whitebrennerllp.com
1414 K Street, 3
rd Floor
Sacramento, CA 95814
T 916.468.0950 | F 916.468.0951
{CW127336.5}
March 29, 2023
VIA U.S. CERTIFIED MAIL RETURN RECIEPT
Sasha Brodsky, Esq.
Attorney at Law
1362 Pacific Avenue
Santa Cruz, CA 95060
Central Valley – Sierra Associates
100 West Las Palmas Avenue, Suite H
Patterson, CA 95363
Attention : Sadie Schut
Re.: Central Valley – Sierra Associates Development Agreement Dear Ms. Schut and Mr. Brodsky:
This is to advise that due to Central Valley-Sierra Associates’ (“CVSA”) longstanding default of the terms set forth in the development agreement (“Development Agreement”) between the City of Patterson (“City”) and CVSA, which expired in July 2022, the City will be taking action to confirm the expiration of the Development Agreement and revoke the Conditional Use Permit (“CUP”) issued to CVSA.
As you know, on December 5, 2017, the Patterson City Council (“City Council”) adopted Ordinance No. 812 approving the Development Agreement to allow CVSA to operate a commercial cannabis retail business at 100 West Las Palmas Avenue, Suite H, Patterson, CA 95363 (the “Project”). Under Section 1.7 of the Development Agreement, the initial term of the Development Agreement commenced on January 4, 2018, the date Ordinance 812 took effect. Under the terms of the Development Agreement, CVSA was required to pay a monthly public benefit to the City (the “Public Benefit Amount").
Following the adoption of the Development Agreement and the subsequent land use entitlements for the Project, CVSA and City entered into alternative payment schedules of the Public Benefit Amount at CVSA's request. CVSA requested and was granted a deferral of half the amounts due until such time as the business opened to the public (“Deferral Payment”), with the remaining amounts due in twelve (12) equal payments after opening.
Nubia I. Goldstein
T: 916.468.0946
[email protected]
Sasha Brodsky, Esq.
Sadie Schut
March 29, 2023
{CW127336.5}
The City's agreement to defer the Public Benefit Amount was predicated on CVSA's assurances that the Deferral Payment would be paid as agreed upon and that the Public Benefit Amount would be paid on time moving forward. CVSA's failure to remit the required Public Benefit Amount at the agreed upon time to the City resulted in an overdue Public Benefit Amount (the “Delinquent Public Benefit Amount”) and constitutes a default of the Development Agreement pursuant to section 8.1(a).
Following several discussions and through emails from Mr. Brodsky dated December 6, 2021, and March 10, 2022, CVSA requested a reduction in amounts due and modification of City’s proposal to bring the Project current and resolve those outstanding issues with the Delinquent Public Benefit Amount owed.
On June 17, 2022, the City sent CVSA a letter declining CVSA’s proposed reduction and payment modifications to the Delinquent Public Benefit Amount. This letter also made an offer to resolve the entire Delinquent Public Benefit Amount for $79,925, subject to certain specified terms and conditions. The letter requested a response from CVSA within 10 calendar days, pursuant to Section 8.1(a) of the Development Agreement. In emails to the City following this letter, CVSA tried to amend this proposal. The most recent correspondence from Mr. Brodsky, dated December 19, 2022, proposed a counteroffer that included a payment plan and schedule, among other terms.
The City Council has rejected this counteroffer. Moreover, the Development Agreement expired on July 4, 2022. Section 1.7 of the Development Agreement provides that “the Initial Term and the Conditionally Extended Terms, if granted, shall not exceed fifty-hour (54) months, unless otherwise extended pursuant to the terms of this Agreement.” (Development Agreement, Sec. 1.7.) The City and CVSA have never agreed to an extension of the 54-month period, and the Development Agreement.
For the reasons explained above, the City has determined that it will no longer entertain discussions to resolve this delinquency and it will not be renewing or reinstating the Development Agreement with CVSA. This will provide notice that the City will be taking action to confirm the expiration of the Development Agreement and revoke the Project’s CUP under the terms of the Project approvals. Once a revocation hearing for the CUP is scheduled, the City will provide notice of the hearing in accordance with Section 8.1(c), Patterson Municipal Code section 18.14.050, and California Government Code sections 65090 and 65094.
Please contact me or City Manager Ken Irwin if you have any questions.
Sasha Brodsky, Esq.
Sadie Schut
March 29, 2023
{CW127336.5}
Regards,
White Brenner LLP
Nubia I. Goldstein
JSM/CA
Cc: Ken Irwin, City Manager
Sasha Brodsky, Esq.
Sadie Schut
March 29, 2023
{CW127336.5}
DECLARATION OF SERVICE
I am a citizen of the United States, over the age of 18 years, and not a party to or interested in this action. I am employed by White Brenner LLP and my business address is 1414 K Street, 3rd Floor, Sacramento, CA 95814. On this day, I caused to be served the following document(s):
February 3, 2023 Notice of Intent to Seek Inspection and Abatement Warrant XX By United States Certified Mail Return Receipt. I enclosed the documents in a sealed envelope or package addressed to the persons at the addresses set forth below and deposited the sealed envelope with the United States Postal Service, with the postage fully prepaid.
Jeffrey Smith and Michelle Smith
6212 Don Carlos Avenue
Riverbank, CA 95367
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on February 3, 2023, at Sacramento, California. ___________________________________
Patrick R. Barbieri