COMMUNITY BENEFITS AGREEMENT
between CITY OF MANTECA and MANTECA RESPONSIBLE AND COMPLIANT RETAIL LLC (d/b/a “Embarc Manteca”) This COMMUNITY BENEFITS AGREEMENT (“Agreement”) is effective as of (“Effective Date”) and is entered into by and between the CITY OF MANTECA (“City”), a California municipal corporation, and MANTECA RESPONSIBLE AND COMPLIANT RETAIL LLC (dba “Embarc Manteca”) (“Permittee”), a California Limited Liability Company. City and Permittee may each be referred to herein individually as a “Party” or collectively as the “Parties.”
RECITALS
WHEREAS, on December 21, 2021, the City Council of the City of Manteca adopted Ordinance No. O2021-16, which authorized and adopted regulations applicable to commercial cannabis businesses in the City.
WHEREAS, on December 18, 2023, the City Council adopted Resolution No. 2023-30 approving the Permittee’s Application to operate a retail cannabis business at 1140-1142 S Main St, Manteca, CA 95337 (“Site”) and authorizing the City Manager to formally issue a permit to Permittee upon confirmation by the Director of Development Services that all of the required land use approvals had been obtained, subject to the adopted Conditions of Approval, and in accordance with Chapter 5.64 of the Manteca Municipal Code.
WHEREAS, pursuant to Section 5.64.110 of the Manteca Municipal Code, the Permittee shall enter into a community benefits agreement prior to commencing operations, which sets forth the terms and conditions under which the Permittee shall implement its community benefits program.
WHEREAS, Permittee supports active collaboration with local stakeholders through ongoing dialogue and consultation, with a focus on identifying and implementing community benefits that reflect the goals of the communities in which it operates.
WHEREAS Permittee may consider further, future community collaboration as a possible future consideration with the City and/or residents/businesses of Manteca.
WHEREAS, Permittee enters into this Agreement voluntarily and out of its own volition.
WHEREAS, the Permittee and City desire to enter into this Agreement in order to memorialize the terms of the Permittee’s community benefit obligations.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows:
AGREEMENT
ARTICLE 1
GENERAL PROVISIONS
Section 1.1. Recitals. The Recitals above are true and correct and are hereby incorporated into and made a part of this Agreement.
Section 1.2 Purpose. The purpose of this Agreement is to memorialize Permittee’s commitments to as set forth in the Community Benefits Plan and Labor and Local Enterprise Plan in Permittee’s Application for a commercial cannabis business permit and to satisfy the Conditions of Approval for the Permit.
Section 1.3. Definitions. In this Agreement, unless the context otherwise requires, the terms below have the following meanings:
“Agreement” means this Community Benefits Agreement and all Exhibits attached hereto. “City Manager” means the City Manager of the City of Manteca, or his or her designee. “Community Benefits Commitments” has the meaning set forth in Section 2.2 of this Agreement. “Complaining Party” has the meaning set forth in Section 4.2 of this Agreement. “Defaulting Party” has the meaning set forth in Section 4.2 of this Agreement. “Labor and Local Enterprise Commitments” has the meaning set forth in Section 2.3 of this Agreement. “Major Amendment” means any amendment to this Agreement that affects or relates to any Community Benefit or Labor and Local Enterprise Commitment. “Minor Amendment” means any clarification, minor change, or minor adjustment to the Agreement that is not a Major Amendment. “Notice of Default” has the meaning as set forth in Section 4.2 of this Agreement. “Notice of Review” has the meaning as set forth in Section 3.2 of this Agreement. “Permit” has the meaning as set forth in the Recitals, above. “Permittee’s Application” means the application for a commercial cannabis business permit submitted by Permittee to the City. “Site” has the meaning as set forth in the Recitals, above. “Term” has the meaning set forth in Section 1.5 of this Agreement.
