HomeMy WebLinkAbout2018 04 12 Special Meeting Council/=�
BALDWIN PARK CITY COUNCIL
SPECIAL MEETING
APRIL 12, 2018
7:00 PM
COUNCIL CHAMBER
14403 E. Pacific Avenue
Baldwin Park, CA 91706
(626) 960-4011
Manuel Lozano
Ricardo Pacheco
Cruz Baca
Monica Garcia
Susan Rubio
- Mayor
- Mayor Pro Tem
- Council Member
- Council Member
- Council Member
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PUBLIC COMMENTS
The public is encouraged to address the City
Council or any of its Agencies listed on this
agenda on any matter posted on the agenda or on
any other matter within its jurisdiction. If you wish
to address the City Council or any of its Agencies,
you may do so during the PUBLIC
COMMUNICATIONS period noted on the agenda.
Each person is allowed three (3) minutes
speaking time. A Spanish speaking interpreter is
available for your convenience.
COMENTARIOS DEL PUBLICO
Se invita al publico a dirigirse al Concilio o cualquiera otra
de sus Agencias nombradas en esta agenda, para hablar
sobre cualquier asunto publicado en la agenda o
cualquier tema que este bajo su jurisdiccion. Si usted
desea la oportunidad de dirigirse al Concilio o alguna de
sus Agencias, podra hacerlo durante el periodo de
Comentarios del Publico (Public Communications)
anunciado en la agenda. A cada persona se le permite
hablar por tres (3) minutos. Hay un interprete para su
conveniencia.
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CALL TO ORDER
INVOCATION
PLEDGE OF ALLEGIANCE
ROLL CALL
CITY COUNCIL
SPECIAL MEETING — 7:00 PM
Council Members: Cruz Baca, Monica Garcia, Susan Rubio, Mayor
Pro Tem Ricardo Pacheco and Mayor Manuel Lozano
REPORT FROM CLOSED SESSION
ANNOUNCEMENTS
PUBLIC COMMUNICATIONS
Three (3) minute speaking time limit
Tres (3) minutos sera el limite para hablar
THIS IS THE TIME SET ASIDE TO ADDRESS THE CITY COUNCIL
PLEASE NOTIFY THE CITY CLERK IF YOU REQUIRE THE SERVICES OF AN INTERPRETER
No action may be taken on a matter unless it is listed on the agenda, or unless certain emergency or special circumstances
exist. The legislative body or its staff may: 1) Briefly respond to statements made or questions asked by persons, or 2) Direct
staff to investigate and/or schedule matters for consideration at a future meeting. [Government Code §54954.2]
ESTE ES EL PERIODO DESIGNADO PARA DIRIGIRSE AL CONCILIO
FAVOR DE NOTIFICAR A LA SECRETARIA SI REQUIERE LOS SERVICIOS DEL INTERPRETE
No se podra tome accion en algOn asunto a menos que sea incluido en la agenda, o a menos que exista algana emergencia o
circunstancia especial. El cuerpo legislativo y su personal podran: 1) Responder brevemente a declaraciones o preguntas
hechas por personas, o 2) Dirigir personal a investigar y/o fijar asuntos para tomar en consideracion en juntas proximas. [Codigo
de Gobierno §54954.2]
PUBLIC HEARINGS
1. A request for consideration of Fifteen (15) Development Agreements; Fourteen (14
for the Cultivation and Manufacturing of Cannabis and One (1) for the Exclusive
Distribution of Cannabis and Cannabis Related Products (Locations: 4145 Puente
Avenue; 14551 Joanbridge Street; 14824 Ramona Blvd. & 4150 Puente Avenue; 13111
Spring Street & 428 Cloverleaf Drive; 5117 Calmview Avenue; 13467 Dalewood Street;
14837 & 14841 Ramona Blvd.; 5148 Bleecker Street; 15023 Ramona Blvd.; 4621
Littlejohn Street; 5157 Azusa Canyon Road; 5175 Commerce Drive; 13450 Brooks
Drive, Units A & C; 4802 Littlejohn Street; and 13460 Brooks Drive; Applicant: City of
Baldwin Park; Case Numbers: DA 18-01 through DA 18-15.) (Back up materials for
this item will be included under separate cover and are available in the City Clerk's
Office for inspection)
Staff recommends that the City Council open the public hearing, receive public comment,
and following the public hearing adopt the following Ordinances:
City Council Agenda
Page 2
A. Introduce for first reading, by title only and waive further reading, Ordinance No.
1410, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with
Jenome Research for the Cultivation and/or Manufacturing of Cannabis at the Real
Property Located at 4145 Puente Avenue (APN: 8437-015-014) within the City of
Baldwin Park."
B. Introduce for first reading, by title only and waive further reading, Ordinance No.
1411, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with
Baldwin Park Take Corp. for the Cultivation and/or Manufacturing of Cannabis at the
Real Property Located at 14551 Joanbridge Street (APN: 8414-006-002) within the City
of Baldwin Park."
C. Introduce for first reading, by title only and waive further reading, Ordinance No.
1412, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with Rukli,
Inc. for the distribution of Cannabis and Cannabis Products at the Real Property Located
at 14824 Ramona Blvd. and 4150 Puente Avenue (APN: 8437-014-014 & 8437-022-008)
within the City of Baldwin Park."
D. Introduce for first reading, by title only and waive further reading, Ordinance No.
1413, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with 428
Cloverleaf, LLC for the Cultivation and/or Manufacturing of Cannabis at the Real
Property Located at 13111 Spring Street and 428 Cloverleaf Drive (APN: 8535-023-051,
8564-021-009, & 8564-021-010) within the City of Baldwin Park."
E. Introduce for first reading, by title only and waive further reading, Ordinance No.
1414, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with Casa
Verde Group for the Cultivation and/or Manufacturing of Cannabis at the Real Property
Located at 5117 Calmview Avenue (APN: 8413-007-062) within the City of Baldwin
Park."
F. Introduce for first reading, by title only and waive further reading, Ordinance No.
1415, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with RD
Baldwin Park for the Cultivation and/or Manufacturing of Cannabis at the Real Property
Located at 13467 Dalewood Street (APN: 8559-003-018) within the City of Baldwin
Park."
G. Introduce for first reading, by title only and waive further reading, Ordinance No.
1416, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with
Organic Management Solutions for the Cultivation and/or Manufacturing of Cannabis at
the Real Property Located at 14837 and 14841 Ramona Blvd (APN: 8437-018-002 &
8437-018-001) within the City of Baldwin Park."
City Council Agenda
Page 3
H. Introduce for first reading, by title only and waive further reading, Ordinance No.
1417, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with Medical
Grade Farms BP for the Cultivation and/or Manufacturing of Cannabis at the Real
Property Located at 5148 Bleecker Street (APN: 8414-004-005) within the City of
Baldwin Park."
I. Introduce for first reading, by title only and waive further reading, Ordinance No.
1418, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with Kultiv8
Group, LLC for the Cultivation and/or Manufacturing of Cannabis at the Real Property
Located at 15023 Ramona Blvd. (APN: 8437-021-006) within the City of Baldwin Park."
J. Introduce for first reading, by title only and waive further reading, Ordinance No.
1419, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with GSC
Capital Group for the Cultivation and/or Manufacturing of Cannabis at the Real Property
Located at 4621 Littlejohn Street (APN: 8535-023-033) within the City of Baldwin Park."
K. Introduce for first reading, by title only and waive further reading, Ordinance No.
1420, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with Elite
Green Cultivators For the Cultivation and/or Manufacturing of Cannabis at the Real
Property Located at 5157 Azusa (APN: 8413-001-030) within the City of Baldwin Park."
L. Introduce for first reading, by title only and waive further reading, Ordinance No.
1421, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with Pacific
Cultivation, LLC for the Cultivation and/or Manufacturing of Cannabis at the Real
Property Located at 5175 Commerce Drive (APN: 8535-002-041) within the City of
Baldwin Park."
M. Introduce for first reading, by title only and waive further reading, Ordinance No.
1422, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with Cloud
Control Inc. for the Cultivation and/or Manufacturing of Cannabis at the Real Property
Located at 13450 Brooks Drive (APN: 8535-023-010) within the City of Baldwin Park."
N. Introduce for first reading, by title only and waive further reading, Ordinance No.
1423, entitled, "An Ordinance of the City Council of the City of Baldwin Park, California,
Authorizing the City of Baldwin Park to Enter into a Development Agreement with VRD,
Inc. for the Cultivation and/or Manufacturing of Cannabis at the Real Property Located
at 4802 Littlejohn Street (APN: 8535-023-011) within the City of Baldwin Park."
O. Introduce for first reading, by title only and waive further reading, Ordinance No. 1424,
entitled, "An Ordinance of the City Council of the City of Baldwin Park, California, Authorizing the
City of Baldwin Park to Enter into a Development Agreement with Green Health Industries, LLC
for the Cultivation and/or Manufacturing of Cannabis at the Real Property Located at 13460
Brooks Drive (APN: 8535-024-018) within the City of Baldwin Park."
City Council Agenda
Page 4
ADJOURNMENT
CERTIFICATION
I, Alejandra Avila, City Clerk of the City of Baldwin Park hereby certify that, under penalty of
perjury under the laws of the State of California, the foregoing agenda was posted on the City
Hall bulletin board not less than 24 hours prior to the meeting. Dated this 11th day of April, 2018.
n
Alejandra Avila
City Clerk
PLEASE NOTE: Copies of staff reports and supporting documentation pertaining to each item on this agenda are available for
public viewing and inspection at City Hall, 2nd Floor Lobby Area or at the Los Angeles County Public Library in the City of
Baldwin Park. For further information regarding agenda items, please contact the office of the City Clerk at (626) 960-4011
ext. 466 or via e-mail at vi.l iia baldwin ark.com.
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please
contact the Public Works Department or Risk Management at (626) 960-4011. Notification 48 hours prior to the meeting will
enable staff to make reasonable arrangements to ensure accessibility to this meeting. (28 CFR 34.102.104 ADA TITLE II)
City Council Agenda
Page 5
STAF]
E
ITEM NO.
TO: Honorable Mayor and City Councilmembers
FROM: City Attorney's Office
PREPARED BY: Amy L. Harbin, AICP, City Plann
Abraham Tellez, Associate Planner��
DATE: April 12, 2018
SUBJECT: A REQUEST FOR CONSIDERATION FIFTEEN (15)
DEVELOPMENT AGREEMENTS; FORTEEN (14) FOR THE
CULTIVATION AND MANUFACTURING OF CANNABIS
AND ONE (1) FOR THE EXCLUSIVE DISTRIBUTION OF
CANNABIS AND CANNABIS RELATED PRODUCTS
(LOCATIONS: 4145 PUENTE AVENUE; 14551
JOANBRIDGE STREET; 14824 RAMONA BLVD. & 4150
PUENTE AVENUE; 13111 SPRING STREET & 428
CLOVERLEAF DR.; 5117 CALMVIEW AVENUE; 13467
DALEWOOD STREET; 14837 & 14841 RAMONA BLVD. 5148
BLEECKER STREET; 15023 RAMONA BLVD.; 4621
LITTLEJOHN STREET; 5157 AZUSA CANYON ROAD; 5175
COMMERCE DRIVE; 13450 BROOKS DRIVE, UNITS A & C;
4802 LITTLEJOHN STREET; AND 13460 BROOKS DRIVE;
APPLICANT: CITY OF BALDWIN PARK; CASE NUMBERS:
DA 18-01 THROUGH DA 18-15.)
SUMMARY
This report requests City Council approve fifteen (15) Development Agreements for the Cultivation and
Manufacturing or Distribution of Cannabis for Adult and/or Medicinal Use.
FISCAL IMPACT
Each of the Development Agreements has a financial component which provides a positive fiscal impact to the
City. Please refer to each of the attachments for the specific financial details for each Agreement.
RECOMMENDATION
Staff recommends that the City Council open the public hearing, receive public comment, and following the
public hearing adopt the following Ordinances:
ORDINANCE 1410 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH JENOME RESEARCH FOR THE CULTIVATION AND/OR
MANUFACTURING OF CANNABIS AT THE REAL PROPERTY LOCATED
DA 18-01 Through DA 18-15
April 12, 2018
Paee 2 of 6
AT 4145 PUENTE AVENUE (APN: 8437-015-014) WITHIN THE CITY OF
BALDWIN PARK
ORDINANCE 1411 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH BALDWIN PARK TALE CORP. FOR THE CULTIVATION AND/OR
MANUFACTURING OF CANNABIS AT THE REAL PROPERTY LOCATED
AT 14551 JOANBRIDGE STREET (APN: 8414-006-062) WITHIN THE CITY
OF BALDWIN PARK
ORDINANCE 1412 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH RUKLI, INC. FOR THE DISTRIBUTION OF CANNABIS AND
CANNABIS PRODUCTS AT THE REAL PROPERTY LOCATED AT 14824
RAMONA BLVD. AND 4150 PUENTE AVENUE (APN'S: 8437-014-014 &
8437-022-008) WITHIN THE CITY OF BALDWIN PARK
ORDINANCE 1413 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH 428 CLOVERLEAF, LLC FOR THE CULTIVATION AND/OR
MANUFACTURING OF CANNABIS AT THE REAL PROPERTY LOCATED
AT 13111 SPRING STREET AND 428 CLOVERLEAF DRIVE (APN: 8535-
023-051, 8564-021-009, & 8564-021-010) WITHIN THE CITY OF BALDWIN
PARK
ORDINANCE 1414 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH CASA VERDE GROUP FOR THE CULTIVATION AND/OR
MANUFACTURING OF CANNABIS AT THE REAL PROPERTY LOCATED
AT 5117 CALMVIEW AVENUE (APN: 8413-007-062) WITHIN THE CITY
OF BALDWIN PARK
ORDINANCE 1415 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH RD BALDWIN PARK FOR THE CULTIVATION AND/OR
MANUFACTURING OF CANNABIS AT THE REAL PROPERTY LOCATED
AT 13467 DALEWOOD STREET (APN: 8559-003-018) WITHIN THE CITY
OF BALDWIN PARK
ORDINANCE 1416 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH ORGANIC . MANAGEMENT SOLUTIONS, LLC FOR THE
CULTIVATION AND/OR MANUFACTURING OF CANNABIS AT THE
GACannabis\Staff Report\DA 18-01 to 18-15 Master Report.doc
DA 18-01 Through DA 18-15
April 12, 2018
Pan 3 of 6
REAL PROPERTY LOCATED AT 14837 AND 14841 RAMONA BLVD.
