City of Patterson
Administration Department
1 Plaza
P.O. Box 667
Patterson, California 95363
Phone (209) 895-8010 Fax (209) 895-8019
www.ci.patterson.ca.us
August 10, 2018
Central Valley – Sierra Associates
Attn: Sadie Schut
100 West Las Palmas Avenue, Suite H
Patterson, CA 95363
Re: Cannabis Development Agreement – Public Benefit Amount Payment Dear Ms. Schut:
This correspondence constitutes a side letter (“Side Letter”) concerning the development agreement (“Original Agreement”) between the City of Patterson (“City”) and Central Valley – Sierra Associates (“Developer”), relating to the Developer’s operation of a cannabis dispensary business (the “Project”).
Background
On November 7, 2017, the Patterson City Council (the “City Council”) adopted Ordinance No. 806 to establish a Cannabis Business Pilot Program, which allows for the regulation of cannabis businesses within the City pursuant to a development agreement and a conditional use permit. On December 5, 2017, the City Council adopted Ordinance No. 807 to establish zoning limitations and requirements for all cannabis businesses.
On December 5, 2017, the City Council approved Ordinance No. 812 which authorized Developer to operate the Project in exchange for the monthly payment of a “Public Benefit Amount.” Pursuant to Section 4.2 of the Original Agreement, Developer was scheduled to remit their first Public Benefit Amount on February 1, 2018 (“Public Benefit Due Date”), in the amount of Ten Thousand Dollars ($10,000) (the “Tier 1 Amount,” as defined in the Original Agreement).
Developer has yet to open their business to the public. Developer now seeks a deferral for a portion of their Public Benefit Amount until Developer opens its business to the public (“Deferral”).
Pursuant to the terms approved by the City Council, this Side Letter provides the City’s agreement to allow the Deferral, which is calculated upon the date of this Side Letter (the “Effective Date”), under the conditions outlined herein.
Analysis
I. Deferral Payment
Developer acknowledges and agrees that fifty percent (50%) of the Tier 1 Amount equals Five Thousand Dollars ($5,000) per month (“Deferral Payment”). City agrees to allow Developer to pay the Deferral Payment 2 from the Public Benefit Due Date until Developer opens their business to the public. The chart below summarizes the current relevant amounts to the Deferral Payment:
Public Benefit Due Date Deferral Payment Number of Months in Deferral
Total Due as of the
Effective Date
February 1, 2018 $5,000 per month 7 $35,000
Developer acknowledges and agrees that Developer will be responsible for paying the Deferral Payment amount, each month, for every month that Developer fails to open their business to the public. In order to catch up on the amount of Thirty Five Thousand Dollars ($35,000), Developer must pay that amount in full by September 28, 2018. Ongoing payments for the Deferral Payment amounts will be due on the first day of each month.
II. Effect of Deferral
Developer acknowledges and agrees that fifty percent (50%) of the Tier 1 Amount equals Five Thousand Dollars ($5,000) per month (the “Remainder Amount”). Developer acknowledges and agrees to pay the Remainder Amount in twelve (12) monthly equal payments once their business opens to the public. Developer agrees and acknowledges that the Remainder Amount shall be paid, in addition to any Public Benefit Amount then due and payable.
All other terms and provisions of the Original Agreement shall remain in full force and effect. If any terms or provisions of this Side Letter conflicts with terms and provisions of the Original Agreement, the terms and provisions of this Side Letter shall control.
Sincerely,
Ken Irwin
City Manager
ACKNOWLEDGMENT AND ACCEPTANCE
Developer acknowledges receipt ofthe foregoing Side Letter and agrees to act under and pursuant to the terms and conditions ofthe Side Letter.
DEVELOPER:
Central Valley - Sierra Associates
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Date:
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