Section 1.4. Commercial Cannabis Business is a Private Undertaking. The Parties agree that Permittee’s commercial cannabis business is a private business and that City has no interest therein, except as authorized in the exercise of its governmental functions. City shall not for any purpose be considered an agent of Permittee or its business.
Section 1.5. Term and Termination. The term of this Agreement (“Term”) shall commence on the Effective Date and shall run concurrently with the term of the Permit. If the Permit issued to Permittee is renewed pursuant to Section 5.64.180 of the Manteca Municipal Code, this Agreement shall be automatically extended contemporaneously with the Permit. Permittee may, at any time and in its sole discretion, effective thirty (30) days after Permittee provides written notice to the City, terminate this Agreement prior to the expiration of the Term if Permittee’s commercial cannabis business has permanently ceased operations, or intends to cease operations within thirty (30) days after such notice, provided that Permittee shall be required to simultaneously forfeit, without compensation or consideration of any kind, the Permit.
Section 1.6. Conditional Use Permit. Notwithstanding Section 1.5 of this Agreement, this Agreement shall only be effective for the duration of the Permit, and shall automatically terminate in the event Permit is no longer effective.
Section 1.7. Amendments. This Agreement shall be amended only by mutual consent of the Parties. All amendments shall be in writing. The City Council hereby expressly authorizes the City Manager to approve a Minor Amendment to this Agreement, upon written notification to the City Council. A Major Amendment to this Agreement must be approved by the City Council. Nothing in this Agreement shall be construed as requiring a noticed public hearing for an amendment of this Agreement, unless required by law.
ARTICLE 2
COMMUNITY BENEFITS PROGRAM
Section 2.1. Intent. The Parties acknowledge and agree that the Permit confers substantial private benefits on the Permittee that will place burdens on City infrastructure, services, and neighborhoods and that the private benefits provided to the Permittee should be balanced with commensurate public benefits for the community.
Section 2.2. Voluntary Commitment. The Permittee acknowledges and agrees that it has the sole authority and discretion to determine what to include in its Community Benefits Commitments, and the City required no changes or adjustments to the Permittee’s submitted Community Benefits Commitments.
Section 2.3. Permit to Operate. The Parties acknowledge and agree that this Agreement is not in connection with approval of a development project as defined by Government Code Section 66000(a). Parties further agree that this Agreement is part of Permittee’s right to operate pursuant to a commercial cannabis permit within the City.
Section 2.4. Community Benefits Commitments. At a minimum, Permittee agrees to provide Community Benefits as set forth in the Community Benefits Plan that the Permittee selected and submitted in Permittee’s Application. All commitments made in Permittee’s Application, inclusive of the Business Plan, Community Benefits Plan, and Neighborhood Compatibility Plan, are incorporated into this Agreement as if fully set forth in this Agreement. Any failure or breach by Permittee in providing the commitments set forth in Permittee’s Application shall be deemed a breach of this Agreement. Nothing herein shall require Permittee to provide more than as set out in this Agreement and/or as set out/mandated in the Manteca Municipal Code. In accordance with the Community Benefits Plan set forth in Permittee’s Application, Permittee agrees to provide the following (collectively, the “Community Benefits Commitments”):
A. Permittee will allocate 1% of all cannabis sales to a Community Investment Fund (“CIF”) in perpetuity to provide ongoing funding for community organizations. The monetary allocations of the CIF will be controlled by a Community Advisory Board (“CAB”), which will work collaboratively with Permittee’s ownership to drive efforts to address the Community’s needs. 100% of the CIF will be allocated by the CAB to local organizations and partners. Key initiatives of the CAB will include, without limitation: enriching and empowering youths, supporting healthy and stable households, and creating and maintaining a family friendly environment in the Community. In order to show compliance with this commitment, Permittee shall, on an annual basis, submit evidence of CIF allocations to the City.
B. Permittee will remit 6% of gross receipts as a direct fee to the City. In order to show compliance with this commitment, Permittee shall, on an annual basis, submit state tax filings showing gross receipts collected and evidence of such payments to the City.
