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City of Patterson
Office of the City Manager
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1 Plaza
P.O. Box 667
Patterson, California 95363
Bus. (209) 895-8015
Main (209) 895-8010
Email [email protected]
April 23, 2019
Central Valley - Sierra Associates
Attn: Sadie Schut
PO Box 135
Patterson, CA 95363
Re: Cannabis Development Agreement - Deferred Benefit Fee Payment Dear Ms. Schut:
This correspondence constitutes a side letter ("Side Letter") concerning the development agreement ("Development Agreement"), executed on January 1 , 20 1 8, between the City ofPatterson ("City") and Central Valley - Sierra Associates ("Developer"), relating to the Developer's operation of a cannabis dispensary business (the "Project").
Background
On November 7, 20 1 7, the Patterson City Council ("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, 201 7, the City Council adopted Ordinance No. 807 to establish zoning limitations and requirements for all cannabis businesses.
On December 5, 201 7, the City Council approved Ordinance No. 8 1 2 which authorized Developers to operate the Project in exchange for the monthly payment of a "Public Benefit Amount." Pursuant to Section 4.2 of the Development Agreement, executed on January 1, 2018, Developer was scheduled to remit their first Public Benefit Amount on February 1 , 201 8 ("Public Benefit Due Date"), in the amount ofTen Thousand Dollars ($10,000) (the "Tier 1 Amount." as defined in the Original Agreement).
On November 19, 2018, Developer executed a side letter ("Initial Side Letter") agreeing to a deferral for a portion ofthe Public Benefit Amount, in the amount of Five Thousand Dollars ($5,000) per month until the Developer opens the Project ("Deferred Benefit Fee").
As ofApril 23, 201 9, Developer has yet to open their Project nor made any payment on the Deferred Benefit Fee. Developer owes a total of One Hundred Ninety-Five Thousand Dollars ($195,000) with a resulting Deferred Benefit Fee of Ninety-Seven Thousand Five Hundred Dollars ($97,500). Developer now seeks a deferral for a portion of the Deferred Benefit Fee.
Pursuant to the terms approved by the City Council, this Side Letter provides the City's agreement to allow the deferral of a portion of the Deferred Benefit Fee, under the conditions outlined herein.
Deferral Payment
Developer acknowledges and agrees that fifty percent (50%) ofthe Deferred Benefit Fee equals Forty-Eight Thousand Seven Hundred and Fifty Dollars ($48,750). City agrees to allow Developer to pay half of the Deferred Benefit Fee ($48,750) prior to opening its Project Developer acknowledges and agrees that fifty percent (50%) ofthe Deferred Benefit Fee equals Forty-Eight Thousand Seven Hundred and Fifty Dollars ($48,750) (the "Remainder Amounts. Developer acknowledges and agrees to pay the Remainder Amount within 60 days ofopening its Project. Developer agrees that ifthe payment is made after 60 days ofopening the Project, the Developer shall pay a penalty fee often percent (10%) ofall monies owed. "All monies owed" includes the Deferred Benefit Fee described in the Initial Side Letter, and all other Public Benefit Amount payments owed as described in the Development Agreement Developer agrees and acknowledges that the Remainder Amount shall be paid, in addition to any Public Benefit Amount agreed to in the Development Agreement, and the Deferred Benefit Fee amount agreed to in the Initial Side Letter, then due and payable.
All other terms and provisions ofthe Development Agreement and the Initial Side Letter shall remain in full force and effect Ifany terms or provisions ofthis Side Letter conflicts with the terms and provisions ofthe Development Agreement or the Initial Side Letter, the terms and provisions ofthis Side Letter shall control.
Sincerely,
Ken Irwin
City Manager
2 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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