Special Council Meeting
February 16, 2022
Email / eComment Report
The Following item(s) were commented on:
File ID 22-137
HEARING - Consideration of an appeal of the City Manager's decision to approve retail Commercial Cannabis Business Permit No. C-20-3, for property located at 4248 W Ashlan Avenue (Council District 1 ).
Total number of emails: 1
ltem(s)
Supplemental Information:
Any agenda related public documents received and distributed to a majority of the City Council after the Agenda Packet is printed are included in Supplemental Packets.
Supplemental Packets are produced as needed. The Supplemental Packet is available for public inspection in the City Clerk's Office, 2600 Fresno Street, during normal business hours (main location pursuant to the Brown Act, G.C. 54957.5(2). In addition, Supplemental Packets are available for public review at the City Council meeting in the City Council Chambers, 2600 Fresno Street. Supplemental Packets are also available on-line on the City Clerk's website.
Americans with Disabilities Act (ADA):
The meeting room is accessible to the physically disabled, and the services of a translator can be made available. Requests for additional accommodations for the disabled, sign language interpreters, assistive listening devices, or translators should be made one week prior to the meeting. Please call City Clerk's Office at 621-7650. Please keep the doorways, aisles and wheelchair seating areas open and accessible. If you need assistance with seatinq because of a disability, please see Security.
DAMIAN A. MARTIN, ESQ., M.B.A.
6700 Pacific Coast Hwy, Ste. 201, Long Beach, CA 90803
Phone: (757) 652-0460 | Email: [email protected] P
age 1 of 6
February 11, 2022
VIA EMAIL AND OVERNIGHT DELIVERY:
O
ffice of Cannabis Oversight
Office of the City Manager, City of Fresno
2600 Fresno Street, Room 2064
Fresno, CA 93721
Phone: (559) 621-5555
Email: [email protected]
Copy to VIA EMAIL:
Todd Stermer
City Clerk, City of Fresno
2600 Fresno Street, Room 2133
Fresno, CA 93721
Phone: (559) 621-7650
Email: [email protected]
Jennifer Ruiz, M.B.A.
Project Manager, City of Fresno
2600 Fresno Street, Room 2064
Fresno, CA 93721
Phone: (559) 621-5555
Email: [email protected]
RE: W ritten Correspondence (the “Written Correspondence”) to be Delivered to the City Council Regarding the Public Hearing (the “Public Hearing”) for the Appeal of Commercial Cannabis Business Permit Application No. C-20-3 (Authentic 559 LLC) on February 16, 2022
D
ear Office of Cannabis Oversight:
I am Damian A. Martin, administrative legal counsel (SBN: 309684) for Catalyst - Fresno LLC, d.b.a. Catalyst - Highway 99 ( my “Client” and “ Catalyst - Highway 99”). Pursuant to the enclosed notice for the Public Hearing and the procedures for delivery of this Written Correspondence to the City of Fresno (the “ City” or “Fresno”) Office of Cannabis Oversight and the Fresno City Clerk, my Client and I are providing this Written Correspondence well in advance of 24 hours before the Public Hearing. Accordingly, please ensure that this Written Correspondence is delivered to the City Council prior to the Public Hearing. See Enclosure #1.
With that requirement in mind, the purpose of this Written Correspondence is to demonstrate to the Fresno City Council that Authentic 559 LLC (“Authentic”) is not—and never was—a qualified applicant under the Fresno Municipal Code (“ FMC”) and, therefore, Authentic’s preliminary approval to operate a cannabis retail storefront at 4248 W. Ashlan Avenue, Fresno, CA 93722, should be denied / rejected, and, in fact, should have never been issued in the first place.
W
ith that in mind, Authentic is not—and never was—a qualified applicant under the FMC for the following reasons:
1. Authentic’s Co-CEO and 14.25% Co-Owner Brian Mitchell Resigned from Authentic in Disgrace after Being Charged with Felony Fraud, which is in Violation of Sections 9-3316(d), 9-3318(a)(8), 9-3321, 9-3325(a)(1) of the FMC—and Potentially in Violation of Section 9-3318(a)(5) if Mr. Mitchell is Ultimately Convicted.
As indicated in the enclosed application form for Authentic, at the time Authentic submitted its application, Brian Mitchell (“Mr. Mitchell”) was the Co-CEO and 14.25% Co-Owner of Authentic.
See Enclosure #2. Thus, Mr. Mitchell meets the definitions of “owner” and “applicant” of Authentic under Section 9 -3304 of the FMC . That noted, on or about September 21, 2021, Mr. Mitchell resigned in disgrace from Authentic after he was charged with felony fraud by the Alameda County District Attorney’s Office, along with the California Department of Insurance. See Enclosures #3 through #6; also compare Enclosure #7 with Enclosure #8 (showing Brian Mitchell as the sole limited liability company manager of Authentic as of April 13, 2020, before being replaced by SGI Management LLC as of November 2, 2021).
Section 9- 3325(a)(1) of the FMC provides that : “A change in ownership for the replacement of any operator, owner, investor or manager, of a commercial cannabis business or a commercial retail business, shall only be considered at the same time as a renewal application and with the filing requirements as stated in Section 9- 3322.” The fact that Mr. Mitchell is no longer the Co-CEO and 14.25% Co-Owner of Authentic is an unpermitted change of ownership / control in violation of Section 9- 3325(a)(1) of the FMC, which is only permitted upon license renewal and obviously not during the application process while the City is evaluating applicants against each other. On that note, the application form enclosed with this Written Correspondence and signed by Authentic under penalty of perjury states that “the issuance of a permit will be based on the application you submit and any major changes to your business or proposal (i.e. ownership, location, etc.) after your application is submitted may result in denial.”
Further, Section 9-3316(d) of the FMC provides that:
At the time of filing, each applicant shall sign a statement, under penalty of perjury, that all information submitted is true and correct. If it is later discovered that any false information was provided by the applicant, the application shall be denied, and if a commercial cannabis business permit was granted, it shall be revoked with no opportunity for an appeal.
See also FMC §§ 9 -3318(a)(8) (The following shall be grounds for denial of a commercial cannabis business permit: “The applicant has knowingly made a false statement in his or her application or to any city officer, employee, or agent”.); 9-3321 (“Commercial cannabis business permits may be revoked for any violation of any law, rule, regulation and/or standard adopted or if an application contained false information.”). The fact that Mr. Mitchell is listed on Authentic ’s application as Co-CEO and 14.25% Co-Owner, but is now no longer Co- CEO and 14.25% Co - Owner and will not actually be an active and participating member of Authentic’s cannabis retail storefront business in Fresno is false and misleading in violation of Sections 9 -3316(d), 9- 3318(a)(8), and 9-3321 of the FMC.
Further still, Section 9-3318(a)(5) of the FMC provides that the following shall be grounds for denial of a commercial cannabis business permit: “The applicant has been convicted of a violent felony, a crime involving moral turpitude, a crime involving lotteries, gambling, bookmaking, larceny, perjury, bribery, extortion, fraud, theft, or embezzlement, or has been convicted of prostitution, pimping, human trafficking, or pandering, or has been convicted of any crime substantially related to service or entertainment business ”. Because the charges against Mr. Mitchell include multiple counts of fraud, i f he is ultimately convicted of the charges against him, Authentic will also be in violation of Section 9-3318(a)(5) of the FMC.