(APN: 8437-018-002 & 8437-018-001) WITHIN THE CITY OF BALDWIN
PARK
ORDINANCE 1417 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH MEDICAL GRADE FARMS BP FOR THE CULTIVATION AND/OR
MANUFACTURING OF CANNABIS AT THE REAL PROPERTY LOCATED
AT 5148 BLEECKER STREET (APN: 8414-004-005) WITHIN THE CITY OF
BALDWIN PARK
ORDINANCE 1418 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH KULTIV8 GROUP, LLC FOR THE CULTIVATION AND/OR
MANUFACTURING OF CANNABIS AT THE REAL PROPERTY LOCATED
AT 15023 RAMONA BLVD. (APN: 8437-021-006) WITHIN THE CITY OF
BALDWIN PARK
ORDINANCE 1419 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH GSC CAPITAL GROUP FOR THE CULTIVATION AND/OR
MANUFACTURING OF CANNABIS AT THE REAL PROPERTY LOCATED
AT 4621 LITTLEJOHN STREET (APN: 8535-023-033) WITHIN THE CITY
OF BALDWIN PARK
ORDINANCE 1420 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH ELITE GREEN CULTIVATORS FOR THE CULTIVATION AND/OR
MANUFACTURING OF CANNABIS AT THE REAL PROPERTY LOCATED
AT 5157 AZUSA CANYON ROAD (APN: 8413-001-030) WITHIN THE CITY
OF BALDWIN PARK
ORDINANCE 1421 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH PACIFIC CULTIVATION, LLC FOR THE CULTIVATION AND/OR
MANUFACTURING OF CANNABIS AT THE REAL PROPERTY LOCATED
AT 5175 COMMERCE DRIVE (APN: 8535-002-041) WITHIN THE CITY OF
BALDWIN PARK
ORDINANCE 1422 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH CLOUD CONTROL, INC. FOR THE CULTIVATION AND/OR
MANUFACTURING OF CANNABIS AT THE REAL PROPERTY LOCATED
GACannabis\Staff Report\DA 18-01 to 18-15 Master Report.doc
DA 18-01 Through DA18-15
April 12, 2018
Pan 4 of 6
AT 13450 BROOKS DRIVE, UNITS A AND C (APN: 8535-023-010) WITHIN
THE CITY OF BALDWIN PARK
ORDINANCE 1423 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH VRD, INC FOR THE CULTIVATION AND/OR MANUFACTURING
OF CANNABIS AT THE REAL PROPERTY LOCATED AT 4802
LITTLEJOHN STREET (APN: 8535-023-011) WITHIN THE CITY OF
BALDWIN PARK
ORDINANCE 1424 ENTITLED, AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF BALDWIN PARK AUTHORIZING THE CITY OF
BALDWIN PARK TO ENTER INTO A DEVELOPMENT AGREEMENT
WITH GREEN HEALTH INDUSTRIES, LLC FOR THE CULTIVATION
AND/OR MANUFACTURING OF CANNABIS AT THE REAL PROPERTY
LOCATED AT 13460 BROOKS DRIVE (APN: 8535-024-018) WITHIN THE
CITY OF BALDWIN PARK
BACKGROUND
CALIFORNIA ENVIRONMENTAL QUALITYACT (CEQA)
In accordance with the provisions of the California Environment Quality Act (CEQA), it has been determined
that the proposed Development Agreement Projects (DA 18-01 through DA 18-15) will not have a significant
impact of the environment and are Categorically Exempt pursuant to Article 19, Section 15301, Class 1,
`Existing Facilities'. Furthermore each of the locations is proposed within an existing building.
NOTICING
A Notice of Public Hearing for the Planning Commission and City Council were posted at each location as
noted in the subject line on Thursday, March 29, 2018. Public Hearing Notices were also emailed to a
principal for each Development Agreement on Thursday, March 29, 2018. Furthermore, notices were posted at
City Hall, the Community Center and Barnes Park no later than Friday March 30, 2018. Additionally, public
hearing notices were mailed to all property owners within 300 feet of the subject site on March 30, 2018.
DISCUSSION
Cannabis Ordinance Proeression
Since early 2017 the City Council has conducted several Study Sessions regarding the potential about amending
the City's Code to allow and regulate Cannabis Cultivation, Manufacturing and Distribution uses within the
City. On August 9, 2017 the Council heard AZC-183 which amended the City's Zoning Code allowing
Cannabis uses within the IC, Industrial Commercial and I, Industrial Zones and deleted Sections 153.120.330.0
and 153.120.330.D which were in conflict with the proposal to allow Adult and Medical Cannabis Cultivation,
Manufacturing and Distribution. The City Council ultimately approved that Zoning Text Amendment
(Ordinance 1401) and on the same date also approved Ordinance 1400 adding Chapter 127 of Title IX
(Business Regulations), adding Medical and Adult use of Cannabis.
On December 13, 2017 the Council amended Chapter 127, approving Ordinance 1403 which refined the
measurement of distances required between uses.
GACannabis\Staff Report\DA 18-01 to 18-15 Master Report.doc
DA 18-01 Through DA 18-15
April 12, 2018
Paae 5 of 6
Most recently on March 21, 2018, the City Council approved on first reading Ordinance 1408 amending
Chapter 127 to increase the number of Adult and Medical Cannabis permits allowed from fifteen (15) to
twenty-five (25). Second reading of the ordinance is anticipated on April 4, 2018 and if approved the ordinance
1408 will become effective 30 -days later on May 4, 2018.
Development Aereements
Section 127.06 of Ordinance 1400 requires as a condition that each approved Cannabis permitee enter into a
development agreement with the City. The development agreement sets forth the terms and conditions under
which each facility will operate, in addition to the requirements and standards set forth in the most recently
amended Chapter 127 of the City's Municipal Code. This section in the Ordinance (127.06) which discusses
development agreements does not refer to, nor make mention that these development agreements, which were
executed by each of the permitees, are considered Development Agreements pursuant to Article 2.5, Section
65864-65869.5 of the California Government Code. Because these agreements were originally not processed as
Development Agreements pursuant to the CA Government Code or Section 153.210, Part 17 of the City's
Zoning Code, notice was not provided, public hearings not held, and the agreements were not recorded with the
Los Angeles County Recorder's Office. On December 13, 2017, the City Council approved a template
development agreement, and instructed the City Attorney's Office to negotiate with the approved fifteen (15)
Cannabis applicants. Each of the agreements was negotiated and has an effective date of December 29, 2017
according to the City Attorney's Office.
Recently, as the result of a lawsuit filed against the City, Staff has been directed to process each of the
agreements as Development Agreements pursuant to not only the California Government Code, but also the
City's Zoning Code, Section 153.210, Part 17. In order to streamline this process as much as possible, each of
the attachments has information, including Development Agreement Findings of Fact, specific to each Cannabis
Permit that was approved.
PLANNING COMMISSION ACTION
The Planning Commission will hear this item on Wednesday, April 11, 2018. However, at the time of this
report printing for both bodies, the item had not been considered yet. Action of the Planning Commission will
be verbally presented at the City Council meeting.
LEGAL REVIEW
This report has been reviewed and approved by the City Attorney's Office as to legal form and content.
ALTERNATIVES
The alternative would be to deny the requests for the Development Agreements, however, an action of that
nature may have a negative impact upon the lawsuit that the City was recently served.
ATTACHMENTS
#1, DA 18-01; Jenome Research
#2, DA 18-02; Baldwin Park TALE Corp.
Informational Table; CAN 17-01
Informational Table; CAN 17-02
Vicinity Map
Vicinity Map
Findings of Fact
Findings of Fact
Development Agreement
Development Agreement
Draft Ordinance
Draft Ordinance
#3, DA 18-03; RUKLI, Inc.
#4, DA 18-04; 428 Cloverleaf, LLC
Informational Table; CAN 17-06
Informational Table; CAN 17-07
Vicinity Map
Vicinity Map
GACannabis\Staff Report\DA 18-01 to 18-15 Master Report.doc
DA 18-01 Through DA 18-15
April 12, 2018
Paee 6 of 6
Findings of Fact
Findings of Fact
Development Agreement
Development Agreement
Draft Ordinance
Draft Ordinance
#5, DA 18-05; Casa Verde Group
#6, DA 18-06; RD Baldwin Park
Informational Table; CAN 17-08
Informational Table; CAN 17-09
Vicinity Map
Vicinity Map
Findings of Fact
Findings of Fact
Development Agreement
Development Agreement
Draft Ordinance
Draft Ordinance
#7, DA 18-07; Organic Management Solutions, LLC
#8, DA 18-08; Medical Grade Farms BP
Informational Table; CAN 17-10
Informational Table; CAN 17-12
Vicinity Map
Vicinity Map
Findings of Fact
Findings of Fact
Development Agreement
Development Agreement
Draft Ordinance
Draft Ordinance
#9, DA 18-09; Kultiv8 Group LLC
#10, DA 18-10; GSC Capital Group
Informational Table; CAN 17-13
Informational Table; CAN 17-15
Vicinity Map
Vicinity Map
Findings of Fact
Findings of Fact
Development Agreement
Development Agreement
Draft Ordinance
Draft Ordinance
#11, DA 18-11; Elite Green Cultivators
#12, DA 18-12; Pacific Cultivation, LLC
Informational Table; CAN 17-17
Informational Table; CAN 17-18
Vicinity Map
Vicinity Map
Findings of Fact
Findings of Fact
Development Agreement
Development Agreement
Draft Ordinance
Draft Ordinance
#13, DA 18-13; Cloud Control, Inc.
#14, DA 18-14; VRD, Inc.
Informational Table; CAN 17-27
Informational Table; CAN 17-28
Vicinity Map
Vicinity Map
Findings of Fact
Findings of Fact
Development Agreement
Development Agreement
Draft Ordinance
Draft Ordinance
#15, DA 18-15; Green Health Industries, LLC
Informational Table; CAN 17-31
Vicinity Map
Findings of Fact
Development Agreement
Draft Ordinance
GACannabis\Staff Report\DA 18-01 to 18-15 Master Report.doc
ITEM: A (Jenome Research)
ATTACHMENT #1 DA 18-01
JENOME RESEARCH
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-01
Location
4145 Puente Ave. APN: 8437-015-014
Zoning of Subject Location
I -C, Industrial Commercial
Principal Names
Edward Avak an
Company Name
Jenome Research
Term of Development
Fifteen (15) years from 12/29/17
Agreement
June 30 and December 31 for Year #1
Payment Schedule
Quarterly for Years #2 through #15—Four equal
payments
Year #1--$198,000
Year #2--$242,000
Payment Amount
Year #3--$286,000
Year #4--$330,000
Year #5--$352,000—The Mitigation Fee is subject to
reassessment by the City every five 5) years
Floor Area of Buildings
4,360 s.f. per City Records
Employee Requirements
A minimum of 20% of the Project's workforce shall
consist of residents of the City.
P K a
VICINITY MAP
CASE NUMBER: DA 18-01
LOCATION: 4145 Puente Avenue
DATE: April 12, 2018
DA 18-01
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I -C, Industrial Commercial Zone, it is anticipated that the
use of the property is consistent with the other light industrial uses within
the area. The adoption of cannabis cultivation and manufacturing
activities is also consistent with Goal 1.0 of the City's Economic
Development Element in the General Plan in that the City encourages and
facilitates activities that expand the City's revenue base. Furthermore,
Goal 6.0 of the same element encourages the expansion of the City's
diverse industrial base. Policy 6.5 of Goal 6.0 encourages an on-going
campaign with local businesses to hire local residents. This Development
Agreement requires that a minimum of 20% of the businesses workforce
shall consist of Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I -C, Industrial Commercial Zone
surrounded by lighter industrial uses. The use exceeds the distance
requirement of fifty (50) feet between cannabis uses and the closest
residential zone; furthermore, pursuant to Section 127.07.E.1 of the City's
Municipal Code, the cannabis use exceeds the distance required between
other sensitive uses such as schools, day care centers, parks or youth
centers (Baldwin Park Teen Center).
Pursuant to the Neighborhood Compatibility Plan submitted by the
Applicant, their desire is to be very discreet and do not intend to place any
DA 18-01
cannabis related signage outside and leave the industrial fagade as is,
except for ordinary repair and maintenance. The facility will intended to be
indiscernible to the surrounding community thereby not creating any
negative impacts on the surrounding area or the City as a whole:
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April Mand 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1410
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
JENOME RESEARCH FOR THE CULTIVATION
AND/OR MANUFACTURING OF CANNABIS AT THE
REAL PROPERTY LOCATED AT 4145 PUENTE
AVENUE (APN: 8437-015-014) WITHIN THE CITY OF
BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code §§
65864 - 65869.5.
