750 repealing Ordinance No. 689 terminating DA No. 18-017C.

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ATTACHMENT(S)
A. Proposed Ordinance No. 750
B. Ordinance No. 673
C. City Council Resolution No. 18-37
D. Ordinance No. 689
E. Final Demand Letter dated June 23, 2023
F. Administrative Record for Nyce Guys, LLC
G. Decision and Order for Nyce Guys, LLC
H. Review Hearing Waiver dated December 29, 2023
I. Nyce Guys, LLC Invoice dated June 13, 2024
J. Newspaper Publication
K. Planning Commission Resolution No. 2024-13

ORDINANCE NO. 750

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CUDAHY REPEALING ORDINANCE NO. 689 AND

TERMINATING RELATED DEVELOPMENT AGREEMENT
NO. 18-017C BETWEEN NYCE GUYS, LLC AND THE CITY
OF CUDAHY.

WHEREAS, the City of Cudahy (the “City”) is a general law city, incorporated under the laws of the State of California; and
WHEREAS, pursuant to its police power, the City may enact and enforce laws within its boundaries that promote the public health, safety, or general welfare of the community, and are not in conflict with general laws; and WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic risk of development, the California State Legislature adopted Section 65864 et seq. of the California Government Code (the “Development Agreement Statute"); and
WHEREAS, the Development Agreement Statute authorizes the City to enter into a development agreement with a person having legal or equitable interest in real property for the development of such property in order to establish certain development rights in exchange for public benefits; and
WHEREAS, in accordance with the Development Agreement Statute, the City Council adopted Ordinance No. 690 in 2018 establishing the procedures and requirements for the consideration of development agreement with the City and are contained within Cudahy Municipal Code (“CMC”) Sections 20.84.530 through 20.84.640; and WHEREAS, on September 11, 2017, the City Council adopted Ordinance No. 673 establishing regulations for commercial cannabis activities, in a specified Overlay Zone through an acquisition of a Commercial Cannabis Permit and execution of a development agreement with the City; and
WHEREAS, on June 25, 2018, the City Planning Commission (“Planning Commission”) conducted a properly noticed public hearing to consider an application by Nyce Guys, LLC (“Operator”) for approval of a Commercial Cannabis Permit to allow nonstore front commercial cannabis manufacturing activities at 4907 Cecilia Street (“Site”); and
WHEREAS, at this hearing, the Planning Commission heard and considered verbal and written testimony and evidence, and recommended approval of the Commercial Cannabis Permit subject to the Operator’s execution of a development agreement with the City; and
WHEREAS, on July 17, 2018, the City Council conducted a properly noticed public Attachment A - Draft Ordinance No. 750 Page 56 of 3559
Ordinance No. 750

hearing to consider the issuance of the Commercial Cannabis Permit (“CCP”) No. 18-0017 and Development Agreement (“DA”) No. 18-017C at which the City Council heard and considered both written and oral testimony and evidence and subsequently approved, and adopted Resolution No. 18-37 for CCP No. 18-0017; and
WHEREAS, at the same hearing, the City Council considered and approved CCP No. 18-0017, it also conducted the first reading of Ordinance No. 689 which authorized the execution of DA No. 18-017C between the Operator and the City; and WHEREAS, on August 7, 2018, the City Council adopted, on second reading, Ordinance No. 689, approving DA No. 18-017C and authorizing the Mayor to execute the DA on behalf of the City; and
WHEREAS, the effective date of the Development Agreement is September 7, 2018 (“Effective Date”); and
WHEREAS, upon the Effective Date of Ordinance No. 689, the Operator was granted the permission to conduct commercial cannabis cultivation, manufacturing, and distribution activities provided, among other things, it apply for and receive a Zoning Clearance pursuant to the CMC’s requirements, receive State licensing approval from the Department of Cannabis Control, and comply with the terms outlined in the DA and conditions of approval under the CCP inclusive of the timely payment of Community Benefit Fees, Cost Recovery Fees and Operating/Non-Operating Fees and applicable penalties and interest; and
WHEREAS, the Operator has not complied with the terms and conditions of the DA and CCP despite multiple notices and opportunities to cure and remains in material breach of thereof; and
WHEREAS, on November 27, 2023, the City provided notice to the Operator that it would be conducting a Review Hearing (“Review Hearing”) under Article 19 of DA No. 18- 017C which informed the Operator of the burden to prove compliance with the DA and CCP; and
WHEREAS, the Operator never provided a timely response to the City’s notice for a Review Hearing; and
WHEREAS, on December 29, 2023, the City sent a follow up notice informing the Operator it had not received any response to the Review Hearing Notice; and WHEREAS, the Operator did not respond to the follow up notice; and WHEREAS, on January 8, 2024, Steve Napolitano, Esq., a duly appointed thirdparty hearing officer for the City (“Hearing Officer”), conducted a properly noticed Review Hearing; and
WHEREAS, the Operator did not participate at the Review Hearing, was not present at the hearing and did not present any evidence for consideration prior to or during the Attachment A - Draft Ordinance No. 750 Page 57 of 3559
Ordinance No. 750

hearing, and the Hearing Officer heard and considered information and evidence by City staff, which a true and correct copy of the staff report and supporting evidence is attached hereto as Exhibit “A” and incorporated herein by reference; and WHEREAS, the Hearing Officer heard and considered information and evidence by City staff; and
WHEREAS, on February 12, 2024, the Hearing Officer issued a written decision and order (the “Decision”), incorporated by reference and attached hereto as Exhibit “B”, making several findings of fact and conclusions of law with respect to the Operators noncompliance with the DA and CCP based on a preponderance of the evidence; and WHEREAS, the Hearing Officer determined that Operator breached the DA and CCP in five material respects by a preponderance of the evidence; and WHEREAS, the Hearing Officer determined that Operator had breached its payment obligations due to the Operator’s non-payment of fees and penalties due and owed to the City totaling $682,331.88, which continue to accumulate; and WHEREAS, the Operator continues to fail to meet its payment obligations and the total amount due to the City as of June 13, 2024, is $767,969.24; and WHEREAS, the Operator’s duty to comply with the CCP No. 18-0017’s conditions of approval are incorporated into DA No. 18-017C under Section 18; and WHEREAS, the Operator breached its obligation to implement the project within the prescribed time periods contained with CCP No. 18-0017 Condition of Approval Nos. 49 (Zoning Clearance) and 51 (Time Limits), because there is no evidence that the Operator has made a diligent effort to implement the Project in any fashion inclusive of an application for a Zoning Clearance to permit the commercial cannabis activities; and WHEREAS, the Operator breached CCP No.18-0017 Condition of Approval No. 49 (Construction Activities) due to the Operator’s unpermitted work and improvements at the Site and failure to receive the requisite approvals or permits; and WHEREAS, the Operator failed to comply due to the Operator’s failure to maintain all its necessary licenses to operate under the DA in violation of Article 21 of the DA; and WHEREAS, the Operator breached CCP No. 18-0017 Condition of Approval No. 48 (Commercial Cannabis Permit Modification) due to the Operator’s failure to receive City Manager approval for the design changes made to the facility WHEREAS, the Hearing Officer has recommended that the City Council adopt an ordinance repealing Ordinance No. 689 terminating DA No. 18-017C and revoke the related interest in CCP No. 18-0017; and
WHEREAS, pursuant to state law and the CMC, the Planning Commission duly noticed, agendized, and conducted a public hearing on this matter on May 14, 2024; and Attachment A - Draft Ordinance No. 750 Page 58 of 3559
Ordinance No. 750

WHEREAS, the Planning Commission considered all public comments received before and during the public hearing, the presentation by City staff, the relevant staff report, administrative record, and all other pertinent documents relating to the repeal of Ordinance No. 689; and
WHEREAS, after the close of such public hearing, the Planning Commission adopted Resolution No. 2024-13, attached hereto and incorporated by reference as Exhibit “C,” recommending the City Council repeal Ordinance No. 689 and terminate related DA No. 18-017C; and
WHEREAS, pursuant to state law and the CMC, the City Council duly noticed, agendized, and conducted a public hearing on this matter; and WHEREAS, the City Council considered all public comments received before and during the public hearing, the presentation by City staff, the relevant staff report, administrative record, and all other pertinent documents relating to the repeal of Ordinance No. 689; and
WHEREAS, after the close of such public hearing, the City Council introduced and adopted by first reading Ordinance No. 750, repealing Ordinance No. 689 and terminating related DA No. 18-017C.

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

SECTION 1. RECITALS
That the above Recitals are true and correct and are incorporated as though fully set forth herein.

SECTION 2. ADOPTION OF HEARING OFFICER’S FINDINGS OF FACT AND

CONCLUSIONS OF LAW
The City Council has reviewed and considered the Decision by the Hearing Officer (Exhibit “B”) issued on February 12, 2024, on this matter. For the reasons stated in the Decision, and as recommended by the Planning Commission (Exhibit “C”), the City Council adopts the Hearing Officer’s findings of fact and conclusions of law as its own and determines that Nyce Guys, LLC is not in compliance with the terms and conditions of the Development Agreement No. 18-017C and finds that Nyce Guys, LLC is in default of its contractual obligations set forth in said Development Agreement and has breached its Conditions of Approval for CCP No. 18-0017 by a showing of the preponderance of the evidence.

SECTION 3. TERMINATION OF DEVELOPMENT AGREEMENT
Pursuant to Article 19(d) of the Development Agreement, the City Council may terminate Development Agreement No.18-017C in its entirety. For the reasons stated in Attachment A - Draft Ordinance No. 750 Page 59 of 3559
Ordinance No. 750

the Decision, and as recommended by the Planning Commission, the City Council hereby adopts this Ordinance repealing Ordinance No. 689 terminating DA No. 18-017C in its entirety.

SECTION 4. SEVERABILITY
If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions might subsequently be declared invalid or unconstitutional.

SECTION 5. CALIFORNIA ENVIRONMENTAL QUALITY ACT
The City Council has determined that this Ordinance is categorically exempt from the California Environmental Quality Act (“CEQA”) (Pub. Res. Code § 21000 et seq.) and CEQA Guidelines (Cal. Code Regs., tit. 14, § 21000 et seq.) pursuant to CEQA Guidelines Section 15321 (Class 21) because the repeal of Ordinance No. 689 and termination of DA No. 18-017C is an enforcement action to revoke an entitlement interest.

SECTION 6. PUBLICATION
The City Clerk shall certify the passage and adoption of this Ordinance and shall cause this Ordinance to be published and/or posted as required by law, which shall take full force and effect thirty days from its adoption.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Cudahy at the regular meeting of this ______ day of _____ 2024. ______________________________
Jose R. Gonzalez
Mayor
ATTEST:
____________________________
Richard Iglesias
City Clerk
Attachment A - Draft Ordinance No. 750 Page 60 of 3559
Ordinance No. 750

CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:

CITY OF CUDAHY )
I, Richard Iglesias, City Clerk of the City of Cudahy, hereby certify that the foregoing Ordinance No. 750 was introduced for a first reading on the _____ day of ____ 2024 and approved for a second reading and adopted by said Council at its regular meeting held on the ______ day of ______ 2024 by the following vote, to-wit:

AYES:

NOES:

ABSENT:

ABSTAIN:
_________________________
Richard Iglesias
City Clerk
Attachment A - Draft Ordinance No. 750 Page 61 of 3559
Ordinance No. 750

EXHIBIT “A”
EVIDENCE SUBMITTED BY THE CITY (“ADMINISTRATIVE RECORD”) Attachment A - Draft Ordinance No. 750 Page 62 of 3559
Ordinance No. 750

EXHIBIT “B”

HEARING OFFICER DECISION AND ORDER
Attachment A - Draft Ordinance No. 750 Page 63 of 3559
Ordinance No. 750

EXHIBIT “C”
PLANNING COMMISSION RESOLUTION NO. 2024-13
Attachment A - Draft Ordinance No. 750 Page 64 of 3559
ORDINANCE NO. 673

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CUDAHY AMENDING TITLE 5 (BUSINESS LICENSES AND
REGULATIONS) AND TITLE 20 (ZONING) OF THE

CUDAHY MUNICIPAL CODE TO PROHIBIT CANNABIS

RETAILERS/DISPENSARIES CITYWIDE AND TO

ESTABLISH REGULATIONS AND A DISCRETIONARY

REVIEW PROCESS FOR THE ALLOWANCE OF

MEDICINAL-ONLY COMMERCIAL CANNABIS ACTIVITIES
(CULTIVATION, DISTRIBUTION, MANUFACTURING,

DELIVERIES, MICROBUSINESS, AND LABORATORY

TESTING) IN A SPECIFIED OVERLAY ZONE THROUGH A

DEVELOPMENT AGREEMENT
WHEREAS, in 1996, the California Legislature approved Proposition 215, also known as the Compassionate Use Act (the "CUA"), which was codified under Health and Safety Code Section 11262.5 et sec. and was intended to enable persons in need of medical marijuana for specified medical purposes, such as cancer, anorexia, AIDS, chronic pain, glaucoma and arthritis, to obtain and use marijuana under limited circumstances and where recommended by a physician. The CUA provides that "nothing in this section shall be construed or supersede legislation prohibiting persons from engaging in conduct that endangers others, or to condone the diversion of marijuana for non-medical purposes.";
WHEREAS, in 2004, the California Legislature enacted the Medical Marijuana Program Act (Health & Saf. Code, § 11362.7 et seq.)(the "MMP"), which clarified the scope of the CUA, created a state-approved voluntary medical marijuana identification card program, and authorized cities to adopt and enforce rules and regulations consistent with the MMP. Assembly Bill 2650 (2010) and Assembly Bill 1300 (2011) amended the MMP to expressly recognize the authority of counties and cities to "[a]dopt local ordinances that regulate the location, operation, or establishment of a medical marijuana cooperative or collective" and to civilly and criminally enforce such ordinances;
WHEREAS, the Federal Controlled Substances Act (21 U.S. C., § 801 et seq.) makes it unlawful under federal law for any person to cultivate, manufacture, distribute or dispense, or possess with intent to manufacture, distribute, or dispense marijuana.

Despite such federal prohibition, on August 29, 2013, the United States Department of Justice issued a memorandum (the "Cole Memo") stating that, notwithstanding the federal classification of marijuana as a schedule 1 controlled substance, jurisdictions that have legalized marijuana in some form are less likely to be subject to federal enforcement under the Controlled Substances Act if they have implemented strong and effective regulatory and enforcement systems to follow eight guiding principles: (1) preventing the distribution of marijuana to minors; (2) preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels; (3) preventing the

ATTACHMENT B Page 65 of 3559
diversion of marijuana from states where it is legal under state law in some form to other states; (4) preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity; (5) preventing violence and the use of firearms in the cultivation and distribution of marijuana; (6) preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use; (7) preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and (8) preventing marijuana possession or use on federal property;
WHEREAS, in September 2015, the California State Legislature enacted, and Governor Brown signed into law three bills - Assembly Bill 243, Assembly Bill 266, and Senate Bill 643 - which together comprise the Medical Marijuana Regulation and Safety Act (the "MMRSA"). The MMRSA created a comprehensive dual state licensing system for the cultivation, manufacture, retail, sale, transport, distribution, delivery, and testing of medical cannabis;
WHEREAS, on August 22, 2016, the City Council of the City of Cudahy (the "City Council" of the "City") adopted Interim Urgency Ordinance No. 656U to establish a temporary moratorium on medical "commercial cannabis activities," as defined under the MMRSA, for a period of 45 days and extended such moratorium for an additional period of 22 months and 15 days under Interim Urgency Ordinance No. 661, on September 26, 2016;
WHEREAS, the MMRSA was renamed the Medical Cannabis Regulation and Safety Act (the "MCRSA") under Senate Bill 837 in June 2016, which also made substantive changes to the applicable state laws, which affect the various state agencies involved in regulating cannabis businesses as well as potential licensees; WHEREAS, on November 8, 2016, the Control, Regulate, and Tax Adult Use of Marijuana Act ("AUMA") was approved California voters as Proposition 64 and became effective on November 9, 2016, pursuant to the California Constitution (Cal. Const., art.

II, § 10(a).). Proposition 64 legalized the nonmedical use of cannabis by persons 21 years of age and over, and the personal cultivation of up to six (6) cannabis plants. On November 14, 2016, the City Council adopted Urgency Ordinance No. 663 to prohibit outdoor personal marijuana cultivation and establish regulations and a permitting process for indoor personal marijuana cultivation;
WHEREAS, AUMA also created a state regulatory and licensing system j governing the commercial cultivation, testing, and distribution of nonmedical cannabis, and the manufacturing of nonmedical cannabis products. On January 9, 2017, Interim Urgency Ordinance No. 666 was adopted by the City Council to establish a temporary moratorium on nonmedical "commercial cannabis activities" for a period of 45 days and extended such moratorium for an additional period of 22 months and 15 days under Interim Urgency Ordinance No. 667, on February 27, 2017; Page2
ATTACHMENT B Page 66 of 3559
\
I
)
WHEREAS, on June 27, 2017, Governor Brown signed the Legislature-approved Senate Bill 94. SB 94 combined elements of the MCRSA and AUMA to establish a streamlined singular regulatory and licensing structure for both medical and nonmedical cannabis activities given that there were discrepancies between the MCRSA and AUMA. The new consolidated provisions under SB 94 is now known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act ("MAUCRSA") to be governed by the California Bureau of Cannabis Control. MAUCRSA refers to medical cannabis as "medicinal cannabis" and nonmedical/recreational cannabis as "adult-use cannabis"; WHEREAS, on June 27, 2017, the as part of an Economic Development Ad Hoc Committee presentation on revenue-generating opportunities, commercial cannabis regulations and strategies were offered to and discussed by the City Council; WHEREAS, the City seeks to establish an overlay zone in the City in which certain medicinal-only commercial cannabis activities can be conducted in accordance with MAUCRSA and the City's police power under Section 7 of Article XI of the California Constitution;
WHEREAS, it is the purpose and intent of the City to regulate medicinal cannabis in a manner that is consistent with the Cole Memo and promotes the health, safety, and general welfare of the residents and businesses within the City, while limiting any negative impacts;
WHEREAS, the City intends to be on the forefront of groundbreaking research, science, innovation, and development of treatment for symptoms and cures in the field of medicinal cannabis, as scientific research, studies, and data have established that medicinal cannabis can help patients with a vast array of medical conditions; WHEREAS, the City desires to reduce the illegal market for cannabis while minimizing the chances of social harm and creating jobs and revenue for the City; and WHEREAS, nothing in this Ordinance shall be construed to allow persons to engage in conduct that violates the law, endangers others, causes a public nuisance, allows the illegal use or diversion of cannabis, or allows any activity relating to cannabis that is otherwise illegal under California state law, as amended.