In other words, Authentic is not a qualified applicant under the FMC because Br ian Mitchell’s disgraceful resignation as the Co-CEO and 14.25% Co-Owner of Authentic after being charged with felony fraud results in Authentic violating Sections 9-3316(d), 9-3318(a)(8), 9-3321, 9-3325(a)(1) of the FMC—and potentially Section 9-3318(a)(5).
2. Authentic’s Head of Operations and 19.5% C o-Owner Tony Huang Has Been Noticed, Charged, Cited, and Found Liable of Violating Laws / Ordinances Relating to the O peration of a C ommercial Cannabis Activity, which is in Violation of Sections 9-3316(d), 9-3318(a)(8), 9-3318(a)(9), and 9-3321 of the FMC.
As indicated in the enclosed application form for Authentic, Tony Huang (“Mr. Huang”) is the Head of Operations and 19.5% Co-Owner of Authentic. See Enclosure #2. Thus, Mr. Huang meets the definitions of “owner” and “applicant” of Authentic under Section 9-3304 of the FMC.
That noted, on or about September 12 , 2019, Mr. Huang had an order of abatement granted against him by the City of Pasadena “with regard to the operation of an unlawful cannabis dispensary which is a public nuisance and a violation of the Pasadena Municipal Code” according to the administrative action staff report enclosed with this Written Correspondence. See Enclosure #9. One of the many damning findings in the City of Pasadena’s order of abatement against Mr. Huang include: “The CITY has taken enforcement measures against HUANG including the issuance of multiple administrative citations and obtaining a COMMISSION Order in an effort to compel HUANG’s compliance with the PMC yet HUANG remains non-compliant.” Id.
Section 9-3318(a)(9) of the FMC provides that the following shall be grounds for denial of a commercial cannabis business permit: “The applicant has been noticed, charged, cited, or convicted of violating any law or ordinance relating to the operation of a commercial cannabis activity.” As indicated in the City of Pasadena’s enclosed order of abatement against Mr. Huang, Mr. Huang has been noticed, charged, cited, and found liable for violating laws / ordinances relating to the operation of a commercial cannabis activity in violation of Section 9-3318(a)(9) of the FMC. Further, Section 9-3316(d) of the FMC provides that:
At the time of filing, each applicant shall sign a statement, under penalty of perjury, that all information submitted is true and correct. If it is later discovered that any false information was provided by the applicant, the application shall be denied,
and if a commercial cannabis business permit was granted, it shall be revoked with no opportunity for an appeal.
See also FMC §§ 9 -3318(a)(8); 9-3321. With that in mind, on the enclosed application form, Authentic answered “No” to the following question: “Has the Applicant or any of its owners been the subject of any administrative action, including but not limited to suspension, denial, or revocation of a cannabis business license at any time during the past three (3) years?” Given the enclosed order of abatement against Mr. Huang, the answer of “No” by Authentic to such a critical application question is obviously false and was knowingly false at the time Authentic submitted its application to the City in violation of Sections 9-3316(d), 9-3318(a)(8), and 9-3321 of the FMC.
In other words, Au thentic is not—and never was —a qualified applicant under the FMC because (a) Authentic’s Head of Operations and 19.5% Co-Owner Tony Huang has been noticed, charged, cited, and found liable for violating law s / ordinances relating to the operation of a commercial cannabis activity in violation of Section 9 -3318(a)(9) of the FMC and (b) Authent ic provided an obviously and knowingly false statement on its application to the City that Mr. Huang had not been noticed, charged, cited, or convicted of violating any law or ordinance relating to the operation of a commercial cannabis activity in violation of Sections 9-3316(d), 9-3318(a)(8), and 9-3321 of the FMC.
3. Contrary to What Authentic Submitted in Its Application, Authentic’s Co- CEO and 51% Co-Owner Matthew Garza Did Not Actually Have Control of Authentic, which is in Violation of Sections 9-3316(d), 9-3318(a)(8), and 9-3321 of the FMC.
According to the enclosed application form for Authentic, Matthew Garza (“Mr. Garza”), a resident of Clovis and (apparently) a businessowner in Fresno as of March 2020, is the Co-CEO and 51% Co-Owner of Authentic. See Enclosure #2. By listing Mr. Garza as its Co -CEO and 51% Co-Owner, Authentic was able to receive the maximum 80 points available for “local preference” under the City’s Review Criteria. See Enclosure #10; see also FMC § 9-3317(a).
However, in the publicly available and easily reviewable information posted on the California Secretary of State’s website, Authentic is listed as a single-manager limited liability company with first Mr. Mitchell and then SGI Management LLC —not Mr. Garza—as its sole limited liability company manager. See Enclosures #7 and #8. In other words, despite what was submitted in its application, Mr. Garza did not actually have control of Authentic as alleged in the application, but rather, Mr. Mitchell and SGI Management LLC at all times maintained operational control , if not majority ownership, over Authentic.
While it presently is unclear whether removing the additional points Authentic falsely earned on its Social Policy and Local Enterprise Plan by using Mr. Garza as a fake “front man” on its application would cause Authentic’s percentage score to drop below my Client in the City Council District 1 application ranking, my Client believes it might well do so. But more importantly, whether those additional local preference points ultimately gave Authentic the edge over my Client is neither necessary nor directly relevant here, since Authentic’s provision of false information in its application, standing alone and regardless of effect , is a violation of the FMC . On that note,
Section 9-3318(a)(8) of the FMC provides that t he following shall be grounds for denial of a commercial cannabis business permit: “The applicant has knowingly made a false statement in his or her application or to any city officer, employee, or agent ”. See also FMC §§ Section 9- 3316(d) (“If it is later discovered that any false information was provided by the applicant, the application shall be denied, and if a commercial cannabis business permit was granted, it shall be revoked with no opportunity for an appeal. [emphasis added]); 9-3321.
In other words, Authentic is not —and never was —a qualified applicant under the FMC because Authentic provided an obviously and knowingly false statement of its application to the City that Mr. Garza had control of Authentic in violation of Sections 9-3316(d), 9-3318(a)(8), and 9-3321 of the FMC.
CONCLUSION
As thoroughly demonstrated above, Authentic is not —and never was —a qualified applicant under the FMC for multiple reasons , each of which stands alone as independent grounds for denial / rejection of Authentic’s application and preliminary approval . In ord er to preserve its legal rights, my Client filed a petition for writ of mandamus alleging the above grounds, and others, for denying / rejecting Authentic’s application and preliminary approval to operate a cannabis retail storefront at 4248 W. Ashlan Avenue, Fresno, CA 93722. See Enclosure #11.
Therefore, the City’s position to grant Authentic preliminary approval is legally unsustainable, and for the reasons articulated in this Written Correspondence, including the enclosed petition for writ of mandamus, the Fresno City Council should be deny / reject Authentic’s preliminary approval to operate a cannabis retail storefront at 4248 W. Ashlan Avenue, Fresno, CA 93722.
