ITEM 4. 3
CITY MANAGER' S REPORT
AUGUST 8, 2022 CITY COUNCIL REGULAR MEETING
ITEM: SECOND READING AND ADOPTION OF ORDINANCE
22- 438 BY THE CITY COUNCIL OF THE CITY OF
LATHROP APPROVING THE DEVELOPMENT
AGREEMENT BETWEEN THE CITY OF LATHROP AND
CENTRAL CALIFORNIA GREENS, INC. ( DA- 22- 81)
RECOMMENDATION: Waive Full Reading And Adopt Ordinance 22- 438 By Title Only To Approve The Development Agreement
Between The City Of Lathrop And Central California
Greens, Inc. ( DA- 22- 81)
RECOMMENDED ACTION:
The City Council to conduct second reading and adopt Ordinance 22- 438 entitled:
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LATHROP APPROVING THE
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF LATHROP AND CENTRAL CALIFORNIA GREENS, INC. ( DA- 22- 81)
SUMMARY:
On July 11, 2022, the City Council approved the introduction and first reading of the subject Ordinance by the following vote:
AYES: Diallo, Lazard, Torres- O' Callaghan, and Dhaliwal NOES: None
ABSTAIN: Akinjo
ABSENT: None
The Ordinance will take effect 30 days after adoption.
SUBMITTED BY:
L 2
e esa Vargas, Cit lerk Date
ORDINANCE NO. 22- 438
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LATHROP
APPROVING THE DEVELOPMENT AGREEMENT BETWEEN THE CITY OF LATHROP AND CENTRAL CALIFORNIA GREENS, INC. ( DA- 22- 81) WHEREAS, the City of Lathrop City Council held a duly noticed public hearing to consider the Development Agreement between the City of Lathrop and Central California Greens, Inc. pursuant to the Lathrop Municipal Code; and WHEREAS, the request is for a Conditional Use Permit and Development Agreement to occupy an approximately 2, 000 square foot tenant space for a retail cannabis dispensary and delivery facility within an existing multi- tenant building High 5 Plaza) on a 0. 83- acre parcel on S. Harlan Road; and WHEREAS, the project is located at 16925 S. Harlan Road, Suite 103 ( APN:
198- 210- 10); and
WHEREAS, Central California Greens, Inc. a California corporation, have applied for approval of a Development Agreement; and
WHEREAS, California Government Code Section 65864 et seq. authorizes any city, county, or city and county to enter into an agreement for the development of real property within its jurisdiction; and
WHEREAS, the proposed Development Agreement has been reviewed by City staff and City Attorney, and who have recommended City Council review and approve the Development Agreement as attached and incorporated in the City Council Staff Report as Attachment " 6"; and
WHEREAS, the proposed Development Agreement is exempt according to California Environmental Quality Act ( CEQA) Article 19 § 15301 Class 1 " Existing Facilities". The proposed project would operate a cannabis dispensary in an existing multi- tenant retail building on S. Harlan Road. The proposed project is located within an existing facility and will involve tenant improvements. Site improvements such as paving, lighting, landscaping, off- street parking and curb, gutter, and sidewalk are fully developed; and
WHEREAS, proper notice of this public meeting was given in all respects as required by law including the publishing of a legal notice of the hearing in the Manteca Bulletin on or about June 23, 2022, email notification sent to Public Hearing subscribers on June 23, 2022, and mailed out to property owners located within 300- feet radius from the Central California Greens project site on June 23, 2022. In addition, the meeting agenda was posted at the Council Chambers bulletin board and three ( 3) other locations accessible to the public and posted to the City' s website; and
Ordinance No. 22- 438
WHEREAS, the City of Lathrop Planning Commission held a duly noticed public hearing at a regular meeting on June 15, 2022, at which they adopted PC Resolution No. 21- 5 finding consistency with the Lathrop General Plan and recommending the City Council approve the Development Agreement between the City of Lathrop and Central California Greens, Inc.; and WHEREAS, the City Council has reviewed all written evidence and oral testimony presented to date.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Lathrop finds that the text of the Development Agreement is consistent with the Lathrop General Plan as amended, since there is no resultant change in zoning, land use standards, or other similar regulations, and that the Development Agreement is exempt according to the California Environmental Quality Act because:
a. The proposed Development Agreement involves organizational and financial matters that have no potential for direct or indirect physical effect on the environments.
b. The proposed Development Agreement is exempt according to CEQA Guidelines Article 19 § 15301 Class 1 " Existing Facilities". The proposed project would operate a cannabis dispensary and delivery facility in an existing multi- tenant building on S. Harlan Road. The proposed project is located within an existing facility and will involve tenant improvements. Site improvements such as paving, lighting, landscaping, off- street parking, curb, gutter and sidewalk are fully improved.
c. The proposed Development Agreement would not alter the physical nature of the Project Site or its potential environmental impacts.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LATHROP DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. This Ordinance incorporates, and by this reference makes a part hereof, that certain Development Agreement, as shown in Attachment 6 of the City Council Staff Report, relative to the Central California Greens Project.