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

SECTION 1. The above recitals are true and correct and are incorporated herein.

SECTION 2. Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended by the addition of a new Chapter 20.120 (Commercial Cannabis Overlay Zone), which shall read as follows:

Chapter 20.120 - Commercial Cannabis Overlay Zone.

ATTACHMENT B Page 67 of 3559

20.120.010 Definitions
For purposes of this Chapter 20.120, the following definitions shall apply:
"Commercial cannabis activities" mean the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis and cannabis products. ) "Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or j Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from cannabis. "Cannabis" also means marijuana as defined by Section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. Cannabis does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this Chapter, cannabis does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
"Cannabis product" means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, or other cannabis derivative, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients. "Day care center" means any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and schoolage child care centers.
"Overlay Zone" means the commercial cannabis overlay zone, whose area and boundaries are attached to City Council Ordinance No. 673 as Exhibit "A" "MAUCRSA" means the Medicinal and Adult-Use Cannabis Regulation and Safety Act, as may hereinafter be amended.
"Youth center" means any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to, private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities.

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20.120.020 Prohibitions.

Adult-use commercial cannabis activities and medicinal commercial cannabis activities, as both are described in state law, including, but not limited to MAUCRSA, are hereby prohibited unless otherwise allowed in this Chapter.

20.120.030 Overlay zone.

Medicinal commercial cannabis activities, except retail dispensaries that are open to the public for point-of-sale purchases, shall be allowed within the Overlay Zone pursuant to a development agreement adopted in accordance with the Development Agreement Law (Gov. Code, § 65864 et seq.) and Cudahy Municipal Code Chapter

20.28 (Development Agreements). No such activities shall be permitted without a development agreement within or outside of the boundaries of the Overlay Zone.

The City may approve or deny such a development agreement in its sole and absolute discretion.

20.120.040 Particular restrictions for Atlantic Avenue.

Section 20.120.030 notwithstanding, no cannabis-related business shall be located within the Overlay Zone and on Atlantic Avenue with a storefront facing Atlantic Boulevard unless such business employs and effectuates a business model with a primary entertainment purpose.

20.120.050 Indoor Horticulture.

Indoor horticulture, excluding cannabis horticulture shall be permitted by-right within the Overlay Zone.

20.120.060 Prohibition on new schools, day cares, and youth centers in overlay zone.

The establishment of public or private schools providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center is prohibited within the Overlay Zone, or within 600 feet of the boundaries of the Overlay Zone, is hereby prohibited, unless otherwise mandated under state or federal law. An existing public or private school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center located within the Overlay Zone, or within 600 feet of the boundaries of the Overlay Zone shall be considered legal nonconforming, in accordance with Chapter 20.24 (Legal Nonconforming) of Title 20 (Zoning) of the Cudahy Municipal Code.

20.120.070 Temporary permits for local events - rights reserved.

The City reserves the right to issue temporary permits for onsite cannabis sales to, and consumption by, persons 21 years of age or older at a county fair, district agricultural association event, or other similar event authorized under state law, which is located within the Overlay Zone, pursuant to the provisions of Subdivision (e) of Business and Professions Code Section 26200.

SECTION 3. Subsection (3)(p) of Section 20.64.090 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.64 (Residential Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:

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(p) Schools, public and private, excluding schools providing instruction in kindergarten or any grades 1 through 12 located within 600 feet of a residential zone located within the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 4. Subsection (24) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(24) Day care centers, excluding those occupying any portion of the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 5. Subsection (49) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(49) Schools, colleges, and universities, accredited, including appurtenant facilities that offer instruction required to be taught by the Education Code of the state of California and in which no pupil is physically restrained, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 6. Subsection (50) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(50) Schools, business and professional, including art, barber, beauty, dance, drama, music, and swimming, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 7. Subsection (46) of Section 20.68.150 (Uses by conditional use permit in C-M Zone) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(46) Schools, colleges, and universities, accredited, including appurtenant facilities which offer instruction required to be taught by the Education Code of the state and in which no pupil is physically restrained, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the C-M zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise

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mandated under state or federal law.

SECTION 8. Subsection (47) of Section 20.68.150 (Uses by conditional use permit in C-M Zone) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(47) Schools, business and professional, including art, barber, beauty, dance, drama, music, and swimming, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the C-M zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 9. Title 5 (Business License and Regulations) of the Cudahy Municipal Code is hereby amended by the addition of a new Chapter 5.20 (Cannabis Permitting and Regulation), which shall read as follows:

Chapter 5.20 - Cannabis Permitting and Regulation.

5.20.010 Section Intent and Purposes.

The intent and purpose of this Chapter is to regulate Commercial Cannabis Activity (as defined below) in accordance with State Law (as defined below) to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to State Law, including, but not limited to, MAUCRSA. The goals of this regulation for Commercial Cannabis Activity include:
(a) To comply with the goals and guidance set forth in the Cole Memo. (b) To minimize the size of the illegal market for Cannabis in the City and the surrounding regions.
(c) To create jobs, revenue, and economic growth for the City and its residents. (d) To enable law enforcement and regulators to have sufficient rights to inspect and audit Cannabis Permittees and take expeditious action against Cannabis Permittees who violate the requirements of this Chapter. (e) To minimize social harms which may arise from Cannabis including youth consumption or intoxicated driving.
(f) To regulate the manner of advertising and location of Cannabis Permittees such that public nuisance is minimized.

5.20.020 Definitions.

For purposes of this Chapter, the following definitions shall apply, unless the context clearly indicates otherwise:
(a) "Applicant" means an Owner seeking a Cannabis Permit pursuant to this Chapter.
(b) "Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every

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compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. Cannabis also means the separated resin, whether crude or purified, obtained from cannabis. Cannabis also means marijuana as defined by Section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. Cannabis does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this Chapter 5.18, Cannabis does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
(c) "Cannabis Permit" means a permit issued by the City to conduct a Commercial Cannabis Activity, including, but not limited to a Cultivation Permit, Distribution Permit, Manufacturing Permit, Microbusiness Permit, Retail Delivery Permit, or Testing.
(d) "Cannabis Permittee" means a Person who holds a Cannabis Permit. (e) "Cannabis Product" means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, or other cannabis derivative, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients.
(f) "City" shall mean the City of Cudahy.
(g) "City Coden means the City of Cudahy Municipal Code. (h) "City Manager" means the City Manager of the City of Cudahy. (i) "Cole Memo" means the August 29, 2013 United States Department of Justice memorandum offering guidance on federal enforcement priorities regarding Cannabis.

U) "Commercial Cannabis Activity(ies)" means the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of Cannabis and/or Cannabis Products. (k) "Cultivation" means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of Cannabis.
(I) "Cultivation Permit" means a Cannabis Permit for the Indoor Cultivation of Cannabis in accordance with the terms and conditions of this Chapter and the Development Agreement for the applicable Cannabis Permit issued to the particular Cultivation Permittee.
(m) "Cultivation Permittee" means an applicant who has applied for and has been issued a Cultivation Permit by the City pursuant to the terms and conditions of this Chapter.

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(n) "Day Care Center" means any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and schoolage child care centers.
(o) "Development Agreement" means an agreement adopted pursuant to the Development Agreement Law (Gov. Code, § 65864 et seq.) and Cudahy Municipal Code Chapter 20.28 (Development Agreements), which provides agreed upon community benefits to the City.
(p) "Distribution" means the procurement, sale, and transport of cannabis and cannabis products between persons authorized to engage in permitted commercial cannabis activities pursuant to this Chapter. (q) "Distribution Permit" means, with respect to a Distribution Permittee, a Cannabis Permit for Distribution in accordance with the terms and conditions of this Chapter and the Development Agreement for the applicable Cannabis Permit issued to such Distribution Permittee.
(r) "Distribution Permittee" means a Person that has been issued a Distribution Permit by the City pursuant to the terms and conditions of this Chapter. (s) "Fully Enclosed and Secure Structure" means a space within a building or other structure which has a complete roof enclosure supported by connecting walls extending from the ground to the roof, which is reasonably secure against unauthorized entry, provides complete visual screening or is behind fencing or other features providing complete visual screening, and which is accessible only through one or more lockable doors and is inaccessible to minors. (t) "Good Cause" for purposes of refusing or denying a Cannabis Permit, for revoking a Cannabis Permit, or for refusing or denying a Cannabis Permit renewal or reinstatement means: (i) the Applicant has not obtained approval by the City Council of a Development Agreement setting forth the general terms for the operation of commercial cannabis activity or breaches a term or terms of a Development Agreement approved by the City Council pursuant to this Chapter; (ii) The Applicant or Cannabis Permittee has violated the terms, conditions, or provisions of this Chapter, of state law, of any regulations or rules promulgated pursuant to state law or this Chapter, any applicable local rules, regulations, or conditions placed upon its state license or Cannabis Permit; (iii) the licensed Premises have been operated in a manner that adversely affects the public health, safety, or welfare or the safety of the immediate neighborhood in which the Commercial Cannabis Activity is being conducted; (iv) the Applicant or Cannabis Permittee has knowingly made false statements, misrepresentations, or material omissions on an application form, renewal form, or other document submitted to the City; (v) the Applicant or Cannabis Permittee's criminal history does not indicate that the Applicant or Cannabis Permittee is of Good Moral Character or the Applicant or Cannabis Permittee has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the Applicant or Cannabis Permittee. However, if the City has issued a Cannabis Permit to the Applicant or Cannabis Permittee, the City shall not consider any

ATTACHMENT B Page 73 of 3559
criminal history of the Applicant or Cannabis Permittee that was disclosed to or discovered by the City prior to issuance of the Cannabis Permit and is confirmed by the Applicant or Cannabis Permittee. For any criminal history that was not disclosed to or discovered by the City prior to issuance of a Cannabis Permit, or that arose after the issuance of the Cannabis Permit, the City shall conduct a thorough review of the nature of the crime, conviction, circumstances, and evidence of rehabilitation of the Applicant or Cannabis Permittee, and shall evaluate the suitability of the Applicant or Cannabis Permittee based upon such review. In determining which offenses are substantially related to the qualifications, functions, or duties of the Applicant or Cannabis Permittee, the City shall consider factors set forth in Business and Professions Code Section 26057; (vi) the Applicant or Cannabis Permittee is employing or allowing to volunteer any person whose criminal history indicates that such person is not of Good Moral Character; (vii) the Applicant or Cannabis Permittee fails to allow inspection by City officials of the security recordings, activity logs, business records, or other accessible records pertaining to the activities conducted on the applicable Premises; or (viii) the Applicant or Cannabis Permittee allows for Physician Services to be conducted on the applicable Premises. (u) "Good Moral Character" means having a personal history that demonstrates the propensity to serve the public in a manner that reflects openness, honest, fairness, and respect for the law and rights and well-being of others. In determining Good Moral Character, the following standards shall apply: (i) a judgment of guilt in a criminal prosecution or a judgment in a civil action shall not be used, in and of itself, as proof of an individual's lack of Good Moral Character.

Such judgment, however, may be used as evidence in the determination and when so used, the individual shall be notified and shall be permitted to rebut the evidence by showing that, at the current time, he or she has the ability to, and is likely to serve the public, in a fair, honest, and open matter, that he or she is rehabilitated, and/or that the substance of the former offense is not substantially related to the applicable Commercial Cannabis Activity; and (ii) a prior conviction where the sentence, including any term of probation incarceration, or supervised release is completed for the possession of, possession for sale, sale, manufacture, transportation, or cultivation of a controlled substance, is not considered substantially related, and shall not be the sole ground for denial of a Cannabis Permit, except that any of the convictions set forth in Business and Professions Code Section 26057(b)(4), as may be amended, shall be deemed substantially related to applicable Commercial Cannabis Activity. (v) "Health and Safety Code" means the California Health and Safety Code, as amended from time to time.
(w) "Indoor" means within a Fully Enclosed and Secure Structure. (x) "Manufacture" or "Manufacturing" means to compound, blend, extract, infuse, or otherwise make or prepare a Cannabis Product from such blends, extractions, or infusions.

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ATTACHMENT B Page 74 of 3559
(y) uManufacturing Permit" means a Cannabis Permit to Manufacture in accordance with the terms and conditions of this Chapter and the conditions of approval for the applicable Cannabis Permit issued to the particular Manufacturing Permittee.
(z) "Manufacturing Permittee" means a Person that has been issued a Manufacturing Permit by the City pursuant to the terms and conditions of this Chapter.
(aa) "Medicinal Permittee" means a Person who is issued a Cannabis Permit to engage in Commercial Cannabis Activity with respect to medicinal Cannabis in accordance with applicable City law and State Law, including MAUCRSA. (bb) "Microbusiness" means a commercial medicinal cannabis business facility of cultivation of medicinal cannabis on areas less than 10,000 square feet and also acts as a licensed distributor, manufacturer, and Delivery-only retailer, pursuant to State Law, including MAUCRSA. Microbusinesses shall not be open to the public for point-of-sale retail Cannabis sales.
(cc) "Microbusiness Permit" means a Cannabis Permit to establish and conduct a Microbusiness in accordance with the terms and conditions of this Chapter and the conditions of the Development Agreement for the applicable Cannabis Permit issued to the particular Microbusiness Permittee. (dd) "Microbusiness Permittee" means a Person who has been issued a Microbusiness Permit by the City pursuant to the terms and conditions of this Chapter.
(ee) "Outdoors" means any location within the City that is not within a Fully Enclosed and Secure Structure.
(ff) "Owner" means any of the following: (i) a Person with an aggregate ownership interest of 20% or more in the Person applying for a Cannabis Permit, unless the interest is solely a security, lien, or encumbrance; (ii) the chief executive officer of a nonprofit or other entity; a member of the boards of directors of a nonprofit; (iv) an individual who will be participating in the direction, control, or management of the person applying for a Cannabis Permit. (gg) "Permit Zone" means, with respect to a Person holding a Cannabis Permit, the overlay zone described in Cudahy Municipal Code Chapter 20.120 where such Cannabis Permit type is permitted to operate pursuant to a Development Agreement with the City.
(hh) "Person" includes any individual, entity, firm, co-partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.
(ii) "Physician Services" means the consultation by a State-licensed physician of a patient with the possible recommendation by such physician of medicinal Cannabis for such patient.

ATTACHMENT B Page 75 of 3559
OD "Premises" means the designated structure or structures and land specified in the application that is owned, leased, or otherwise held under the control of the Cannabis Permittee applicant or Cannabis Permittee where the Commercial Cannabis Activity will be or is conducted. The premises shall be a contiguous area and shall only be occupied by one Cannabis Permittee. (kk) "Retail Delivery" means the commercial transfer or delivery of Cannabis or Cannabis Products to a customer, patient, primary caregiver or Cannabis Permittee.
(II) "Retail Delivery Establishment" means a location where Cannabis or Cannabis Products are, either individually or in any combination, Delivered pursuant to State Law, including MAUCRSA. Retail Delivery Establishments shall not be open to the public for point-of-sale retail sales. (mm) "Retail Delivery Permit" means a Cannabis Permit to Deliver Cannabis and Cannabis Products to customers, patients, and primary caregivers in accordance with the terms and conditions of this Chapter and the conditions of the Development Agreement for the applicable Cannabis Permit issued to the particular Retail Delivery Permittee.
(nn) "Retail Delivery Permittee" means a Person that has been issued a Retail Delivery Permit by the City pursuant to the terms and conditions of this Chapter. (oo) "State" means the State of California.
(pp) "State Law" means all laws of the State of California, including, but not limited to, all rules and regulations adopted by State agencies and State regulatory entities, including subsequent amendments to such laws, rules, and regulations.
(qq) "State Medicinal license" means a State license for medicinal Commercial Cannabis Activities issued pursuant to State Law. (rr) "Testing" means the activities conducted by a Testing Laboratory. (ss) "Testing Laboratory" means an accredited laboratory, facility, or entity in the City that offers or performs tests of medicinal cannabis or medicinal cannabis products in accordance with State Law and City law:
(tt) "Testing Permit" means a Cannabis Permit for Testing the quality and makeup of Cannabis and Cannabis Products pursuant to the terms and conditions of this Chapter and the conditions of the Development Agreement for the applicable Cannabis Permit issued to the particular Testing Permittee. (uu) "Testing Permittee" means a Person who has been issued a Testing Permit by the City pursuant to the terms and conditions of this Chapter. (vv) "Volatile Solvent" means a Class I Flammable liquid as defined by the National Fire Protection Association, including butane and propane. (ww) "Youth Center" means any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to,

ATTACHMENT B Page 76 of 3559
private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities.

5.20.030 Commercial Cannabis Activity Prohibited.

All Commercial Cannabis Activity within the City is prohibited except as permitted by this Chapter.

5.20.040 Certain Commercial Cannabis Activity Permitted. Medicinal Commercial Cannabis Activities, except retail dispensaries that are open to the public for point-of-sale purchases, shall be allowed within the area set forth in the overlay zone/Permit Area illustrated in Exhibit "A" to City Council Ordinance No. 673 pursuant to a development agreement adopted in accordance with the Development Agreement Law (Gov. Code,§ 65864 et seq.) and Cudahy Municipal Code Chapter

20.28 (Development Agreements). No such activities shall be permitted without a Development Agreement within or outside of the boundaries of such overlay zone.