Respectfully Submitted,
Damian A. Martin, Esq., M.B.A.
Counsel (SBN: 309684) for Catalyst - Fresno
LLC, d.b.a. Catalyst - Highway 99
Enclosures:
1. Notice of Public Hearing for the Appeal of Commercial Cannabis Business Permit Application No. C-20-3
2. Application Form for Commercial Cannabis Business Permit Application No. C -20-3 (Authentic 559 LLC)
3. Press Release from Shryne Group Inc. – Jon Avidor Named CEO of Shryne Group
4. Ganjapreneur – Former CEO of California Cannabis Brand Charged With Fraud
5. Bay Area News Group – Three charged in Alameda County after scheme to defraud insurance carriers
6. Press Release by the CA Department of Insurance – Owners of painting and construction companies charged in $5 million workers’ compensation fraud scheme
7. Statement of Information for Authentic 559 LLC (Filed April 13, 2020)
8. Statement of Information for Authentic 559 LLC (Filed November 2, 2021)
9. City of Pasadena - Recission of Abatement Terms RE Tony Huang
10. Review for Commercial Cannabis Business Permit Application No. C-20-3 (Authentic 559 LLC)
11. First Amended Petition for Writ of Mandamus by Catalyst - Fresno LLC, d.b.a. Catalyst - Highway 99
CITY OF FRESNO
CITY MANAGER’S OFFICE
NOTICE OF PUBLIC HEARING
COMMERCIAL CANNABIS BUSINESS PERMIT APPLICATION
NO. C-20-3
NOTICE IS HEREBY GIVEN that the Fresno City Council, in accordance with Section 9-3317 of the Fresno Municipal Code will conduct a pu blic hearing to consider and make a determination on the following application filed by Ellen Wysocki on behalf of Authentic 559 LLC , pertaining to property located at 4248 W Ashlan Avenue in Fresno, located on the north side of Ashlan Avenue west of Highway 99.
1. Commercial Cannabis Business Permit Application No. C -20-3: A request to operate a cannabis retail business on the subject parcel in the CG (Commercial General) zone district.
*The above documents are available for public review via the upcoming City Council Agenda.
Due to the closures of public facilities in response to COVID -19, City Hall may not be open to the public, however any interested person may appear electronically, by either Zoom meeting or telephone with instructions provided on the Council Agenda, at the public hearing and present written testimony, via an eComment or by email to [email protected], or speak in favor or against the proposal. Unless otherwise required by law to be accepted by the City at or prior to a City Council meeting or hearing, no documents shall be accepted for City Council review unless they are submitted to the Office of Cannabis Oversight or the City Clerk at least 24 hours prior to the commencement of the City Council meeting at which the associated agenda item is to be heard. If you challenge the above application in court, you may be limited to raising only those issues, you, or someone else, raised at the public hearing described in this notice, or in written correspondence delivered to the Fresno City Council or contact person below, at, or prior to, the public hearing. Action by the Council is final.
NOTE: This public hearing notice is being mailed to surrounding property within 1,000 feet of the project site pursuant to the requirements of Fresno Municipal Code Section 9-3317.
For additional information regarding this project, contact Jennifer Ruiz , Project Manager , Office of Cannabis Oversi ght, 2600 Fresno Street, Fresno, Californi a 93721- 3604, by phone at (559) 621- 8037 or via e- mail at [email protected] .
Si necesita información en Español,
comuníquese con Jose Valenzuela al teléfono (559) 621- 8070 o por correo electrónico a [email protected]. If you would like additonal information about the project , documents are available to view at: http://www.fresno.gov/cannabis
OFFICE OF THE CITY MANAGER
Thomas Esqueda, City Manager
Dated: January 11, 20222
SEE MAP ON REVERSE SIDE
Office of Cannabis Oversight
Office of the City Manager
2600 Fresno Street · Fresno, CA 93721 · Phone (559) 621-5555
FRESNO CITY COUNCIL
Date: Wednesday, February 16, 2022
Time: 1:00 p.m., or thereafter
Place: City Hall – in person and/or electronic.
Watch the live broadcast via the Zoom link located on the Council Agenda found at the City’s website:
https://fresno.legistar.com/Calendar.aspx
Jennifer Ruiz
CITY MANAGER’S OFFICE
2600 FRESNO STREET
FRESNO CA 93721-3604
THIS IS A LEGAL NOTICE REGARDING
4248 W Ashlan Avenue
C-20-3
VICINITY MAP
Subject Property
Business Name: Authentic 559 LLC
Application #: C-20-3
CANNABIS BUSINESS PERMIT APPLICATION REVIEW - RETAIL Points Possible
All or
None Exceptional Good Acceptable
Applicant
Score
Evaluation Notes (Explain each time points are
deducted)
SECTION 1: BUSINESS PLAN 300 Points Possible for Section 1 Resume:
Resumes Provided for All Owners: Score 5 5 5
Resumes Provided in 2-page Format: Score 2 2 2
Education: (select highest academic level among ownership team, cannabis specific education separately)
Cannabis specific education/training (accredited) 2 2
High School Degree Reported: Score 4 4
Bachelor's Degree Reported: Score 6 6
Master's Degree or Higher Reported: Score 8 8 8
Experience: (among ownership team, select one at highest level) Regulated Cannabis Retail Ownership Experience CA 13 13 13 Regulated Cannabis Retail Experience CA (management level or below): Score 10 10 Other Retail Business Experience Reported, More than 5 years: or 8 8 Other Retail Business Experience Reported, Less than 5 Years: Score 5 5
1.1 Sub-Total: 30 28
Construction Cost Estimate:
Construction Cost Estimate Provided: Score 8 8 6 4 6 Needs detail Construction Contingency Factor Included: Score 6 6 6
All Labor, Trades, Materials, Supplies and Permits and other Cost Factors Identified: Score 6 6 4 2 4 Needs detail Reference Data Provided for Unit Cost Factors: Score 5 5 3 1 1 Very little explanation, just says based on
experience
Operation and Maintenance Cost Estimates:
Operation and Maintenance Cost Estimate Provided: Score 8 8 6 4 6 Needs detail All Labor, Trades, Materials, Supplies, Utilities, and other Cost Factors Identified: Score 6 6 4 2 4 Needs detail for salaries, etc.