Ordinance 1410
Page 2
WHEREAS, as required by law, the City Council gave first reading to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, `Existing Facilities'. Furthermore each of the
locations is proposed within an existing building
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I -C, Industrial Commercial Zone, it is
anticipated that the use of the property is consistent with the other'
light industrial uses within the area. The adoption of cannabis
cultivation and manufacturing activities is also consistent with Goal
1.0 of the City's Economic Development Element in the General Plan
in that the City encourages and facilitates activities that expand the
City's revenue base. Furthermore, Goal 6.0 of the same element
encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement'
requires that a minimum of 20% of the businesses workforce shall
consist of Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances)
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
Ordinance 1410
Page 3
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general
area and City as a whole as it is located within the I -C, Industrial
Commercial Zone surrounded by lighter industrial uses. The use
exceeds the distance requirement of fifty (50) feet between cannabis
uses and the closest residential zone; furthermore, pursuant to
Section 127.07.E.1 of the City's Municipal Code, the cannabis use
exceeds the distance required between other sensitive uses such as
schools, day care centers, parks or youth centers (Baldwin Park
Teen Center).
Pursuant to the Neighborhood Compatibility Plan submitted by the
Applicant, their desire is to be very discreet and do not intend to place
any cannabis related signage outside and leave the industrial fagade
as is, except for ordinary repair and maintenance. The facility will
intended to be indiscernible to the surrounding community thereby
not creating any negative impacts on the surrounding area or the City
as a whole.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full force and
operation from and after thirty (30) days after its final reading and adoption.
PASSED AND APPROVED ON THE _ day of , 2018
MANUEL LOZANO, MAYOR
Ordinance 1410
Page 4
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a special meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1410 was duly approved and adopted at a regular
meeting of the City Council on , 2018 by the following vote:
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND JENOME RESEARCH
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("STATUTORY
AGREEMENT") is intended to replace the previous non -statutory municipal Development
Agreement, and is dated April , 2018 for references purposes only and is entered
into between (i) the City of Baldwin Park ("City"), a California municipal corporation, and
(ii) Jenome Research, a California Mutual Benefit Corporation ("Owner"). This
STATUTORY AGREEMENT shall become effective on the Effective Date defined in
Section 3.1.9 below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and Jenome Research previously entered into a non -
statutory municipal Development Agreement that was not intended to be a Government
Code Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be a Statutory Development Agreement under and
through Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City .is authorized pursuant to Government Code Section
65864, et seq. to enter into binding statutory development agreements with persons
having legal or equitable interests in real property for the development of such property;
and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture, medical and adult use cannabis in September
2017; and at that time the City determined that the uses authorized in this STATUTORY
AGREEMENT were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of various entitlements, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
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2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map and the Baldwin Park Municipal Code as of the Agreement
Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have, been
duly taken or approved in accordance with all applicable legal requirements for notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or Property, ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Manufacturing and
Cultivation Facility pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127
and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture cannabis and cannabis related products at its facility or facilities up to 22,000
square feet.
2.14 WHEREAS, the City entered into a Development Agreement with Rukli, Inc.
to be the exclusive distributor of cannabis and cannabis related products in the City of
Baldwin Park. The City is entering into development agreements with owners for permits
for cultivation and manufacturing of cannabis and cannabis related products in the City of
Baldwin Park. The City prohibits the sale of cannabis and cannabis related products within
the City of Baldwin Park so the cannabis and cannabis related products must be
distributed to and sold in cities where it is legal to do so. Rukli, Inc. shall be the exclusive
distributor for the cultivation and/or manufacturing permit holders within the City of
Baldwin Park and City conditions the cultivation and/or manufacturing permits on Rukli,
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Inc. being the exclusive distributor for any permit issued by Baldwin Park for cultivation or
manufacturing.
ARTICLE 3. GENERAL TERMS.
3.1 Definitions and Exhibits. The following terms when used -in this
STATUTORY AGREEMENT shall be defined as follows:
3.1.1 "Agreement" means this STATUTORY AGREEMENT pursuant to
Government Code Section 65864 et seq.
corporation.
3.1.2 "City" means the City of Baldwin Park, a California municipal
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" If applicable, means other entitlements for
the Development of the Property, including any and all conditions of approval, subject to
approval or issuance by the City in connection with Development of the Property.
"Development Approvals" also include both the Existing Development Approvals and the
Subsequent Development Approvals approved or issued by the City that are consistent
with this STATUTORY AGREEMENT.
3.1.7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code
3.1.9 "Effective Date" means the day this STATUTORY AGREEMENT is
approved and adopted by the Baldwin Park City Council and signed by the Mayor of
Baldwin Park or his designee.
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved or issued prior to or on the Effective Date. Existing
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Development Approvals include the approvals set forth in Section 3.1.6 and all other
approvals which are a matter of public record prior to or on the Effective Date.
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
3.1.12 "Land Use Regulations" If and where applicable means all
ordinances, resolutions and codes adopted by the City governing the development and
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.14 "Owner" means Jenome Research, a California Mutual Benefit
Corporation.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City. .
3.1.16 "Project" If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, the application, any and all entitlements, licenses, and permits
related to the Project.
3.1.17 "Property" means the real property described in Owner's application
and incorporated herein by this reference. Owner may modify the location or locations or
add locations to the Property subject to City approval and all applicable zoning and
distance requirements.
3.1.18 "Reasonable" means using due diligence to accomplish a stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives of the
STATUTORY AGREEMENT.
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3.1.19 "Reservations of Authority" means the rights and authority excepted
from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.20 "Space or Canopy Space" shall mean any space or ground, -floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing, and/or harvesting
phases, including without limitation any space used for activities such as growing,
planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering,
irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used
for storing any cannabis, no matter where such storage may take place or such storage
space may be located.
3.1.21 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times- and in
such sequences -as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.22 "Subsequent Land Use Regulations" If applicable means any Land
Use Regulations defined in Section 3.1.12 that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents, by this reference, are made part of
this STATUTORY AGREEMENT: '
No. 1 — Legal Description of the Property.
No. 2 — Map showing Property and its location.
No. 3 - Application
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is hereby
made subject to. this STATUTORY AGREEMENT. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of the Property is hereby
authorized and shall, except as otherwise provided in this STATUTORY AGREEMENT,
be carried out only in accordance with the terms of this STATUTORY AGREEMENT and
the Development Plan, if any. In the event of conflict or uncertainty between this
STATUTORY AGREEMENT and the Development Plan, the provisions of this
STATUTORY AGREEMENT shall control.
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3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of 8437-
015-014 and is more particularly described in the application and document "No. 1" in
Section 3.2 and incorporated herein.
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
expressly stated in this STATUTORY "AGREEMENT to survive termination without the
need of further documentation from the parties hereto. The STATUTORY
AGREEMENT's Fee is subject to renegotiation after the first term, and every five year
term thereafter.
3.5.1 Term Extension. This STATUTORY AGREEMENT may only be
extended by mutual agreement of City and Owner in writing and signed by Owner and
the Mayor of Baldwin Park. If the Mayor of Baldwin Park does not sign the agreement or
renegotiated agreement any such agreement is null and void.
3.6 Automatic Termination. This STATUTORY AGREEMENT shall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY AGREEMENT as set
forth in Section 3.5;
(ii) The entry of a final judgment (or a decision on any appeal therefrom)
voiding the City's General Plan or any element thereof, which judgment or decision would
preclude development of the Project, but only if the City is unable to cure such defect in
the General Plan or element within one hundred and eighty (180) days from the later of
entry of final judgment or decision on appeal.
(iii) Failure to timely pay the Fee or Fees. Failure to timely pay the
$50,000 towards the police salary or benefits. Failure to pay any fees due to the City
under this STATUTORY AGREEMENT.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements and permits
approved for the Owner and/or the Property. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to any default in the performance of the provisions of this STATUTORY AGREEMENT
which has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT. Owner
may terminate this STATUTORY AGREEMENT without cause, without penalty or liability
IA
to the City of Baldwin Park upon sixty (60) days' prior written notice to the City of Baldwin
Park.
3.7 Notices.
3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
(iii) on the date of personal delivery shown in the records of the
delivery company after delivery to the recipient named below; or
(iv) on the date of delivery by facsimile transmission' to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: Edward Avakyan
1441 Huntington Dr. #200,
South Pasadena, CA 91030
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
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3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's cost to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property with a commercial cannabis facility in accordance
with and to the extent of the Development Plan and/or application. The Property shall
remain subject to all Subsequent Development Approvals required to complete the
Project as contemplated by the Development Plan and/or application.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed buildings,
and the design, improvement, occupancy and construction standards and specifications
applicable to development of the Property shall be the Development Plan and/or
application. Provided, however, that in approving tentative subdivision maps, if any, the
City may impose ordinary and necessary dedications for rights-of-way or easements for
public access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the Project
or Development Approvals may be appropriate and mutually desirable. The City shall act
on such applications, if any, in accordance with the Existing Land Use Regulations,
subject to the Reservations of Authority, or except as otherwise provided by this
STATUTORY AGREEMENT. If approved, any such change in the Existing Development
Approvals shall be considered an additional Existing Development Approval.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
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such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City.
(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new development
projects of the same uses within the City; and
(v) Regulations that do not conflict with the Development Plan. The term
"do not conflict" means new rules, regulations, and policies which: (a) do not modify the
Development Plan, including, without limitation, the permitted land uses, the density or
intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying or
conditionally approving any Subsequent Development applications on the basis of such
subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
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reasonably cooperate with other public agencies processing Development Approvals for
the Project.
4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term
of any tentative subdivision map shall be in effect for a period of fifteen (15) years, and
may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within one (1) year from the
Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means the
issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns. The City has
the power and authority to examine such books and records at any reasonable time,
including but not limited to, during normal business hours. If the City wishes to inspect
the areas of the Property where the cannabis is being cultivated or manufactured, City
may do so at any time with no prior notice to Owner. In addition, City agrees that all of
its employees or agents which enter the cultivation, manufacturing, and curing areas shall
follow all of the policies and guidelines imposed on Owner's employees, including without
limitation, the wearing of any clothing or equipment to insure that no pests or impurities
shall enter the cultivation and curing areas.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by -commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project.
5.2 Year One: Owner will pay the City a total of $198,000 as a Fee. This fee is
calculated based on $9.00 a square foot of permit space and a permit which allows. up to
22,000 sq. feet, among other factors.
5.3 Year Two: Owner will pay the City a total of $242,000 as a Fee. This fee is
calculated based on $11.00 a square foot of permit space and a permit which allows up
to 22,000 sq. feet, among other factors.
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Year Three: Owner will pay the City a total of $286,000 as a Fee. This fee
is calculated based on $13.00 a square foot of permit space and a permit which allows
up to 22,000 sq. feet, among other factors.
5.4 Year Four: Owner will pay the City a total of $330,000 as a Fee. This fee is
calculated based on $15.00 a square foot of permit space and a permit which allows up
to 22,000 sq. feet, among other factors.
Year Five: Owner will pay the City a total of $352,000 as a Fee. This fee is
calculated based on $16.00 a square foot of permit space and a permit which allows up
to 22,000 sq. feet, among other factors.
5.5 The Fee schedule is as follows: The first Fee payment is due at the close
of the second quarter. Therefore, the first payment will be due on the last day of June
2018, the second and last payment for the first year is due on the last day of December
2018. For the years 2 through 15, the Fee schedule is as follows: divide the total Fee for
the respective year into four and make four equal payments due at the end of each quarter
of the respective year.
5.6 The Fee is subject to reassessment by the City every five years. At the end
of year five, the City will set a new Fee which will be applied in years 6 through 10. At
the end of year 10, the City will set a new Fee which will be applied in years 11 through
15. No one factor is dispositive in the City's determination of the new Fee. The Cannabis
permit will expire at the close of the 15th year and will require the Owner to reapply with
the City for a new permit. If Owner and City cannot agree to a new Fee or Fees by
December 22, 2022, this STATUTORY AGREEMENT will automatically terminate on
December 23, 2022.
5.7 Further, Owner will pay a payment of $50,000 to the City that can be used
to mitigate the impact of the cannabis business on the City and its resources which
includes but is not limited to, to use to pay a part of a police officer's salary and/or benefits.
The payment is due within thirty (30) days of issuance of permit and thereafter on the
anniversary of the issuance of the permit.
5.8 Jobs and Wage Creation.
5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the City or
who employ a significant number of City residents. At least 20 percent of the Project's
workforce shall consist of residents of the City. Job announcements shall be posted at City
Hall, along with proof that the job announcements were advertised in at least two
newspapers published, printed or distributed in the City and on various social media sites
accessible to the general public. In addition, Owner shall make a good faith effort to advertise
job announcements at local job fairs, on local radio and through public agencies and
organizations.
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5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses and all
documents evidencing compliance with state and local law. As such, upon issuance of
its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the
City for any associated costs with processing the Project, as detailed above and
reimbursing the City for its actual costs incurred in drafting and processing this
STATUTORY AGREEMENT. Owner will be liable for the City's actual costs incurred in
processing future Development Approval applications. City acknowledges and agrees
that this payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 Transportation of Cannabis. All pick ups and drop offs of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity, arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City . Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT.. During
the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council may automatically terminate this
STATUTORY AGREEMENT notwithstanding any other provision of this STATUTORY
AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT and impose
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such conditions as are reasonably necessary to protect the interests of the City. The
decision of the City Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special.
review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City would
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings.
In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
or to any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest, if successors in interest are
permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof,
not to sue for damages or claim any damages:
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(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application or request for a permit for cultivation, manufacturing' and/or
distribution or interpretation or effect of the provisions of this STATUTORY AGREEMENT.
Owner hereby agrees to waive and/or release the City of Baldwin Park for any claim or
claims or cause of action, not specifically and expressly reserved herein, which Owner
may have at the time of execution of this STATUTORY AGREEMENT relating to any
application to the City of Baldwin Park including but not limited to, any application for any
type of distribution, cultivation or manufacturing permit, any application for any
distribution, cultivation or manufacturing rights, or any application for any distribution,
cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTORY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged.
Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
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shall modify or abridge any defenses or immunities available to the City and its employees
pursuant to the ' Government Tort Liability Act and all other applicable statutes and
decisional law.
Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8.1, Section 8.2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money damages and
remedies at law are inadequate, and specific performance and other non -monetary relief
are particularly appropriate remedies for the enforcement of this STATUTORY
AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Section 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of STATUTORY AGREEMENT for Default of the City. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default.