The City may approve or deny such a Development Agreement in its sole and absolute discretion. The City Manager is authorized to develop and promulgate policies and procedures consistent with the intent and spirit of this Chapter concerning the applications, application process, including, but not limited to, the information required of Applicants, and application review procedures, which shall inform the administration and protocols to be used and followed by the City in the application and hearing processes.

5.20.050 Business standards.

Commercial Cannabis Activity within the City shall be in conformance with the standards set forth in this Section, in addition to those additional standards that may be imposed through negotiated Development Agreement. The City Manager is hereby authorized to formulate and impose additional Business Requirements applicable to Cannabis Permittees in furtherance of the public health, safety, and/or welfare.
(a) Commercial Cannabis Activity shall only be allowed upon application and issuance of a Cannabis Permit and a Development Agreement by the City in accordance with the criteria and process set forth in this Chapter and City Code. (b) Zoning and Land Use.
(1) Operation Near Schools, Day Cares, and Youth Centers. Following the enactment of this Chapter, no new Premises shall be established, developed, or operated within 600 feet of a Day Care Center, Youth Center, or public or private school providing instruction in kindergarten or any grades 1 through 12 that is in existence at the time the Cannabis Permit is issued. All distances shall be measured in a straight line, without regard to intervening structures, from the nearest point of the building or structure in which the Premises are, or will be, located to the nearest property line of those uses describe in this Subsection. The restrictions set forth in this Subsection shall not apply to Premises which operate within 600 feet of any Day Care Center, Youth Center, or public or private school

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providing instruction in kindergarten or any grades 1 through 12, if such Premises existed prior to the establishment of the applicable Day Care Center, Youth Center, or school that is located within 600 feet of such Premises.
(2) Co-Location. All Commercial Cannabis Activity shall fully comply with all l mandates set forth in State Law. To the extent not prohibited under State Law, a Cannabis Permittee may be located within the same unit of the same Premises or building, facility or real property parcel as another Cannabis Permittee.
(3) Development Agreement.
a) Prior to commencing operations, all Cannabis Permittees shall enter into a Development Agreement with the City.
b) All Premises shall be operated in accordance with the terms of the applicable Development Agreement for the specified parcel of real property (or sub-portion thereof) upon which the Premises is located. c) Except as specified, Commercial Cannabis Activities shall not exceed the square footage authorized pursuant to the applicable Development Agreement.
d) All Premises shall be located in the Permit Zone pursuant to the applicable Development Agreement.
(c) Commercial Cannabis Activity is allowed only within Fully Enclosed and Secure Structures that are inaccessible to minors.
(d) Signage for any business must be applied for through the City's Planning Division, which shall require review and approval prior to installation. Business identification signage shall be limited to that needed for identification only, and shall not contain any logos or information that identifies, advertises, or lists the services or the products offered. No Cannabis Permittee shall advertise by having a person holding a sign and advertising the business to passersby, whether such person is on the Premises of the Cannabis Permittee or elsewhere including, but not limited to, the public right-of-way. (e) From any public right-of-way, there shall be no visible evidence of the consumption of any Cannabis Products. Commercial Cannabis Activity shall not adversely affect the health or safety of the nearby residents by creating dust, glare, heat, noise, smoke, traffic, vibration, odor or other impacts, and shall not be hazardous due to use or storage of materials, processes, products, or wastes. (f) Hours of operation limits, if any, shall be specified in terms mutually agreed upon in a Development Agreement.
(g) All Cannabis and Cannabis Products shall be kept in a secured manner during all business and nonbusiness hours.
(h) All Commercial Cannabis Activities shall operate within Premises that are compliant with all applicable State Laws and local laws.

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(i) Cannabis Permittees must pay all applicable taxes pursuant to all federal, State, and local laws, including, but not limited to, fees relating to infrastructure improvements within the Permit Zone.

U) Cannabis Permittees shall provide sufficient odor absorbing ventilation and exhaust systems so that odors outside the applicable Premises are not a nuisance on any adjacent property of public right-of-way. Any violation of this Section shall be remedied within thirty (30) days of the Cannabis Permittee receiving notice of such violation.
(k) Cannabis Permittees shall utilize product and inventory tracking software and accounting software that is consistent with reasonable business practices within the industry and the seed-to-sale tracking software being developed by the State. (I) Except permitted in this Chapter, on-site smoking, ingestion, or consumption of Cannabis or Cannabis Products shall be prohibited on Premises. Except to the extent otherwise permitted pursuant to this Chapter, the entrance of the Premises shall be clearly and legibly posted with a notice indicating that smoking, ingesting, or consuming Cannabis, Cannabis Products or alcohol on such Premises is prohibited.
(m) Signage for all Premises shall be in compliance with the City's sign code and application for all signs must be submitted to the City's Planning Division and comply with its sign permitting protocol.
(n) Alcoholic beverages and tobacco shall not be sold, stored, distributed, or consumed on the Premises. Cannabis Permittees shall not hold or maintain a license from the State Department of Alcohol Beverage Control to sell alcoholic beverages, or operate a business that sells alcoholic beverages or tobacco with respect to the Premises. In addition, alcohol shall not be provided, stored, kept, located, sold, dispensed, or used on the Premises.
(o) Physician Services shall not be provided at any Premises. (p) The Premises shall fully comply with all applicable rules, regulations, and laws including, but not limited to, zoning and building City Codes, the City's business license ordinances, the Revenue and Taxation Code, the Americans with Disabilities Act, and MAUCRSA.
(q) Each Cannabis Permittee shall provide the City Manager, or the City Manager's designee, with the name, phone number, facsimile number, and email address of an on-site representative of such Cannabis Permittee to whom the City and the public can provide notice if there are any operational problems associated with such Cannabis Permittee's Premises. Each Cannabis Permittee shall make reasonable and good faith efforts to encourage residents and the public to call this representative to resolve any operational problems before any calls or complaints are made to the City or law enforcement. (r) All Cannabis Permittees must comply with the following security requirements:
(1) General Security Requirements.

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a) Security cameras shall be installed and maintained in good working condition and used in a format approved by the City Manager. The cameras shall be in use 24 hours per day, 7 days per week. The areas to be covered by the security cameras include areas as determined by the City Manager, including, but not limited to, the area in which the primary Commercial Cannabis Activity occurs, e.g. the Cultivation area for a for a cultivator.
b) The Premises shall be alarmed with a reliable commercial alarm system that is operated and monitored by a security company or alarm business in a manner satisfactory to the City Manager.
c) Entrance to any storage areas shall be locked at all times and under the control of staff of the Cannabis Permittee.
d) The business entrance(s) and all window areas shall be illuminated during evening hours. The Applicant shall comply with the City's lighting standards regarding fixture type, wattage, illumination levels, shielding, etc., and secure the necessary approvals and permits, as necessary. e) All windows on the Premises shall be appropriately secured with all Cannabis and Cannabis Products securely stored.
f) Each Cannabis Permittee shall implement track and trace protocols, as noted above in this Section, in order to prevent diversion of Cannabis or Cannabis Products.
g) All waste and disposal containers shall be locked at all times and stored ins a secure area and, at all times, under the control of the Cannabis Permittee.
(2) Security Alarm Systems - Minimum Requirements.
a) Each Premises shall have a security alarm system installed by a licensed alarm company on all perimeter entry points and perimeter windows.
b) Each Premises must ensure that its location is continuously monitored. Premises may engage the services of outside vendors to fulfill this requirement, such as a private security firm.
c) Each Premises shall maintain up to date and current records and existing contracts on the Premises that describe the location and operation of each security alarm system, a schematic of security zones, the name of the licensed alarm company, and the name of any vendor monitoring the Premises.
(3) Lock Standards. At a minimum, all points of ingress and egress shall be secured with commercial-grade, non-residential door locks. (4) Video Surveillance Requirements.

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a) Prior to exercising the privileges of a Cannabis Permit issued under this Chapter, an Applicant must install fully operational video surveillance and camera recording system. The recording system must record in digital format and meet the requirements outlined herein.
b) All video surveillance records and recording must be stored in a secure area that is only accessible to the management staff of the Cannabis Permittee.
c) Video surveillance records and recordings must be made available upon request to the City Manager or designee for a purpose authorized by this Chapter or for any other State or local law enforcement purpose. d) Video surveillance shall be held in confidence by all employees and representatives of the City Manager, except that the City Manager may provide such records and recordings to any State or local law enforcement agency for any purpose authorized under this Chapter for any State or local law enforcement purpose.
e) A sign shall be posted in a conspicuous place near each point of public access, which shall not be less than 12 inches wide and 12 inches long, composed of letters not less than one inch in height, stating that "All Activities Monitored by Video Camera" or "These Premises Are Being Digitally Recorded" or otherwise advising of all persons entering the Premises that a video surveillance and camera recording system is in operation and recording all activity as provided in this Section. f) The Premises shall utilize video surveillance equipment and a camera system that shall be remotely accessible by the City and Los Angeles County Sheriff's Department.
(5) Video Surveillance Equipment.
a) Video surveillance equipment shall, at a minimum, consist of digital or network video recorders, cameras capable of meeting the recording requirements described in this Section, video monitors, digital archiving devices, and a color printable capable of delivering still photos. b) All video surveillance systems must be equipped with a failure notification system that provides prompt notification to a Cannabis Permittee of any prolonged surveillance equipment interruption and/or the complete failure of the surveillance.
c) Cannabis Permittees are responsible for ensuring that all surveillance equipment is properly functioning and maintained so that the playback quality is suitable for viewing and the surveillance equipment is capturing the identity of all individuals and activities in the monitored Premises.
d) All video surveillance equipment shall have sufficient battery backup to support a minimum of four hours of recording in the event of a power outage.

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(6) Placement of Cameras and Required Camera Coverage.
a) Camera placement shall be capable of identifying activity occurring within 20 feet of all points of ingress and egress and shall allow for the clear and certain identification of any individual and activities on the Premises.
b) All entrances and exits to the Premises shall be recorded from both indoor and outdoor vantage points.
c) The system shall be capable of recording all pre-determined surveillance areas in any lighting conditions. If the Premises has a medicinal cannabis cultivation area, a rotating schedule of lighted conditions and zero-illumination can occur as long as ingress and egress points to those areas remain constantly illuminated for recording purposes.
d) Areas where medicinal cannabis is grown, tested, cured, manufactured, or stored shall have a camera placed in the room facing the primary entry door at a height that will provide a clear unobstructed view of activity without sight blockage from lighting hoods, fixtures, or other equipment.
e) Cameras shall also be placed at each location where weighing, packaging, preparation, tagging activities occur, or other distribution preparation activities occur.
f) At least one camera must be dedicated to record the access points to the secured surveillance recording area.
(7) Location and Maintenance of Surveillance Equipment. a) Surveillance recording equipment must be housed in a designated, locked, and secured room or other enclosure with access limited to authorized employees, the City Manager or designee, Los Angeles County Sheriff's Department, as authorized by this Chapter, other State or local law enforcement purpose, and service personnel or contractors. b) Premises must keep a current list of all authorized employees and service personnel who have access to the surveillance system and/or surveillance system room on the Premises. Premises must keep a surveillance equipment activity log on the Premises to record all service activity, including the identity of all individuals performing services on system service, the service date and time, and the reason for such service to the surveillance system.
c) Off-site monitoring and video recording storage of the Premises by an independent third party may be authorized so long as standards exercised at the remote location meets or exceeds all of the standards applicable to onsite monitoring.

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d) Each Premises located in a common or shred building must have a separate surveillance room/area that is dedicated to that specific Premises. The facility that does not house the central surveillance room is required to have a review station, printer, and map of camera placement on the Premises. All minimum requirements for equipment and security standards as set forth in this Section apply to such review station. (8) Video Recording Retention Requirements.
a) All camera views of all recorded areas must be continuously recorded 24 hours a day.
b) All surveillance recordings must be kept for a minimum of 30 days and be in a format that can be easily accessed for viewing. Video recordings must be archived in a format that ensures authentication of the recording as legitimately-capture video and guarantees that no alteration of the recorded image has taken place.
c) The surveillance system or equipment must have the capabilities to produce a color still photograph form any camera image, live, or recorded, of the Premises.
d) The date and time must be embedded on all surveillance recordings without significantly obscuring the picture. e) Time is to be measured in accordance with the official United States time established by the National Institute of Standards and Technology and the U.S. Naval Observatory at www.time.gov. f) After the 30-day surveillance retention schedule has lapsed, surveillance video recordings must be erased or destroyed prior to being discarded or disposed of for any other purpose. Surveillance video recordings shall not be destroyed if the Cannabis Permittee knows or should have known of a pending criminal, civil, or administrative investigation or any other proceeding sfor which the recording may contain relevant information.
(9) Other Records. All records applicable to the surveillance system and cannabis tracking system shall be maintained on the Premises. At a minimum, Premises shall maintain a map of the camera locations, directions of coverage, camera numbers, surveillance equipment maintenance activity log, user authorization list and operating instructions for the surveillance equipment.
(s) Audit. Each Cannabis Permittee shall maintain accurate books and records in an electronic format, which detail all revenues and expenses of the business, including, but not limited to, all assets and liabilities. On no less than an annual basis, or at any time upon reasonable request of the City, each Cannabis Permittee shall file a sworn statement detailing business activity during the previous 12-month period (or shorter period based upon the timing of the request). The statement shall include gross sales for each month and all

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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 Cannabis Permittee shall be subject to a regulatory compliance review and financial audit as determined by the City Manager or designee. (t) Inspections. The City Manager, or designee, or Los Angeles County Sheriff's Department shall have the right to enter all Premises from time to time unannounced during a Cannabis Permittee's hours of operation for the purpose of making reasonable inspections to observe and enforce compliance with this Chapter, to inspect and copy records required to be maintained under this Chapter, or to inspect, view, and copy recordings made by security cameras, all without requirement for a search warrant, subpoena, or court order, and subject to appropriate fees, as specified in the Development Agreement, or adopted by the City.

5.20.060 Application and fee requirements.
(a) All applicants wishing to obtain a Cannabis Permit from the City shall file an application with the City upon a form approved by the City Manager and shall pay a permit application fee as established by the City. The fee may vary depending on the type of Cannabis Permit. The City Manager or designee may require and conduct background checks, as necessary, to process and evaluate Cannabis Permit applications.
(b) Prior to operating in the City, each Cannabis Permittee shall timely and fully pay all fees associated with the establishment of Commercial Cannabis Activity.

The fees shall be as set forth in the schedule and fees and charges established by the City Council, including, but not limited to, the following:
(1) Application fee for accepting a registration application, due and payable in full at the time an application is submitted;
(2) Processing fee for the cost to the City of processing an application and reviewing, investigating, and scoring each application in accordance with any evaluation system to determine eligibility for issuance of a Cannabis Permit, due and payable in full at the time a registration application is submitted;
(3) Permit issuance fee for the cost to the City of preparing a Development Agreement, Planning Commission and City Council review of the Development Agreement and the Cannabis Permit, and preparation and issuance of the Cannabis Permit, as authorized by the Cannabis Permit; (4) Amended registration fee for the cost to the City of reviewing amendments or changes to the registration form previously filed on behalf of an Applicant, due and payable in full at the time amendments or changes to any Cannabis Permit form is submitted to the City;

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(5) Permit renewal fee for the cost ot the City of processing an application to renew a Cannabis Permit, due and payable in full at the time application is made to renew a Cannabis Permit; and
(6) Any fees set forth in the applicable Development Agreement.

5.20.070 Permit conditions.
(a) A Cannabis Permit application may be denied and not awarded by the City if:
(1) The Applicant or the Applicant's agent(s) has made one or more false or misleading statements or omissions in the application or during the application process.
(2) The proposed Premises or Commercial Cannabis Activity at the Premises is not allowed by State Law or City law.
(3) The Applicant is not a legal representative of the proposed Cannabis Permittee.
(4) The Applicant or any of its officers, directors, owners, managers, or employees is under 21 years of age.
(5) The Applicant's facility or its location is in violation of any building, zoning, health, safety, or other provision of this Chapter or of any State or local law that substantially affects the public health, welfare, safety, or morals, or the facility or its location is not permitted in the proposed area, or the issuing or continuation of a Cannabis Permit would be contrary ro the public health, welfare, safety, or morals.
(6) The Applicant or any of its officers, directors, owners, managers, or employees has been sanctioned by the City, State, or any county for unauthorized cannabis activities or has had a registration revoked under this Chapter in the previous 3 years.
(7) The Applicant or the Applicant's agent(s) have engaged in unlawful, fraudulent, unfair, or deceptive business acts or practices. (8) The Applicant has not been or is not in good standing with the City related to other or previous business activities operated in the City. (9) The Applicant has not satisfied all requirement of this Chapter. (10) For Good Cause, as defined in this Chapter.
(b) A Cannabis Permit shall be awarded by the City to Applicants in accordance with the process established by the City Manager.
(c) Before a Cannabis Permit can be issued to an applicant, a Cannabis Permit fee must be paid to offset all related costs to the City, and the proposed Premises must pass all applicable inspections.

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(d) Each Cannabis Permit is subject to the conditions of approval in the applicable Development Agreement for the parcel of real property upon which the Premises is located.
(e) Each Cannabis Permit is subject to any additional conditions that may be applied by the City at the time of issuance or renewal as necessary to properly regulate the applicable Commercial Cannabis Activities and to protect the public. (f) Each Cannabis Permittee shall execute a Development Agreement with the City to, among other things, fully reimburse the City for all fiscal impacts, costs, expenses, fees, and attorneys' fees incurred by the City related to the Cannabis Permit and the related Commercial Cannabis Activity of such Cannabis Permittee.
(g) Each Cannabis Permittee shall:
(1) Carry liability insurance in the amounts and types set by the City Manager or the City Manager's designee, and name the City as an additional insured on all such insurance policies.
(2) Execute an Indemnification Agreement prepared by the City that fully indemnifies the City for all liabilities associated with the Cannabis Permit, the Cannabis Permittee's Commercial Cannabis Activities, and any action taken by the Cannabis Permittee pursuant to this Chapter. Such indemnification may be set forth in the applicable Development Agreement.
(3) Defend the City, at the Cannabis Permittee's sole expense, in any action against the City or its agents, officers, officials, or employees associated with the Cannabis Permit, the Cannabis Permittee's Commercial Cannabis Activities, or any action taken by the Cannabis Permittee pursuant to this Chapter. The City may, at its sole discretion, participate in the defense of any such action, but such participation shall not relieve the Cannabis Permittee of its indemnification and reimbursement obligations. (4) Reimburse the City for all costs, expenses, fees, and attorney's fees incurred by the City related to any action against the City or its agents, officers, or employees associated with the Cannabis Permit, the Cannabis Permittee's Commercial Cannabis Activity, or any action taken by the Cannabis Permittee pursuant to this Chapter.
(h) A Cannabis Permittee shall keep the City and law enforcement updated with the names, addresses, and relevant criminal histories of the Applicant's Agents.