Annual Cost Escalators for Operating Costs Provided: Score 6 6 4 2 0 Not included Reference Data Provided for Unit Cost Factors: Score 5 5 3 1 1 Very little explanation, just says based on
experience
1.2 Sub-Total: 50 28
Proof of Capitalization Specific to one or more Owners: Score 5 5
1.1 Owner qualifications. Resumes are not to exceed two (2) pages per owner. (30 points possible)
1.2 A budget for construction, operation, and maintenance, compensation of employees, equipment costs, utility cost, and other operation costs.(50 points possible)
1.3 Proof of capitalization in the form of documentation of cash or other liquid assets on hand, Letters of Credit or other equivalent assets which can be verified by the City. (50 Points Possible) Criteria Narrative:
Criteria Narrative:
Proof of Capitalization Specific to Business Name/Address: Score 5 5 5
In name of Shryne/SGI which will be same company
that owns Authentic 559/letter of explanation
Proof of Capitalization Sufficient to Cover Proforma (3 months) and Construction Costs: Score 15 15 15 Assets in excess of Certified Audited Financial Report Provided for one or more Owners: Score 5 5 Score one of the following for a maximum 20 points:
Capital source is 100% liquid (cash in owners bank, no debt obligation) 20 20 20 Capital souce is debt obligation (letter of credit/loan from individual or institution) 10 10 Capital consists of non-liquid assets (i.e. real property) 8 8 Capital consists of a mixture of liquid and non-liquid assets 15 15
1.3 Sub-Total: 50 40
Three Years of Data Provided: Score 10 10 8 6 8 Needs detail Total Gross Revenue Estimates Provided: 3 3 3
Total Gross Revenue by Product Type (flower and manufactured) Identified: 3 3 Total Personnel Costs Provided: 5 5 4 3 3 Just listed as line item. Needs more detail Total Property Rental or Purchase Costs Provided: 2 2 2 Total Utilities Costs Provided: 2 2 2
Total Cannabis Product Purchase Expense Provided 2 2 2
All Contract Services Identified: 2 2 2
Annual Net Revenue Identified: 3 2 2
Annual Cost Escalators Identified: 4 4 3 2 3 Shows some cost escalation but no explanation Annual Estimated Sales Tax Payments to State Provided: 2 2 2 Annual Estimated Sale Tax Payments to City of Fresno Provided: 5 2 2 Annual Business Tax License and Cannabis Permit Fee Provided: 2 2 2 Annual Net Income Provided: 5 5 5
Scoring Guidance: full points for realistic figures for all three years. Dock points for severe miscalculations, unrealistic estimates, or providing less than the request three years.
1.4 Sub-Total: 50 38
Hours of Operation Provided: Score 5 5 5
Hours of Operation Provided for all 7 days of the week: Score 3 3 3 Hours of Operation Provided for Holidays: Score 2 2 0 Holidays not mentioned Opening and Closing Procedures Provided: Score 10 10 8 6 8 Does not describe role of contracted security guards
in opening nor closing procedures
Scoring Guidance: full points for describing information in detail. Dock points for leaving information out or not providing enough detail.
1.5 Sub-Total: 20 16
1.6 Daily operations. With as much detail as possible, the Business Plan should describe the day-to-day operations which meet industry best practices. This should include at a minimum the following criteria for each permit type in which you are applying for a permit. (100 points possible)
1.4 Pro forma for at least three years of operation.
1.5 Fully describe hours of operation and opening and closing procedures. (20 points possible) Criteria Narrative:
Criteria Narrative:
Criteria Narrative:
1.6.1 Fully describe the day-to-day operations if your applying for a retail permit:
i. Describe customer check-in procedures. 20 20 15 10 20 II. Identify location and procedures for receiving deliveries during business hours. 10 10 8 6 10 iii. Identify the name of the Point-of-sale system to be used and the number of Point-of-Sale locations. 10 10 10 IndicaOnline; 18 POS locations iv. The estimated number of customers to be served per hour/day. 20 20 15 10 15 Did not describe method of estimation/source v. Describe the proposed product line to be sold and estimate the percentage of sales of flower and manufactured products. 20 20 15 10 20
vi. If proposed, describe delivery service procedures, number of vehicles and product security during transportation. (if no delivery service application must state this clearly for full points) 20 20 15 10 20
1.6 Sub-Total: 100 95
Section 1 Total: 300 245
SECTION 2: SOCIAL POLICY AND LOCAL ENTERPRISE 400 Points Possible for Section 2 Description of Commitment to pay a Living Wage provided: Score 10 10 8 6 10 Definition of Living Wage Provided: Score 5 5 4 3 5
Living Wage Defined as Greater than Minimum Wage: Score 5 5 5 is minimum per CBA
2.1 Sub-Total: 20 20
Wages and Salary
CCB Entry-Level Hourly Wage Greater than Minimum Wage 5 5 5 CCB Entry-Level Annual Salary Greater than Median Household Income ($50,432) 5 5 0 Health Care Benefits
CCB Offers Medical Coverage to All Employees: Score 5 5 5 CCB Offers Dental Coverage to All Employees: Score 3 3 3 CCB Offers Vision Coverage to All Employees: Score 3 3 3 CCB Offers Health Reimbursement Account for Qualified Medical Expenses: Score 1 1 0 Not mentioned Employee Pays $0 for Employee Medical Premium: Score 3 3 0 Employee Pays $0 for Employee Dental Premium: Score 2 2 0 Employee Pays $0 for Employee Vision Premium: Score 2 2 0 Employee Pays less than $500 per month for Family Health Care Coverage (Medical, Dental, Vision):
Score 2 2 2 Employer pays 70% of premium
Leave Benefits
Number of Paid Vacation/PTO Days Per Year: (10+ days = excep; 6-9 days = Good; 3-5 days Acceptable) 5 5 4 3 4 Number of Paid Holidays Per Year: (10 or more paid holidays = excep; 4-10 = Good; 1-3 Acceptable) 5 5 4 3 5 Number of days paid time off for Sick/Medical time: (7+ days= Exceptional, 4-6 days = Good, 3 days = acceptable (8 hour day)) 5 5 4 3 4
Retirement
Offers employee retirement plan 2 2 2
Criteria Narrative:
Criteria Narrative:
2.1 Describe whether the Commercial Cannabis Business is committed to offering employees a Living Wage. (20 points possible) Scoring Guidance: https://livingwage.mit.edu/counties/06019
2.2 Briefly describe benefits provided to employees such as health care, vacation, and medical leave, to the degree they are offered as part of employment. (50 points possible)
Offers company match for employee retirement plan 2 2 2 Employer funded pension in addition to 401k
2.2 Sub-Total: 50 35
CCB Provides Tuition Reimbursement for Certificates: Score 3 3 0 CCB Provides Tuition Reimbursement for associate degrees: Score 3 3 3
LA Tech college provides employee courses free of
charge. Proposed partnership with FCC.