Section 2.5. Community Benefits Commitments. In addition to the commitment to provide Community Benefits pursuant to Section 2.2 of this Agreement, Permittee agrees to provide the following additional Community Benefits:
Automatic License Plate Reader
Section 2.6. Labor and Local Enterprise Commitments. In accordance with the Labor and Local Enterprise Plan in Permittee’s Application, Permittee agrees to provide the following (collectively, the “Labor and Local Enterprise Commitments”):
Permittee has entered into a Labor Peace Agreement with the United Food and Commercial Workers union and shall abide by its terms.
Permittee will offer its employees health, dental and vision benefits and an employer funded life insurance policy.
Permittee will pay its employees no less than a living wage as prescribed by a legally binding Collective Bargaining Agreement (CBA) with the United Food and Commercial Workers Union.
Permittee will offer its employees up to 40 hours per year of paid volunteerism.
Permittee will offer financial literacy training, tuition assistance and scholarships, and transportation assistance for qualifying employees.
Permittee will offer employee assistance program for qualifying employees facing hardship or crisis.
Permittee will offer employees an internal incentive program.
Section 2.7. Yearly Reports. In addition to the recordkeeping requirements set forth in Section 5.64.350 of the Manteca Municipal Code, Permittee shall provide the City a written report describing the Community Benefits and Labor and Local Enterprise Commitments provided by Permittee to the Manteca community and which demonstrate Permittee’s compliance with the commitments set forth in Sections 2.2 and 2.3 of this Agreement (“Annual Report”).
ARTICLE 3
ANNUAL REVIEW
Section 3.1. Timing of Annual Review. The City may conduct an annual review of Permittee’s good faith compliance with this Agreement. The City shall make reasonable efforts to conduct such review in conjunction with any applicable renewal application for the Permit.
Section 3.2. Initiation of Review. The City Manager, or his or her designee, shall initiate the annual review by providing the Permit with thirty (30) days’ written notice that the City intends to undertake such review (“Notice of Review”). Within ten (10) business days of receiving the Notice of Review, Permittee shall provide to the City the Annual Report described in Section 2.4. The City shall not waive its right to conduct its annual review of Agreement for failure to provide timely notice of the initiation of such annual review.
Section 3.3. Fee for Annual Review. The reasonable cost for the City’s annual review of this Agreement shall be paid by Permittee, not to exceed the actual costs incurred by the City in connection with such review.
ARTICLE 4
DEFAULT AND REMEDIES
Section 4.1. Default. The failure of either Party to perform any obligation or duty under this Agreement within the time required by this Agreement shall be a default and after the giving of notice and the passage of the applicable amount of time, such a default shall constitute an event of default.
Section 4.2. Notice of Default. A party (“Complaining Party”) may not assert that the other Party (“Defaulting Party”) has committed or caused an event of default unless the Complaining Party has first given written notice to the Defaulting Party (“Notice of Default”), specifying the nature of the default and the manner in which the default may be cured, if known to the Complaining Party. Any failure or delay by the Complaining Party in giving such Notice of Default shall not waive such default or waive any of the Complaining Party’s remedies.
Section 4.3. Cure. The Defaulting Party shall have thirty (30) days from the receipt of the Notice of Default to cure the default except as otherwise provided herein.
Monetary Default. In the case of a monetary default (e.g., failure to pay Community Benefits Fees), any such default must be cured by the payment of the amount demanded within such thirty (30) day period.
Non-Monetary Default. In the case of non-monetary defaults, if the default cannot be reasonably cured within 30 days, the default shall be deemed cured if: the cure is commenced at the earliest practicable date following receipt of the Notice of Default and the cure is diligently prosecuted to completion (but in no event shall Permittee be allowed more than sixty (60) days after receipt of the Notice of Default to compete the cure of the default).