Section 2. Based on the findings set forth in this Ordinance, and evidence in the Staff Report, the City Council hereby adopts the Ordinance for the proposed Development Agreement. This document shall be substantially in the form on file with the City Clerk.
Section 3. By Adoption Resolution No. 21- 4923 based on substantial evidence in the record, City Council, acting as the land use agency, adopted Adequate Progress Findings toward providing a 200- year Urban Level of Flood Protection in the Mossdale Tract Area by the year 2028, based upon the 2021 Annual Adequate Progress Report Update.
Ordinance No. 22- 438
Section 4. This Ordinance is not intended to and shall not be construed or given effect in a manner that imposes upon the city or any officer or employee thereof a mandatory duty to care toward persons and property within or without the city so as to provide a basis of civil liability for damages, except as otherwise imposed by law.
Section 5. Severabilitv. If any section, subsequent subdivision, paragraph, sentence, clause or phrase of this Ordinance is for any reason held to be unconstitutional or otherwise invalid, such a decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance irrespective of the unconstitutionality or invalidity of any section, subsection, subdivision, paragraph, sentence, clause or phrase.
Section 6. Effective Date. This Ordinance shall take legal effect 30 days from and after the date of its passage.
Section 7. Publication. Within fifteen days of the adoption of this Ordinance, the City Clerk shall cause a copy of this Ordinance to be published in full accordance with Section 36933 of the Government Code.
THIS ORDINANCE was introduced at a meeting of the City Council of the City of Lathrop on the 11th day of July 2022, and was PASSED AND ADOPTED at a regular meeting of the City Council of the City of Lathrop on the day of 2022, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Sonny Dhaliwal, Mayor
ATTEST: APPROVED AS TO FORM:
Teresa Vargas, City Clerk Salvador Navarrete, City Attorney Ordinance No. 22- 438
Revised Developer Agreemerrt between
Recording fees exempt pursuant to the City of Lathrop 8 Central Califomia Government Code§ 27383 Greens, LLC
Prepared by and after Recording Return to:
City of Lathrop
c/ o City Clerk
390 Towne Centre Drive
Lathrop, CA 95330
Space above this line for Recorder' s use
DEVELOPMENT AGREEMENT
This DEVELOPMENT AGREEMENT ( the " Agreement") is made this _ day of 2022, between the City of Lathrop, California, a general law city (" City"), and Central California Greens, Inc., a California corporation (" Operator"). City and Operator are individually referred to as " Party" or collectively as " Parties."
RECITALS
A. WHEREAS, Operator is the tenant of a long-term lease for the real property located at 16925 South Harlan Road 103, Lathrop, CA 95330 ( the " Property"); and B. WHEREAS, Operator plans to operate a cannabis dispensary ( the " Business") on the Property pursuant to Lathrop Municipal Code (" LMC") Chapter 5. 26; C. WHEREAS, the Parties mutually desire to enter into this Agreement to facilitate the development and expansion of community programs and infrastructure; and D. WHEREAS, California Government Code Sections 65864 et seq., authorizes municipalities to enter into development agreements at their discretion to establish certain development rights in real property for a period of years regardless of intervening changes in land use regulations, to vest certain land use rights in the Operator, and to meet certain public purposes in local government.
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NOW, THEREFORE, in consideration of the above Recitals and mutual promises, conditions and covenants of the Parties in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
1. AUTHORITY FOR THIS AGREEMENT
a. This Agreement is authorized by Section 65865 of the Government Code of the State of California and LMC section 5. 26. 060.
b. Pursuant to this Agreement, City and Operator have taken all actions mandated by and fulfilled all requirements set forth in Section 65865 of the Government Code of the State of California.
c. Having duly examined and considered this Agreement and having held a properly noticed public hearing regarding this Agreement before the Planning Commission on date], 2022 and befare the City Council on [ date], 2022, the City Council declared this Agreement:
i. Is consistent with the objectives, policies, general land uses and programs specified in the general plan and any applicable specific plan; ii. Is compatible with the uses authorized in, and the regulations prescribed for, the land use district in which the real property is located; iii. Is in conformity with public convenience, general welfare and good land use practice;
iv. Will not be detrimental to the health, safety and general welfare; and v. Will not adversely affect the orderly development of the property or the preservation of properry values.