CCB Provides Tuition Reimbursement for bachelor's degrees: Score 3 3 0 CCB Provides Tuition Reimbursement for master's degrees: Score 3 3 0 CCB Provides Tuition Reimbursement for Specialized Commercial Cannabis Business Operations Training: Score 3 3 0
CCB Offers General Training for Health and Safety, Workplace Environment, Customer Service, etc. 5 5 4 3 5
2.3 Sub-Total: 20 8
General Recruitment Plan Provided: Score 10 10 8 6 10
Social Policy Recruitment Plan Provided: Score 10 10 8 6 10 Recruitment Plan Includes Demographic Data for District, City or County: Score 10 10 8 6 0 Recruitment Plan Includes List of CBOs, Non-Profits and Public-Agency Hiring Partners: Score 10 10 8 6 10 Recruitment Plan Includes Hiring Targets (percentages) by Demographic Groups: Score 10 10 8 6 6 No targets other than social policy and local hire
targets referenced in FMC
2.4 Sub-Total: 50 36
Owners
Number of Owners: 5
Number of Owners that live within the City of Fresno: 0 Number of Owners that live in the County of Fresno: 1
Number of Owners that Own a Business in the City of Fresno: 1 51%+ ownership interest percent of the Owners live or own a business in the City : Score 80 80 80 51%+ ownership interest percent of the Owners live or own a business in the County : Score 40 40 Less than 50 percent of the Owners live or own a business in the Cityf no owners are local, score zero) 20 20 Managers
Number of Managers (salaried, non-owners) 7
Number of Managers that live in the City of Fresno: 3
Number of Managers that Own a Business in the City of Fresno:
Criteria Narrative:
Criteria Narrative: LOI with Fresno City College to pay up to 3 scholarship to cover 2-years for qualified social equity. Offer for PT employment.
Criteria Narrative:
Data, non-scored. Write response in Evaluation Notes
column.
Data, non-scored. Write response in Evaluation Notes
column.
IF full points achieved for Ownership category, don't score managers.
Section is total of 80 points possible.
2.3 Describe compensation to and opportunities for continuing education and employee training.(20 points possible)
2.4 Describe the Commercial Cannabis Business plan to recruit individuals who meet the criteria listed in the Social Policy Section 9-3316 (b) (1) of the Fresno Municipal Code (FMC) and the percentage of local employees it hires. (50 points possible)
2.5 Describe the extent to which the Commercial Cannabis Business will be a locally managed enterprise whose owners and /or managers reside within or own a commercial business within the City of Fresno, for at least one year prior to March 2, 2020.(80 points possible)
100 percent of the Managers live or own a business in the City: Score 20 20 75 to 99 percent of the Managers live or own a business in the City: Score 15 15 50 to 74 percent of the Managers live or own a business in the City: Score 10 10 Less than 50 percent of the Managers live or own a business in the City: Score 5 5 5 Specified 3 local managers
2.5 Sub-Total: 80 80
Responsibilities Described for All Titles/Positions: Score 20 20 15 10 20
2.6 Sub-Total: 20 20
Does CCB have more than five employees: 5 5 5
CCB has signed a peace agreement: Score 5 5 5 signed, CBA in effect
2.7 Sub-Total: 10 10
Work Force Plan Provided: Score 10 10 8 6 10
Commitment to Local Hire Provided: 10 10 8 6 10
Commitment to Offer Apprenticeships Provided: 10 10 8 6 10 Commitment paying for continuing education provided 10 10 8 6 6 Limited to classes provided by company, not at
discretion of employee
Description of commitment to paying a living wage provide. (Score same as sec. 2.1) 10 10 8 6 10
2.8 Sub-Total: 50 46
CCB is willing to serve as Social Equity Business Incubator: Score 100 100 80 60 100 Mentorship and Training: Score yes
Equipment Donation: Score yes
Shelf Space: Score yes
Legal Assistance: Score yes
Finance Services Assistance: Score
Other Technical Assistance: Score compliance, application assistance, connection to distribution network
Scoring Guidance: full points for willingness to serve with detailed plan offering at least three aspects mentioned above or of similar benefit. Less points for willingness to serve but vague or unclear commitment. Zero points if there is no clear commitment to serve as Incubator.
Criteria Narrative:
2.9 Describe whether the business is willing to serve as a Social Equity Business Incubator by offering support to local cannabis social equity businesses in the form of mentorship, training, equipment donation, a percentage of shelf space dedicated to Fresno equity business products, legal assistance, financial services assistance, or other technical assistance support.(100 points possible) Criteria Narrative:
Data to inform score on first line of this section. Write response in Evaluation Notes column.
2.8.3. Commitment to pay a living wage to its employees
2.6 Describe the number of employees, title/position and their respected responsibilities.(20 points possible)
2.7 Describe whether the CCB has five (5) or more employees and whether it has signed a labor peace agreement allowing employees to unionize without interference. (10 points possible)
2.8 Provide a workforce plan that includes at a minimum the following provisions: (50 points possible)
2.8.1. Commitment for 30% of employees to be local hires; the business must show that it has either hired or made a good faith effort to hire bona fide residents of Fresno who have not established residency after the submission of an application for employment with the applicant/permittee.
2.8.2. Commitment to offer apprenticeships and/or compensation for continuing education in the field; and Criteria Narrative:
Criteria Narrative:
2.9 Sub-Total: 100 100
Section 2 Total: 400 355
SECTION 3: NEIGHBORHOOD COMPATIBILITY PLAN 300 Points Possible for Section 3 CCB will document complaints (time of complaint, nature of complaint, resolution of complaint): Score 10 10 8 6 8 Needs more detail CCB will established a dedicated contact person to receive complaints: Score 10 10 10 CCB will establish a dedicated phone number to receive complaints: Score 5 5 5 CCB will establish a dedicated email address to receive complaints: Score 5 5 5 CCB will establish a response time standard for returning complaint calls and emails: Score 5 5 0 Info not provided CCB will schedule or participate in periodic community meetings to engage with residents about the CCB operation: Score 10 10 10 Stated in Section 3.2
Other measure unique to business (i.e. website complaint form) 5 5 5 Scoring Guidance: full points for detailed proactive plan addressing all aspects mentioned. Dock points for leaving out aspect, vagueness, or reactive plans.
3.1 Sub-Total: 50 43
CCB will maintain a listserv of community residents to update and information residents of business operations.
10 10 0 Info not provided
CCB will schedule or attend periodic community meetings (at least annually) to engage with residents about the CCB operation: Score 10 10 10
CCB will prepare a community outreach and engagement plan: Score 50 50 40 30 40 Needs more detail CCB will issue periodic Newsletters to community providing information about CCB operations 10 10 0 Info not provided CCB will hire residents from the community work at the CCB: Score 20 20 0 Info not provided Scoring Guidance: full points for detailed proactive plan. Dock points for leaving out aspect, vagueness, or reactive plans.
3.2 Sub-Total: 100 50
CCB has identified sensitive receptors to nuisance odors in vicinity of business operations: Score 5 5 0 Info not provided CCB has prepared a nuisance odor control plan: Score 10 10 8 6 6 Needs more detail Nuisance odor control plan identifies locations where fugitive emissions may exit the premise boundary:
Score 5 5 5 Stated in Section 3.4
Nuisance odor control plan describes specific odor control measures to reduce fugitive emissions exiting the premise boundary: Score 5 5 5
CCB has established an odor reporting system: Score 5 5 0 Info not provided CCB will install a nuisance odor monitoring system: Score 10 10 0 Info not provided Criteria Narrative:
Criteria Narrative:
Criteria Narrative:
3.1 Describe how the CCB will proactively address and respond to complaints related to noise, light, odor, litter, vehicles, and pedestrian traffic.(50 points possible)
3.2 Describe how the CCB will be managed to avoid becoming a nuisance or having impacts on its neighbors and the surrounding community.(100 points possible)
3.3 Describe odor mitigation practices.(40 points possible)
3.3 Sub-Total: 40 16
CCB has identified the potential sources of nuisance odors for the business operation: Score 10 10 8 6 10 Scoring Guidance: full points for detailed proactive plan. Dock points for vagueness or reactive plans.