Relevant criminal histories shall include any drug-related or felony convictions, the nature of such offenses, and the sentences received for such convictions. (i) Transfer.
(1) Any Cannabis Permittee may not sell, transfer, pledge, assign, grant an option, or otherwise dispose of his or her ownership interest in the Commercial Cannabis Business authorized pursuant to the Cannabis Permit.

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(2) In order for a Cannabis Permittee to transfer its Cannabis Permit to any Person, such Cannabis Permittee must submit a transfer application to the City Manager or City Manager's designee. The City Manager or designee may create a transfer application and reasonable transfer application process, including mandatory fee, that Cannabis Permittees and the City must follow and pay for Cannabis Permit transfer requests. Each transfer request of a Cannabis Permit and the related transfer application is subject to the prior approval of the City Manager or designee. (3) Applicants for Cannabis Permits must show proof of lawful possession of the applicable location. Evidence of lawful possession consists of properly executed deeds of trust, leases, and other written instruments, as may be accepted by the City.
(4) The location shall only be the geographical area that is specifically and accurately described in executed documents verifying lawful possession.

No Cannabis Permittee is authorized to relocate to other areas or units within a building structure without first filing a change of location application and obtaining approval form the City regardless of any possessory interest or right to possession to such additional space. No Cannabis Permittee shall add additional contiguous units or areas, thereby altering initially-approved Premises without filing an application to modify the location on forms prepared by the City Manager, including any applicable processing fee.
(5) No Cannabis Permittee is authorized to sublet any portion of any Premises for any purpose unless all necessary forms and applications to modify the existing location to accomplish any subletting have been approved by the City.
(6) The City Manager shall develop and promulgate a process for the renewal of Cannabis Permits and the establish related fees, in accordance with applicable laws.

U) To the fullest extent permitted by law, the City does not assume any liability, and expressly does not waive sovereign immunity, with respect to any Commercial Cannabis Activities, or for the other activities of any Cannabis Permittee or for any other activities taking place at Premises. (k) Changing, Altering, or Modifying Location.
(1) After issuance of a Cannabis Permit, the Cannabis Permittee shall not make any physical change, alteration, or modification to the Premises that materially or substantially alters the location, production estimates, and/or usage of the location form the plans originally approved under the applicable Development Agreement, without the prior written approval of the City Council or designee. The Cannabis Permittee whose Premises are to be materially or substantially changed is responsible for filing an application with the City in order to obtain requisite approval.

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(2) Material or substantial changes, alterations, or modifications requiring approval include, but are not limited to, the following: (i) an increase or decrease in the total physical size or capacity of the location; (ii) the sealing off, creation of or relocation of a common entryway, doorway, passage, or other such means of public ingress and/or egress, when such common entryway, doorway, or passage alters or changes limited access areas; or (iii) the installation or replacement of electric fixtures or equipment, the lowering of a ceiling, or electrical modifications made for the purpose of increasing power usage ..
(3) The City Council or designee may grant approval for the types of changes, alterations, or modifications described herein upon the filing of an application by the Cannabis Permittee and payment of any applicable fee, subject to any requisite amendments to the applicable Development Agreement. The Cannabis Permittee must submit all information requested by the City Council or designee including, but not limited to, documents that verify the following: (i) the Cannabis Permittee will continue to have the exclusive possession of the Premises, as changed, by ownership, lease, rental agreement, or other means, and sole control over all activities; and (ii) the proposed change conforms to any and all City restrictions related to the time, manner, and place of regulation of the applicable Commercial Cannabis Activity.
(I) To the fullest extent permitted by law, the City does not assume any liability, and expressly does not waive sovereign immunity, with respect to any Commercial Cannabis Activities, or for the other activities of any Cannabis Permittee or for any other activities taking place at Premises.

5.20.080 Enforcement and Appeals.
(a) Any Commercial Cannabis Activity within the City in violation of this Chapter is hereby declared to be unlawful and a public nuisance. (b) Any Person who willfully or knowingly (i) engages in a violation of this Chapter or (ii) owns, possesses, controls, or has charge of any parcel of real property in the City upon which a violation of this Chapter is maintained and who has actual knowledge of such violation ( or would have actual knowledge of such violation after a reasonable inquiry), shall be subject to the penalties and remedies provided by this Chapter.
(c) Any violation of this Chapter shall constitute a separate offense for each and every day the violation occurs or persists.
(d) Any Person in violation of any provision of this Chapter or who causes another Person to be in violation of this Chapter shall have committed a misdemeanor. In addition which shall be punishable by a fine of up to one thousand dollars ($1,000) for each violation and for each day the applicable violation continues to persist.

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(e) Any person in violation of any provision of this Chapter shall be punishable by an administrative fine of up to a $1,000 per offense.
(f) Any material violation of this Chapter or any other relevant City law or State Law by a Cannabis Permittee, or a Cannabis Permittee's agent, is grounds for suspending or revoking the relevant Cannabis Permit. In addition, the City Manager or the City Manager's designee may suspend or revoke a Cannabis Permit, disqualify an Applicant from the application process, or elect not to renew a Cannabis Permit if any of the following occur:
(1) The City Manager or the City Manager's designee determines that the Cannabis Permittee has failed to comply with this Chapter, any condition of approval, or any agreement or covenant as required pursuant to this Chapter.
(2) The Cannabis Permittee's Commercial Cannabis Activities cease for more than ninety (90) calendar days.
(3) Ownership of the Cannabis Permittee is changed without approval from the City.
(4) The licensed Commercial Cannabis Activity moves from the licensed Premises to a different, unauthorized location.
(5) The Cannabis Permittee fails to provide remote access to the security cameras to the City Manager, the City Manager's designee, or Los Angeles County Sheriff's Department, or fails to allow inspection of the security recordings, the activity logs, or of the Premises by authorized City officials.
(g) Any decision regarding the suspension or revocation of a Cannabis Permit, disqualification of an Applicant from the application process, or election not to renew a Cannabis Permit may be appealed to an independent neutral third-party administrative hearing officer appointed by the City Manager or the City Manager's designee (the "Hearing Officer"). Said appeal shall be made by a notice of appeal from the Person appealing within thirty (30) days from the date of the City's decision. The appeal shall be accompanied by a written verified declaration setting forth the basis for the claim that the City's decision was improper. The Hearing Officer's decision shall be final and binding upon the City and the appellant Cannabis Permittee or Applicant. Alternatively, the City Manager may provide for the appeal to be made to the City Council, in lieu of a hearing officer. In such case, the City Council's decision shall be final and binding upon the City and the appellant.
(h) These penalties and remedies are cumulative, and in addition to any other penalties and remedies available to the City.

5.20.090 State Medicinal License Requirement.
(a) Cannabis Permittees must obtain a State Medicinal License in accordance with State Law, including, but not limited, to the temporary and permanent State Medicinal Licenses provided for in MAUCRSA.

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(b) Each Cannabis Permittee must expeditiously provide proof of receipt of the applicable State Medicinal License by such Cannabis Permittee to the City Manager or designee.

5.20.100 Medicinal Cannabis Cultivation.
(a) Purpose. The purpose and intent of this Section is to permit and regulate the medicinal Cannabis Cultivation in order to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to State Law. (b) Scope; Medicinal Cannabis. This Section permits and regulates the medicinal Cannabis Cultivation pursuant to State Law, including MAUCRSA.

Subject to the terms of this Chapter, Cultivation Permits may be issued by the City for medicinal Cannabis Cultivation pursuant to and in accordance with State Law, including MAUCRSA.
(c) Outdoor Cultivation is prohibited within the City.
(d) Indoor Cultivation is permitted only on properties within the applicable Permit Zone with a valid Cultivation Permit and other requisite permits and entitlements. (e) Indoor Cultivation may include growing Cannabis plants, harvesting Cannabis plants, and drying Cannabis flowers but shall not include the Manufacturing or of Cannabis Products, unless otherwise authorized pursuant to this Chapter. (f) Entrance to the Cultivation area, and all storage areas, of the applicable Premises shall be locked at all times and under the control of the staff of such Premises.

5.20.110 Medicinal Cannabis Products Manufacturing.
(a) Purpose. The purpose and intent of this Section is to permit and regulate the medicinal Cannabis Products Manufacturing to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to State Law. (b) Scope; Medicinal Cannabis. This Section permits and regulates medicinal Cannabis Products Manufacturing pursuant to State Law, including MAUCRSA.

Subject to the terms of this Chapter, Manufacturing Permits may be issued by the City for medicinal Cannabis Products Manufacturing, pursuant to and in accordance with State Law, including MAUCRSA.
(c) Medicinal Cannabis Products Manufacturing is a permitted use only on properties within the applicable Permit Zone with a valid Cultivation Permit and other requisite permits and entitlements.
(d) A Manufacturing Permittee must employ at least one (1) member of its personnel dedicated full time to quality control.
(e) The Manufacturing Permittee must establish standard operating procedures and batch records that comply with current good manufacturing practices and applicable State Law, including MAUCRSA.

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(f) All Cannabis Products produced by a Manufacturing Permittee must be labeled in compliance with applicable State Law, including MAUCRSA. (g) All Cannabis Products produced by a Manufacturing Permittee must be packaged in child resistant containers prior to leaving the Premises fOf such Manufacturing Permittee in accordance with applicable State Law, including MAUCRSA.
(h) Manufacturing Permittees may conduct Manufacturing using any type of solvents, including Volatile Solvents, or Manufacturing processes if such Manufacturing complies with the requirements of this Chapter and State or local law, including but not limited to Health and Safety Code Section 11362.775 (or any successive State Law) all applicable fire and building codes in the City and any other laws of the City designed to ensure the safety of such operation. (i) Manufacturing Permittees using Volatile Solvents for Manufacturing Cannabis Products must operate in a manner to reduce the risk of explosion or danger to public health, including through the use of a close-loop · or solvent dispersion system consistent with the requirements of Health and Safety Code Section 11362.775 (or any successive State Law).

U) If hazardous materials, flammable gas, flammable liquefied gas, flammable and combustible liquids, or other flammable material, as those terms are defined in California Fire Code Section 202, are to be used in the processing of medicinal Cannabis, then the provisions of California Fire Code Section 407 shall be applicable where hazardous materials are subject to permits under California Fire Code Section 50 (Hazardous Materials) are located on the Premises or where required by the applicable building or fire official.
(k) Storage, use, and handling of compressed gases in compressed gas containers, cylinders, tanks, and systems shall comply with California Fire Code Chapter 53. Partially full compressed gas containers, cylinders, or tanks containing residual gases shall be considered as full for the purposes of the controls required. Compressed gases classified as hazardous materials shall also comply with California Fire Code Chapter 50 for general requirements and California Fire Code Chapter 53 addressing specific hazards, including California Fire Code Chapter 58 (Flammable Gases), California Fire Code Chapter 60 (Highly Toxic and Toxic Materials), California Fire Code Chapter 63 (Oxidizers, Oxidizing Gases and Oxidizing Cryogenic Fluids, and California Fire Code Chapter 64 (Pyrophoric Materials). Prevention, control, and mitigation of dangerous conditions related to storage, use, dispensing, mixing, and handling of flammable and combustible liquids shall be in accordance with California Fire Code Chapters 50 and 57.
(I) Labeling Requirements - Edibles.
(1) Before a Manufacturing Permittee prepares any edible Cannabis or edible Cannabis Product for retail sale, it shall be labeled and placed in tamperevident packaging which at least meets the requirements of State Law, including, but not limited to, MAUCRSA.

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(2) All items to be sold or distributed shall be individually wrapped at the original point of preparation by the Cannabis Permittee. (3) Labeling must include a warning if nuts or other known allergens are used, and must include the total weight (in ounces or grams) of Cannabis in the package, not to exceed ten (10) milligrams of tetrahydrocannabinol (THC) per serving.
(4) A warning that the item is a medication and not a food must be clearly legible on the front of the package and/or must comply with state packing requirements.
(5) The package must have a label warning that the product is to be kept away from children.
(6) The label must also state that the product contains Cannabis and must specify the date of Manufacture and the Manufacture Permittee's information, including, but not limited to, address, and phone number. (7) Distributions must be in a properly labeled opaque package when distributed.
(8) The City Manager, or designee, may impose additional packaging and labeling requirements on Cannabis or Cannabis Products.

5.20.120 Medicinal Cannabis and Cannabis Products Retail Delivery (Retail Delivery Only, Dispensaries Prohibited).
(a) Purpose. The purpose and intent of this Section is to regulate the Retail Delivery of medicinal Cannabis and Cannabis Products in order to promote the health, safety, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to the State Law. (b) Scope; Medicinal Cannabis Only. This Section permits and regulates the Retail Delivery of medicinal Cannabis and Cannabis Products pursuant to State Law, including MAUCRSA. Subject to the terms of this Chapter, Retail Delivery Permits may be issued by the City for the Retail Delivery of medicinal Cannabis and Cannabis Products pursuant to and in accordance with State Law, including MAUCRSA. The point-of-sale sale of Cannabis or Cannabis Products is strictly prohibited.
(c) Retail Delivery of Cannabis and Cannabis Products is a permitted use only on properties within the applicable Permit Zone with a valid Retail Delivery Permit and other requisite permits and entitlements.
(d) The Retail Delivery of medicinal Cannabis and Cannabis Products may only include the Retail Delivery of Cannabis and Cannabis Products by a Retail Delivery Permittee to a customer, patient or primary caregiver, in accordance with State Law, including MAUCRSA.
(e) Retail Delivery Permittees shall implement sufficient security measures to both deter and prevent unauthorized entrance into areas containing Cannabis

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and Cannabis Products and theft of Cannabis and Cannabis Products from the Retail Delivery Establishment or employees participating in Retail Delivery. (f) All Cannabis and Cannabis Products shall be stored in a secured and locked room, safe, or vault, and in a manner as to prevent diversion, theft, or loss. (g) Individuals shall not be allowed to remain on the Premises comprising of the Retail Delivery Establishment unless they are engaging in activity expressly related to the operations of the Retail Delivery Establishment or are a customer. (h) A Retail Delivery Permittee shall notify the City Manager or the City Manager's designee within 24 hours of discovering any of the following:
(1) Significant discrepancies identified during inventory. The level of significance shall be determined by the City Manager or the City Manager's designee.
(2) Diversion, theft, loss, or any criminal activity involving the Retail Delivery Establishment or any agent or employee of the Retail Delivery Establishment.
(3) The loss or unauthorized alteration of records related to Cannabis, Cannabis Products, registered qualifying patients, primary caregivers, or Retail Delivery Establishment agents or employees.
(4) Any other material breach of security.
(i) The Retail Delivery of medicinal Cannabis and Cannabis Products shall comply with all State and local Law, including all laws requiring presentment of government-issued identification card, physician's recommendation, or medicinal Cannabis identification card at the time of initial purchase.

U) With respect to medicinal Cannabis, physicians' recommendations for medicinal cannabis use shall be verified by a Retail Delivery Permittee prior to the Retail Delivery any medicinal Cannabis to a qualified patient or primary caregiver and at least every six months thereafter.
(k) A Retail Delivery Establishment may not employ or enter into any agreements with any physicians who recommend medicinal Cannabis; Physician Services are prohibited from any and all Retail Delivery Establishments. (I) A Retail Delivery Permittee shall inspect all Cannabis and Cannabis Products received for quality assurance prior to the Retail Delivery to any Person. (m) The Retail Delivery of Cannabis and Cannabis Products shall occur only after such Cannabis and Cannabis Products have been inspected and quality tested in accordance with applicable State Law, including MAUCRSA. (n) Each Retail Delivery Establishment shall do regular monthly inventories and record the total quantity of Cannabis and Cannabis on the Premises. These records shall be maintained for three years from the date created and shall be open to inspection by the City Manager, the City Manager's Designee, and law enforcement.

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(o) A Retail Delivery Permittee shall register with the City each location where Cannabis or Cannabis Products are stored for purposes of Retail Delivery by such Retail Delivery Permittee within the City.
(p) A Retail Delivery Establishment shall maintain customer and patient and other business records in a secure location (including electronically or cloud-based) j. that is compliant with, as applicable, HIPAA and other federal and state privacy laws.
(q) During the Retail Delivery of Cannabis or Cannabis Products, each vehicle driver shall carry a copy of the Retail Delivery Permit, a copy of the Retail Delivery request, a form of government-issued identification, and all other information required by State and local Law. The driver shall present these documents upon the request of law enforcement, the City Manager, or the City Manager's designee.
(r) Prior to Retail Delivery of Cannabis and Cannabis Products, such Cannabis and Cannabis Products shall be labeled and placed in a tamper-evident package.

Labels and packages of Cannabis and Cannabis Products shall, at minimum, meet the requirements specified under State Law, including MAUCRSA. (s) All Retail Delivery vehicles shall:
(1) Be equipped with, and utilize, a vehicle alarm system. (2) Have and utilize a direct communication system with the related Retail Delivery Establishment.
(3) Keep all Cannabis and Cannabis Products in a secure and locked container.
(4) Have an internal partition between the driver and all passengers from the Cannabis and Cannabis Products storage containers that prevents access by the driver and passengers to all cannabis products from inside the vehicle.
(5) Not carry more Cannabis and Cannabis Products than allowed by State and local Law and required to fulfill all immediate Retail Delivery requests (6) Not display any logo, signage, or other information that identifies, advertises, or lists the services or the products offered.