8.4 Owner Default. No building permit shall be issued or building permit
application accepted for any structure on the Property after Owner is determined by the
City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
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ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
as the result of a judicial determination that the General Plan, or portions thereof, are
invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that any STATUTORY AGREEMENT or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees),- which the City or its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the environmental impact report, mitigated negative
declaration or negative declaration, as the case may be, prepared in connection with the
development of the Property; and (iii) the proceedings or procedure undertaken in
connection with the adoption or approval of any permit or any of the above. In the event
of .any legal or equitable action or other proceeding instituted by anyone against the City
or its City Council, any third party (including a governmental entity or official) challenging
the validity of any provision of this STATUTORY AGREEMENT or the procedure upon
which the permit was issued, or any portion thereof as set forth herein, the parties shall
mutually cooperate with each other in defense of said action or proceeding.
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Notwithstanding the above, the City, at is sole option, may tender to Owner and Owner
agrees to accept any such tender of the complete defense of any third party challenge as
described herein. In the event the City elects to contract with special counsel to provide
for such a defense, the City may do so in its sole discretion and Owner will be required to
pay the defense costs of the City as the costs are incurred. Owner agrees to pay any
and attorneys' fees or retainer regarding the selection of counsel, and Owner shall pay
all costs and all attorneys' fees related to retention of such counsel.
9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers,- agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9.4 do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
settlement offer, City shall notify Owner of the offer and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
in connection with Owner's development, operation and use of the Property (collectively,
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"Actions"). The City shall not disclose information and documents to the Federal
Government or State Government, its officers, or agents regarding any party to this
STATUTORY AGREEMENT absent a grand jury subpoena, civil or administrative
subpoena, warrant, discovery request, summons, court order or similar process
authorized under law hereinafter called "Governmental Notice". If any Action is brought
by either the Federal or State Government, City shall immediately notify Owner of the
nature of the Claim including all correspondence or documents submitted to the City.
Prior to responding to the Governmental Notice, City shall provide Owner ten (10) days
from the date of such notice subpoena or the like to serve and obtain on the City a
protective order, or the like, from a court of competent jurisdiction.
9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or modification is consistent with the intent and purposes of this STATUTORY
AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or
in any way limit City's rights under this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly contained herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
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court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein, are essential elements
of this STATUTORY AGREEMENT and the City would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at the. City's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever. The foregoing notwithstanding, the
development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential
elements of this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Owner's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel in the
negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect' any construction or interpretation of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, .and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint ventureor any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure bya party
to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms
of this STATUTORY AGREEMENT thereafter.
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11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
11.9 This STATUTORY AGREEMENT when signed and executed by Owner and
the Mayor of Baldwin Park supercedes and renders null and void that certain non -
statutory municipal Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
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STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto.
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or.her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter and bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
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mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
claim that the terms in this STATUTORY AGREEMENT constitute an abuse of the police
power, violate substantive due process, deny equal protection of the laws, effect a taking
of property without payment of just compensation, and/or impose an unlawful tax.
11.20 [RESERVED]
11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply.with all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of.BPMC.
11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits and/or
licenses are attached hereto and incorporated herein by this reference.
11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
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IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK
By:
Manual Lozano, Mayor
ATTEST:
JENOME RESEARCH
By:
Edward Avakyan
CEO
APPROVED AS TO FORM:
By:
City Clerk By:
APPROVED AS TO FORM:
By:
Robert N. Tafoya,
City Attorney
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Legal Counsel for
Jenome Research
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
"I"
EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
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ITEM: B (Baldwin Park Take Corp.)
ATTACHMENT #2 DA 18-02
BALDWIN PARK TALE CORP.
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-02
Location 14551 Joanbridge St. APN: 8414-006-062
Zoning of Subject Location I, Industrial
Principal Names Lih Ping HenryLiou
Company Name Baldwin Park TALE Corp.
Term of Development Fifteen (15) years from 12/29/2017
Agreement
June 30 and December 31 for Year #1
Payment Schedule Quarterly for Years #2 through #15—Four equal
payments.
Year #1--$220,000
Years #2 and #3--$275,000
Payment Amount Years #4 and #5--$330,000—The Mitigation Fee is
subject to reassessment by the City every five (5)
Floor Area of Buildings 11,400 s.f per City Records.
Employee Requirements At least 20% of the Project's workforce shall consist
of residents of the City.
VICINITY MAP
CASE NUMBER: DA 18-02
LOCATION: 14551 Joanbridge Street
DATE: April 12, 2018
DA 18-02
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I, Industrial Zone, it is anticipated that the use of the
property is consistent with the other light industrial uses within the area.
The adoption of cannabis cultivation and manufacturing activities is also
consistent with Goal 1.0 of the City's Economic development Element in
the General Plan in that the City encourages and facilitates activities that
expand the City's revenue base. Furthermore, Goal 6.0 of the same
element encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement requires
that a minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I, Industrial Zone surrounded by
lighter industrial uses. The use exceeds the distance requirement of fifty
(50) feet between cannabis uses and the closest residential zone;
furthermore, pursuant to Section 127.07.E.1 of the City's Municipal Code,
the cannabis use is not nearby any sensitive uses such as schools, day
care centers, parks or youth centers.
As a community benefit, Baldwin Park TALE Corp is proposing to
contribute 1% of it's gross revenue to nonprofit community benefit
DA 18-02
programs in the City of Baldwin Park. Donating to school science
programs and programs that benefit elder care are important to the
Applicant. Baldwin Park TALE Corp. also intends to exceed the 20%
requirement of Baldwin Park Resident hiring to 50%.
A comprehensive security plan was provided which addresses security of
the facility from all angles, thereby reducing the potential for any negative
impacts from the facility on the neighborhood and the city.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1411
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
BALDWIN PARK TALE CORP. FOR THE
CULTIVATION AND/OR MANUFACTURING OF
CANNABIS AT THE REAL PROPERTY LOCATED AT
14551 JOANBRIDGE STREET (APN: 8414-006-002)
WITHIN THE CITY OF BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code §§
65864 - 65869.5.
Ordinance 1411
Page 2
WHEREAS, as required by law, the City Council gave first reading to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore each of the
locations is proposed within an existing building.
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I, Industrial Zone, it is anticipated that
the use of the property is consistent with the other light industrial
uses within the area. The adoption of cannabis cultivation and
manufacturing activities is also consistent with Goal 1.0 of the City's
Economic development Element in the General Plan in that the City
encourages and facilitates activities that expand the City's revenue
base. Furthermore, Goal 6.0 of the same element encourages the
expansion of the City's diverse industrial base. Policy 6.5 of Goal
6.0 encourages an on-going campaign with local businesses to hire
local residents. This Development Agreement requires that a
minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances)
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
Ordinance 1411
Page 3
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general
area and City as a whole as it is located within the I, Industrial Zone
surrounded by lighter industrial uses. The use exceeds the distance
requirement of fifty (50) feet between cannabis uses and the closest
residential zone; furthermore, pursuant to Section 127.07.E.1 of the
City's Municipal Code, the cannabis use is not nearby any sensitive'
uses such as schools, day care centers, parks or youth centers.
As a community benefit, Baldwin Park TALE Corp is proposing to
contribute 1% of its gross revenue to nonprofit community benefit
programs in the City of Baldwin Park. Donating to school science
programs and programs that benefit elder care are important to the
Applicant. Baldwin Park TALE Corp. also intends to exceed the 20%
requirement of Baldwin Park Resident hiring to 50%.
A comprehensive security plan was provided which addresses
security of the facility from all angles, thereby reducing the potential
for any negative impacts from the facility on the neighborhood and
the city.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full force and
operation from and after thirty (30) days after its final reading and adoption.
PASSED AND APPROVED ON THE _ day of , 2018
MANUEL LOZANO, MAYOR
Ordinance 1411
Page 4
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a special meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1410 was duly approved and adopted at a regular
meeting of the City Council on , 2018 by the following vote:
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND BALDWIN PARK TALE CORP
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("STATUTORY
AGREEMENT") is intended to replace the previous non -statutory municipal Development
Agreement, and is dated April , 2018 for references purposes only and is entered into
between (i) the City of Baldwin Park ("City"), a California municipal corporation, and
(ii) Baldwin Park TALE Corp, a California non-profit mutual benefit corporation ("Owner").
This STATUTORY AGREEMENT shall become effective on the Effective Date defined in
Section 3.1.11 below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and Baldwin Park TALE Corp. previously entered into
a non -statutory municipal Development Agreement that was not intended to be a
Government Code Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statute Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be a Statutory Development Agreement under and
through Government Code Section 65864 et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code lection
65864 et seq. to enter into binding statutory development agreements with persons
having legal or equitable interests in real property for the development of such property;
and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture medical and adult use cannabis in September
2017; and at that time the City determined that the uses authorized in this STATUTORY
AGREEMENT were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of various entitlements, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
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2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map and the Baldwin Park Municipal Code as of the Agreement
Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements for notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or Property, ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Manufacturing and
Cultivation Facility pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127
and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture cannabis and cannabis related products at its facility or facilities up to 22,000
square feet.
2.14 WHEREAS, the City entered into a Development Agreement with Rukli, Inc.
to be the exclusive distributor of cannabis and cannabis related products in the- City of
Baldwin Park. The City is entering into development agreements with owners for permits
for cultivation and manufacturing of cannabis and cannabis related products in the City of
Baldwin Park. The City prohibits the sale of cannabis and cannabis related products within
the City of Baldwin Park so the cannabis and cannabis related products must be
distributed to and sold in cities where it is legal to do so. Rukli, Inc. shall be the exclusive
distributor for the cultivation and/or manufacturing permit holders within the City of
Baldwin Park and City conditions the cultivation and/or manufacturing permits on Rukli,
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Inc. being the exclusive distributor for any permit issued by Baldwin Park for cultivation or
manufacturing.
ARTICLE 3. GENERAL TERMS.
3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows:
3.1.1 "Agreement" means this STATUTORY AGREEMENT pursuant to
Government Code Section 65864 et seq.
corporation.
3.1.2 "City" means the City of Baldwin Park, a California municipal
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" If applicable, means all other entitlements
for the Development of the Property, including any and all conditions of approval, subject
to.approval or issuance by the City in connection with Development of the Property.
"Development Approvals" also include both the Existing Development Approvals and the
Subsequent Development Approvals approved or issued by the City that are consistent
with this STATUTORY AGREEMENT.
3.1.7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code.
3.1.9 "Effective Date" means the day this STATUTORY AGREEMENT is
approved and adopted by the Baldwin Park City Council and signed by the Mayor of
Baldwin Park or his designee.
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved or issued prior to or on the Effective Date. Existing
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Development Approvals include the approvals set forth in Section 3.1.6 and all other
approvals which are a matter of public record prior to or on the Effective Date.
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
3.1.12 "Land Use Regulations" If and where applicable means all
ordinances, resolutions and codes adopted by the City governing the development and
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable ' to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.14 "Owner" means Baldwin Park TALE Corp, a California non-profit
mutual benefit corporation.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City.
3.1.16 "Project" If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, the application, any and all entitlements, licenses, and permits
related to the Project.
3.1.17 "Property" means the real property described on in Owner's
application and incorporated herein by this reference. Owner may modify the location or
locations or add locations to the Property subject to City approval and all applicable
zoning and distance requirements.
3.1.18 "Reasonable" means using due diligence to accomplish a stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives of the
STATUTORY AGREEMENT.
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3.1.19 "Reservations of Authority" means the rights and authority excepted
from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.20 "Space or Canopy Space" shall mean any space or ground, floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing and/or harvesting
phases, including without limitation any space used for activities such as growing,
planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering,
irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used
for storing any cannabis, no matter where such storage may take place or such storage
space may be located.
3.1.21 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times and in
such sequences as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.22 "Subsequent Land Use Regulations" If applicable means any. Land
Use Regulations defined in Section 3.1.12 that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents are attached to and, by this
reference, are made part of this STATUTORY AGREEMENT:
No. 1 — Legal Description of the Property.
No. 2 — Map showing Property and its location.
No. 3 — Application.
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is "hereby
Made subject to this STATUTORY AGREEMENT. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of the Property is hereby
authorized and shall, except as otherwise provided in this STATUTORY AGREEMENT,
be carried out only in accordance with the terms of this STATUTORY AGREEMENT and
the Development Plan, if any. In the event of conflict or uncertainty between this
STATUTORY AGREEMENT and the Development Plan, the provisions of this
STATUTORY AGREEMENT shall control.
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3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of 8414-
006-062 and is more particularly described in the application and document "No. 1" in
Section 3.2 and incorporated herein.
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
expressly stated in this STATUTORY AGREEMENT to survive termination without the
need of further documentation from the parties hereto. The STATUTORY
AGREEMENT's Fee is subject to renegotiation afterthe first term, and every five year term
thereafter.
3.5.1 Term Extension. This STATUTORY AGREEMENT may only be
extended by mutual agreement of City and Owner in writing and signed by Owner and
the Mayor of Baldwin Park. If the Mayor of Baldwin Park does not sign the agreement or
renegotiated agreement any such agreement is null and void.
3.6 Automatic Termination. This STATUTORY AGREEMENT, shall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY AGREEMENT as set
forth in Section 3.5;
(ii) The entry of a final judgment (or a decision on any appeal therefrom)
voiding the City's General Plan or any element thereof, which judgment or decision would
preclude development of the Project, but only if the City is unable to cure such defect in
the General Plan or element within one hundred and eighty (180) days from the later of
entry of final judgment or decision on appeal.
