VIA EMAIL AND REGULAR MAIL
June 17, 2022
Re: Cannabis Development Agreement - Central Valley - Sierra Associates Dear Ms. Schut:
Development Agreement Revisions and Repayment
Sasha Brodsky
Attorney at Law
1362 Pacific Avenue, Suite 219
Santa Cruz, CA 95060
Central Valley - Sierra Associates
100 West Las Palmas Avenue, Suite H
Patterson, CA 95363
Attention: Sadie Schut
This correspondence concerns the development agreement (“Development Agreement'’) between the City of Patterson (“City”) and Central Valley-Sierra Associates (“Developer”), approved and adopted by the Patterson City Council in December 2017, for the operation of a cannabis retail business located at 100 West Las Palmas Avenue, Suite H, Patterson CA 95363 (the “Project”).
Following several discussions and based on Mr. Brodsky’s emails dated March 10, 2022 and December 6, 202 1 , you have requested a modification to the City’s proposal to bring your Project current and resolve all outstanding issues with the Project’s delinquent public benefit. After careful consideration, the City will not grant your request for any reduction or deferral of payment for the delinquent public benefit amount owed.
While the City will not agree to your proposed reduction and payment modifications, this letter outlines the necessary changes to the Project’s entitlements, including the Development Agreement, with the goal of bringing your Project back in good standing and enable the Project to continue operations.
You must agree to the following items within the specified timeframe in order to extinguish the delinquent public benefit and bring the Project back to good standing:
R 1
City of Patterson
Office of the City Manager
I Plaza
P.O. Box 667
Patterson. Cali torn ia 95363
Bus. (209) 895-8015
Main (209) 895-8010
Email k irwin@c i. patterson ,ca. us
1 . To offset the entire delinquent amount (the “Adjusted Public Benefit”), you must agree to pay City Seventy-Nine Thousand Nine Hundred Twenty-Five Dollars ($79,925.00). Payment shall be made in full within ten (10) calendar days of the date you execute the required Acknowledgement and Acceptance form attached to this letter. Further, you must pay the City seven percent (7%) of gross
2. 3.
a.
b.
Please feel free to contact me or the City Attorney if you have any questions or concerns.
Sincerely,
CC: Nubia 1. Goldstein, City Attorney
2 Ken Irwin
City Manager
receipts from operating the Project starting from the date of the previous offer letter dated October 21, 2021 to date. Full payment of this amount shall be made within thirty (30) calendar days of the date you execute the required Acknowledgement and Acceptance form.
Upon payment, City acknowledges full and complete satisfaction of the Adjusted Public Benefit.
City agrees to waive the remainder of the delinquent public benefit amount to date.
The Adjusted Public Benefit constitutes the final compromise as to the delinquent public benefit. In the event you fail to make the Adjusted Public Benefit payment by the due date, it shall constitute a breach of the Development Agreement and condition of approval for the Project and City may in its sole discretion begin the necessary proceedings to terminate the Development Agreement and revoke the Conditional Use Permit for the Project. You shall waive the notice and cure provisions associated with any such delinquency set forth in the Development Agreement.
As detailed in the letter dated September 21, 2021, you are currently in default of the terms set forth in the Development Agreement. In the event you fail to rectify the breach within 10 calendar days as outlined in this letter, the City will take the necessary steps to terminate the Development Agreement and revoke the Project’s Conditional Use Permit (“CUP”).
City shall process and you shall agree to execute an amendment to the Development Agreement to address the following:
You will be subject to City’s cannabis business tax on an ongoing basis. The amended Development Agreement will establish a new public benefit payment schedule requiring a monthly minimum payment of $7,000 or a 7% tax rate of Developer’s gross receipts, whichever is higher. The new public benefit shall become effective on the first business day following adoption of the amended Development Agreement.
Your prompt attention to this matter is required. You must submit an executed Acknowledgement and Acceptance form by July 5, 2022 to give City staff sufficient time to begin the process of amending the Development Agreement. The City’s goal is for the Project to reach its full potential. However, the Project has not complied with its financial obligations to date. If the City does not receive an executed Acknowledgment and Acceptance form, we will initiate the proceedings to terminate the Development Agreement and revocation ofthe Project’s Conditional Use Permit under the terms of the Project approvals.
ACKNOWLEDGMENT AND ACCEPTANCE
DEVELOPER:
Central Valley - Sierra Associates
(name)
Date:
3 Developer acknowledges receipt ofthe foregoing letter and agrees to act under and pursuant to the terms and conditions set forth herein.