3.4 Sub-Total: 10 10
Nuisance odor control plan describes specific odor control equipment: Score 10 10 8 6 8 Needs more detail Nuisance odor control plan describes specific odor control measures/techniques: Score 10 10 8 6 10 Odor control measures are identified for different nuisance odor sources: Score 10 10 0 Info not provided
3.5 Sub-Total: 30 18
Nuisance odor control plan describes the operation, monitoring, and maintenance requirements for odor control measures: Score 10 10 10
Nuisance odor control plan describes the staff training required for system operations, maintenance, repair, and troubleshooting. 10 10 10
3.6 Sub-Total: 20 20
CCB has identified the sources of waste generated by the business operation: Score 10 10 10
CCB has prepared a source-separation plan to segregate different sources of waste generated by business operations: Score 10 10 10
The source-separation plan identifies policy, procedures, and locations where different sources of waste are to be collected for disposal: Score 10 10 8 6 10
The source-separation plan describes specific measures to control the collection and disposal cannabis waste: Score 10 10 10
The name of licensed cannabis disposal company provided: Score 10 10 10
3.7 Sub-Total: 50 50
Section 3 Total: 300 207
SECTION 4: SAFETY PLAN 300 Points Possible for Section 4 Safety Plan Prepared by Consultant: Score 10 10 10
Safey Plan Assessed by Consultant: Score (if prepared by, also give points for assessed by) 10 10 0 no mention of assessmnt Criteria Narrative:
3.7 Describe the waste management plan. (50 points possible) Criteria Narrative:
4.1 The Safety Plan shall be prepared and/or assessed by a professional fire prevention and suppression consultant. (50 points possible)
3.4 Identify potential sources of odor. (10 points possible)
3.5 Describe odor control devices and techniques employed to ensure that odors from cannabis are not detectable beyond the permitted premises. (30 points possible)
3.6 Describe all proposed staff odor training and system maintenance.(20 points possible) Criteria Narrative:
Criteria Narrative:
Criteria Narrative:
Safety Plan Prepared for CCB Address (specific proposed location): Score 10 10 5 moderate details Safety Plan includes Site Plan of Premise: Score 10 10 10 section 4.5 Safety Plan includes Building Layout Plan: Score 10 10 10 4.5
4.1 Sub-Total: 50 35
Written Accident/Incident Procedure Provided: Score 20 20 15 10 20 Procedures Address Multiple Accident/Incident Scenarios: Score 10 10 8 6 10 Total Number of Scenarios Described: Score 12 different possible injuries Active Shooter Incident Described: Score 10 10 0 not mentioned Robbery Incident Described: Score 10 10 0 not mentioned
4.2 Sub-Total: 50 30
Evacuation Plan Provided: Score 20 20 15 10 20
Adequate Number of Evacuation Routes Identified: Score 20 20 15 10 20 Evacuation Route Distance to Public Right of Way: Score 10 10 8 6 5 no over all site plan
4.3 Sub-Total: 50 45
Location of Fire Suppression System Elements Identified: Score 10 10 10 Type of Fire Suppression System Elements Identified: Score 20 20 15 10 20 Location of Fire Extinguishers Identified: Score 10 10 10 Adequate Number of Fire Extinguisher Locations Identified: Score 10 10 8 6 10
4.4 Sub-Total: 50 50
Written Procedure for Fire Emergencies Provided: Score 20 20 15 10 20 Written Procedure for Medical Emergencies Provided: Score 20 20 15 10 20 Cardiac Arrest Medical Emergency Described: Score 20 20 15 10 0 not mentioned Gunshot Wound Medical Emergency Described: Score 20 20 15 10 0 not mentioned Other Medical Emergency Conditions Described: Score 20 20 15 10 0 not mentioned
4.5 Sub-Total: 100 40
Section 4 Total: 300 200
SECTION 5: SECURITY PLAN 300 Points Possible for Section 5 Security Plan Prepared by Consultant: Score 10 10 10
Security Plan Assessed by Consultant(if prepared by, also give points for assessed by): Score 10 10 10
4.3 Describe evacuation routes. (50 points possible)
4.2 Describe accident and incident reporting procedures. (50 points possible) Criteria Narrative:
4.5 Describe procedures and training for all fire and medical emergencies.(100 points possible)
5.1 The Security Plan shall be prepared and/or assessed by a professional security consultant.(50 points possible) Criteria Narrative:
Criteria Narrative:
Criteria Narrative:
4.4 Location of fire extinguishers and other fire suppression equipment. (50 points possible) Criteria Narrative:
Data-write response in Evaluation Notes Column
Security Plan Prepared for CCB Address (specific proposed location): Score 10 10 10 Security Plan includes Site Plan of Premise: Score 10 10 10 Security Plan includes Building Layout Plan: Score 10 10 10
5.1 Sub-Total: 50 50
Premises (Security) Diagram Provided: Score 20 20 15 10 20 Diagram is drawn to correct scale: Score 5 5 5
Diagram provides required details for premise: Score 5 5 5 Diagram shows the location of all security cameras: Score 5 5 5 Descriptions of activities to be conducted in each area of the premise 5 5 5 Limited-Access Areas Clearly Marked: Score 5 5 5
Number and Location of All Security Cameras Identified: Score 5 5 5
5.2 Sub-Total: 50 50
Intrusion Alarm and Monitoring System Identified: Score 15 15 15 Name and Contact Information for Monitoring Company Provided: Score 5 5 5 Total Points of Entry into Premise Identified: Score 5 5 5 All Points of Entry to be Alarmed Identified: 5 5 5
Type of Alarm Identified (motion, infrared, glass break, etc.): Score 10 10 10 Backup Power Supply Identified: Score 10 10 10
5.3 Sub-Total: 50 50
Written Cash-Handling Procedure Provided: Score 30 30 20 15 30 Dual-Custody is Practiced for all cash handling: Score 10 10 10 Video Surveillance Used to Monitor All Cash Handling: Score 20 20 20 Armored Car Service Used for Bank Deposits: Score 10 10 10 All Cash Deposited weekly with Bank: Score 10 10 10
Onsite Vault Provided to Secure Cash Prior to Bank Deposit: Score 20 20 20
5.2.3 Description of cannabis activity that will be conducted in each area of the premise. Commercial cannabis activities that must be identified on the diagram/site plan may include but are not limited to the following if applicable to the business operations; storage areas, batch sampling areas, loading/unloading of shipment areas, packaging and labeling, customer sales areas, training areas, employee break room areas, extractions, infusions, processing, and testing areas.
5.2.4 Limited-access areas, defined as areas in which cannabis goods are stored or held and only accessible to permittees, or its employees or contractors and areas used for video surveillance monitoring and storage devices (Pursuant to CCR Title 16, Division 42, §5000 (m) Limited-Access Area and §5042 Limited-Access Area.