(iii) Failure to timely pay the Fee or Fees. Failure to timely pay the
$50,000 towards the policy salary or benefits. Failure to pay any fees due to the City
under this STATUTORY AGREEMENT.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements and permits
approved for the.Owner and/or the Property. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to any default in the performance of the provisions of this STATUTORY AGREEMENT
which has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
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3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
(iii) on the date of personal delivery shown in the records of the
delivery company after delivery to the recipient named below; or
(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: Lih Ping Henry Liou
911 Mariner St.,
Brea, CA 92821
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual, receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's cost to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
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process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property with a commercial cannabis facility in accordance
with and to the extent of the Development Plan and/or application. The Property shall
remain subject to all Subsequent Development Approvals required to complete the
Project as contemplated by the Development Plan and/or application.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed buildings,
and the design, improvement, occupancy and construction standards and specifications
applicable to development of the Property shall be the Development Plan and/or
application. Provided, however, that in approving tentative subdivision maps, the City
may impose ordinary and necessary dedications for rights-of-way or easements for public
access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the Project
or Development Approvals may be appropriate and mutually desirable. The City shall act
on such applications, if any, in accordance with the Existing Land Use Regulations,
subject to the Reservations of Authority, or except as otherwise provided by this
STATUTORY AGREEMENT. If approved, any such change in the Existing Development
Approvals shall be considered an additional Existing Development Approval.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City.
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(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new development
projects of the same uses within the City; and
(v) Regulations that do not conflict with the Development Plan. The term
"do not conflict" means new rules, regulations, and policies which: (a) do not modify the
Development Plan, including, without limitation, the permitted land uses, the density or
intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying or
conditionally approving any Subsequent Development applications on the basis of such
subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
reasonably cooperate with other public agencies processing Development Approvals for
the Project.
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4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term
of any tentative subdivision map shall be in effect for a period of fifteen (15) years, and
may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within one (1) year from the
Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means the
issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns. The City has
the power and authority to examine such books and records at any reasonable time,
including but not limited to, during normal business hours. If the City wishes to inspect
the areas of the Property where the cannabis is being cultivated or manufactured, City
may do so at any time with no prior notice to Owner. In addition, City agrees that all of
its employees or agents which enter the cultivation, manufacturing, and curing areas shall
follow all of the policies and guidelines imposed on Owner's employees, including without
limitation, the wearing of any clothing or equipment to insure that no pests or impurities
shall enter the cultivation and curing areas.
ARTICLES. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project.
5.2 For the first year, Owner will pay the City a total of $220,000 as a Fee. This
fee is calculated based on $10.00 a square foot of permit space and a permit which allows
up to 22,000 sq. feet, among other factors.
5.3 In year two and year three, the Fee will increase to $12.50 per sq. foot for
a total of $275,000 per year, among other factors.
5.4 At the beginning of year four and year five, Owner will pay a Fee of.$15.00
per sq. foot for a total of $330,000 per year, among other factors.
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5.5 The Fee schedule is as follows: The first Fee payment is due at the close
of the second quarter. Therefore, the first payment will be due on the last day of June
2018, the second and last payment for the first year is due on the last day of December
2018. For years 2 through 15, the Fee schedule is as follows: divide the total Fee for the
respective year into four and make four equal payments due at the end of each quarter
of the respective year. If Owner and City cannot agree to a new Fee or Fees by December
22, 2022, this STATUTORY AGREEMENT will automatically terminate on December 23,
2022.
5.6 The Fee is subject to reassessment by the City every five years. At the end
of year five, the City will set a new Mitigation Fee which will be applied in years 6 through
10. At the end of year 10, the City will set new Fee which will be applied in years 11
through 15. No one factor is dispositive in the City's determination of the new Fee. The
Cannabis permit will expire at the close of the 15th year and will require the Owner to
reapply with the City for a new permit.
5.7 Further, Owner will pay a yearly payment of $50,000 each year to the City
that can be used to mitigate the impact of the cannabis business on the City and its
resources which includes but is not limited to, to use to pay a part of a police officer's
salary and/or benefits. This $50,000 amount will be due at the time the permit is issued.
Subsequent annual payments will be due on the permit issuance anniversary date. This
payment is due within thirty (30) days of issuance of the permit and thereafter on the
anniversary of the issuance of the permit.
5.8 Jobs and Wage Creation.
5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the City or
who employ a significant number of City residents. At least 20 percent of the Project's
workforce shall consist of residents of the City. Job announcements shall be posted at City
Hall, along with proof that the job announcements were advertised in at least two
newspapers published, printed or distributed in the City and on various social media sites
accessible to the general public. In addition, Owner shall make a good faith effort to advertise
job announcements at local job fairs, on local radio
5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses and all
documents evidencing compliance with state and local law. As such, upon issuance of
its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the
City for any associated costs with processing the Project, as detailed above and
reimbursing the City for its actual costs incurred in drafting and processing this
STATUTORY AGREEMENT. Owner will not be liable for the City's actual costs incurred
in processing future Development Approval applications. City acknowledges and agrees
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that this payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 Transportation of Cannabis. All pick ups and drop offs of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity, arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. During
the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council may automatically terminate this
STATUTORY AGREEMENT notwithstanding any other provision of this STATUTORY
AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT and impose
such conditions as are reasonably necessary to protect the interests of the City. The
decision of the City Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special
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review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not lipble for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City would
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings.
In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
or to any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest, if successors in interest are
permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof,
not to sue for damages or claim any damages:
(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application or request for a permit for cultivation, manufacturing and/or
distribution or interpretation or effect of the provisions of this STATUTORY AGREEMENT.
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Owner hereby agrees to waive and/or release the City of Baldwin Park for any claim or
claims or cause of action, not specifically and expressly reserved herein, which. Owner
may have at the time of execution of this STATUTORY AGREEMENT relating to any
application to the City of Baldwin Park including but not limited to, any application for any
type of distribution, cultivation or manufacturing permit, any application for any
distribution, cultivation or manufacturing rights, or any application for any distribution,
cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTORY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:.
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged.
Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
shall modify or abridge any defenses or immunities available to the City and its employees
pursuant to the Government Tort Liability Act and all other applicable statutes and
decisional law.
Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8.1, Section 8.2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money damages and
remedies at law are inadequate, and specific performance and other non -monetary relief
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are particularly, appropriate remedies for the enforcement of this STATUTORY
AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Section 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of .this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of Agreement for Default of the City Owner may terminate this
STATUTORY AGREEMENT only in the event of a default by the City in the performance
of a material term of this STATUTORY AGREEMENT and only after providing written
notice to the City of default setting forth the nature of the default and the actions, if any,
required by the City to cure such default and, where the default can be cured, the City
has failed to take such actions and cure such default within sixty (60) days after the
effective date of such notice or, in the event that such default cannot be cured within such
sixty (60) day period but can be cured within a longer time, has failed to commence the
actions necessary to cure such default within such sixty (60) day period and to diligently
proceed to complete such actions and cure such default.
8.4 Attorneys' Fees and Costs. In any action or proceeding between the City
and Owner brought to interpret or enforce this STATUTORY AGREEMENT, or which in
any way arises out of the existence of this STATUTORY AGREEMENT or is based upon
any term or provision contained herein, the "prevailing party" in such action or proceeding
shall be entitled to recover from the non -prevailing party, in addition to all other relief to
which the prevailing party may be entitled pursuant to this STATUTORY AGREEMENT,
the prevailing party's reasonable attorneys' fees and litigation costs, in an amount to be
determined by the court. The prevailing party shall be determined by the court in
accordance with California Code of Civil Procedure Section 1032. Fees and costs
recoverable pursuant to this Section 9.4 include those incurred during any appeal from
an underlying judgment and in the enforcement of any judgment rendered in any such
action or proceeding.
8.5 Owner Default. No building permit shall be issued or building, permit
application accepted for any structure on the Property after Owner is determined by the
City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
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this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
as the result of a judicial determination that the General Plan, or portions thereof, are
invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that the STATUTORY AGREEMENT or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees), which the City and its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the environmental impact report, mitigated negative
declaration or negative declaration, as the case may be, prepared in connection with the
development of the Property; and (iii) the proceedings or procedure undertaken in
connection with the adoption or approval of any permit or any of the above. In the event
of any legal or equitable action or other proceeding instituted by anyone against the City
or its City Council, any third party (including a governmental entity or official) challenging
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the validity of any provision of this STATUTORY AGREEMENT or procedure upon which
the permit was issued, or any portion thereof as set forth herein, the parties shall mutually
cooperate with each other in defense of said action or proceeding. Notwithstanding the
above, the City, at is sole option, may tender to Owner and Owner agrees to accept any
such tender of the complete defense of any third party challenge as described herein. In
the event the City elects to contract with special counsel to provide for such a defense,
the City may do so in its sole discretion and Owner will be required to pay the defense
costs of the City as the costs are incurred. Owner agrees to pay any and all attorney's
fees or retainer regarding the selection of counsel, and Owner shall pay all costs and all
attorneys' fees related to retention of such counsel.
9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers, agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9A do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify, any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
settlement offer, City shall notify Owner of the offer and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the.City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
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9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
in connection with Owner's development, operation and use of the Property (collectively,
"Actions"). The City shall not disclose information and documents to the Federal
Government or State Government, its officers, or agents regarding any party to this
agreement absent a grand jury subpoena, civil or administrative subpoena, warrant,
discovery request, summons, court order or similar process authorized under law
hereinafter called "Governmental Notice". If any Action is brought by either the Federal
or State Government, City shall immediately notify Owner of the nature of the Claim
including all correspondence or documents submitted to the City. Prior to responding to
the Governmental Notice, City shall provide Owner ten (10) days from the date of such
notice subpoena or the like to serve and obtain on the City a protective order, or the like,
from a court of competent jurisdiction.
9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or modification is consistent with the intent and purposes of this STATUTORY
AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or
in any way limit City's rights under this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly contained herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
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statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein, are essential elements
of this STATUTORY AGREEMENT and the City would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at the City's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever. The foregoing notwithstanding, the
development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential
elements of this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Owner's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to'achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel in the
negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation -of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any:of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure by a party
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to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms
of this STATUTORY AGREEMENT thereafter.
11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
11.9 This STATUTORY AGREEMENT when signed and executed by Owner and
the Mayor of Baldwin Park supercedes and renders null and void that certain non -
statutory municipal Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and,agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
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and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto.
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter and bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
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(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
claim that the terms in this STATUTORY AGREEMENT constitute an abuse of the police
power, violate substantive due process, deny equal protection of the laws, effect a taking
of .property without payment of just compensation, and/or impose an unlawful tax.
11.20 [RESERVED]
11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply with all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of BPMC.
11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits and/or
licenses are attached hereto and incorporated herein by this reference.
11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
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IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK
By:
Manuel Lozano, Mayor
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
Robert N. Tafoya,
City Attorney
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Baldwin Park TALE Corp
By:
President
APPROVED AS TO FORM:
By:
Legai counsei Tor
Baldwin Park TALE Corp
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
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EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
-1-
ITEM: C (Rukli, Inc.)
ATTACHMENT #3 DA 18-03
RUKLI, INC.
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-03
Location
14824 Ramona Blvd. APN 8437-014-014 & 4150
Puente Ave. APN 8437-022-008
Zoning of Subject Locations
I -C, Industrial Commercial (both)
Principal Names
Shaun Bershatski
Company Names
RUKLI, Inc.
Term of Development
Perpetuity as long as owner or successor in interest to
Agreement
the property complies with obligations under this
agreement.
Payment Schedule
July 1 and December 31
Year #1--$220,000; or $15,714.29 per cultivation permit
issued.
Years #2 and #3--$275,000; or $19,642.86 per
cultivation permit issued
Payment Amount
Years #4 and #5--$330,000; or $23,571.43 per
cultivation permit issued
Beginning in Year #4 the Mitigation Fee shall be
increased annually based on increases in the Consumer
Price Index.
Floor Area of Buildings
320 s.f. and 17,200 s.f. per City Records, respectively
At least 30% of the Project's workforce shall consist of
Employee Requirements
residents of the City. Additionally owner will adhere to
the labor standards agreed upon with the United Food
and Commercial Workers UFCW Local 1428.
Em
VICINITY MAP
CASE NUMBER: DA 18-03
LOCATION: 14824 Ramona Boulevard
DATE: April 12, 2018
VICINITY MAP
CASE NUMBER: DA 18-03
LOCATION: 4150 Puente Avenue
DATE: April 12, 2018
DA 18-03
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because both of the locations of the cannabis distribution business are
located within the I -C, Industrial Commercial Zone, it is anticipated that the
use of the property is consistent with the other light industrial uses within
the area. The adoption of cannabis cultivation and manufacturing
activities is also consistent with Goal 1.0 of the City's Economic
development Element in the General Plan in that the City encourages and
facilitates activities that expand the City's revenue base. Furthermore,
Goal 6.0 of the same element encourages the expansion of the City's
diverse industrial base. Policy 6.5 of Goal 6.0 encourages an on-going
campaign with local businesses to hire local residents. This Development
Agreement requires that a minimum of 40% of the businesses workforce
shall consist of Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I -C, Industrial Commercial Zone
surrounded by lighter industrial uses. The use exceeds the distance
requirement of fifty (50) feet between cannabis uses and the closest
residential zone; furthermore, pursuant to Section 127.07.E.1 of the City's
Municipal Code, the cannabis use is not nearby any sensitive uses such
as schools, day care centers, parks or youth centers.
The distribution facility is the hub of all RUKLI Activity and as such security
is this highest priority. Rukli, Inc. intends to utilize the best available
DA. 18-03
SOP's and technologies to minimize security risks, thereby minimizing any
potential for negative impacts upon the surrounding area and Citywide.
Both interior and exterior security will be provided, including video
surveillance, sensor cables, and motion detection.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1412
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
RUKLI, INC. FOR THE CULTIVATION AND/OR
MANUFACTURING OF CANNABIS AT THE REAL
PROPERTY LOCATED AT 4150 PUENTE AVENUE
(APN: 8437-014-014 and 8437-022-008) WITHIN THE
CITY OF BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code §§
65864 - 65869:5.