2. AGREEMENT
a. TER1v. The term of this Agreement ( the " Term") shall commence upon the Effective Date defined below and continue perpetually, unless terminated earlier under Sections 9 or 10 of this Agreement. " Effective Date" is defined as the first date on which both of the following are true: ( i) the ordinance adopting this Agreement is effective, expected to be 30 days after second reading; and ( ii) the Operator has obtained City permits and approvals necessary to operate the Business. b. OPERATOR OBLIGATIONS.
i. In consideration for the rights granted by this Agreement, the Operator agrees to contribute to community benefits program to be implemented by the City:
1. A one- time, non- refundable payment of $ 79, 165. 50 (" Advance Payment") within sixty ( 60) days of the Effective Date of this Agreement; and
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2. A monthly fee of five percent ( 5%) of in-store Gross Receipts and two percent ( 2°Io) of delivery Gross Receipts from operation of the retail storefront Business on the Property (" Fee") from and after the Effective Date.
3. Within 30 days of receipt of an invoice, Operator shall reimburse the City' s costs to implement this Agreement and to enforce Chapter 5. 26 of the City Code, including but not limited to:
a. The cost of an independent contractor to enforce this Agreement; b. Any law enforcement responses to the Property or the Business which exceed the level of service provided to other businesses in the City.
Operator may seek review of any such invoice by written request to the Finance Director of the City within the 30 days referenced in this subdivision and, if the Operator remains dissatisfied after such a review, may resart to its remedies under sections 10 and ll of this Agreement.
Failure to seek review within that time shall constitute waiver of the right to object to the invoice, which shall be immediately due and payable. ii. Although the funds collected pursuant to the Advance Payment and Fee may be appropriated for any lawful purpose in the discretion of the City Council, the Parties understand that the Advance Payment and Fee may be devoted to:
1) drug awareness programs; ( 2) recreational programs; ( 3) public safety programs, and ( 4) programs to address food insecurity and hunger in the City. iii. Gross Receipts Definition. " Gross Receipts" shall be as defined in Lathrop Municipal Code Section 5. 04. 010. In addition, any portion of the Operator' s payments to the City passed through to consumers or other third parties is excluded from " Gross Receipts, " provided, however, that no reference in that section to forms of business exchange not lawful as to the Business shall be read to permit such exchanges.
iv. The Fee shall be abated and shall not be due to and/ or collected by the City until such time as the total amount of the accrued Fee calculated in accordance with Section 2( b)( i)(2) after the Effective Date exceeds the amount of the Advance Payment. From and after such time, the Fee shall be due and payable to the City with respect to the amount that exceeds the Advance Payment in accordance with Section 2( b)( i)(2). If the Fee never exceeds the Advance Payment, the City has no obligation to return any portion of the Advance Payment to Operator. v. In addition to other reporting requirements described in this Agreement, Operator shall make a monthly return to City in a form specified by the Finance Directar of the City (" Finance Director"). The Operator shall, within 20 days following the close of each calendar month, or at the close of any shorter 3 a 6o. s
reporting period which may be established by the Finance Director, make a return to the Finance Director of gross receipts collected in that month and the amount of the Fee due on account of those receipts. When the return is filed, the full amount of the Fee due shall be remitted to the Finance Director. The Finance Director may establish shorter reporting periods for the Operator if he or she deems it necessary to ensure collection of the Fee and he or she may require further information in the return. Returns and payments are due immediately upon cessation of business for any reason. All Fees collected by the Operatars from customers shall be held in trust for the City until paid to Finance Director. Operator shall keep complete, accurate and appropriate books and records of all receipts from operations of the Business in accordance with generally accepted accounting principles. For purposes of this Agreement, books and records" shall mean all bookkeeping or accounting documents Operator typically utilizes in managing its Business operations. Operator shall make available to the City, its auditors, and other authorized representatives all books and records, and other relevant documents as the City may reasonably require, upon reasonable written notice. If the City determines at any time, in its sole discretion, such books and records are inadequate to record the Gross Receipts and to calculate the Fee, Operator shall, upon the written request of the City, procure and maintain books and records adequate for such purpose. vi. Operator shall provide the City courtesy copies of every report Operator must provide to the State of California as to sales and use or other taxes when such filings are made.
vii. At all times during the Term of this Agreement, Operator agrees to comply with all of the requirements of LMC Chapter 5. 26 as amended by the City from time to time and to hold and comply permits and other approvals issued by the City for operation of the Business.
viii. Operator shall nol advertise on any Outdoor Advertising Structul e ( OAS) located within the City limit of Lathrop. The OAS ( billbo irds) is defined in Section 17. 04. 080 of the Lathrop Municipal Code.