5.20.130 Medicinal Cannabis and Cannabis Products Distribution. (a) Purpose. The purpose and intent of this Section is to permit and regulate the Distribution of Cannabis and Cannabis Products between Cannabis Permittees in order to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to State Law.
(b) Scope; Medicinal Cannabis Only. This Section permits and regulates the Commercial Cannabis Activity of Distribution of medicinal Cannabis and Cannabis Products pursuant to State Law, including MAUCRSA. Subject to the terms of this Chapter, Distribution Permits may be issued by the City for the

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Distribution of medicinal Cannabis and Cannabis Products pursuant to and in accordance with State Law, including MAUCRSA. Distribution of Cannabis and Cannabis Products requires a Development Agreement with the City and must be located within the applicable Permit Zone. -,
(c) Distribution activities includes the receiving and releasing of Cannabis and Cannabis Products for inspection, Testing, and quality assurance, as required under applicable State Law and such other activities as are permitted pursuant to State Law.
(d) A Distribution Permittee shall only Distribute Cannabis and Cannabis Products between Cannabis Permittees or to facilities or portions of facilities wholly controlled by such Distribution Permittee to the extent permitted by State Law.
(e) A Distribution Permittee shall inspect all Cannabis and Cannabis Products received by it for quality assurance prior to Distributing to any Cannabis Permittee, as required under applicable State Law.
(f) In addition to the application requirements in Section 0, a Distribution Permittee shall register with the City each location within the City where Cannabis and Cannabis Products are stored for purposes of Distribution activities within the City.
(g) A Distribution Permittee shall Distribute Cannabis and Cannabis Products to Cannabis Permittees only after such Cannabis and Cannabis Products have been inspected and quality tested in accordance with applicable State Law, including MAUCRSA.
(h) A Distribution Permittee may also hold any other Permit type to the extent permitted by State Law. To the extent permitted by State law, a Distribution Permittee that also holds another Permit type may self-distribute its Cannabis Products.

5.20.140 Medicinal Cannabis and Cannabis Products Microbusiness. (a) Purpose. The purpose and intent of this Section is to permit and regulate the medicinal Cannabis and Cannabis Products Microbusiness in order to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to State Law, including MAUCRSA.
(b) Scope; Medicinal Cannabis Only. This Section permits and regulates Microbusinesses, pursuant to State Law, including MAUCRSA. Subject to the terms of this Chapter, Microbusiness Permits may be issued by the City pursuant to and in accordance with State Law, including MAUCRSA. (c) All Microrobusinesses shall require a Development Agreement with the City and must be located within the applicable Permit Zone.
(d) All components of a Microbusiness (i.e., Cultivation, Manufacturing, etc.) must be in compliance with the provisions of this Chapter and State Law, including MAUCRSA.

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(e) The City may authorize the smoking, vaporizing, and ingestion of Cannabis or Cannabis Products on the Premises of a Microbusiness if all of the following are met:
(1) Access to the area where Cannabis consumption is allowed is restricted to persons 21 years of age and older.
(2) Cannabis consumption is not visible from any public place or nonagerestricted area. (3) Sale or consumption of alcohol or tobacco is not allowed on the Premises.

5.20.140 Medicinal Cannabis and Cannabis Products Testing. (a) Purpose. The purpose and intent of this Section is to permit and regulate the Testing of medicinal Cannabis and Cannabis Products in order to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City intends to be on the forefront of medicinal Cannabis research and Testing. The City is authorized to regulate this activity pursuant to State Law.
(b) Scope; Medicinal Cannabis Only. This Section permits and regulates Cannabis and Cannabis Products Testing, pursuant to State Law, including MAUCRSA. Subject to the terms of this Chapter, Testing Permits may be issued by the City for the Testing of medicinal Cannabis and Cannabis Products pursuant to and in accordance with State Law, including MAUCRSA. (c) Testing of Cannabis and Cannabis Products requires a Development Agreement with the City and must be located within the applicable Permit Zone. (d) Each Testing Permittee must employ at least one (1) full time quality control personnel employee.
(e) Testing Permittees must operate, and all Cannabis and Cannabis Products must be properly tested by Testing Permittees, in accordance with applicable State Law.
(f) All Testing devices used by a Testing Permittee must be "UL listed," and/or otherwise approved for the intended use by the City's Building Official, the Fire Department or other person designated by the City Manager or designee. (g) Each Testing Permittee must notify the State Department of Public Health and the City Manager, or the City Manager's designee, within one business day after the receipt of notice of any kind that its accreditation has been denied, suspended, or revoked.

SECTION 10. Recognizing that there is a potential conflict between federal and State law, it is the City Council's intention that this Ordinance shall be deemed to comply with applicable State Law and shall defer to such applicable State Law through preemption.

SECTION 11. The City Council determines that it is in the best interest of the residents of the City to allow Commercial Cannabis Activities in compliance with applicable State Law, including MAUCRSA, to be established and operated as permitted uses within certain areas of the City subject to the regulations and restrictions provided in this

)
J
ATTACHMENT B Page 96 of 3559
Ordinance. It is the City Council's intention that nothing in this Ordinance shall be construed to:

1. Allow a Person to engage in conduct that endangers others or causes a public nuisance.

2. Allow any activity relating to Cannabis that is otherwise not permitted under State law.

SECTION 12. The City Council finds that the actions contemplated by this Ordinance are exempt from the California Environmental Quality Act pursuant to Section 15061 (b )(3) and 15305 of the Guidelines, in that the Ordinance alone does not have the potential for causing a significant effect on the environment. Further permits and approvals will be required before any activity that will affect the environment will be permitted. In addition, Business and Professions Code Section 26055 exempts local ordinances from CEQA that authorizes commercial cannabis activity through discretionary review and approval.

SECTION 13. If any section or provision of this Ordinance is for any reason held to be invalid, unconstitutional, illegal, or unenforceable by any court of competent jurisdiction, or contravened by reason of any preemptive legislation, then such section or provision shall be severed and shall be inoperative, and the remainder of this Ordinance shall remain in full force and effect.

SECTION 14. By regulating Commercial Cannabis Activity, the City is only undertaking to preserve the general welfare through implementing the MAUCRSA. The City Council is not assuming, nor is it imposing on its officers and employees, an obligation for which a breach thereof would expose the City to liability in money damages to any Person who claims that such breach proximately caused injury. To the fullest extent permitted by law, the City shall assume no liability whatsoever, and expressly does not waive sovereign immunity, with respect to any provision of this Ordinance or for the activities of any Cannabis Permittee. To the fullest extent permitted by law, any actions taken by a public officer or employee under the provisions of this Ordinance shall not become a personal liability of any public officer or employee of the City. Nothing in this Ordinance shall be deemed or considered in any respects to constitute authorization to violate any law.

SECTION 15. Inconsistent Provisions. Any provision of the Cudahy Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to the extent necessary to implement the provisions of this Ordinance.

SECTION 16. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance, or any part thereof is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subs,ection, subdivision, paragraph, sentence, clause or phrase thereof,

ATTACHMENT B Page 97 of 3559
irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase would be subsequently declared invalid or unconstitutional.

SECTION 17. Publication and Effective Date. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in a newspaper of general circulation within fifteen (15) days after its adoption. This Ordinance shall become effective thirty (30) days after adoption.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Cudahy at the / ." ,_, regular meeting of this 11th day of September, 2017. ,.,_,,,_ /4. ~VY

STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

CITY OF CUDAHY
)
)
)
SS:

Chris Garcia
Mayor
I, Richard Iglesias, Deputy City Clerk of the City of Cudahy, hereby certify that the foregoing Ordinance No. 673 was introduced for a first reading on the 14th day of August 2017 and approved for a second reading and adopted by said Council at its regular meeting held on the 11th day of September, 2017 by the following vote, to-wit:

AYES: Markovich, Hernandez, Garcia
)
I
l
NOES: Guerrero
ABSTAIN: None
ABSENT: Sanchez
.. --;' ~ j ~~----'~ -

Richard lgles~a~ / 7 · · · ·-:---___ __
Deputy City B r:I<
ATTACHMENT B Page 98 of 3559
EXHIBIT "A": OVERLAY ZONE
IIABI! NA~ l'!ATIJRl!B
,-.... I._.J Cuclohy Boundary
-Railroad, EXISTING ZONING - Boundaries of Overlay Zone .,r Portion of High Density Residential Zone which shall be available for Medicinal Commercial Cannabis Activity upon rezoning by the City Council by General Plan Amendment, Zoning Map Amendment, or other means.

CUDAHY GENERAL PLAN
ATTACHMENT B Page 99 of 3559
RESOLUTION NO. 18-37

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

CUDAHY, CALIFORNIA, APPROVING THE ISSUANCE OF
COMMERCIAL CANNABIS PERMIT NO. CCP18-0017 (LOCATION:
4907 CECELIA STREET, APPLICANT: NYCE GUYS, LLC).

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 Section 65864 et seq. of the California Government Code (the Development Agreement Statute"); and
WHEREAS, the Development Agreement Statute authorizes the City to enter into a property development agreement with any person having legal or equitable interest in real property for the development of such property in order to establish certain development rights; and WHEREAS, in accordance with California law, the City of Cudahy has adopted Municipal Code Chapter 20.28 (Development Agreements) establishing the procedures and requirements for the consideration of development agreement with the City; and WHEREAS, on September 11, 201 7, the City Council for the City of Cudahy passed Ordinance No. 673 establishing regulations and a discretionary review process for the allowance of medicinal-only commercial cannabis activities (cultivation, distribution, manufacturing, deliveries, micro-business and laboratory testing) in a specified Overlay Zone through a development agreement; and
WHEREAS, all procedures of the California Environmental Quality Act ("CEQA"), California Public Resources Code §21000 et seq., and the CEQA guidelines, title 14 of the California Code of Regulations, chapter 3, §15000 et seq. have been satisfied. The City has found that the proposed Project is Categorically Exempt from California Environmental Quality Act (CEQA) requirements under provisions of CEQA Guidelines Section 15301 - Existing Facilities.

This exemption applies to projects characterized as alterations to existing facilities meeting the conditions described in Section 15301;
WHEREAS, the City of Cudahy Planning Commission ("Planning Commission") conducted a properly noticed public hearing to consider approval of a Commercial Cannabis Permit and a Development Agreement, at which testimony and evidence, both written and oral, were presented to and considered by the Planning Commission; and WHEREAS, the City Council shall approve a development agreement by ordinance; and WHEREAS, subsequent to receipt of the recommendation of the Planning Commission, the City Council conducted a properly noticed public hearing to consider the approval of a Commercial Cannabis Permit No. CCP18-0017 and Development Agreement No. DA18-017C, at which testimony and evidence, both written and oral, were presented to and considered by the City Council.

ATTACHMENT C Page 100 of 3559
l~""esolution. l'lo. 18-- 37
]?age 2 of 4

NOW THEREFORFE, THE CITY COUNCIL OF THE CITY OF CUDAHY
DOES HEREBY RESOLVE, DECLARE AND DETERMINE AS FOLLOWS:

SECTION 1. RECITALS
That the above Recitals are true and correct and are incorporated as though fully set forth herein.

SECTION 2. APPROVAL OF COMMERCIAL CANNABIS PERMIT
.

That the City Council hereby approves Commercial Cannabis Permit No. CCPI 8-0017, subject to the terms and conditions stated therein, to allow a Commercial Cannabis Facility for the Site located at: 4907 Cecelia Street. A copy of the permit is attached hereto and incorporated herein by this reference as Exhibit "A." The Commercial Cannabis Permit shall be issued upon execution by the City of a Development Agreement for the Site.

SECTON 3. SEVERABILITY
That the City Council declares that, should any provision, section, paragraph, sentence or word of this Resolution be rendered or declared invalid by any final court action in a court of competent jurisdiction or by reason of any preemptive legislation, the remaining provisions, sections, paragraphs, sentences or words of this Resolution as hereby adopted shall remain in full force and effect.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Cudahy at its regular meeting on this 17th day of July, 2018. / -~
ATTEST:
~-if ---~
Richard Iglesias
DepU]y City Clerk
---
2 .~ /_ L
Chris Garcia
Mayor
ATTACHMENT C Page 101 of 3559
f(esol'utio111\To. 18-3 7

CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:

CITY OF CUDAHY )
I, Richard Iglesias, Deputy City Clerk of the City of Cudahy, do hereby certify that the above and foregoing Resolution No.18-37, signed by the Mayor and attested by the Deputy City Clerk at a meeting of said City Council of the City of Cudahy held on this 17th day of July 2018, and that said Resolution was adopted by the following votes to wit:

A YES: Gonzalez, Hernandez, and Garcia
NOES: None
ABSTAIN: Sanchez
ABSENT: Markovich
_..,Richard
~ Iglesias ' --
Deputy City Clerk
3 ATTACHMENT C Page 102 of 3559
F .. esohxtion. ]>·Io. 18-3 7
Pa,ge 4 of 4
EXHIBIT "A"

COMMERCIAL CANNABIS PERMIT

SEE ATTACHMENT
[The Permit will be based upon the Staff Report with
Conditions of Approval and Issued in a Letter to Follow] 4 j
ATTACHMENT C Page 103 of 3559
ORDINANCE NO. 689

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CUDAHY, CALIFORNIA, APPROVING: (1) DEVELOPMENT
AGREEMENT NO. 18-017C BY AND BETWEEN THE CITY OF

CUDAHY AND NYCE GUYS, LLC, A CALIFORNIA LIMITED
LIABILITY COMP ANY AND (2) THE ISSUANCE OF COMMERCIAL
CANNABIS PERMIT NO. 18-0017
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 Section 65864 et seq. of the California Government Code (the Development Agreement Statute"); and
WHEREAS, the Development Agreement Statute authorizes the City to enter into a property development agreement with any person having legal or equitable interest in real property for the development of such property in order to establish certain development rights; and WHEREAS, in accordance with California law, the City of Cudahy has adopted Municipal Code Chapter 20.28 (Development Agreements) establishing the procedures and requirements for the consideration of development agreement with the City; and WHEREAS, on September 11, 2017, the City Council for the City of Cudahy passed Ordinance No. 673 establishing regulations and a discretionary review process for the allowance of medicinal-only commercial cannabis activities ( cultivation, distribution, manufacturing, deliveries, micro-business and laboratory testing) in a specified Overlay Zone through a development agreement; and
WHEREAS, all procedures of the California Environmental Quality Act ("CEQA"), California Public Resources Code §21000 et seq., and the CEQA guidelines, title 14 of the California Code of Regulations, chapter 3, §15000 et seq. have been satisfied. The City has found that the proposed Project is Categorically Exempt from California Environmental Quality Act (CEQA) requirements under provisions of CEQA Guidelines Section 15301 - Existing Facilities.

This exemption applies to projects characterized as alterations to existing facilities meeting the conditions described in Section 15301;
WHEREAS, the City of Cudahy Planning Commission ("Planning Commission") conducted a properly noticed public hearing to consider approval of a Commercial Cannabis Permit and a Development Agreement (as defined below), at which testimony and evidence, both written and oral, were presented to and considered by the Planning Commission; and WHEREAS, the City Council shall approve a development agreement by ordinance; and WHEREAS, subsequent to receipt of the recommendation of the Planning Commission, the City Council conducted a properly noticed public hearing to consider the approval of a Commercial Cannabis Permit and Development Agreement, at which testimony and evidence, both written and 1 ATTACHMENT D Page 104 of 3559
Ordinance No. 689

oral, were presented to and considered by the City Council.

NOW THEREFORFE, THE CITY COUNCIL OF THE CITY OF CUDAHY
DOES ORDAIN AS FOLLOWS:

SECTION 1. RECITALS
That the above Recitals are true and correct and are incorporated as though fully set forth herein.

SECTION 2. APPROVAL OF DEVELOPMENT AGREEMENT NO. 18-
017C
That the City Council hereby approves the Development Agreement No. 18-017C By and Between the City of Cudahy and Nyce Guys, LLC, a California limited liability company, (the "Development Agreement"), a copy of which is attached hereto and incorporated herein by this reference as Exhibit "A," subject to the terms and conditions stated therein.

SECTION 3. APPROVAL OF COMMERCIAL CANNABIS PERMIT NO. 18- 0017
That the City Council hereby approves Commercial Cannabis Permit No. CCP 18-0017, subject to the terms and conditions stated therein, to allow a Commercial Cannabis Facility for the Site located at 4907 Cecilia Street, City of Cudahy, State of California [APN 6224-024-011] (the "Site"). A copy of the permit is attached hereto and incorporated herein by this reference as Exhibit "B." The Commercial Cannabis Permit shall be issued upon execution by the City of the Development Agreement.

SECTION 4. SEVERABILITY
That the City Council declares that, should any provision, section, paragraph, sentence or word of this Ordinance be rendered or declared invalid by any final court action in a court of competent jurisdiction or by reason of any preemptive legislation, the remaining provisions, sections, paragraphs, sentences or words of this Ordinance as hereby adopted shall remain in full force and effect.

SECTION 5. EFFECTIVE DATE OF ORDINANCE
That this Ordinance shall take effect thirty (30) days after its second reading by the City Council.

SECTION 6. EXECUTION OF DEVELOPMENT AGREEMENT
The Development Agreement shall not be executed by the City until on or after the effective date of the Ordinance.

SECTION 7. RECORDATION OF DEVELOPMENT AGREEEMENT
2 ATTACHMENT D Page 105 of 3559
Ordinance No. 689

That the City Clerk is hereby directed to record the fully executed Development Agreement with the County Recorder for the County of Los Angeles no later than ten (10) days after its execution.

SECTION 8. CERTIFICATION
That the City Clerk shall certify to the passage of this Ordinance and shall cause the same to be published, in full text or in summary form, according to law.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Cudahy at the regular meeting ofthis ?
1h day of August, 2018.