Ordinance 1412
Page 2
WHEREAS, as required by law, the City Council gave first reading to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore each of the
locations is proposed within an existing building.
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because both of the locations of the cannabis distribution business
are located within the I -C, Industrial Commercial Zone, it is
anticipated that the use of the property is consistent with the other
light industrial uses within the area. The adoption of cannabis
cultivation and manufacturing activities is also consistent with Goal
1.0 of the City's Economic development Element in the General Plan
in that the City encourages and facilitates activities that expand the
City's revenue base. Furthermore, Goal 6.0 of the same element
encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement
requires that a minimum of 20% of the businesses workforce shall
consist of Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances)
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Ordinance 1412
Page 3
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general
area and City as a whole as it is located within the I -C, Industrial
Commercial Zone surrounded by lighter industrial uses. The use
exceeds the distance requirement of fifty (50) feet between cannabis
uses and the closest residential zone; furthermore, pursuant to
Section 127.07.E.1 of the City's Municipal Code, the cannabis use is
not nearby any sensitive uses such as schools, day care centers,
parks or youth centers.
The distribution facility is the hub of all RUKLI Activity and as such
security is this highest priority. Rukli, Inc. intends to utilize the best
available SOP's and technologies to minimize security risks, thereby
minimizing any potential for negative impacts upon the surrounding
area and Citywide. Both interior and exterior security will be
provided, including video surveillance, sensor cables, and motion
detection.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 1.1 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full forceand
operation from and after thirty (30) days after its final reading and adoption.
PASSED AND APPROVED ON THE _ day of , 2018
MANUEL LOZANO, MAYOR
Ordinance 1412
Page 4
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1412 was duly approved and adopted at a regular
meeting of the City Council on , 2018 by the following vote:"
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND RUKLI, INC.
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("Agreement") is
intended to replace the previous non -statutory municipal Development Agreement, and
is dated April , 2018 for references purposes only and is entered into between (i) the
City of Baldwin Park ("City"), a California municipal corporation, and (ii) RUKLI, Inc., a
California Corporation ("Owner"). This Agreement shall become effective on the Effective
Date defined in Section 3.1.9 below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and Rukli, Inc. previously entered into a non -statutory
municipal Development Agreement that was not intended to be a Government Code
Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be Statutory Development Agreement under and
through Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code Section
65864 et seq. to enter into binding statutory development agreements with persons
having legal or equitable interests in real property for the development of such property;
and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to be the only distributor allowed to obtain a City of Baldwin Park permit to
distribute and transport medical and adult use cannabis in September 2017; and at that
time the City determined that the uses authorized in this STATUTORY AGREEMENT
were lawfully permitted and authorized to occur on Owner's Property, subject to Owner's
acquisition of various entitlements, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
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2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map as of the Agreement Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements for notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or the Property,
ensure progressive installation of necessary improvements, and provide for public
services appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Distribution Facility
pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127 and all applicable
state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to be the only
business to obtain distribution and transportation permits issued by the City of Baldwin
Park to distribute cannabis and cannabis related products.
2.14 WHEREAS, City is entering into development agreements with owners for
permits for cultivation and manufacturing of cannabis in the City of Baldwin Park.
Fourteen cultivation/manufacturing permits have thus far been authorized, City prohibits
the sale of cannabis within the City of Baldwin Park so the cannabis must be
transported to and sold in cities where it is legal to do so. Owner shall be the exclusive
distributor and transporter for the cultivation/manufacturing permit holders within the
City of Baldwin Park and City shall condition the cultivation/manufacturing permits on
Owner being the exclusive distributor.
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ARTICLE 3. GENERAL TERMS.
3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows:
3.1.1 "Agreement" means this Development Agreement pursuant to
Government Code Section 65864 et seq.
corporation.
3.1.2 "City" means the City of Baldwin Park, a California municipal
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 INTENTIONALLY BLANK
3.1.5 "Development" In the event that the property does not have a
building and needs to be developed the building currently on site will be further
developed, then "Development" includes grading, construction or installation of public and
private facilities and the right to maintain, repair or reconstruct any private building,
structure, improvement or facility after the construction and completion thereof;
provided, however, that such maintenance, repair, or reconstruction take place within
the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" means all permits, licenses, and/or other
entitlements for the Development of the Property, including any and all conditions of
approval, subject to approval or issuance by the City in connection with Development of
the Property.
3.1.7 "Development Approvals" specifically include this STATUTORY
AGREEMENT. "Development Approvals" also include both the Existing Development
Approvals, if any, and the Subsequent Development Approvals, if any, approved or issued
by the City that are consistent with this STATUTORY AGREEMENT.
3.1.8 "Development Plan" means the Existing Development Approvals, if
any, and the Existing Land Use Regulations applicable to development of the Property
for the Project, as modified and supplemented by Subsequent Development Approvals,
if any.
3.1.9 "BPMC" means the City of Baldwin Park Municipal Code.
3.1.10 "Effective Date" means the day this STATUTORY AGREEMENT is
approved and adopted signed by the Baldwin Park City Council and signed by the Mayor
of Baldwin Park or his designee.
3.1.11 "Existing Development Approvals" If any, it means all Development
Approvals approved or issued prior to or on the Effective Date. Existing Development
Approvals, if any, include the approvals set forth in Section 3.1.6 and all other approvals
which are a matter of public record prior to or on the Effective Date.
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3.1.12 "Existing Land Use Regulations" means all Land Use Regulations in
effect on the Effective Date. Existing Land Use Regulations include all regulations that
are a matter of public record on the Effective Date as they may be modified by the
Existing Development Approvals.
3.1.13 "Land Use Regulations" means all ordinances, resolutions and
codes adopted by the City governing the development and use of land, including the
permitted use of land, the density or intensity of use, subdivision requirements, the
maximum height and size of proposed buildings, the provisions for reservation or
Dedication of land for public purposes, and the design, improvement and construction
and initial occupancy standards and specifications applicable to the Development of the
Property.
3.1.14 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.15 "Owner" means RUKLI, Inc. a California S Corporation.
3.1.16 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal
permits, building permits, demolition permits, grading permits, and other permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and
inspection and which are in force and effect on a general basis at such time as said
approvals, permits, review, inspection or entitlements are granted or conducted by the
City.
3.1.17 "Project" means the Development of the Property contemplated by
the Development Plan, as such Development Plan may be further defined, enhanced or
modified pursuant to the provisions of this STATUTORY AGREEMENT. The Project shall
consist of this STATUTORY AGREEMENT, the Development Plans if any, the
application, any and all entitlements, licenses, and permits related to the Project.
3.1.18 "Property" means the real property described in Owner's application
and incorporated herein by this reference. Owner may modify the location or locations or
add locations to the Property subject to City's written approval and all applicable zoning
and distance requirements.
3.1.20.1 "Reasonable" means using due diligence to accomplish a stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives of the
STATUTORY AGREEMENT.
3.1.19 "Reservations of Authority" means the rights and authority
excepted from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
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3.1.20 "Subsequent Development Approvals" If any, it means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals, if any occur, include, but are not
limited to, all excavation, grading, building, construction, demolition, encroachment or
street improvement permits, occupancy certificates, utility connection authorizations, or
other permits or approvals necessary, convenient or appropriate for the grading,
construction, marketing, use and occupancy of the Project within the Property at such
times and in such sequences as Owner may choose consistent with the Development
Plan and this STATUTORY AGREEMENT.
3.1.21 "Space" If applicable, shall mean any space or ground, floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing and harvesting phases,
including without limitation any space used for activities such as growing, planting,
seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering, irrigating,
topping, pinching, cropping, curing or drying marijuana or any such space used for storing
any cannabis, no matter where such storage may take place or such storage space may
be located.
3.1.22 "Subsequent Land Use Regulations" means, any Land Use
Regulations defined in Section 3.1.12that are adopted and effective after the Effective
Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents are attached to and, by this
reference, are made part of this STATUTORY AGREEMENT:
No. 1 — Legal Description of the Property.
No. 2 — Map showing Property and its location.
No. 3 — Application.
3.3 Binding Effect of STATUTORY AGREEMENT. The Permit, and/or Project
and/or Property is hereby made subject expressly to this STATUTORY AGREEMENT.
Subject to Owner's receipt of all Development Approvals, if any, relative thereto, the
Development of the Property is hereby authorized and shall, except as otherwise provided
in this STATUTORY AGREEMENT, be carried out only in accordance with the terms of
this STATUTORY AGREEMENT and the Development Plan, if any. In the event of
conflict or uncertainty between this STATUTORY AGREEMENT and the Development
Plan, the provisions of this STATUTORY AGREEMENT shall control.
3.4 Ownership of Property. Owner represents and covenants that it has a
legal or equitable interest in the Property, which has an Assessor's Parcel Number _
and is more particularly described in the application and document "No. 1" in Section 3.2
and incorporated herein.
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3.5 Term. The initial term of this STATUTORY AGREEMENT shall be for forty-
nine (49) years commencing as of the Effective Date. Thereafter, the term of this
STATUTORY AGREEMENT shall automatically renew for successive ten (10) year terms
unless one party provides written notice to the other party at least ninety (90) days in
advance of the end of the then existing term that it does not wish to renew the term of this
STATUTORY AGREEMENT.
3.6 Automatic Termination. This STATUTORY AGREEMENT shall
automatically terminate upon the occurrence of any of the following events:
(i) The entry of a final judgment (or a decision on any appeal
therefrom) voiding the City's General Plan or any element thereof, which judgment or
decision would preclude a cannabis operation on the subject Property, but only if the
City is unable to cure such defect in the General Plan or element within one hundred
and eighty (180) days from the later of entry of final judgment or decision on appeal.
(ii) A change in State law prohibiting the business permitted
such as cultivation, manufacturing or distribution of cannabis products.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements approved for the
Property. Upon the termination of this STATUTORY AGREEMENT, no party shall have
any further right or obligation hereunder except with respect to any obligation to have
been performed prior to such termination, or with respect to any default in the
performance of the provisions of this STATUTORY AGREEMENT which has occurred
prior to such termination, or with respect to any obligations which are specifically and
expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
(iii) on the date of personal delivery shown in the records of the
delivery company after delivery to the recipient named below; or
(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
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postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: Sharone "Shaun" Bershatski
569 S. Williams Road.
Palm Springs, CA 92264
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or
an officer or representative of a party or to a different address, or both. Notices given
before actual receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's costs to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property with a commercial cannabis facility in accordance
with and to the extent of the Development Plan and/or application. The Property shall
remain subject to all Subsequent Development Approvals, if any, required to complete
the Project as contemplated by the Development Plan and/or application.
4.2 Effect of Agreement on Land Use Regulations. Except as otherwise
provided by this STATUTORY AGREEMENT, the rules, regulations and official policies
and conditions of approval governing permitted uses of the Property, the density and
intensity of use of the Property, the maximum height and size of proposed buildings, and
the design, improvement, occupancy and construction standards and specifications
applicable to development of the Property shall be the Development Plan and/or
application. Provided, however, that in approving tentative subdivision maps, the City
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may impose ordinary and necessary dedications for rights-of-way or easements for public
access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the
Project or Development Approvals may be appropriate and mutually desirable. The City
shall act on such applications, if any, in accordance with the Existing Land Use
Regulations, subject to the Reservations of Authority, or except as otherwise provided by
this STATUTORY AGREEMENT. If approved, any such change in the Existing
Development Approvals shall be considered an additional Existing Development
Approval.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or
actual costs to the City of processing applications for Development Approvals or for
monitoring compliance with any Development Approvals granted or issued, which fees
are charged to reimburse the City's lawful expenses attributable to such applications,
processing, permitting, review and inspection and which are in force and effect on a
general basis at such time as said approvals, permits, review, inspection or entitlement
are granted or conducted by the City.
(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals
and any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California
and subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new
development projects of the same uses within the City; and
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(v) Regulations that do not conflict with the Development Plan. The
term "do not conflict" means new rules, regulations, and policies which: (a) do not modify
the Development Plan, including, without limitation, the permitted land uses, the
density or intensity of use, the phasing or timing of Development of the Project, the
maximum height and size of proposed buildings on the Property, provisions for
Dedication of land for public purposes and Development Exactions, except as expressly
permitted elsewhere in this STATUTORY AGREEMENT, and standards for design,
development and construction of the Project; (b) do not prevent Owner from obtaining
any Subsequent Development Approvals, including, without limitation, all necessary
approvals, permits, certificates, and the like, at such dates and under such circumstances
as Owner would otherwise be entitled by the Development Plan; or (c) do not prevent
Owner from commencing, prosecuting, and finishing grading of the land, constructing
public and private improvements, and occupying the Property, or any portion thereof, all
at such dates and schedules as Owner would otherwise be entitled to do so by the
Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying
or conditionally approving any Subsequent Development applications on the basis of
such subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other
public agencies not within the control of the City possess authority to regulate aspects of
the development of the Property separately from or jointly with the City, and this
STATUTORY AGREEMENT does not limit the authority of such other public agencies.
The City shall reasonably cooperate with other public agencies processing Development
Approvals for the Project.
4.6 Tentative Subdivision Map and Development Approvals Lifespan. The
term of any tentative subdivision map shall be in effect for a period of fifteen (15) years,
and may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within. one (1) year from
the Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means
the issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and
all conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
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4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns. The City has
the power and authority to examine such books and records at any reasonable time,
including but not limited to, during normal business hours. If the City wishes to inspect
the areas of the Property, City may do so at any time with no prior notice to Owner.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by commensurate public benefits. Accordingly, the parties intend to provide
consideration to the public to balance the private benefits conferred on Owner by
providing more fully for the satisfaction of the public needs resulting from the Project.