C. CITY BLIGATIONS.
i. Provided that Operator maintains current permits and approvals in compliance with LMC Chapter 5. 26 and applicable State law, as they now exist or may hereafter be amended, City hereby grants Operator the vested land use right to locate the Business on the Property consistent with the land use entitlements the City issues to Operator, which will include, but not be limited to: a conditional use permit, a business license certificate, building permits for tenant improvements to the Property, and other approvals required pursuant to LMC Chapter 5. 26. City shall not promulgate any land use rules, ordinances 4 277607. 5
or restrictions other than those in effect as of the Effective Date, which would unreasonably restrict, impair or prohibit the location of the Business on the Property, unless: ( i) the Parties agree to such land use rules, ordinances or restrictions in writing; or (ii) such land use rules, ordinances or restrictions are proposed by initiative and adopted by voters , or ( iii) such land use rules, ordinances or restrictions apply City- wide to any cannabis dispensary. In such an event, Operator will nevertheless be subject to those new land use rules, ordinances or restrictions but Operator may give a notice of default under section 10 of this Agreement and, upon resolution of that notice, shall thereafter be relieved of the obligations of this Agreement. ii. During the Term of this Agreement, if the City or voters adopt and impose an alternative revenue mechanism specifically related to cannabis operations ( e. g., a cannabis tax), Operator' s payments under this Agreement after the effective date of that alternative revenue mechanism shall be credited against the alternative revenue mechanism such that Operator shall only pay the greater of the two; in no circumstance shall Operator be required to pay both. As used in this subsection, " alternative revenue mechanism" does not include taxes, fees, or assessments levied on or collected from both cannabis and non- cannabis businesses in the City or the City' s application of regulatory fees under LMC Chapter 5. 26. If the City' s tax on cannabis commerce should ever exceed that of the City of Stockton for any reason, at Operator' s option, it may initiate good faith dialog with the City to explore whether that additional taxation is in the parties mutual interests given the risk of sales leakage to Stockton. City shall participate in those discussions in good faith, but is not obligated to agree to change its tax.
iii. City shall keep strictly confidential all statements of revenue furnished by Operator related to operation of the Business, except as otherwise required by law. In particular, the City will exercise its right to withhold such documents under Government Code section 6254, subdivisions ( i) and ( n).
3. GENERAL PLAN CONSISTENCY.
a. The City Council hereby finds the land use entitlements for Operator' s conduct of the Business are consistent with the Lathrop General Plan, including the policies noted below.
b. On December 17, 1991, the City adopted a comprehensive General Plan that included the Project Site within the City' s Sub- Plan Area# l. The General Plan has been amended periodically with the latest amendment on November 8, 2021. The adopted General Plan designated the Project Site for commercial use and provides for the development of this property in a manner that will benefit the City and the 5 277607. 5
community. Specifically, the Planning Commission and City Council find that approval of this Agreement and the associated land use entitlements will further these General Plan goals.
c. Goal No. 1 — Balancing the Social and Economic Costs and Benefits of Urbanization
i. General - Policy 1. The City' s ability to stay abreast of its financial and service capabilities will require continuous monitoring. Once a system is in place, it will be relatively easy to identify current conditions and to estimate the probable impacts of new development proposals. Rather than adhering to an arbitrarily fixed percentage of annual growth as a matter of policy, it will be the City' s responsibility to manage the growth rate in relation to physical and financial capability of municipal service while being consistent with all applicable policies and proposals of the General Plan.
ii. Commercial Development - Policy 1. Areas having early potential for retail and highway commercial development primarily involve lands located at the easterly quadrants of the Lathrop Road and Louise Avenue interchanges with I5. The largest commercial project being considered in the short term is a Factory Stores center proposed at the southeast quadrant of the Louise Avenue interchange.
iii. Commercial Development - Policy 4. Proposals for the classifications of retail activity described in Part IV-A of the Plan are to be considered as offering flexibility for ingenuity and innovation in the selection, promotion, design and development of commercial centers and uses.
d. Goal No. 2— Equal Opportunity
Policy 1. The City intends that positive benefits accrue to the community as a whole, through programs which maximize the potential of local residents to obtain jobs, assuming adequate training and personal characteristics. Contracts will be sought with employers of commercial and industrial establishments which will ensure the opportunity for employing qualified local residents. e. Goal No. 4— Quality in the Form, Design and Functions of the Urban Area:
Commercial and Industrial Areas - Policy 2. The visual interface between commercial/ industrial areas and residential areas shall be designed and developed so as to avoid obtrusive visual impacts of commercial or industrial activities on nearby residential areas.
f. Goal No. 8 — Public Safety Hazards:
Policy l. The City will continue to give high priority to the support of police protection, and to fire suppression and prevention and life safety functions of the Lathrop-Manteca Fire District. Ultimate expansion of the City' s fire service 6 277607. 5
is to include additional stations affording adequate response within a maximum of 3- 4 minutes to all parts of the urban area.
4. REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGEMENTS.
a. INTEREST IN PROPERTY. Operator represents and warrants that as of the Effective Date, Operator has an enforceable legal interest in the Property and that all persons holding legal or equitable interest in the Property have consented to this Agreement. b. AUTxolt TY. The Parties represent and warrant that the persons signing this Agreement are duly authorized to enter into and execute this Agreement on behalf of their respective principals.
5. RELATIONSHIP OF CITY AND OPERATOR. This Agreement is a contract that has been negotiated and voluntarily entered into by City and Operator related to land use. The relationship of Operator and City is and at all times shall remain solely that of City as a regulatory body and Operator as the operator of the Business. It is specifically understood and agreed by and between the Parties that the Business proposed to be conducted on the Property by Operator is a private development and a for-profit business. City and Operator hereby disclaim any form of joint venture or partnership between them, agree that nothing in this Agreement or in any document executed in connection with this Agreement shall be construed as making City and Operator joint venture partners.
6. PUBLIC HEARING. City Council approves this Agreement consistent with Government Code section 65867, after the Agreement was duly examined and considered at a properly noticed public hearings by the Planning Commission on [ date], 2022 and by the City Council on [ date], 2022.
7. APPLICABLE RULES, REGULATIONS AND POLICIES.
a. LAWS AND REGULATIONS APPLICABLE TO COMMERCIAL CANNABIS ACTIVITIES.
Operator shall comply fully with all existing and future State and local laws, rules and regulations applicable to Operator' s Business on the Property, including but not limited to LMC Chapter 5. 26, and shall ensure such compliance by all of Operator' s employees, contractors, vendors and members of the public invited or allowed access to the Property. Nothing in this Agreement shall be construed as the City authorizing or condoning any actions that violate federal, state or local law with respect to the Business or the Property. It shall be the responsibility of Operator to ensure that the Business operates at all times in compliance with all applicable laws and regulations, including for as long as applicable, all state laws, any subsequently enacted state or local law or regulatory, licensing, or certification standards or requirements, and any specific, additional operating procedures or requirements which may be imposed as conditions of approval of a state license or of required City permits or approvals for the Business.
b. L cE1vSUxE oF OPE i'r olvs. Operator shall obtain and maintain all State and local 7 277607. 5
licenses and permits required for operation of the Business on the Property. The City understands that a Type 10 State license is required for operation of the Business.
8. AMENDMENT. This Agreement may be amended or canceled, in whole or in part, by mutual consent of the Parties in writing, consistent with Government Code section 65868, unless the City Manager or his designee determines that the amendment is insubstantial. If the Ciry Manager or his designee determines an amendment is both insubstantial and consistent with the Agreement and the City' s existing land use regulations, then the City Council may approve the proposed amendment without notice and a public hearing. An insubstantial amendment may not relate to the Term; conditions, terms, restrictions, and requirements relating to subsequent modification ar termination; monetary contributions; or any conditions or covenants relating to the use of the Property. An insubstantial amendment may include interpretation of terms contained herein, and clarification of ambiguities. An insubstantial amendment may also include logical extensions of terms and provisions of this Agreement which are not inconsistent with its provisions.
9. ANNUAL REVIEW OF AGREEMENT.
a. IN GENERAL. City shall annually review performance of this Agreement in accordance with this section and California Government Code section 65865. 1.
Operator shall provide any information the City requests to facilitate the annual review within 14 days of such request.
b. MODIFICATION OR TERMINATION. If the City Council finds and determines through an annual review, based on substantial evidence, that Operator has not complied in good faith with this Agreement, Ciry may terminate or modify the Agreement pursuant to Section 10 of this Agreement.
c. OTHER INVESTIGATIONS AND EVALUATIONS. City may investigate or evaluate, from time to time and as a part of an annual review or otherwise, any matter properly the subject of an annual review of this Agreement.
