REPORT TO CITY COUNCIL
To:Honorable Mayor and Members of the City Council
From:Jason Simpson, City Manager
Prepared by:Damaris Abraham, Community Development Director Date:August 26, 2025
Subject:Request to Amend Pipe Dreamz's Development Agreement to Revise the Community Benefit Fees
Applicant:Tim Scalzo, Pipe Dreamz
Recommendation
1. Find that the proposed project is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15301 (Existing Facilities); and
2. Introduce by title only and waive further reading of AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING THE DEVELOPMENT AGREEMENT AMENDMENT (DA-2025-08) FOR PIPE DREAMZ LOCATED AT 31881 CORYDON ROAD, SUITE 160 AND 31875 CORYDON ROAD, SUITE 120 (APN: 370-051- 031 AND 370-051-008).
Planning Commission Action
On July 15, 2025, the Planning Commission conducted a duly noticed Public Hearing at their regular meeting and recommended approval of the Development Agreement (DA) to the City Council with a 5-0 vote. Members of the public, including the cannabis business owner, were present at the meeting and the item did not receive any public comments.
Project Location
Pursuant to Lake Elsinore Municipal Code (LEMC) Section 17.156.040, cannabis businesses are permitted only within the M-1 (Limited Manufacturing) and M-2 (General Manufacturing) zoning districts. The subject cannabis business is located in the M-1 district at 31881 Corydon Road, Suite 160 and 31875 Corydon Road, Suite 120, which are within the East Lake District neighborhood.
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Background
The cannabis business, Pipe Dreamz, is requesting to amend their DA to revise the CBF and establish a separate CBF rate for retail (e.g. storefront, delivery to customers) versus non-retail (e.g. cultivation, distribution, manufacturing and testing laboratory) cannabis operations. The proposed amendment also includes revisions to the definitions and general provisions. All other terms and provisions of the previously adopted DA would remain unchanged and would still be applicable.
The requested amendments are as a result of the City Council Cannabis Subcommittee’s response to the cannabis business owners’ concerns with operating a viable and successful cannabis business in the City.
Discussion
Since adopting the Cannabis Ordinance, other surrounding cities, as well as Riverside County, have allowed cannabis uses within their jurisdiction, which has created a competitive market for the cannabis businesses in Lake Elsinore. Due to the growing competition, stringent land use regulations and permitting requirements, and costs associated with operating and managing a cannabis business – the businesses have expressed concerns with their ability to remain in operation.
The Cannabis Subcommittee reviewed these concerns and directed staff to amend the Cannabis Ordinance and DAs to alleviate these issues while still ensuring compatible land uses and protecting the general welfare and safety of the community.
The following is a summary of the proposed DA amendment:
•Revised CBF for Cannabis Retail: The CBF rate for cannabis retail would be capped at $25 per square foot. Once it reaches this level, the 4% annual increase will no longer apply.
•Revised CBF for Cannabis Non-Retail: The CBF rate for cannabis non-retail would be reduced to $5 per square foot with no 4% annual increase. •CBF Payments: Cannabis businesses would now have the option to pay their CBF payments in 12 (monthly) equal payments instead of a lump sum payment annually (that was due at the time of City business license renewal).
•Floor Area Definition: The definition of “floor area” is proposed to be revised to mean the interior gross floor area square footage of a cannabis facility. In addition, the definition would be clarified to distinguish between cannabis retail and non-retail business floor areas. This revised definition is to create a clear delineation between the types of cannabis uses within a cannabis facility for purposes of calculating a cannabis business’ revised CBF.
•Floor Plan Exhibit(s): An updated floor plan exhibit of the cannabis facility would be included to provide a clear delineation between the retail and non-retail floor areas.
The new CBF rates would become effective in 2025 and would not be retroactive.
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Any future changes to the cannabis facility’s floor plan layout would require an amendment to the previously approved CUP subject to the Planning Commission’s review at a separate public hearing. Any CUP amendment that would revise the DA floor plan exhibit would be formalized through an Operating Memoranda pursuant to the terms of the cannabis business’ DA.
Environmental Determination
The proposed project is exempt from the California Environmental Quality Act (Cal. Pub. Res.
Code §§21000 et seq.: “CEQA”) and the CEQA Guidelines (14 C.C.R. §§ 15000 et seq.) pursuant to Section 15301 (Class 1, Existing Facilities). Class 1 consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. The proposed project is an existing cannabis business that is operating in a fully developed site and buildings. The proposed amendment to the business’ development agreement would not result in new construction, additional square footage, or expansion of the existing uses.
Public Notice
Notice of the public hearing has been published in the Press-Enterprise newspaper and mailed to property owners within 300 feet of the subject properties. As of the writing of this report, no written comments concerning these applications have been received by staff.
Fiscal Impact
The time and costs related to the processing of this application have been covered by the application fees paid by the applicants. No General Fund budgets have been allocated or used in the processing of these applications.
Attachments
Attachment 1 – DA-2025-08 Ordinance
Exhibit A – DA Amendment Form
Attachment 2 – GIS Exhibits
Attachment 3 – Public Notice Materials