5.2 The parties acknowledge and agree that the public's need for mitigation
and Owner's obligation only commences when the cultivation/manufacturing permit
holders commence their operations. Without the commencement of operations by the
cultivation/manufacturing permit holders, Owner has nothing to distribute and nothing on
which to assess fees.
5.3 For the first year, Owner will pay the City a maximum flat fee in the
amount of $220,000 as a Fee. The Fee shall be prorated based on the actual number
of the number of licensees that are actually operational and authorized
cultivation/manufacturing permit holders. For example, assuming Rukli is distributing for
the cities remaining 14 permit holders, then if only seven permit holders have commenced
cultivation/manufacturing, the Fee will be $110,000.
5.4 In year two and year three, Owner shall pay to the City a Fee of $275,000.
The proration as set forth in 5.3 shall apply.
5.5 At the beginning of year four and for year five, Owner will pay the City a Fee
of $330,000 for years four and five. The proration as set forth in 5.3 shall apply.
5.6 Starting in year four, the Fee shall be increased annually based on
increases in the Consumer Price Index.
5.7 The Fee schedule is as follows: the first payment for each year is due for
each year on or before July 1 of each year the permit is valid. Therefore, the first fee
payment for the first year will be due on July 1, 2018, the second Fee payment for the
first year is due on or before December 31, 2018. In years two through five, the Fee
payments are due on the same month and day of each respective year while the permit
is valid.
5.8 Further, Owner will pay a yearly payment of $50,000 to the City that can
be used to pay a part of a police officer's salary and/or benefits. This $50,000 amount
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will be due at the time the permit is issued. Subsequent annual payments will be due
on the permit issuance anniversary date.
5.9 Jobs and Wage Creation.
5.9.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts
to retain the services of qualified contractors and suppliers who are located in the City
or who employ a significant number of City residents. At least 30 percent of the
Project's workforce shall consist of residents of the City. In addition owner will adhere
to the labor standards agreed upon with the United Food and Commercial
Workers, (UFCW) Local 1428 related Labor Peace Agreement ie: industry prevailing
wages, along with recognized labor friendly health and welfare concessions. Job
announcements shall be posted at City Hall, along with proof that the job
announcements were advertised in at least two newspapers published, printed or
distributed in the City and on various social media sites accessible to the general public.
In addition, Owner shall make a good faith effort to advertise job announcements at local
job fairs, on local radio and through public agencies and organizations.
5.10 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses and all
documents evidencing compliance with state and local law. As such, Owner must
deposit $15,000 with the City for the purpose of reimbursing the City for any associated
costs with processing the Project, as detailed above and reimbursing the City for its
actual costs incurred in drafting and processing this STATUTORY AGREEMENT. Owner
will be liable for the City's actual costs incurred in processing future Development
Approval applications. City acknowledges and agrees that this payment is not merely a
deposit, but is a cap on the amount of the City's actual costs incurred in processing this
STATUTORY AGREEMENT.
ARTICLE 6. [RESERVED]
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. During
the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
7.2 Special Review. The City Council may order a special review of
compliance with this STATUTORY AGREEMENT at any time.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon
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substantial evidence, that Owner has not complied in good faith with the terms or
conditions of this STATUTORY AGREEMENT, the City Council may automatically
terminate this STATUTORY AGREEMENT notwithstanding any other provision of this
STATUTORY AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT
and impose such conditions as are reasonably necessary to protect the interests of the
City. The decision of the City Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special
review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated
with any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable
for costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City
would not have entered into this STATUTORY AGREEMENT if it were to be liable in
damages under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party not less than thirty (30) days' notice in writing specifying the nature of the alleged
default and the manner in which said default may be satisfactorily cured during any such
thirty (30) day period, the party charged shall not be considered in default for purposes of
termination or institution of legal proceedings. Notwithstanding the foregoing to the
contrary, if the alleged default is of such a nature that it cannot be cured within thirty
(30) days, the alleged defaulting party shall not be deemed in default as long as such
party commences to cure such default within such thirty (30) day period and thereafter
diligently prosecutes such cure to completion.
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In general, each of the parties hereto may pursue any remedy at law or equity
available for the breach of any provision of this STATUTORY AGREEMENT through any
state court, except that the City shall not be liable in monetary damages, unless expressly
provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
or to any successors in interest of Owner or mortgagee or lender, or to any other person,
and Owner covenants on behalf of itself and all successors in interest to the Property or
any portion thereof, not to sue for damages or claim any damages:
(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application or interpretation or effect of the provisions of this STATUTORY
AGREEMENT.
Nothing contained herein shall modify or abridge Owner's rights or remedies (including
its rights for damages, if any) resulting from the exercise by the City of its power of
eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing
herein shall modify or abridge any defenses or immunities available to the City and its
employees pursuant to the Government Tort Liability Act and all other applicable
statutes and decisional law.
Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8.1, Section 8.2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money damages
and remedies at law are inadequate, and specific performance and other non -monetary
relief are. particularly appropriate remedies for the enforcement of this STATUTORY
AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Section 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
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reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of STATUTORY AGREEMENT for Default of the City. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default.
8.4 Attorneys' Fees and Costs. In any action or proceeding between the City
and Owner brought to interpret or enforce this STATUTORY AGREEMENT, or which in
any way arises out of the existence of this STATUTORY AGREEMENT or is based upon
any term or provision contained herein, the "prevailing party" in such action or proceeding
shall be entitled to recover from the non -prevailing party, in addition to all other relief to
which the prevailing party may be entitled pursuant to this STATUTORY AGREEMENT,
the prevailing party's reasonable attorneys' fees and litigation costs, in an amount to be
determined by the court. The prevailing party shall be determined by the court in
accordance with California Code of Civil Procedure Section 1032. Fees and costs
recoverable pursuant to this Section 9.4 include those incurred during any appeal from
an underlying judgment and in the enforcement of any judgment rendered in any such
action or proceeding.
8.5 Owner Default. No building permit shall be issued or building permit
application accepted for any structure on the Property after Owner is determined by the
City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including but not limited to money or fees received by the City
hereunder. One example of a material default by Owner would be the failure to timely
pay the Mitigation fee or any other payment or fee required by the City under this
STATUTORY AGREEMENT or by virtue of any BPMC.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
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as the result of a judicial determination that the General Plan, or portions thereof, are
invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that any STATUTORY AGREEMENT or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury,
including death, as well as from claims for property damage which may arise from
Owner or Owner's contractors, subcontractors, agents, or employees operations under
this STATUTORY AGREEMENT, whether such operations be by Owner, or by any of
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, or by any one or more persons directly or indirectly employed
by, or acting as agent for Owner or any of Owner's contractors or subcontractors. Owner
agrees to and shall defend City and its elective and appointive boards, commissions,
officers, agents and employees from any suits or actions at law or in equity for damage
caused, or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City
and its agents, officers and employees against and from any and all liabilities, demands,
claims, actions, lawsuits, government claims or proceedings and costs and expenses
incidental thereto (including costs of defense, settlement and reasonable attorneys'
fees), which any or all of them may suffer, incur, be responsible for or pay out as a
result of or in connection with any challenge to the legality, validity or adequacy of any
of the following: (i) this STATUTORY AGREEMENT and the concurrent and subsequent
permits, licenses and entitlements approved for the Project or Property; (ii) the
environmental impact report, if any, mitigated negative declaration, if any, or negative
declaration, if any, as the case may be, prepared in connection with the development of
the Project or Property; and (iii) the proceedings undertaken in connection with the
adoption or approval of any of the above. In the event of any legal or equitable action or
other proceeding instituted by any party including but not limited to a third party (including
a governmental entity or official) challenging the validity of any provision of this
STATUTORY AGREEMENT or any portion thereof as set forth herein, the parties shall
mutually cooperate with each other in defense of said action or proceeding and Owner
shall pay all of City's legal fees for a lawyer of its choosing. Notwithstanding the above,
the City, at is sole option, may tender the complete defense of any third party challenge
as described herein. In the event the City elects to contract with special counsel to
provide for such a defense, the City shall at its sole discretion be permitted to select
special counsel to defend the City, and Owner shall pay all costs related to retention of
such counsel. However, the hourly fee of any special counsel selected by the City may
not be over $450.00 per hour.
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9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or
asserted, upon any act or omission of the Owner, its officers, agents, employees,
subcontractors, predecessors in interest, successors, assigns and independent
contractors, excepting any acts or omissions of City as successor to any portions of the
Property dedicated or transferred to City by Owner, for any violation of any federal, state
or local law, ordinance or regulation relating to industrial hygiene or to environmental
conditions on, under or about the Property, including, but not limited to, soil and
groundwater conditions, and Owner shall defend, at its expense, including attorneys'
fees, the City, its officers, agents and employees in any action based or asserted upon
any such alleged act or omission. The City may in its discretion participate in the
defense of any such claim, action or proceeding. The provisions of this Section 9.4 do
not apply to environmental conditions that predate Owner's ownership or control of the
Property or applicable portion; provided, however, that the foregoing limitation shall not
operate to bar, limit or modify any of Owner's statutory or equitable obligations as an
owner or seller of the Property.
9.5 INTENTIONALLY BLANK
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9,
the City shall not reject any reasonable good faith settlement. Before accepting any
such settlement offer, City shall notify Owner of the offer and provide Owner with a copy
of the offer. If Owner disagrees with the City's intention to accept the offer, prior to the
City's response to any offer, the parties shall meet and confer in order to attempt to
resolve the parties' differences. If the City does reject a reasonable, good faith
settlement that is acceptable to Owner, Owner may enter into a settlement of the action,
as it relates to Owner, and the City shall thereafter defend such action (including
appeals) at its own cost and be solely responsible for any judgments rendered in
connection with such action. This Section 9.6 applies exclusively to settlements
pertaining to monetary damages or damages which are remedial by the payment of
monetary compensation. Owner and the City expressly agree that this Section 9.6 does
not apply to any settlement that requires an exercise of the City's police powers, limits
the City's exercise of its police powers, or affects the conduct of the City's municipal
operations.
9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State
Government in connection with Owner's development, operation and use of the
Property (collectively, "Actions"). The City shall not disclose information and documents
to the Federal Government or State Government, its officers, or agents regarding any
party to this STATUTORY AGREEMENT absent a grand jury subpoena, civil or
administrative subpoena, warrant, discovery request, summons, court order or similar
process authorized under law hereinafter called "Governmental Notice". If any Action is
brought by either the Federal or State Government, City shall immediately notify Owner
of the nature of the Claim including all correspondence or documents submitted to the
City. Prior to responding to the Governmental Notice, City shall provide Owner ten
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(10) days from the date of such notice subpoena or the like to serve and obtain on the
City a protective order, or the like, from a court of competent jurisdiction. The City will
respond to all Public Records Act requests as required by state law and nothing in this
paragraph prevents the City from fulfilling its duties under state law regarding Public
Records Act requests.
9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges
that the lenders providing such financing may request certain interpretations and
modifications of this STATUTORY AGREEMENT and agrees upon request, from time to
time, to meet with Owner and representatives of such lenders to negotiate in good faith
any such request for interpretation or modification. The City will not unreasonably
withhold its consent to any such requested interpretation or modification provided such
interpretation or modification is consistent with the intent and purposes of this
STATUTORY AGREEMENT, provided, further, that any modifications of this
STATUTORY AGREEMENT are subject to the provisions of Section 10.5.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly contained herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein, are essential
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elements of this STATUTORY AGREEMENT and the City would not have entered into
this STATUTORY AGREEMENT but for such provisions, and therefore in the event that
any portion of such provisions are determined to be invalid, void or unenforceable, at the
City's option this entire STATUTORY AGREEMENT shall terminate and from that point
on be null and void and of no force and effect whatsoever. The foregoing notwithstanding,
the development rights set forth in Article 4 of this STATUTORY AGREEMENT are
essential elements of this STATUTORY AGREEMENT and Owner would not have
entered into this STATUTORY AGREEMENT but for such provisions, and therefore in the
event that any portion of such provisions are determined to be invalid, void or
unenforceable, at Owner's option this entire STATUTORY AGREEMENT shall terminate
and from that point on be null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel in the
negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other
form of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any of
the provisions of this STATUTORY AGREEMENT by the other party, or the failure by a
party to exercise its rights upon the default of the other party, shall not constitute a waiver
of such party's right to insist and demand strict compliance by the other party with the
terms of this STATUTORY AGREEMENT thereafter.
11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
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11.9 Force Majeure. If delays are caused by unforeseen events beyond the
control of Owner, such delays will entitle Owner to an extension of time as provided in
this Section and Article 7. Such unforeseen events ("Force Majeure") shall mean war,
insurrection, acts of God, local, state or national emergencies, third party litigation,
strikes and other labor difficulties beyond the party's control, any litigation filed by a third
party, any Action initiated by the Federal Government or State Government, or any
default by the City hereunder, which Force Majeure event substantially interferes with
the development or construction of the Project.
11.10 In the case of a Force Majeure event, any and all time periods referred to
in this STATUTORY AGREEMENT shall be extended for a period equal to any delay to
the Project caused by any such Force Majeure event; provided, however, that no such
time period shall be extended beyond a cumulative total of five (5) years.
Extensions of time, when granted, will be based upon the effect of delays on the
Project. They will not be granted for: (1) delays of three days or less or (2) for delays
due to Owner's inability to obtain financing with respect to the Development of the Project.
Owner shall in writing promptly notify Chief Executive Officer upon learning of
any such Force Majeure event. The Chief Executive Officer or his or her designee shall
ascertain the facts and the extent of the delay and his findings thereon shall be included
in Owner's annual monitoring report unless Owner disputes the findings and requests
that the period of delay be heard and determined as a part of the annual review process.
11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited party.