Section 4.4. Remedies. If the Defaulting Party fails to cure a default in accordance with Section 4.3, an event of default shall be deemed to have occurred and the Complaining Party shall have the right to seek all appropriate remedies, at law or in equity, including specific penalty or termination of this Agreement without further or separate notice to the Defaulting Party. If Permittee fails to cure a default, City may terminate or revoke the Permit upon the expiration of applicable cure period, subject to Permittee’s appeal rights, if any.
Section 4.5. City Tax. This Agreement shall automatically terminate, and Permittee shall have no obligation to comply with the Community Benefit Commitments in Section 2.4, upon the City passing a tax on commercial cannabis businesses. The operative termination date of the Agreement under this Section is the date when a City commercial cannabis tax first goes into effect. Notwithstanding the foregoing, Permittee shall be subject to any and all taxes, assessments, or similar charges or fees of general applicability enacted by the federal government, state government, County, or City.
ARTICLE 5
MISCELLANEOUS PROVISIONS
Section 5.1. Assignment. Permittee shall not have the right to sell, assign, or transfer all or any part of its rights, title, and interests in all or a portion of this Agreement and/or the Permit to any person, firm, corporation, or entity during the Term of this Agreement without the advance written consent of the City Manager. Any assignment or transfer prohibited by this Agreement will be considered an immediate breach of this Agreement and City may elect to immediately terminate this Agreement.
Section 5.2. Notices. All notices, demands, and other communications permitted or required under this Agreement shall be in writing and personally delivered, sent by overnight carrier with delivery charges prepaid for next business day delivery, or sent by First Class U.S. Mail with postage prepaid, at the following addresses or at such other address as the respective Parties may provide in writing for this purpose:
CITY:
PERMITTEE:
City of Manteca
City Manager’s Office
1001 W. Center Street
Manteca, CA 95337
209-456-8011
Manteca Responsible and Compliant Retail LLC (dba Embarc Manteca) 1616 Webster Street
Alameda, CA 94501
Attn: Lauren Carpenter
Phone: 916-573-2448
Section 5.3 Indemnification. Permittee shall indemnify, defend and hold harmless the City, its directors, officials, officers, employees, agents, and volunteers in accordance with the City of Manteca Commercial Cannabis Business Indemnification Agreement dated January 17, 2024.
Section 5.4. Governing Law and Venue. This Agreement shall be interpreted and governed according to the laws of the State of California and to the extent applicable, the Manteca Municipal Code. In the event of litigation between the Parties, venue, without exception, shall be in the San Joaquin Superior Court of the State of California. If, and only if, applicable law requires that all or part of any such litigation be tried exclusively in federal court, venue, without exception, shall be in the United States District, Eastern District of California.
Section 5.5. Severability. If this Agreement in its entirety is determined by a court to be invalid or unenforceable, this Agreement shall automatically terminate as of the date of final entry of judgment. If any term or provision of this Agreement shall be determined by a court to be invalid and unenforceable, or if any term or provision of this Agreement is rendered invalid or unenforceable according to the terms of any federal or state statute, any provisions that are not invalid or unenforceable shall continue in full force and effect and shall be construed to give effect to the intent of this Agreement; provided, however, if any portion (or the entirety) of the Community Benefit in Article 2 is rendered invalid (as initiated by an action/challenge of a third party or change in state and/or federal law) then the Parties shall meet and confer in good faith within ten (10) business days of the decision by the court to effectuate and approve a new agreement and/or means to provide the City with the community benefits (or substantially similar community benefits) offered and provided by the Permittee and as discussed herein. The Parties shall, in good faith, use all available and best efforts to effectuate and memorialize this new agreement and/or means within sixty (60) days after the aforementioned decision by the court or change in law. Should the Parties be unable to effectuate a new agreement and/or means, then this Agreement and the Permit shall automatically expire after the sixty (60) day period set out herein. For purposes of clarity, the duty to meet and confer set out in this section shall not apply if the Permittee is the entity who challenges and/or brings forward the legal action regarding the Community Benefit set out in Article 2. The Parties expressly agree that each Party is strictly prohibited from failing to perform any and all obligations under this Agreement on the basis that this Agreement is invalid, unenforceable, or illegal under federal law. By entering into this Agreement, each Party disclaims any right to tender an affirmative defense in any court of competent jurisdiction, that performance under this Agreement is not required because the Agreement is invalid, unenforceable, or illegal under federal law Section 5.6. Attorneys’ Fees and Costs. If either Party commences an action against the other Party, either legal, administrative or otherwise, arising out of or in connection with this Agreement or the Permittee’s operation of Permittee’s commercial cannabis business, the prevailing Party in such litigation shall be entitled to have and recover from the losing Party reasonable attorney’s fees and all other costs of such action. A prevailing party is determined to be a party who prevails on a majority of their claims/causes of action against the other party.