ATTEST:
__ .,,,.,._'--_....;..__��-�.c-=-----_-_ -·-
----
Richard Iglesias
Deputy City Cler
3 Chris Garcia
Mayor
V
ATTACHMENT D Page 106 of 3559
Ordinance No. 689

ST ATE OF CALIFORNIA

COUNTY OF LOS ANGELES

CITY OF CUDAHY
)
)
)

CERTIFICATION
SS:

I, Richard Iglesias, Deputy City Clerk of the City of Cudahy, hereby certify that the foregoing Ordinance No.689 was introduced for a first reading on the 17th day of July, 2018 and approved for a second reading and adopted by said Council at its regular meeting held on the 7th day of August, 2018 by the following vote, to-wit:

A YES: Gonzalez, Markovich, Hernandez, and Garcia
NOES: None
ABSTAIN: None
ABSENT: Sanchez
4 �.�-/
Richard Iglesias
-:.�-==- (/
Deputy City Clerk
ATTACHMENT D Page 107 of 3559
EXHIBIT "A"

DEVELOPMENT AGREEMENT

BY AND BETWEEN

THE CITY OF CUDAHY

AND NYCE GUYS, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY

SEE ATTACHMENT
5 ATTACHMENT D Page 108 of 3559

ATTACHMENT E

ATTACHMENT E

ATTACHMENT E

ATTACHMENT E

ADMINISTRATIVE RECORD FOR

REVIEW HEARING
NYCE Guys, LLC
January 8, 2024
1 of 454 ATTACHMENT F Page 113 of 3559
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REVIEW HEARING STAFF REPORT
Date:

To:

From:

January 8, 2024
Hearing Officer, Steve Napolitano
Juan Arauz, AICP, Community Development Director
Prepared By: Jessica Guillen, Assistant Planner
Concurrence: Cecilia Madrigal-Gonzalez, Senior Planner, Joshua Calhoun, Finance Director, Glenn Ward Calsada, Special Counsel, Raul Diaz, Building Official and Paloma McEvoy, Assistant City Attorney.

Subject: Compliance Hearing relating to Commercial Cannabis (“CCP”) 18-0017 and Development Agreement (“DA”) 18-017C between Nyce Guys, LLC (“Operator”) and the City of Cudahy (“City”).

RECOMMENDATION
Staff recommends that the Hearing Officer take the following action(s):

1. Hear the evidence presented by the City and the Operator; and

2. Make a determination that the Operator is not in compliance with the terms and conditions of DA18-017C with the City and find that the Operator is in default of contractual obligations set forth in the DA and conditions of approval of CCP18-0017; and

3. Make a determination that the Operator is not in compliance with the conditions of approval set forth in CCP18-0017; and

4. Make a recommendation to the City Manager for Planning Commission and City Council to adopt an ordinance repealing Ordinance No. 689 and terminate Development Agreement No. 18-017C and revoke the Operator’s interest under CCP18-0017. 2 of 454 ATTACHMENT F Page 114 of 3559
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BACKGROUND/TIMELINE
On September 11, 2017, the City adopted Ordinance No. 673 (Attachment A) establishing the City’s commercial cannabis production activity regulations codified in Chapter 5.20 of the Cudahy Municipal Code (“CMC”). CMC Section 5.20.040 authorizes medicinal commercial cannabis activities within a designated overlay zone, pursuant to a development agreement adopted in accordance with the Development Agreement Law (Gov. Code § 65864 et seq.) and Chapter 20.28 of the CMC.

On June 25, 2018, the Planning Commission recommended the City Council to approve CCP18- 0017 to permit cannabis cultivation, manufacturing and distribution activities at 4907 Cecilia Street (“Site), subject to the approval of a development agreement between the City and the Operator for cannabis cultivation, manufacturing, and distribution.

On July 17, 2018, the City Council adopted Resolution No. 18-37 (Attachment B) approving the issuance of CCP18-0017 (Attachment C) that imposed conditions of approval upon the permitted cannabis activities with the execution of a development agreement with the City.

On July 17, 2018, the City Council conducted the first reading to adopt Ordinance No. 689 (Attachment D) approving DA18-017C (Attachment E). The second reading was conducted August 7, 2018, approving Ordinance No. 689 inclusive of Exhibits A-F (Attachment F) between Operator and the City authorizing commercial cannabis cultivation, manufacturing, and distribution activities at Site as illustrated in Figures 1 and 2 below. The site plan and floor plan are incorporated by reference in Section 3.c. of DA18-017C. Recital I of DA18-017C permits the Operator to utilize approximately 8,404 square feet of space for the permitted cannabis activities, inclusive of a 3,085 sf cultivation area, 1,196 sf for manufacturing activities, and 1,136 sf for distribution activities.
3 of 454 ATTACHMENT F Page 115 of 3559
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FIGURE 1 – AERIAL OF SITE
FIGURE 2 – FLOOR PLAN
On October 2, 2019, the City provided the Operator with a Notice of Delinquency (Attachment G) prior to placing the Operator in default status due to payment non-compliance with the Development Agreement and Commercial Cannabis Permit, inclusive of the payment of Community Benefit Fees, Cost Recovery Fees, and Non-Operating Fees1 in the amount of ($97,720.74). The Operator was given no later October 17, 2019, to cure the past due amounts, however, the default was not timely cured.

On May 4, 2021, the City provided the Operator with a Notice of Default (Attachment H) due to payment non-compliance with a payment of fees due in the amount of two hundred ninety-one 1 As used herein, the terms Operating Fees and Non-Operating Fees are used interchangeably.

Site
4907 Cecilia Street
4 of 454 ATTACHMENT F Page 116 of 3559
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thousand three hundred thirty-three dollars and fifty-four cents ($291,333.54). The Operator was given no later than thirty (30) days to cure the default, however, the default was not timely cured.

On April 15, 2021, Building Permit No. 8221 was issued by the City’s Building and Safety Division for the installation of a permitter fence (Attachment J).

On September 2, 2021, the City notified the Operator of their failure to sign the DA (Attachment I). The DA was not executed by the Operator until November 7, 2022.

During November 2022, the City’s Building & Safety Division received the plan check submittal for interior tenant improvements as demonstrated in Figure 3 below and Attachment K. The plans did not conform to the floor plans or site plan approved and incorporated with DA-18- 0017C as shown in Figures 1 and 2 above.

FIGURE 3 – NON-CONFORMING FLOOR PLAN
Condition of Approval No. 49 of CCP18-0017 requires the Operator to obtain a Zoning Clearance prior to commencing construction. A Plumbing Permit (Installation of floor drains, trench drains, and rough plumbing) was issued by the City’s Building and Safety Division on November 29, 2021 (Attachment J). The Operator submitted building permit plans for interior tenant improvements on December 13, 2022. The Operator did not obtain a Zoning Clearance prior to submitting the plans nor pay the required plan check fees with the plan check submittal.

Furthermore, the plans submitted by the Operator to the City’s third-party plan check consultants do not conform to the original Site and Floor plans approved by the City in the Operator’s CCP and DA as shown on Figure 3 and Attachment K. The submitted plans were approved by the City’s third party-consultant on December 13. 2022.
5 of 454 ATTACHMENT F Page 117 of 3559
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On December 6, 2022, the City Manager presented the City Council with a proposed a Cannabis Deferment and Payment Program ("Payment Agreement”) to assist cannabis operators with the accumulated Non-Operating and other fees by deferring and providing additional time for payment without penalty, which was approved by the City Council. On December 7, 2023, the City presented the Payment Agreement to the Operator (Attachment L). All cannabis operators interested in participating in this program were given no later than January 31, 2023, to execute the Payment Agreement. The City received interest from the Operator and due to their goodfaith negotiations the City extended the deadline to execute a Payment Agreement. Under the program:
(a) Unpaid Non-operating Fees would be deferred (without penalty) until six (6) months after the Operator was issued a Certificate of Occupancy; and then repay accumulated NonOperating Fees within twelve (12) months; and (b) Operators would continue to be responsible for the timely payment of Community Benefit Fees and Cost Recovery Fees as they accumulated; and (c) Past due Community Benefit Fees and Cost Recovery Fees would be subject to a payment plan and require timely payments.

Under Section 5 of DA18-017C the City Manager or his/her designee(s) have the right to enter all Site from time to time unannounced for the purpose of making reasonable inspections to observe and enforce compliance with the Development Agreement and state and local laws and regulations without the requirement of a search warrant, subpoena, or court order. On March 8, 2023, City staff conducted an inspection of the Site and red tagged the building. During this inspection several violations of building, electrical, and mechanical codes were observed (Attachment M). The unpermitted construction and improvements consisted of the demolition of existing interior walls, the installation of fire sprinklers, insulated panel walls, interior framing walls with mezzanine, electrical wiring, recessed lighting, and HVAC ducts as detailed in (Attachment N). The City has no record of the Operator submitting applications for building permits for unpermitted work. The site inspection resulted in a determination that the unpermitted construction and improvements resulted in an unsafe and dangerous structure and further required all building violations to be remedied before people could reenter or occupy the structure, more commonly known as red-tagging.

On April 10, 2023, the City’s Finance Department presented the Operator with a Letter Agreement agreeing to a payment plan to forbear outstanding payment due on DA-18-017C (Attachment O). The Operator also acknowledged and agreed “that the past due amounts stated are true and correct and are in fact presently due and owing. The parties agree that the Operator is in status’ on its obligations under its Development Agreement with the City...[and would] remain in ‘default status’ on its Development Agreement until all past due fees set forth in [the] Letter Agreement have been paid and Operator is in full compliance with all terms of its Development Agreement.” The Letter Agreement also provided that if the Operator is more 6 of 454 ATTACHMENT F Page 118 of 3559
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than thirty (30) days late on any of the forbearance payments due under the Letter Agreement or fees and costs under the Development Agreement would be deemed a material breach of the Letter Agreement. The Letter Agreement also provided that if the Operator is more than thirty (30) days late on any of the forbearance payments due under the Letter Agreement or fees and costs under the Development Agreement would be deemed a material breach of the Letter Agreement.” The Letter Agreement that in the event of an uncured default under the Letter Agreement, the Letter Agreement would terminate without further notice to the Operator allowing the City to “exercise any and all rights and remedies under the Development Agreement and revocation of the CCP.” The Operator accepted the proposed terms on April 13, 2023, and agreed to begin payments on May 1, 2023.

The Operator made payments on April 13, 2023, for February and March 2023 totaling $15,145.80 as agreed upon Letter Agreement. However, the Operator failed to make the May and June 2023 payments. Between May and June 2023, the City notified the Operator with two (2) Notices of Delinquency (Attachment P) and provided a 30-day opportunity to cure outstanding payments due. However, the default on the Letter Agreement was not timely cured and the Letter Agreement therefore was terminated on June 16, 2023, and longer in force and effect. Accordingly, the total of all past due amounts at the time the Letter Agreement was terminated and an amount of $619,182.74 was due and owed.

In March 2023, the Site was cited by the City’s Building and Safety Division for unpermitted improvements and the observation of several building, electrical and mechanical code violations resulting in a determination that the structure was unsafe for occupancy (“red tag status”). (Attachments M & N.) On April 25, 2023, the Operator requested assistance with the remedy of the red tag. The City’s Building and Safety Division provided a permit fee breakdown on May 4, 2023, with an assessed construction valuation of $420,000.00, including investigation fees, plan check fees, and penalty fees for construction without proper permits, totaling $34,013.20 (Attachment Q). This amount was to be paid by the Operator to obtain all necessary permits and remove the red tag from the building. The Operator did not agree with the construction valuation of $420,000.00 assessed by the City’s Building and Safety Division and thus City staff provided an alternative option to retain a third-party appraiser to make an independent building valuation assessment (Attachment Q).

The Operator did not entertain this option and failed to remediate the red tag status. The Operator has not remedied the red tag since its issuance of citations on March 8, 2023, the structure continues to maintain its red tag status as of the writing of this report.

On June 23, 2023, the City sent a Final Demand Letter (Attachment R) demanding Operator to respond to the following demands: 1) Forwarding your payment for the total past due amount; 2) Forwarding your payment of $34,013.20 in order to remove “red tag” from building. 3) Contact City staff for a meeting to revise CCP’s Schedule of Performance and for further information to 7 of 454 ATTACHMENT F Page 119 of 3559
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become compliant with DA and CCP. The total amount past due as of June 1, 2023, was $606,616.42. The Operator did not respond in a timely manner and has failed to make any attempt to cure the defaults. As of the writing of this report, the City has received minimal payment of fees due under DA18-017C since the Development Agreement has been in effect.

On August 9, 2023, the City issued an Escrow Account Letter (Attachment S) requiring all cannabis Operators to open an escrow account by September 15, 2023, to ensure payment of Cost Recovery Fees consistent with the escrow accounts required to be opened and maintained by all cannabis operators within the City. As of the writing of this report, the Operator has not opened an escrow account nor made any payments into the account.

On October 10, 2023, City staff conducted an inspection of the Site and entered areas that were not accessible during the March 8, 2023, Site inspection. Further, violations were observed, the unpermitted installation of non-structural walls in the rear of the facility and an unpermitted welding business in the rear of the property (Vazquez Iron Work). A violation notice was issued by the City’s Code Enforcement Division with the following corrective steps required 1) Contact the Planning Department, 2) Obtain necessary approval and inspection from the Planning Department, 3) Submit Zoning Clearance (Attachment T). As of the writing of this report the violation notice has not been corrected.

On October 17, 2023, the Operator’s legal counsel submitted correspondence to dispute (1) the legality of the fees assessed and due under DA18-107C and CCP18-0017; and (2) the legality of the Building and Safety Division’s issuance of building citations at the Site. (Attachment U.) The City Council was informed of the demands made by the Operator in Closed Session and instructed the City Attorney to respond to the Operator’s legal counsel, which also detailed the reasons why legal counsel’s arguments were not supported by the law. (Attachment U.) On October 24, 2023, the City issued a letter (Attachment V) updating the Operator on their payment and fees related to the DA by correcting the amount due to an error in the total amount billed. The City provided a credit in the amount of $14,950.50. As of December 1, 2023, Operator owes the City six hundred eighty-two thousand three hundred thirty-one dollars and eightyeight cents ($682,331.88). Community Benefit Fees, Cost-Recovery and Non-operating Fees plus penalties continue to accrue and the total amount due may be higher as of the date of the Review Hearing on January 8, 2024.

On November 27, 2023, the City issued to the Operator a Notice of Review Hearing (Attachment W) with the hearing date, time, and place.

As of December 18, 2023, the website for the California Department of Cannabis Control shows no record of a cannabis license issued to Nyce Guys, LLC. (Attachment X) or see https://search.cannabis.ca.gov/results?searchQuery=nyce%20guys . 8 of 454 ATTACHMENT F Page 120 of 3559
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DISCUSSION/ANALYSIS
Under Section 19 of the Development Agreement, if the “City finds and determines based on substantial evidence that, Owner or Landlord executing [the] Agreement, or successor in interest thereto, has not complied in good faith with the terms or conditions of the Agreement, City may terminate or modify [the] Agreement (except that no modification shall increase Owner’s liability nor reduce Owner’s rights).

Pursuant to the CMC Section 5.20.080(6)(a), “[a]ny material violations of this chapter or any other relevant city law by a cannabis permittee, or cannabis permittee’s agent, is ground for suspending or revoking the relevant cannabis permit.” To suspend or revoke a cannabis permit the City Manager must determine “that the cannabis permittee has failed to comply with any conditions of approval, or any agreement or covenant.”
City staff recommends that the Hearing Officer review the material violations and evidence and make the following findings in support of finding the Operator to be in default of DA18-017C and in violation of the conditions of approval for CCP18-0017.

Violation #1. Breach of Payment Obligations. Pursuant to the DA Section 5.b (Community Benefit Fees), Section 7.c (Operating Fees) and Section 8 (Cost Recovery Fees), the Operator must pay the City an annual Community Benefit Fee in the amount of $66,667.00 ($13,333.40 down payment and monthly payments in the amount of $5,333.36), a Cost Recovery Fee, and an Operating [or Non-Operating] Fee each year since 2018. The Operator is also obligated to make each year since 2018. The Operator is also obligated to make payments for these fees under Condition of Approval No. 45; the obligation for Non-Operating Fees is also repeated in Condition of Approval No. 8 for cultivation activities, Condition of Approval No. 13 for manufacturing activities, and Condition of Approval No. 37 for distribution activities. The Operator has made minimal required timely payments and as of December 1, 2023, is past due in the amount of $669,028.41 as shown in Table 1 below. Past-due payments continue to accumulate, including late payment penalties. The Operator must pay all required DA fees in accordance with DA terms.

Failure to pay fees constitutes a breach of the DA and may result in suspension or immediate revocation of the DA. Accordingly, the Operator is in breach of its payment obligation under DA No. 18-017C.
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TABLE 1 – SUMMARY OF PAST AND CURRENT AMOUNTS DUE AS OF DECEMBER 1, 20232 Fee Type Payment Amount Due
Community Benefit Program $ 324,001.72
Cost Recovery Fees $ 94,310.10
Non-Operating Fees $ 215,310.48
Penalties (Late Payment) $ 48,709.58
TOTAL: $ 682,331.88
Finding 1. The Operator breached the terms of Development Agreement No. 18-017C by failing to make all required payments to the City that are required pursuant to the terms of Development Agreement No. 18-017C.

Evidence: On August 7, 2018, Nyce Guys, LLC executed Development Agreement No. 18-017C, which is a legally binding contract between Nyce Guys, LLC and the City of Cudahy pursuant to DA Section 5.b [Community Benefit Fees], Section 7.c [Operating Fees] Section 8 [Cost Recovery Fees]. In addition, in accordance with Section 7.c(1), late payment of Non-Operating Fees are subject to penalties that begin to accrue once a payment is more than thirty (30) days late. In December 2022, (Attachment L), the City offered a Payment Agreement to the Operator which was accepted through the execution of a Letter Agreement with the first payment due on May 1, 2023. The Operator did not make their required payments in May, June, or July of 2023.