5.2.5 Number and location of all video surveillance cameras. (50 points possible)
5.4 Briefly describe cash handling procedures which covers day to day transactions with customers, vendors armor carrier vehicles and transporting it to the bank.(100 points possible)
5.3 Identify intrusion alarm and monitoring system including the name and contact information for the monitoring company (if the company has been selected).(50 points possible) Criteria Narrative:
Criteria Narrative:
Criteria Narrative:
5.2 Premises (Security) Diagram. In addition to diagrams submitted for other sections of the application, applicants are expected to submit a premises diagram (or site plan) which, focuses on the proposed security measures and how they relate to the overall business. (Pursuant to CCR Title 16, Division 42, §5006. Premises Diagram).
5.2.1 The diagram shall be accurate, dimensioned and to scale (minimum scale ¼"). The scale may be smaller if the proposed location exceeds more than a 1/2-acre parcel but must not be printed on larger than an 11" x 17" sheet of paper. (Blueprints and engineering site plans are not required at this point of the application process)
5.2.2 The diagram must be drawn to scale and clearly identify property boundaries, entrances, exits, interior partitions, walls, rooms, windows, and doorways. The activity in each room and the location of all cameras must be identified in the diagram.
Criteria Narrative:
5.4 Sub-Total: 100 100
CCB will use onsite security guards: Score 10 10 10
All onsite guards will be licensed and bonded: Score 10 10 0 No mention of being bonded All onsite security guards will be licensed to carry firearms: Score 10 10 10 Onsite security guards will be on duty before CCB opens for business: Score 10 10 10 Onsite security guards will be on duty after CCB closes for business: Score 10 10 10
5.5 Sub-Total: 50 40
Section 5 Total: 300 290
Section 1: Business Plan Total Points: 300 245
Section 2: Social Policy & Local Enterprise Total Points: 400 355 Section 3: Neighborhood Compatibility Total Points: 300 207 Section 4: Safety Plan Total Points: 300 200
Section 5: Security Plan Total Points: 300 290
Total Points Achieved: 1600 1297
81.06%
TOTAL SCORE
5.5 Discuss whether the CCB will utilize the services of on-site security guards. Include in the discussion: (50 points possible)
5.5.1 Number of guards.
5.5.2 Hours guards will be on-site.
Criteria Narrative:
5.5.3 Locations at which they will be positioned.
5.5.4 Guards' roles and responsibilities.
FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT JEFF AUGUSTINI, SBN 178358
LAW OFFICE OF JEFF AUGUSTINI
9160 Irvine Center Drive, Suite 200
Irvine, California 92618
Telephone: (949) 336-7847
Email: [email protected]
Attorneys for Petitioner/Plaintiff CATALYST - FRESNO LLC
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF FRESNO
CATALYST - FRESNO LLC,
Petitioner/Plaintiff,
vs.
CITY OF FRESNO; and DOES 1-50, inclusive,
Respondents/Defendants,
1261 WISHON OPCO, LLC, a California limited
liability company; TAT FRESNO LLC, a
California limited liability company;
AUTHENTIC 559, LLC, a California limited
liability company; CRESCENT CONQUEST
LLC, a California limited liability company; and
DOES 51-100, inclusive,
Real Parties in Interest.
CASE NO. 21CECG03543
FIRST AMENDED VERIFIED PETITION FOR WRIT OF MANDAMUS ANDCOMPLAINT FOR:
(1) PEREMPTORY WRIT OF MANDATE PURSUANT TO CCP §§1085 AND 1094.5; AND (2) INJUNCTIVE RELIEF
E-FILED1/25/2022 11:52 AMSuperior Court of CaliforniaCounty of Fresno By: A. Ramos, Deputy
2 FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT Petitioner and Plaintiff CATALYST - FRESNO LLC, d.b.a. Catalyst Highway 99 (“Plaintiff” or “Catalyst”), by and through its attorneys, hereby complains, alleges, and avers as follows against Respondents and Defendants the CITY OF FRESNO (“Fresno” or the “City”) and DOES 1-50 (collectively “Respondents”), along with the following Real Parties in Interest whose interest may be affected by this action and/or the relief sough herein: 1261 WISHON OPCO, LLC (“Wishon”), TAT FRESNO LLC (“TAT”), AUTHENTIC 559, LLC (“Authentic”), CRESCENT CONQUEST LLC (“Crescent”), and DOES 51-100.
INTRODUCTION
1. This action arises out of the City’s Manager’s written determination on or about September 1, 2021 to deny Catalyst’s application for a preliminary award for a commercial cannabis retail business permit (“Permit”) in the City purportedly pursuant to the City’s governing ordinance, Fresno Municipal Code (“FMC”) Chapter 9, Article 33 (“Article 33”), as well as the governing Application Procedure Guidelines (“Guidelines”) (as revised) promulgated by the City Manager pursuant to authorization set forth in Article 33. True and correct copies of Article 33 and the Guidelines are attached hereto as Exhibits A and B, respectively.
2. Simply put, Catalyst submits it should have been selected for preliminary approval for a Permit, and that several applicants selected ahead of it in final rankings (including Real Parties) legally are/were not qualified for preliminary approval, should not have obtain preliminary approval, and/or should have their applications denied for providing false information — an offense which under Article 33 mandates denial or revocation of their applications/Permits. SeeArticle 33 at §9-3316(d).
3. Pursuant to both Article 33 and the Guidelines, only a successful applicant, the Mayor of the City, and/or the City Council Member in whose district the applicant would be located has the right to appeal from the City Manager’s determination on preliminary Permit approval. SeeFMC §9-3317(c); Guidelines at 6. As such, Catalyst had and has no right or ability to appeal from the denial of preliminary approval of its application, the granting of preliminary approval for a Permit by the City Manager, or final approval of a Permit following an appeal conducted pursuant to Section 9-3317(c). Furthermore, while Catalyst otherwise might have contacted the City Council member in City Council District 1, the 3 FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT district in which it applied, to discuss options or to advocate for its application and to have that member appeal other preliminarily approved applications in the district, in the present instance Catalyst is prohibited by the ordinance—under threat of disqualification—from contacting let alone speaking with any elected official about the application process. SeeMFC §§9-3315(g); Guidelines at 3. As such, this Petition is the only way Catalyst can obtain a plain, speedy and adequate remedy for its claims herein.
PARTIES AND VENUE
4. Catalyst is and at all relevant times was a California limited liability corporation authorized to do business in the State of California. Catalyst is the lessee of real property located at 2250 N. Weber Avenue in Fresno, California (the “Catalyst Property”). Catalyst applied for a Permit in the City, and participated in the City’s Permit application process as set forth in the governing ordinance and associated City rules and regulations promulgated by the City Manager.