Section 5.7. Survival. The rights and obligations of the Parties set forth in Sections 5.3, 5.4, 5.5, and 5.6 and any right or obligation of the Parties in this Agreement which by its express terms is intended to survive termination of this Agreement, will survive any such termination.
Section 5.8. Waiver. A waiver by any Party of any breach of any term, covenant, or condition herein contained or a waiver of any right or remedy of such Party available hereunder, at law or in equity, shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition herein contained or of any continued or subsequent right to the same right or remedy. No Party shall be deemed to have made any such waiver unless it is in writing and signed by the Party so waiving.
Section 5.9. Integration. This Agreement, together with its specific references, attachments, and Exhibits, constitutes all of the agreements, understandings, representations, conditions, warranties, and covenants made by and between the Parties hereto. Unless set forth herein, no Party to this Agreement shall be liable for any representations made, express or implied.
Section 5.10. Calculation of Time Period. All time referenced in this Agreement shall be calendar days (unless noted otherwise), unless the last day falls on a legal holiday, City Saturday, or Sunday, in which case the last day shall be the next business day.
Section 5.11. Captions. The captions of this Agreement are for convenience and reference only and the words contained therein shall in no way be held to explain, modify, amplify, or aid in the interpretation, construction, or meaning of the provisions of this Agreement.
Section 5.11. Mandatory and Permissive. “Shall”, “will”, and “agrees” are mandatory. “May” or “can” are permissive.
Section 5.12. Counterparts. This Agreement may be executed simultaneously and in several counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument.
Section 5.13. Other Documents. The Parties agree that they shall cooperate in good faith to accomplish the objectives of this Agreement and, to that end, agree to execute and deliver such other instruments or documents as may be necessary and convenient to fulfill the purposes and intentions of this Agreement.
Section 5.14. Authority. All Parties to this Agreement warrant and represent that they have the power and authority to enter into this Agreement and the names, titles, and capacities herein stated on behalf of any entities, persons, states, or firms represented or purported to be represented by such entities, persons, states, or firms and that all formal requirements necessary or required by state or federal law in order to enter into this Agreement had been fully complied with. Further, by entering into this Agreement, each Party hereto warrants and represents that it has not breached the terms or conditions of any other contract or agreement to which such Party is obligated, which such breach would have a material effect hereon. [SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the Parties hereto have caused this Community Benefits Agreement to be executed as evidenced by the signatures of the authorized officers of each of them which appear below.
PERMITTEE:
MANTECA RESPONSIBLE AND COMPLIANT RETAIL LLC (dba Embarc Manteca) A California Limited Liability Company
By:___________________________
Name:________________________
Title:_________________________
CITY:
CITY OF MANTECA
A MUNICIPAL CORPORATION
By:___________________________
Toni Lundgren, City Manager
Date:_________________________
Date:_________________________
By:___________________________
Name:________________________
Title:_________________________
Date:_________________________
ATTESTED:
By:
Cassandra Candini-Tilton, City Clerk
Date:_________________________
APPROVED AS TO FORM:
By:
City Attorney
Date:_________________________
COMMUNITY BENEFITS AGREEMENT
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