Despite the City’s notices and attempts to get the Operator into compliance, the Operator did not cure the delinquency and as a result, the payment plan was null and voided on June 16, 2023. (See, 10-day Notice of Intention to Terminate Letter Agreement (Attachment P).) Proper notice of default was given with the opportunity to cure, but the Operator has failed to fulfill its monetary obligations owed to the City. (See, Final Demand Letter with Notice of Default and 30- day Opportunity to Cure (Attachment R).) This failure is a material breach of the DA and grounds for termination of the DA.

First, if the Operator asserts that City Officials previously made representations that nonretail cannabis operators would not have to pay Non-Operating Fees – no such authority is granted under the CMC nor the Development Agreement. Forgiveness of fees due to a government agency, if not for a public purpose, constitutes an unlawful gift of public funds in violation of Article XVI, Section 6 of the California Constitution. The Operator agreed to pay the NonOperating Fees through the execution of DA18-017C, which is further reinforced through Conditions of Approval Nos. 8, 13, 37 and 45. Further the Operator acknowledged the amounts due under the Letter Agreement.

Second, Operator asserts that it was unable to move forward with its project due to closures at 2 The amount due at the time of the Review Hearing may differ than the amount presented in Table1. The City reserves the right to present updated information reflecting the actual amounts owed at the time of the Review Hearing.
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City Hall caused by the COVID-19 pandemic, and performance under DA18-017C is excused under Section 23.i (Force Majuere), this argument would also fail. Further any argument that the Operator was unable to move forward with its project due to closures at City Hall caused by the COVID-19 pandemic also fails. During the height of the pandemic, City Hall’s physical premises were closed to the public, however, the City continued to conduct business, and process requests, including applications for building permits which could be dropped off at the front of City Hall. Additionally, both commercial cannabis activities, inclusive of cannabis manufacturing, and commercial construction were permitted by the authority granted to the State Public Health Officer pursuant to Executive Order N-33-20. (Attachment X.) Lastly, the Operator’s default and failure to comply with DA18-017C and CCP18-0017 began prior to the onset of the COVID-19 pandemic and continues as of the writing of this report.

Third, the Operator’s assertion that any of the fees due under DA18-017C are subject to and violate the Mitigation Fee Act. This assertion is not supported by the law. The fees are a part of the Development Agreement entered into between the City and the Operator and was enacted via ordinance pursuant to Development Agreement Law (Gov. Code §§ 65864-65869.5). Fees imposed by development agreements are expressly exempt from the Mitigation Fee Act. Gov.

Code § 66000(b) (“ ‘Fee’ means a monetary exaction other than a tax or special assessment…but does not include…fees collected under development agreements adopted pursuant to Article 2.5 (commencing with Section 65864) of Chapter 4…”). Therefore, the fees agreed to by the Operator through the execution of DA 18-017C and subsequent Letter Agreement are not subject to the Mitigation Fee Act.

Further, even if the Mitigation Fee Act was applicable to the Contested Fees, to properly contest the Contested Fees, the Operator would have been required to Tender the required payment, in full and serve written notice to the City that informs the City that payment has been tendered under protest accompanied by a statement of facts. Gov. Code § 66020(a). However, such protests must be filed at the time of the approval of the development or within ninety (90) days of the imposition of fees. The City and Operator entered into the Development Agreement on March 5, 2019. The 90-day statute of limitations to protest such fees ended on June 3, 2019, and has Operator tendered payment in full as required by Government Code Section 66020(a).

Therefore, any opportunity to protest under the Mitigation Fee Act has long since passed.

Fourth, the holdings in Nollan v. California Coastal Commission and Dolan v. City of Tigard do not apply to the Contested Fees. Nollan, (1987) 483 U.S. 825; Dolan, (1994) 512 U.S. 374. The U.S.

Supreme Court holding in Nollan requires exactions to (1) bear a nexus to the burdens imposed by development; and (2) substantially advance a legitimate state interest. The 5-4 U.S. Supreme Court decision in Dolan refines the second prong of the Nollan test and requires development conditions to have a “rough proportionality” to a proposed development’s impact. Dolan at p. 391.

However, the holdings in these cases are inapplicable to fees due under DA18-017C, which was 11 of 454 ATTACHMENT F Page 123 of 3559
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adopted by ordinance. Here, the Court notably limited the holding to adjudicative decisions, and not legislative decisions. Id., at p. 385; see also Lingle v. Chevron U.S.A., (2005) 544 U.S. 528, 547 (reaffirming that the rough proportionality requirement applies to adjudicative decisions and not legislative decisions), Leroy Land Development v. Tahoe Regional Planning Agency (1991) 939 F.2d 696, 698 (holding that separately negotiated agreements are not subject to an unconstitutional “takings” analysis because the agreements were entered into voluntarily, in good faith and supported by consideration). In consideration for the fees due under the development agreement, Operator received a ten (10) year term with an option to renew for another ten (10) year term to operate a medicinal commercial cannabis facility.

Finding 2: The Operator has failed to comply with Conditions of Approval No. 1(a) and (b) of the CCP, which required the Operator to pay all City-issued invoices within 30 days of receipt thereof.

Evidence: The City approved Development Agreement No. 18-017C subject to Conditions of Approval, which are incorporated as part of Development Agreement No. 18-017C. Condition of Approval 1(b) provides that the Operator is required to pay all City-issued invoices within 30 days of receipt thereof. The City has sent the Operator regular monthly invoices for Community Benefit Program fees, Cost Recovery fees, Non-Operating fees, and late penalties since 2019 to (Attachment Y). The current outstanding fees owed by the Operator have been owed to the City for longer than 30 days. Despite demand and after proper notice of default and opportunity to cure, the Operator has failed to cure its monetary obligations owed to the City.

Finding 3: Pursuant to Condition of Approval Nos. 45, 8, 13, and 37 the Operator, LLC’s failure to pay Non-Operating Fees due under the Development Agreement and all fees due under the Development Agreement, respectively, constitutes a cross-breach of Development Agreement No. 18-017C and is grounds for revocation of the Operator’s interest in the CCP for the Site.

Evidence: Pursuant to the foregoing evidence, the Operator’s non-payment of fees due under the DA are grounds for revocation of the Operator’s interest in the CCP for the Site.

Finding 4: Pursuant to the Letter Agreement, “[t]he failure to pay the past due delinquency as required by the notice shall be deemed an uncured event of default and a basis for termination of the Development Agreement. Nothing in this provision abrogates any other remedies available to the City under the Development Agreement for an event of default.” Evidence: As stated above, the Letter Agreement contained language in which the Operator, Operator “acknowledge[d] and agree[d] that past due amounts stated are true and correct and are in fact presently due and owing.” Pursuant to the foregoing evidence, the Operator’s nonpayment of fess due under the Letter Agreement are grounds for termination of DA18-017C.

Violation #2. Breach of Condition of Approval No. 51 (Time Limits) under CCP18-0017. CCP 12 of 454 ATTACHMENT F Page 124 of 3559
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Condition of Approval No. 51.A.i sets a 90-day time limit from the effective date of the CCP for the Permittee to obtain a Zoning Clearance. CCP18-0017 Condition of Approval No. 51A.ii sets a 90-day time limit from the effective date of the CCP for the Permittee to complete construction of Phase I. The Operator had until November 5, 2018, to satisfy these requirements. CCP18-0017 Condition No. 51A.iii sets a 180-day time limit from the effective date of the CCP for the Permittee to complete all Tenant Improvements and construction and to obtain a Certificate of Occupancy from the City Building Department, or until February 3, 2019.

Further, Condition of Approval No. 49 requires the Operator to obtain a Zoning Clearance from the Planning Division prior to any construction.

Condition of Approval No. 51.A. states the approval decision for this CCP becomes effective upon the expiration of the 15-day appeal period following the approval decision, or when any appeals of the decision are finally resolved. The CCP effective date for the Development Agreement was August 7, 2018. No appeal was ever filed and thus as previously stated, the Operator had until November 5, 2018 and February 3, 2019 to satisfy the foregoing requirements. The City Manager may grant an extension of time if the Permittee has made a diligent effort to implement the Project.

Finding 5: The Operator has not obtained a Zoning Clearance pursuant to Chapter 20.84 of the CMC, nor has the Operator applied for a building permit to complete tenant improvements or otherwise obtained a certificate of occupancy. Therefore, the Operator breached its Conditions of Approval under CCP18-0017 by failing to implement the project within the time frames set forth in Condition of Approval No. 51.

Evidence: The Operator has not provided the City with any evidence it has obtained a Zoning Clearance, completed construction of Phase I, completed all Tenants Improvements, or obtained a Certificate of Occupancy for the Site within the time limits set forth in Condition of Approval No. 51. Without an extension, the deadlines expired in late 2018 and early 2019. The City has no record of any request by the Operator to the City Manager for an extension of time, nor is there evidence the Operator has made diligent efforts to comply, such as submitting for a zoning clearance nor applying for building permits. Despite the Operator submitting for building plan check the Operator remains in breach of its conditions of approval by failing to implement the Project within the time limits set forth in the Conditions for Approval No. 51.

Violation #3. Breach of Conditions of Approval No. 49 (Construction Activities) under CCP 18- 0017. CCP Condition No. 49 states that prior to any construction, the Operator shall obtain a Zoning Clearance for construction from the Planning Division and a Building Permit from the Building and Safety Division.

Finding 6: The Operator failed to obtain any requisite approvals and permits from the City 13 of 454 ATTACHMENT F Page 125 of 3559
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Planning Division, Building & Safety Division, and the County Fire Department, prior to the demolition of existing interior walls, the installation of fire sprinklers, insulated panel walls, interior framing walls with mezzanine, electrical wiring, recessed lighting, and HVAC ducts (“Unpermitted Work”). Therefore, the Operator breached its conditions of approval for CCP18- 0017.

Evidence: The City has no record of any requisite approvals or permits obtained by the Operator for the Unpermitted Work. Additionally, the City contacted the Los Angeles Fire Department, Special Occupancy Inspection Unit and no building permits record were found for the fire sprinklers (Attachment AA). In accordance with the DA, the Owner shall not operate any facility, and no permit, license, or other approval issued by City shall be valid unless and until the Los Angeles County Fire Department has approved Owner's site plan, floor plan, safety plan, and any other plans that require its approval.

Violation #4: Failure to Obtain State-Issued Cannabis Licenses for Cultivation and Manufacturing. Recital I of the DA states the Owner has applied for three (3) licenses: 1) Cultivation; 2) Manufacturing; and 3) Distribution. Section 21 of the DA states that the facility shall not operate unless the Owner is the holder of a State-issued Cannabis license for the type of commercial cannabis facility or business operation that is the subject of the DA.

Finding 7: The operator has breached the DA because the Owner has not obtained a State-issued Cannabis license. A search of the term “Nyce Guys” on the Cal Cannabis website shows that the Operator has no record of an active cannabis license issued by the state.

Evidence: See https://search.cannabis.ca.gov/results?searchQuery=nyce%20guys and Attachment X.

Violation #5. Breach of Conditions of Approval No. 48 (Commercial Cannabis Permit Modification) under CCP 18-0017. CCP18-0017 Condition of Approval No. 48 states prior to undertaking any operational or construction-related activity which is not expressly described in the CCP conditions, the Operator shall first contact the City Manager, or his designee, to determine if the proposed activity requires a modification of the CCP. The City Manager may, at his sole discretion, require the Operator to file a written and/or mapped description of the proposed activity in order to determine if a permit modification is required.

Finding 8: On November 18, 2021, the Operator submitted building permit plans for interior tenant improvements at the Site to the City’s Plan Check Consultants without first obtaining a zoning clearance from the Planning Division and required fees. Furthermore, the plans submitted by the Operator to the City’s Plan Check Consultants do not conform to the original Site and Floor plans approved by the City in the Operator’s CCP and DA. The Operator never filed a written or mapped description of the design changes made to the facility plans nor made the City Manager aware that such changes would be made. The City Manager has not approved any changes to the 14 of 454 ATTACHMENT F Page 126 of 3559
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facility that do not conform to the original Site and Floor plans approved by the City in the Operator’s CCP and DA. Therefore, the Operator breached its conditions of approval for CCP18- 0017 by failing to receive City Manager approval for the design changes made to the facility set forth in Condition of Approval No. 48.

Evidence:

The Operator has not filed a written or mapped description of the design changes made to the facility as Condition of Approval No. 48 requires. The City Manager has not approved any changes to the facility that do not conform to the original Site and Floor plans approved by the City in the Operator’s CCP and DA. The Operator remains in breach of its conditions of approval by failing to file the required documentation for the City Manager to approve such changes as expressly described in the Conditions of Approval No. 48.

NOTICE
Pursuant to Section 22 of the Development Agreement the City sent a Review Hearing notice via certified mail, and a courtesy email notice, to all concerned parties on November 27, 2023. The notice advised that the Review Hearing would be held on the hearing date at such location designated in Attachment W. Proof of certified mailing is provided in Attachment BB.

ENVIRONMENTAL ANALYSIS
The action(s) have been assessed in accordance with the California Environmental Quality Act (“CEQA”) and the environmental regulations of the City. The Project is expected to be categorically exempt from the requirements to prepare additional environmental documentation per CEQA Section 15321. Class 21 (Enforcement Actions by Regulatory Agencies) is applicable to “Actions by regulatory agencies to enforce or revoke a lease, permit, license, certificate, or other entitlement for use issues, adopted, or prescribed by the regulatory agency or enforcement or a law, general rule, standard, or objective, administered or adopted by the regulatory agency.” Therefore, the action(s) are categorically exempt from the provisions of CEQA.

CONCLUSION
It is the City’s purpose and intent to regulate cannabis activities within the City in a responsible manner to protect the health, safety, and welfare of the residents of Cudahy and to enforce rules and regulations consistent with California Cannabis laws. (CMC § 5.20.010.) Cannabis Operators with development agreements are obligated to comply with all provisions of the CMC, obligations under DA18-017C and Conditions of Approval under CCP18-0017. As discussed above and based on the evidence attached to this report, the Operator has failed to comply with their obligations despite being provided with ample notice and opportunities to achieve compliance. Therefore, staff recommends the Hearing Officer after independent review, consideration, analysis of staff’s report and the information presented, oral and written testimony by all parties and their witnesses, and the record as a whole – make a determination the Operator, Nyce Guys, LLC, has breached the terms and conditions DA No. 18-017C and recommend that the Planning Commission and City Council repeal Ordinance No. 689 and terminate DA18-017C and revoke the interest under CCP18-0017.
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ATTACHMENT(S)
A. Ordinance No. 673
B. City Council Resolution No. 18-37
C. CCP18-0017 Conditions of Approval
D. Ordinance No. 689
E. Development Agreement No. 18-017C
F. Exhibit A-F of Development Agreement No. 18-017C
G. Correspondence Letter- Notice of Delinquency dated October 2, 2019 H. Correspondence Letter- Notice of Default dated May 4, 2021 I. Correspondence Letter- Notice of Missing DA Signatures dated September 2, 2021 J. Issued Building permit and Plumbing Permit
K. Facility Plans Approved by 3rd Party Consultant
L. Correspondence Letter- Notice of Cannabis Deferment and Payment Program dated December 7, 2022
M. Pictures of inspection resulting in red-tag of building dated March 8, 2023 N. Correspondence Letter- Notice of Red-Tag dated March 21, 2023 O. Letter Agreement (Payment Plan) dated April 14, 2023 P. Correspondence Letter- May and June 2023 Delinquency notices Q. Email Correspondence- Regarding remedy of building red-tag R. Correspondence Letter- Final Demand Letter dated June 23, 2023 S. Correspondence Letter- Notice of Escrow Account dated August 9, 2023 T. Violation Notice and pictures dated October 10, 2023 U. Dispute from Lioness Law Group
V. Notice of updated payment of fees dated October 24, 2023 W. Notice of Review Hearing dated November 27, 2023
X. State Cannabis Unified Search Results for NYCE Guys, LLC Y. Executive Order N-33-20
Z. Invoices from 2019 to December 1, 2023
AA. Los Angeles County Fire Department Plan Corrections Report BB. Proof of certified mailing of Notice of Review Hearing 16 of 454 ATTACHMENT F Page 128 of 3559
ATTACHMENT A.

Ordinance No. 673
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ORDINANCE NO. 673

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
CUDAHY AMENDING TITLE 5 (BUSINESS LICENSES AND
REGULATIONS) AND TITLE 20 (ZONING) OF THE

CUDAHY MUNICIPAL CODE TO PROHIBIT CANNABIS

RETAILERS/DISPENSARIES CITYWIDE AND TO

ESTABLISH REGULATIONS AND A DISCRETIONARY

REVIEW PROCESS FOR THE ALLOWANCE OF

MEDICINAL-ONLY COMMERCIAL CANNABIS ACTIVITIES
(CULTIVATION, DISTRIBUTION, MANUFACTURING,

DELIVERIES, MICROBUSINESS, AND LABORATORY

TESTING) IN A SPECIFIED OVERLAY ZONE THROUGH A

DEVELOPMENT AGREEMENT
WHEREAS, in 1996, the California Legislature approved Proposition 215, also known as the Compassionate Use Act (the "CUA"), which was codified under Health and Safety Code Section 11262.5 et sec. and was intended to enable persons in need of medical marijuana for specified medical purposes, such as cancer, anorexia, AIDS, chronic pain, glaucoma and arthritis, to obtain and use marijuana under limited circumstances and where recommended by a physician. The CUA provides that "nothing in this section shall be construed or supersede legislation prohibiting persons from engaging in conduct that endangers others, or to condone the diversion of marijuana for non-medical purposes.";
WHEREAS, in 2004, the California Legislature enacted the Medical Marijuana Program Act (Health & Saf. Code, § 11362.7 et seq.)(the "MMP"), which clarified the scope of the CUA, created a state-approved voluntary medical marijuana identification card program, and authorized cities to adopt and enforce rules and regulations consistent with the MMP. Assembly Bill 2650 (2010) and Assembly Bill 1300 (2011) amended the MMP to expressly recognize the authority of counties and cities to "[a]dopt local ordinances that regulate the location, operation, or establishment of a medical marijuana cooperative or collective" and to civilly and criminally enforce such ordinances;
WHEREAS, the Federal Controlled Substances Act (21 U.S. C., § 801 et seq.) makes it unlawful under federal law for any person to cultivate, manufacture, distribute or dispense, or possess with intent to manufacture, distribute, or dispense marijuana.