10. TERMINATION.
A. DEFAULT BY OPERATOR.
i. Termination. If City determines, based on substantial evidence, that Operator has not complied in good faith with the terms and conditions of the Agreement, City may terminate the Agreement as indicated herein.
ii. Notice of Proposed Termination. If Operator fails to address the identified default( s), Ciry may give Operator a written notice specifically identifying those obligations Operator has not performed and providing for a period of not less than 60 business days in which the Operator may cure the alleged breach unless the breach involves a payment to the City, in which case the Operator shall cure the default within five business days. If Operator does not cure the breach in that time or, if the breach is such that more time is needed to 8 277607. 5
complete it, commence the cure and inform the City of Operator' s efforts in the applicable time period, the City may give notice of a hearing on termination of this Agreement. The written notice shall include the time and place of the hearing and any other information that City considers necessary to inform Operator of the nature of the proceeding. Nothing herein shall entitle the City to rescind or adversely affect any land use entitlement held by Operator other than in compliance with the LMC and other applicable law. iii. Public Hearing on Proposed Termination. City shall give notice of the public hearing under Government Code sections 65090 and 65091. On conclusion of the public hearing, the City Council may, in lieu of termination, impose such conditions on Operator as it considers reasonably necessary to protect City' s interests. Such a hearing may, in the City' s discretion, be combined with a hearing to revoke land use entitlements under the procedures required by the LMC and other applicable law, including, without limitation, LMC section 17. 112. 120.
iv. Modification of Agreement. City may, instead of termination, modify the terms of the Agreement if it determines that Operator has not complied in good faith with the terms and conditions of this Agreement. If City modifies this Agreement under this subdivision, it must follow the procedures in sections 10( a)( ii), (a)( iii) of this Agreement.
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B. DEFAULT BY CTTY. If City defaults under the provisions of this Agreement, Operatar shall have only the right to compel specific performance of City' s obligations under this Agreement or, as to the imposition of new land use rules, ordinances or restrictions other than those in effect as of the Effective Date, that unreasonably restrict, impair or prohibit the location of a cannabis dispensary on the Properry in violation of section
2. C. i of this Agreement, Operator may terminate this Agreement after complying with this section. Operator shall submit to City a written notice of default stating with specificity those obligations the City has not performed. Upon receipt of the notice of default, City may cure the identified default( s) at the earliest reasonable time after receipt of the notice of default and shall complete the cure within 90 days after receipt of the notice of default, or such longer period as is reasonably necessary to remedy such default( s), provided that City shall continuously and diligently pursue such remedy at all times until such default( s) is cured and regularly notify Operator of City' s efforts to remedy the default( s). Alternatively, City may dispute that a default exists and inform Operator in writing of the basis for City' s conclusion that no default has occurred. If the City disputes the alleged default, the Parties shall seek to resolve their differences by good faith dialog, with or without the assistance of a mediator. Ifthe dispute remains unresolved after 60 days of such dialog, either Party may seek declaratory relief or other appropriate judicial assistance.
11. SPECIFIC PERFORMANCE. Both Parties agree and recognize that Operator has invested considerable time and financial resources in establishment of the Business. For this reason, it may not be possible to determine an amount of monetary damages which would adequately compensate Operator for this work, nor calculate the consideration City would require to enter into this Agreement to justify such exposure. The Parties acknowledge that City would not enter into this Agreement if it might eXpose its assets and the public to the risk of damages arising from failed expectations in continued operation of the Business. Therefore, the Parties agree that monetary damages shall not be an adequate remedy for Operator if City is in default under this Agreement and City fails to remedy the default( s). The Parties further agree that specific performance ( or writ of mandate to compel a required act) shall be the sole available and appropriate remedy for Operator under this Agreement, and Operator shall not seek monetary damages if a default by City occurs under this Agreement or under any otherwise applicable legal basis for monetary damages. Operator agrees that in no event will City or its officers, agents, or employees, be liable for damages for any default under this Agreement; it being expressly understood and agreed by Operator that the sole legal remedy available to Operator for a default under this Agreement by City shall be a legal action in mandamus, specific performance, or other injunctive or declaratory relief to enforce the provisions of this Agreement except that, as to a default under section 2.C. i, Operator may also terminate this Agreement. 10 zn6o. s
12. INSURANCE. Operator shall at all times maintain insurance at coverage limits and with conditions thereon determined necessary and appropriate by the City' s Risk Manager.
13. ASSIGNMENT/ CHANGE OF LOCATION.
a. The provisions hereof shall be binding upon, and inure to the benefit of, City and Operator and their successors and permitted assigns, as the case or context may require.
This Agreement shall likewise be binding upon and obligate the Property and any successors in interest to the Property. Operator must obtain the City' s prior written consent to any assignment and comply with LMC Title 17 as to any transfer of City permits and approvals associated with the Property or the business. b. Should Operator request relocation of the Business, Operator will retain all obligations and responsibilities under this Agreement upon the City' s amendment, in the manner required by the LMC and other applicable law, of the Operator' s land use entitlements to allow operation at the relocation site.