5. The City is and at all relevant times was a municipality located within the State of California, County of Fresno.
6. Catalyst is ignorant of the true names and capacities of the Defendants/Respondents sued herein as DOES 1 through 50, inclusive, and therefore sues such Defendants/Respondents by fictitious names. Catalyst will amend its claims to allege the true names and capacities of DOES 1-50 when they have been ascertained. Catalyst is informed and believes, and on that basis, alleges each of the fictitiously named Defendants/Respondents is responsible in some manner for the acts, omissions, events and occurrences herein alleged, and that Catalyst’s damages herein alleged were proximately caused in some way by such DOE Defendants/Respondents.
7. Real Parties in Interest Wishon, TAT, Authentic and Crescent all submitted applications for a Permit in District 1. Following an appeal of the City Manager’s determination to provide preliminary approval to Wishon and TAT, the Council Member in District 1 appealed the City Manager’s determination to the City Council. In connection with that appeal, Wishon received preliminary approval for a Permit, while TAT was denied preliminary approval. As the remaining applicants in District 1, Catalyst is informed and believes that it, Authentic, and Crescent all are potentially eligible to obtain 4 FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT preliminary approval in replacement of TAT. As noted above, they have been included because of the potential affect this case could have on their applications and the process more generally.
8. Jurisdiction and venue are proper in this Court, as the events at issue all occurred in the City of Fresno, County of Fresno.
FACTS RELEVANT TO ALL CAUSES OF ACTION
9. As noted above, this action arises from the City Manager’s written determination on September 8, 2021, that he was notgoing to select Catalyst for a preliminary award of a Permit for City Council District 1. A true and correct copy of the City Manager’s September 8, 2021, determination letter is attached hereto as Exhibit C.
OVERVIEW OF APPLICATION PROCESS
10. Generally, the application process as laid out by Article 33 and Guidelines was as follows.
Applicants were required to submit their applications and all necessary materials to the City by no later than 4:00 p.m. on December 4, 2020. Guidelines at 5. Once submitted, an applicant was not permitted to amend or supplement its application, except as provided in the ordinance/Guidelines or as specifically authorized by the City in writing. Id.at 1. In “Phase I,” City staff would review submitted applications for completeness.Id.at 4–5. If an application was missing a “major component,” it was summarily rejected.Id.at 1. Applications missing only “minor components” were notified and the applicant was given one week to provide the required information necessary to render its application complete. Id.
11. Applications deemed complete by City staff then advanced to “Phase II,” which is where the City objectively evaluated the applications and scored and ranked them based on a set of objective review criteria described in the ordinance and more specifically articulated in the Guidelines. SeeFMC §9-3316(a); Guidelines at 5, 7–11 (setting out Phase II criteria). Initially only applicants that scored a minimum of 80% of the total possible points were to advance to Phase III, but during the process the City Manager amended the Guidelines to remove the 80% minimum requirement and instead permitted the City (presumably the City Manager) to determine which “top applicants” would advance to Phase III (he also removed a similar 80% minimum threshold for advancement to Phase IV). See Guidelines at 5. 5 FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT
12. Phase III consisted of applicant interviews by City staff, wherein applicants were questioned about aspects of the merit-based criteria referenced in the Guidelines. FMC §9-3316(a), 3317(a); Guidelines at 5, 7-11. Again, following the interviews, the applicants were scored on the stated objective criteria and ranked, with the top applicants (according to the City) advancing to Phase IV.
Guidelines at 5.
13. Notably for purposes of this Petition, one of the objective criteria in both Phase II and III—criteria that the City suggested in publicly available documents would represent 20% of the applicant’s score for its Social Policy and Local Enterprise Plan—addressed what is known as “Local Preference,” where the City in effect gives additional points to applicants who reside in or have businesses located in the City, and gives (potentially) fewer additional points for applicants who reside in or own businesses in Fresno County. See id.at 8, §2.5; Exhibit D(discussing Section 2.5 “Local Preference” criteria, and indicating Section 2.5 alone “represents 20% of section score,” and that an applicant also can obtain “partial points” for county as opposed to City of Fresno residence/business).
14. In Phase IV, the top applicants in each district were referred to the City Manager, who then made the final determination as to which applicants would receive Permits – which also is called “Preliminary Approval” by the City since the City only will actually issue a Permit upon successful completion of the required background check and the City’s land use permitting process. FMC §§ 9- 3316(j), 9-3317(d); Guidelines at 5. Notably also, the Mayor, the City Council member in the district where the applicant will be located, and a successful applicant itself, were given the right to appeal the City Manager’s determination to the City Council, and to have the City Council decide whether the “appealed” applicant should receive preliminary approval. SeeFMC §9-3317(c); Guidelines at 6.
THE CITY MANAGER’S INITIAL APPROVALS IN CITY COUNCIL DISTRICT 1
15. As noted above, Catalyst applied for a Permit in City Council District 1. Its application was deemed complete in Phase I, was advanced through Phase II and Phase III as one of the top-5 non- social equity applicants in City Council District 1, and ultimately advanced to Phase IV, where it was ranked 4th for non-social equity applicants. As the City approved a social equity applicant for City Council District 1 via the separate social equity application process, that left two available Permits for 6 FIRST AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT non-social equity applicants. As such, the City Manager selected the top two ranked applicants for preliminary Permit approval: (i) Wishon and (ii) TAT. SeeExhibit E (“Cannabis Retail Permit Application - Final Scores” in each City Council District).
16. As also noted above, there was no mechanism in the ordinance or the Guidelines to permit Catalyst to appeal or otherwise administratively challenge the City Manager’s determination, or to advocate for the City Council member in City Council District 1 of the Mayor to appeal from the City Manager’s determination. SeeFMC §9-3317(c); Guidelines at 6; see alsoExhibit F.
17. First and foremost, City Manager should have never provided either Wishon or TAT with preliminary permit approval in the first place because Catalyst contends that both provided false information to the City in an (apparently successful) attempt to artificially increase their scores and the City Manager failed to carry out even the most basic investigation of publicly available information with the California Secretary of State to actually verify the information provided by Wishon and TAT.
18. More specifically, in order to obtain the maximum of 80 “local preference points” for its application (Guidelines §2.5), Wishon represented that Kaycee Auston, a resident of Fresno, is the 51% owner and CEO of Wishon (seeExhibit G)—and thereby received the maximum 80 points available for City residents/business owners (seeExhibit H [Wishon receiving 80 points for City residence/business of 51% owner, as opposed to 40 points for County, and 20 where no local resident/owner is involved]).
However, in the publicly available and easily reviewable information posted on the California Secretary of State’s website, Wishon is listed as a single-manager limited liability company with Brandon Johnson—not Kaycee Auston—as its sole limited liability company manager. SeeExhibits I and J.
Notably and contrary to readily available public information, Brandon Johnson is notlisted as Wishon’s sole limited liability company manager on Wishon’s Permit application.See Exh. H.
19. Similar to Wishon, in order to obtain the maximum of 80 “local preference points” for its application (Guidelines §2.5), TAT represented that Lawrence Artenian, a resident of Fresno, is the 51% owner of TAT (seeExhibit K)—and thereby received the maximum 80 points available for City residents/business owners (seeExhibit L[TAT receiving 80 points for City residence/business of 51% owner, as opposed to 40 points for County, and 20 where no local resident/owner is involved]). However,