Despite such federal prohibition, on August 29, 2013, the United States Department of Justice issued a memorandum (the "Cole Memo") stating that, notwithstanding the federal classification of marijuana as a schedule 1 controlled substance, jurisdictions that have legalized marijuana in some form are less likely to be subject to federal enforcement under the Controlled Substances Act if they have implemented strong and effective regulatory and enforcement systems to follow eight guiding principles: (1) preventing the distribution of marijuana to minors; (2) preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels; (3) preventing the

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diversion of marijuana from states where it is legal under state law in some form to other states; (4) preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity; (5) preventing violence and the use of firearms in the cultivation and distribution of marijuana; (6) preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use; (7) preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and (8) preventing marijuana possession or use on federal property;
WHEREAS, in September 2015, the California State Legislature enacted, and Governor Brown signed into law three bills - Assembly Bill 243, Assembly Bill 266, and Senate Bill 643 - which together comprise the Medical Marijuana Regulation and Safety Act (the "MMRSA"). The MMRSA created a comprehensive dual state licensing system for the cultivation, manufacture, retail, sale, transport, distribution, delivery, and testing of medical cannabis;
WHEREAS, on August 22, 2016, the City Council of the City of Cudahy (the "City Council" of the "City") adopted Interim Urgency Ordinance No. 656U to establish a temporary moratorium on medical "commercial cannabis activities," as defined under the MMRSA, for a period of 45 days and extended such moratorium for an additional period of 22 months and 15 days under Interim Urgency Ordinance No. 661, on September 26, 2016;
WHEREAS, the MMRSA was renamed the Medical Cannabis Regulation and Safety Act (the "MCRSA") under Senate Bill 837 in June 2016, which also made substantive changes to the applicable state laws, which affect the various state agencies involved in regulating cannabis businesses as well as potential licensees; WHEREAS, on November 8, 2016, the Control, Regulate, and Tax Adult Use of Marijuana Act ("AUMA") was approved California voters as Proposition 64 and became effective on November 9, 2016, pursuant to the California Constitution (Cal. Const., art.

II, § 10(a).). Proposition 64 legalized the nonmedical use of cannabis by persons 21 years of age and over, and the personal cultivation of up to six (6) cannabis plants. On November 14, 2016, the City Council adopted Urgency Ordinance No. 663 to prohibit outdoor personal marijuana cultivation and establish regulations and a permitting process for indoor personal marijuana cultivation;
WHEREAS, AUMA also created a state regulatory and licensing system j governing the commercial cultivation, testing, and distribution of nonmedical cannabis, and the manufacturing of nonmedical cannabis products. On January 9, 2017, Interim Urgency Ordinance No. 666 was adopted by the City Council to establish a temporary moratorium on nonmedical "commercial cannabis activities" for a period of 45 days and extended such moratorium for an additional period of 22 months and 15 days under Interim Urgency Ordinance No. 667, on February 27, 2017; Page2
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\
I
)
WHEREAS, on June 27, 2017, Governor Brown signed the Legislature-approved Senate Bill 94. SB 94 combined elements of the MCRSA and AUMA to establish a streamlined singular regulatory and licensing structure for both medical and nonmedical cannabis activities given that there were discrepancies between the MCRSA and AUMA. The new consolidated provisions under SB 94 is now known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act ("MAUCRSA") to be governed by the California Bureau of Cannabis Control. MAUCRSA refers to medical cannabis as "medicinal cannabis" and nonmedical/recreational cannabis as "adult-use cannabis"; WHEREAS, on June 27, 2017, the as part of an Economic Development Ad Hoc Committee presentation on revenue-generating opportunities, commercial cannabis regulations and strategies were offered to and discussed by the City Council; WHEREAS, the City seeks to establish an overlay zone in the City in which certain medicinal-only commercial cannabis activities can be conducted in accordance with MAUCRSA and the City's police power under Section 7 of Article XI of the California Constitution;
WHEREAS, it is the purpose and intent of the City to regulate medicinal cannabis in a manner that is consistent with the Cole Memo and promotes the health, safety, and general welfare of the residents and businesses within the City, while limiting any negative impacts;
WHEREAS, the City intends to be on the forefront of groundbreaking research, science, innovation, and development of treatment for symptoms and cures in the field of medicinal cannabis, as scientific research, studies, and data have established that medicinal cannabis can help patients with a vast array of medical conditions; WHEREAS, the City desires to reduce the illegal market for cannabis while minimizing the chances of social harm and creating jobs and revenue for the City; and WHEREAS, nothing in this Ordinance shall be construed to allow persons to engage in conduct that violates the law, endangers others, causes a public nuisance, allows the illegal use or diversion of cannabis, or allows any activity relating to cannabis that is otherwise illegal under California state law, as amended.

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

SECTION 1. The above recitals are true and correct and are incorporated herein.

SECTION 2. Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended by the addition of a new Chapter 20.120 (Commercial Cannabis Overlay Zone), which shall read as follows:

Chapter 20.120 - Commercial Cannabis Overlay Zone.

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20.120.010 Definitions
For purposes of this Chapter 20.120, the following definitions shall apply:
"Commercial cannabis activities" mean the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis and cannabis products. ) "Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or j Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from cannabis. "Cannabis" also means marijuana as defined by Section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. Cannabis does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this Chapter, cannabis does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
"Cannabis product" means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, or other cannabis derivative, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients. "Day care center" means any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and schoolage child care centers.
"Overlay Zone" means the commercial cannabis overlay zone, whose area and boundaries are attached to City Council Ordinance No. 673 as Exhibit "A" "MAUCRSA" means the Medicinal and Adult-Use Cannabis Regulation and Safety Act, as may hereinafter be amended.
"Youth center" means any public or private facility that is primarily used to host recreational or social activities for minors, including, but not limited to, private youth membership organizations or clubs, social service teenage club facilities, video arcades, or similar amusement park facilities.

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20.120.020 Prohibitions.

Adult-use commercial cannabis activities and medicinal commercial cannabis activities, as both are described in state law, including, but not limited to MAUCRSA, are hereby prohibited unless otherwise allowed in this Chapter.

20.120.030 Overlay zone.

Medicinal commercial cannabis activities, except retail dispensaries that are open to the public for point-of-sale purchases, shall be allowed within the Overlay Zone pursuant to a development agreement adopted in accordance with the Development Agreement Law (Gov. Code, § 65864 et seq.) and Cudahy Municipal Code Chapter

20.28 (Development Agreements). No such activities shall be permitted without a development agreement within or outside of the boundaries of the Overlay Zone.

The City may approve or deny such a development agreement in its sole and absolute discretion.

20.120.040 Particular restrictions for Atlantic Avenue.

Section 20.120.030 notwithstanding, no cannabis-related business shall be located within the Overlay Zone and on Atlantic Avenue with a storefront facing Atlantic Boulevard unless such business employs and effectuates a business model with a primary entertainment purpose.

20.120.050 Indoor Horticulture.

Indoor horticulture, excluding cannabis horticulture shall be permitted by-right within the Overlay Zone.

20.120.060 Prohibition on new schools, day cares, and youth centers in overlay zone.

The establishment of public or private schools providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center is prohibited within the Overlay Zone, or within 600 feet of the boundaries of the Overlay Zone, is hereby prohibited, unless otherwise mandated under state or federal law. An existing public or private school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center located within the Overlay Zone, or within 600 feet of the boundaries of the Overlay Zone shall be considered legal nonconforming, in accordance with Chapter 20.24 (Legal Nonconforming) of Title 20 (Zoning) of the Cudahy Municipal Code.

20.120.070 Temporary permits for local events - rights reserved.

The City reserves the right to issue temporary permits for onsite cannabis sales to, and consumption by, persons 21 years of age or older at a county fair, district agricultural association event, or other similar event authorized under state law, which is located within the Overlay Zone, pursuant to the provisions of Subdivision (e) of Business and Professions Code Section 26200.

SECTION 3. Subsection (3)(p) of Section 20.64.090 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.64 (Residential Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:

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(p) Schools, public and private, excluding schools providing instruction in kindergarten or any grades 1 through 12 located within 600 feet of a residential zone located within the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 4. Subsection (24) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(24) Day care centers, excluding those occupying any portion of the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 5. Subsection (49) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(49) Schools, colleges, and universities, accredited, including appurtenant facilities that offer instruction required to be taught by the Education Code of the state of California and in which no pupil is physically restrained, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 6. Subsection (50) of Section 20.68.100 (Uses Permitted in Residential Zones by Conditional Use Permit) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(50) Schools, business and professional, including art, barber, beauty, dance, drama, music, and swimming, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the CC zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 7. Subsection (46) of Section 20.68.150 (Uses by conditional use permit in C-M Zone) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(46) Schools, colleges, and universities, accredited, including appurtenant facilities which offer instruction required to be taught by the Education Code of the state and in which no pupil is physically restrained, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the C-M zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise

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mandated under state or federal law.

SECTION 8. Subsection (47) of Section 20.68.150 (Uses by conditional use permit in C-M Zone) of Chapter 20.68 (Commercial and Professional Districts) of Title 20 (Zoning) of the Cudahy Municipal Code is hereby amended to read as follows:
(47) Schools, business and professional, including art, barber, beauty, dance, drama, music, and swimming, excluding schools which provide instruction in kindergarten or any grades 1 through 12 that occupy any portion the C-M zone located within 600 feet of the Commercial Cannabis Overlay Zone illustrated in Exhibit "A" to City Council Ordinance No. 673, unless otherwise mandated under state or federal law.

SECTION 9. Title 5 (Business License and Regulations) of the Cudahy Municipal Code is hereby amended by the addition of a new Chapter 5.20 (Cannabis Permitting and Regulation), which shall read as follows:

Chapter 5.20 - Cannabis Permitting and Regulation.

5.20.010 Section Intent and Purposes.

The intent and purpose of this Chapter is to regulate Commercial Cannabis Activity (as defined below) in accordance with State Law (as defined below) to promote the health, safety, morals, and general welfare of the residents and businesses within the City. The City is authorized to regulate this activity pursuant to State Law, including, but not limited to, MAUCRSA. The goals of this regulation for Commercial Cannabis Activity include:
(a) To comply with the goals and guidance set forth in the Cole Memo. (b) To minimize the size of the illegal market for Cannabis in the City and the surrounding regions.
(c) To create jobs, revenue, and economic growth for the City and its residents. (d) To enable law enforcement and regulators to have sufficient rights to inspect and audit Cannabis Permittees and take expeditious action against Cannabis Permittees who violate the requirements of this Chapter. (e) To minimize social harms which may arise from Cannabis including youth consumption or intoxicated driving.
(f) To regulate the manner of advertising and location of Cannabis Permittees such that public nuisance is minimized.

5.20.020 Definitions.

For purposes of this Chapter, the following definitions shall apply, unless the context clearly indicates otherwise:
(a) "Applicant" means an Owner seeking a Cannabis Permit pursuant to this Chapter.
(b) "Cannabis" means all parts of the Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every

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compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. Cannabis also means the separated resin, whether crude or purified, obtained from cannabis. Cannabis also means marijuana as defined by Section 11018 of the California Health and Safety Code as enacted by Chapter 14017 of the Statutes of 1972. Cannabis does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this Chapter 5.18, Cannabis does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.
(c) "Cannabis Permit" means a permit issued by the City to conduct a Commercial Cannabis Activity, including, but not limited to a Cultivation Permit, Distribution Permit, Manufacturing Permit, Microbusiness Permit, Retail Delivery Permit, or Testing.
(d) "Cannabis Permittee" means a Person who holds a Cannabis Permit. (e) "Cannabis Product" means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, or other cannabis derivative, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients.
(f) "City" shall mean the City of Cudahy.
(g) "City Coden means the City of Cudahy Municipal Code. (h) "City Manager" means the City Manager of the City of Cudahy. (i) "Cole Memo" means the August 29, 2013 United States Department of Justice memorandum offering guidance on federal enforcement priorities regarding Cannabis.

U) "Commercial Cannabis Activity(ies)" means the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of Cannabis and/or Cannabis Products. (k) "Cultivation" means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of Cannabis.
(I) "Cultivation Permit" means a Cannabis Permit for the Indoor Cultivation of Cannabis in accordance with the terms and conditions of this Chapter and the Development Agreement for the applicable Cannabis Permit issued to the particular Cultivation Permittee.
(m) "Cultivation Permittee" means an applicant who has applied for and has been issued a Cultivation Permit by the City pursuant to the terms and conditions of this Chapter.

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(n) "Day Care Center" means any child day care facility other than a family day care home, and includes infant centers, preschools, extended day care facilities, and schoolage child care centers.
(o) "Development Agreement" means an agreement adopted pursuant to the Development Agreement Law (Gov. Code, § 65864 et seq.) and Cudahy Municipal Code Chapter 20.28 (Development Agreements), which provides agreed upon community benefits to the City.
(p) "Distribution" means the procurement, sale, and transport of cannabis and cannabis products between persons authorized to engage in permitted commercial cannabis activities pursuant to this Chapter. (q) "Distribution Permit" means, with respect to a Distribution Permittee, a Cannabis Permit for Distribution in accordance with the terms and conditions of this Chapter and the Development Agreement for the applicable Cannabis Permit issued to such Distribution Permittee.
(r) "Distribution Permittee" means a Person that has been issued a Distribution Permit by the City pursuant to the terms and conditions of this Chapter. (s) "Fully Enclosed and Secure Structure" means a space within a building or other structure which has a complete roof enclosure supported by connecting walls extending from the ground to the roof, which is reasonably secure against unauthorized entry, provides complete visual screening or is behind fencing or other features providing complete visual screening, and which is accessible only through one or more lockable doors and is inaccessible to minors. (t) "Good Cause" for purposes of refusing or denying a Cannabis Permit, for revoking a Cannabis Permit, or for refusing or denying a Cannabis Permit renewal or reinstatement means: (i) the Applicant has not obtained approval by the City Council of a Development Agreement setting forth the general terms for the operation of commercial cannabis activity or breaches a term or terms of a Development Agreement approved by the City Council pursuant to this Chapter; (ii) The Applicant or Cannabis Permittee has violated the terms, conditions, or provisions of this Chapter, of state law, of any regulations or rules promulgated pursuant to state law or this Chapter, any applicable local rules, regulations, or conditions placed upon its state license or Cannabis Permit; (iii) the licensed Premises have been operated in a manner that adversely affects the public health, safety, or welfare or the safety of the immediate neighborhood in which the Commercial Cannabis Activity is being conducted; (iv) the Applicant or Cannabis Permittee has knowingly made false statements, misrepresentations, or material omissions on an application form, renewal form, or other document submitted to the City; (v) the Applicant or Cannabis Permittee's criminal history does not indicate that the Applicant or Cannabis Permittee is of Good Moral Character or the Applicant or Cannabis Permittee has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the Applicant or Cannabis Permittee. However, if the City has issued a Cannabis Permit to the Applicant or Cannabis Permittee, the City shall not consider any

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criminal history of the Applicant or Cannabis Permittee that was disclosed to or discovered by the City prior to issuance of the Cannabis Permit and is confirmed by the Applicant or Cannabis Permittee. For any criminal history that was not disclosed to or discovered by the City prior to issuance of a Cannabis Permit, or that arose after the issuance of the Cannabis Permit, the City shall conduct a thorough review of the nature of the crime, conviction, circumstances, and evidence of rehabilitation of the Applicant or Cannabis Permittee, and shall evaluate the suitability of the Applicant or Cannabis Permittee based upon such review. In determining which offenses are substantially related to the qualifications, functions, or duties of the Applicant or Cannabis Permittee, the City shall consider factors set forth in Business and Professions Code Section 26057; (vi) the Applicant or Cannabis Permittee is employing or allowing to volunteer any person whose criminal history indicates that such person is not of Good Moral Character; (vii) the Applicant or Cannabis Permittee fails to allow inspection by City officials of the security recordings, activity logs, business records, or other accessible records pertaining to the activities conducted on the applicable Premises; or (viii) the Applicant or Cannabis Permittee allows for Physician Services to be conducted on the applicable Premises. (u) "Good Moral Character" means having a personal history that demonstrates the propensity to serve the public in a manner that reflects openness, honest, fairness, and respect for the law and rights and well-being of others. In determining Good Moral Character, the following standards shall apply: (i) a judgment of guilt in a criminal prosecution or a judgment in a civil action shall not be used, in and of itself, as proof of an individual's lack of Good Moral Character.

Such judgment, however, may be used as evidence in the determination and when so used, the individual shall be notified and shall be permitted to rebut the evidence by showing that, at the current time, he or she has the ability to, and is likely to serve the public, in a fair, honest, and open matter, that he or she is rehabilitated, and/or that the substance of the former offense is not substantially related to the applicable Commercial Cannabis Activity; and (ii) a prior conviction where the sentence, including any term of probation incarceration, or supervised release is completed for the possession of, possession for sale, sale, manufacture, transportation, or cultivation of a controlled substance, is not considered substantially related, and shall not be the sole ground for denial of a Cannabis Permit, except that any of the convictions set forth in Business and Professions Code Section 26057(b)(4), as may be amended, shall be deemed substantially related to applicable Commercial Cannabis Activity. (v) "Health and Safety Code" means the California Health and Safety Code, as amended from time to time.
(w) "Indoor" means within a Fully Enclosed and Secure Structure. (x) "Manufacture" or "Manufacturing" means to compound, blend, extract, infuse, or otherwise make or prepare a Cannabis Product from such blends, extractions, or infusions.