14. INDEMNITY.
a. Operator agrees to protect, defend ( with legal counsel acceptable to City), indemnify and hold harmless City,its council members, officers, agents, independent contractors, attorneys and employees from any and all ( 1) claims, damages, penalties, losses, costs, expenses ( including reasonable attorneys' fees and court costs), injuries and liabilities of every kind arising out of or related to Operator' s conduct of the Business whether such conduct is by Operator or anyone directly employed or contracted with by Operator, and ( 2) claims challenging the City approval, legality, constitutionality, or enforceability of this Agreement or any other City action related to the Business. b. City' s rights of indemnity, as expressly set forth in this Agreement, shall not depend upon payment of any claim, damage, penalty, loss, cost, expense( including reasonable attorneys' fees and court costs), injury or liability sustained by Operator or its contractors, subcontractors, agents or employees. Operator shall not be entitled to a refund of any sums spent pursuant to this indemnity promise if Operator is adjudicated or determined to have been without fault or liability.
c. If City tenders the defense and indemnification of a claim to Operator and its contractors, subcontractors, agents or employees under this Section 14, City shall be entitled to actively supervise defense of the claim, and may select and retain separate counsel, at Operator' s or its contractors, subcontractors, agents or employees' expense, as necessary, which decision shall be made solely and exclusively by City.
City must consent to the disposition of any such claim, including but not limited to, the settlement of any such claim.
d. Within 10 days of the service of any claim or lawsuit against the City challenging this Agreement or any other City action related to the Business, the Operator shall submit to the City a$ 10, 000 cash deposit or irrevocable letter of credit in favor of the City in 11 277607. 5
a form acceptable to the City Attorney, to pay the City' s fees and costs in connection with the defense of any such claim or lawsuit and shall thereafter replenish the funds in increments of$ 5, 000 when requested by the City upon receipt of an accounting, so that the deposit is continuously maintained at $ 10, 000 or more. Failure to provide funds sufficient to satisfy this indemnification obligation shall constitute grounds for the City to take action to terminate this Agreement and to nullify any City permit or approval as to the Business. If the City holds remaining defense funds after any claim or lawsuit is resolved, the City sha11 refund them to Operator within 30 days of the resolution of the claim or lawsuit.
15. CEQA. Nothing in this Agreement shall authorize any development without compliance with the Planning and Zoning Law, the LMC, CEQA( to the extent it applies), the CEQA Guidelines, and other applicable law, policies and procedures. Because the Operator proposes only tenant improvements of an existing structure zoned for retail use, the City has determined that approval of this Agreement and the associated land use entitlements are categorically exempt from analysis under the California Environmental Quality Act pursuant to State CEQA Guidelines sections 15061( b)( 1) [" common sense" exemption], 15273 [ rates, tolls, and charges], 15301 [ existing facilities], 15305 [ minor alterations in land use limitations], and 15332 [ in-fill development].
16. MISCELLANEOUS.
a. Notices. All notices required by this Agreement or by law shall be in writing and personally delivered or sent by certified mail to the following addresses. Notice may be provided by email as well if receipt of that email notice is acknowledged by the recipient. Either Party may change the address stated here by notice in writing to the other Party, and thereafter notices shall be addressed and transmitted to the new address. Notice shall be deemed delivered on the date of personal delivery or email, one ( 1) day after delivery to an overnight delivery service and three ( 3) days after deposit in the U. S. Mail as certified mail.
Notice to City shall be addressed:
CITY OF LATHROP
ATTN: City Manager
390 Towne Centre Drive
Lathrop, California 953302
With a copy to
City Attorney
390 Towne Centre Drive
Lathrop, California 953302
Notice to Operator shall be addressed:
12 277607. 5
Central California Greens, Inc.
16925 So Harlan Road 103
Lathrop, CA 95330
With a Copy to:
Jennifer McGrath, Esq.
9114 Adams Avenue, # 264
Huntington Beach, CA 92646
b. Co1vs' ruUCT o1v oF AGxEE1v E1vT. Operator acknowledges that it has been advised to have this Agreement reviewed by counsel, and agrees that Operator and its counsel and/ or such other business and financial advisers as Operator desires) have reviewed and revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not apply in interpreting this Agreement or any amendments or exhibits.
c. THIRD PARTY BENEFICIARIES. This Agreement is entered into for the sole benefit of the Parties and any successors. No other party (other than a permitted assignee under Section 13) shall have any cause of action or the standing to assert any rights under this Agreement.
d. ATTOR1vEY FEES. If any action at law or in equity is brought by either Party to enforce or interpret provisions of this Agreement against the other Party, then the prevailing Party shall be entitled to reimbursement by the non-prevailing Party for its reasonable and actual attorneys' fees and costs in the action.
e. SEVEUAB LI'rY. Should any provision of this Agreement be found invalid or unenforceable by a court of law, the decision shall affect only the provision interpreted and all remaining provisions shall remain enforceable.
f. INTEGu' r o1v. This Agreement constitutes the entire understanding and agreement of the Parties regarding its subject matter and supersedes any previous oral or written agreement. This Agreement may be modified or amended only by a subsequent writing executed by both Parties.
g. COUNTERPARTS; ELECTRONIC SIGNATURES. This Agreement may be signed in one or more counterparts and will be effective when the Parties have affixed their signatures to counterparts, at which time the counterparts together shall be deemed one original document. Signatures may be given by emailed pdf or other electronic means with the same force as hard copy signatures.
h. INCORPORATION. The recitals and all defined terms in this Agreement are part of this Agreement.
i. COVENANTS. City and Operator acknowledge that all covenants, obligations, and rights run with title to the Property. Each and every purchaser, assignee, or transferee 13 277607 S
of an interest in the Properry, or any portion thereof, shall be obligated and bound by the terms and conditions of this Agreement, and shall be the beneficiary thereof and a party thereto, but only with respect to the Property, or such portion thereof, sold, assigned, or transferred to it. Any such purchaser, assignee, or transferee shall observe and fully perform all the duties and obligations of Operator in this Agreement, as such duties and obligations pertain to the Properry, or such portion thereof, sold, assigned, or transferred to it.
j. GOOD FAITH A1vD FAIx DEALING. City and Operator agree to execute all documents and instruments and to take all action and shall use commercially reasonable efforts to accomplish the purposes of this Agreement. City and Operator shall each diligently, reasonably and in good faith pursue the satisfaction of any conditions or contingencies subject to their approval. Nothing in this section is intended to waive or contract away the City' s governmental authority.
k. ENFORCEMENT. This Agreement shall in all respects be interpreted, enforced, and governed under the laws of the State of California. Parties agree that any action to enforce this Agreement shall be filed and maintained in the San Joaquin County Superior Court and Operator hereby concedes the existence of personal jurisdiction there and consents to the jurisdiction of that Court for this purpose.
1. FEDERAL LAW. The Agreement involves the operation of a business or businesses involving cannabis retail sales. Under federal criminal law, marijuana remains a Schedule I narcotic, manufacture and distribution of which is prohibited, and for which there is no federally approved use. ( Controlled Substances Act, 21 U. S. C. Section 801 et seq.) The U.S. Department of Justice takes the position that the federal law is valid and enforceable even against individuals and companies engaged in cultivation, transportation, delivery or use of inedical or recreational marijuana as permitted under State law. Operator' s direct or indirect involvement in cultivation, dispensing, delivery and retail sale of inedical or adult use of cannabis could expose Operator to criminal liability for violating federal law. ( See the federal Criminal Accessory statute, 18 U. S. C. Section 2, which imposes accessorial liability against a person who intentionally aids or abets another in violating the narcotics law.) City shall not be obligated to defend or indemnify Operator or any person associated with Operator, if any criminal prosecution occurs arising out of activities related to this Agreement. The Parties agree the City' s role as to the Operator' s operation of the Business is solely that of a regulator.
m. TIME IS OF THE ESSENCE. Time is of the essence in this Agreement and every provision within it.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written:
14 277607. 5
City of Lathrop Central California Greens, Inc.
B y:
By: Donald Jimenez
Stephen J. Salvatore Chief Executive Officer
City Manager
Date:
Date:
B y:
Attest: Printed Name:
Teresa Vargas Title:
City Clerk
Date:
Date:
APPROVED AS TO FORM:
B y:
Michael G. Colantuono, Special Counsel
Date:
Property Owner Acknowledgement:
Kulwant Sran
B y:
Signature)
Date:
15 z bo. s
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
ss.
COUNTY OF
On 2022, before me,
personally appeared who proved to me on the basis
of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument, and acknowledged to me that he/ she/ they executed the same in his/ her/ their authorized capacity(ies), and that by his/ her/their signature( s) on the instrument the person( s), or the entity( ies) upon behalf of which the person( s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seaL SEAL)
Notary' s Signature
277607. 5
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
ss.
COUNTY OF
On 2022, before me,
personally appeared who proved to me on the basis
of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument, and acknowledged to me that he/ she/ they executed the same in his/her/their authorized capacity( ies), and that by his/ her/ their signature( s) on the instrument the person( s), or the entiry(ies) upon behalf of which the person( s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal. SEAL)
Notary' s Signature
277607. 5