11.12 Successors in Interest. The burdens of this STATUTORY AGREEMENT
shall be binding upon, and the benefits of this STATUTORY AGREEMENT shall inure to,
all successors in interest to the parties to this STATUTORY AGREEMENT. All provisions
of this STATUTORY AGREEMENT shall be enforceable as equitable servitudes and
constitute covenants running with the land. Each covenant to do or refrain from doing
some act hereunder with regard to development of the Property:
Property;
(i) is for the benefit of and is a burden upon every portion of the
(ii) runs with the Property and each portion thereof; and
(iii) is binding upon each party and each successor in interest during
ownership of the Property or any portion thereof from and after recordation of this
STATUTORY AGREEMENT, it shall impute such notice to all persons as is afforded by
the recording laws of this State.
The burdens of the STATUTORY AGREEMENT shall be binding upon, and the benefits
of the STATUTORY AGREEMENT shall inure to all successors in interest to the parties
to this STATUTORY AGREEMENT.
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11.13 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.14 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.15 Project as a Private Undertaking. It is specifically understood and agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.16 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
11.17 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.18 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
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upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto.
11.19 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter and bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
11.20 Nexus/Reasonable Relationship Challenges. Owner consents to, and
waives any rights it may have now or in the future to challenge the legal validity of, the
conditions, requirements, policies or programs set forth in this STATUTORY
AGREEMENT including, without limitation, any claim that they constitute an abuse of the
police power, violate substantive due process, deny equal protection of the laws, effect a
taking of property without payment of just compensation, or impose an unlawful tax.
11.21 This STATUTORY AGREEMENT when signed and executed by Owner and
the Mayor of Baldwin Park supercedes and renders null and void that certain non -
statutory municipal Development Agreement executed on or about December 29, 2017.
11.22 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or Owners successors in interest, assigns, partners, or
anyone acting on behalf of Owner for any breach thereof. As such, the parties agree that
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in no event shall Owner, or Owners successors in interest, assigns, partners, or anyone
acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.23 Laws. Owner agrees to comply with all applicable state, regional, and
local laws, regulations, polices and rules. In addition, Owner further agrees to comply
with all issued entitlements, permits, licenses, including any and all applicable
development standards. Specifically, Owner agrees to comply with all applicable
provisions of BPMC.
11.24 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits and/or
licenses are attached hereto and incorporated herein by this reference.
11.25 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK RUKLI, INC.
By:
Manual Lozano, Mayor
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
Robert N. Tafoya,
City Attorney
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By:
President
APPROVED AS TO FORM:
By:
Legal Counsel for
RUKLI, INC.
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
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EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
-1-
ITEM: D (428 Cloverleaf, LLC)
ATTACHMENT #4 DA 18-04
428 CLOVERLEAF, LLC
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF' FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-04
13111 Spring St. APN 8535-023-051 & 428
Location Cloverleaf Dr. APN 8564-021-009 and 8564-021-
010
Zoning of Subject Locations I, Industrial and I -C, Industrial Commercial,
res ectivel
Principal Names Min Yong Huang David Sie rist, Esq.)
Company Names 428 Cloverleaf LLC
Term of Development Fifteen (15) years from 12/29/2017
Agreement
June 30 and December 31 for Year #1
Payment Schedule Quarterly for Years #2 through #15—Four equal
Year #1--$220,000
Years #2 and #3--$275,000
Payment Amount Years #4 and #5--$330,000—The Mitigation Fee is
subject to reassessment by the City every five (5)
ears.
Floor Area of Buildings 28,016 s.f. and 16,752 s.f. per City Records,
respective)
Employee Requirements At least 20% of the Project's workforce shall consist
of residents of the City.
VICINITY MAP
CASE NUMBER: DA 18-04
LOCATION: 13111 Spring Street
DATE: April 12, 2018
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VICINITY MAP
CASE NUMBER: DA ] 8-04
LOCATION: 428 Cloverleaf Drive
DATE: April q 2, 2 0 ] 8
DA 18-04
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I, Industrial Zone, it is anticipated that the use of the
property is consistent with the other light industrial uses within the area.
The adoption of cannabis cultivation and manufacturing activities is also
consistent with Goal 1.0 of the City's Economic development Element in
the General Plan in that the City encourages and facilitates activities that
expand the City's revenue base. Furthermore, Goal 6.0 of the same
element encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement requires
that a minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I -C, Industrial Commercial Zone
surrounded by lighter industrial uses. The use exceeds the distance
requirement of fifty (50) feet between cannabis uses and the closest
residential zone; furthermore, pursuant to Section 127.07.E.1 of the City's
Municipal Code, the cannabis use is not nearby any sensitive uses such
as schools, day care centers, parks or youth centers.
The Applicant's Community engagement focuses on local engagement in
the San Gabriel Valley, boy and girl scout troops, local school PTA's
sports leagues and church related organizations. Specifically they want to
DA 18-04
broker joint ventures with the local colleges, including Cal Poly, Mt. Sac,
Rio Hondo and Pasadena City College. The Applicant intends to have
25% of its workforce be Baldwin Park residents, which exceeds the
minimum 20% in the Development Agreement.
To reduce the potential for any neighborhood impacts or Citywide impacts
of the business, the applicant is proposing exterior facility security, in the
form of video surveillance, perimeter fencing, limited points of access, and
limited signage. On-site security is proposed 24 hours, 7 -days per week.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1413
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
428 CLOVERLEAF, LLC FOR THE CULTIVATION
AND/OR MANUFACTURING OF CANNABIS AT THE
REAL PROPERTY LOCATED AT 13111 SPRING
STREET (APN: 8535-023-051, 8564-021-009 and
8564-021-010) WITHIN THE CITY OF BALDWIN
PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code §§
65864 - 65869.5.
Ordinance 1413
Page 2
WHEREAS, as required by law, the City Council gave first reading .to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore each of the
locations is proposed within an existing building
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General 'Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I, Industrial Zone, it is anticipated that
the use of the property is consistent with the other light industrial
uses within the area. The adoption of cannabis cultivation and
manufacturing activities is also consistent with Goal 1.0 of the City's
Economic development Element in the General Plan in that the City
encourages and facilitates activities that expand the City's revenue
base. Furthermore, Goal 6.0 of the same element encourages the
expansion of the City's diverse industrial base. Policy 6.5 of Goal
6.0 encourages an on-going campaign with local businesses to hire
local residents. This Development Agreement requires that a
minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances)
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Ordinance 1413
Page 3
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general area
and City as a whole as it is located within the I, Industrial Zone
surrounded by lighter industrial uses. The use exceeds the distance
requirement of fifty (50) feet between cannabis uses and the closest
residential zone; furthermore, pursuant to Section 127.07.E.1 of the
City's Municipal Code, the cannabis use is not nearby any sensitive
uses such as schools, day care centers, parks or youth centers.
The Applicant's Community engagement focuses on local
engagement in the San Gabriel Valley, boy and girl scout troops,
local school PTA's sports leagues and church related organizations.
Specifically they want to broker joint ventures with the local colleges,
including Cal Poly, Mt. Sac, Rio Hondo and Pasadena City College.
The Applicant intends to have 25% of its workforce be Baldwin Park
residents, which exceeds the minimum 20% in the Development
Agreement.
To reduce the potential for any neighborhood impacts or Citywide
impacts of the business, the applicant is proposing exterior facility
security, in the form of video surveillance, perimeter fencing, limited
points of access, and limited signage. On-site security is proposed
24 hours, 7 -days per week.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full force and
operation from and after thirty (30) days after its final reading and adoption.
Ordinance 1413
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PASSED AND APPROVED ON THE _ day of , 2018
MANUEL LOZANO, MAYOR
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1413 was duly approved and adopted at a regular
meeting of the City Council on , 2018 by the following vote:'
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND 428 CLOVERLEAF, LLC.
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("STATUTORY
AGREEMENT") is intended to replace the previous non -statutory municipal Development
Agreement, and is dated April , 2018 for references purposes only and is entered
into between (i) the City of Baldwin Park ("City"), a California municipal corporation, and
(ii) 428 Cloverleaf, LLC, a California limited liability company ("Owner"). This
STATUTORY AGREEMENT shall become effective on the Effective Date defined in
Section 3.1.9 below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and 428 Cloverleaf, LLC previously entered into a non -
statutory municipal Development Agreement that was not intended to be a Government
Code Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be a Statutory Development Agreement under and
through Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code Section
65864 et seq. to enter into binding statutory development agreements with persons
having legal or equitable interests in real property for the development of such property;
and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture medical and adult use cannabis in September
2017; and at that time the City determined that the uses authorized in this STATUTORY
AGREEMENT were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of various entitlements, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map and the Baldwin Park Municipal Code as of the Agreement
Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements for notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or Property, ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop,a Cannabis Manufacturing and
Cultivation Facility pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127
and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture cannabis and cannabis related products at its facility or facilities up to 22,000
square feet.
2.14 WHEREAS, the City entered into a Development Agreement with Rukli,
Inc. to be the exclusive distributor of cannabis and cannabis related products in the City
of Baldwin Park. The City is entering into development agreements with owners for
permits for cultivation and manufacturing of cannabis and cannabis related products in
the City of Baldwin Park. The City prohibits the sale of cannabis and cannabis related
products within the City of Baldwin Park so the cannabis and cannabis related products
must be distributed to and sold in cities where it is legal to do so. Rukli, Inc. shall be the
exclusive distributor for the cultivation and/or manufacturing permit holders within the City
of Baldwin Park and City conditions the cultivation and/or manufacturing permits on Rukli,
Inc. being the exclusive distributor for any permit issued by Baldwin Park for cultivation or
manufacturing.
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ARTICLE 3. GENERAL TERMS.
3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows:
3.1.1 "Agreement" means this STATUTORY AGREEMENT pursuant to
Government Code Section 65864 et seq.
corporation.
3.1.2 "City" means the City of Baldwin Park, a California municipal
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" If applicable, means other entitlements for
the Development of the Property, including any and all conditions of approval, subject to
approval or issuance by the City in connection with Development of the Property.
"Development Approvals" also include both the Existing Development Approvals and the
Subsequent Development Approvals approved or issued by the City that are consistent
with this STATUTORY AGREEMENT.
3.1.7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code.
3.1.9 "Effective Date" means the day this STATUTORY AGREEMENT is
approved and adopted by the Baldwin Park City Council and signed by the Mayor of
Baldwin Park or his designee.
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved or issued prior to or on the Effective Date. Existing
Development Approvals include the approvals set forth in Section 3.1.6 and all other
approvals which are a matter of public record prior to or on the Effective Date.
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
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include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
3.1.12 "Land Use Regulations" If and where applicable means all
ordinances, resolutions and codes adopted by the City governing the development and
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.14 "Owner" means 428 Cloverleaf, LLC, a limited liability company.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City.
3.1.16 "Project" If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, the application, any and all entitlements, licenses, and permits
related to the Project.
3.1.17 "Property" means the real property described in Owner's application
and incorporated herein by this reference. Owner may modify the location or locations or
add locations to the Property subject to City approval and all applicable zoning and
distance requirements.
3.1.18 "Reasonable" means using due diligence to accomplish a stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives of the
STATUTORY AGREEMENT.
3.1.19 "Reservations of Authority" means the rights and authority excepted
from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.20 "Space or Canopy Space" shall mean any space or ground, floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing and/or harvesting
phases, including without limitation any space used for activities such as growing,
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planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering,
irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used
for storing any cannabis, no matter where such storage may take place or such storage
space may be located.
3.1.21 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times and in
such sequences as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.22 "Subsequent Land Use Regulations" If applicable means any Land
Use Regulations defined in Section 3.1.12 that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents are attached to and, by this
reference, made part of this STATUTORY AGREEMENT:
No. 1 — Legal Description of the Property.
No. 2 — Map showing Property and its location.
No. 3 — Application.
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is hereby
made subject to this STATUTORY AGREEMENT. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of the Property is hereby
authorized and shall, except as otherwise provided in this STATUTORY AGREEMENT,
be carried out only in accordance with the terms of this STATUTORY AGREEMENT and
the Development Plan, if any. In the event of conflict or uncertainty between this
STATUTORY AGREEMENT and the Development Plan, the provisions of this
STATUTORY AGREEMENT shall control.
3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of 8564-
021-009 and or 8564-021-010 and is more particularly described in the application and
document "No. 1" in Section 3.2 and incorporated herein.
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
expressly stated in this STATUTORY AGREEMENT to survive termination without the
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need of further documentation from the parties hereto. The STATUTORY
AGREEMENT's Fee is subject to renegotiation after the first term, and every five year
term thereafter.
3.5.1 Term Extension. This STATUTORY AGREEMENT may only be
extended by mutual agreement of City and Owner in writing and signed by Owner and
the Mayor of Baldwin Park. If the Mayor of Baldwin Park does not sign the agreement or
renegotiated agreement any such agreement is null and void.
3.6 Automatic Termination. This STATUTORY AGREEMENT shall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY AGREEMENT as set
forth in Section 3.5;
(ii) The entry of a final judgment (or a decision on any appeal therefrom)
voiding the City's General Plan or any element thereof, which judgment or decision would
preclude development of the Project, but only if the City is unable to cure such defect in
the General Plan or element within one hundred and eighty (180) days from the later of
entry of final judgment or decision on appeal.
(iii) Failure to timely pay the Fee or Fees. Failure to timely pay the
$50,000 towards the police salary or benefits. Failure to pay any fees due to the City
under this STATUTORY AGREEMENT.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements and permits
approved for the Owner and/ or the Property. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to any default in the performance of the provisions of this STATUTORY AGREEMENT
which has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
(iii) on the date of personal delivery shown in the records of the
delivery company after delivery to the recipient named below; or
(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: David G. Torres-Siegrist, Esq.
225 S. Lake Ave., Suite 300
Pasadena, CA 91101
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9. Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's cost to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property with a commercial cannabis facility in accordance
with and to the extent of the Development Plan and/or application. The Property shall
remain subject to all Subsequent Development Approvals required to complete the
Project as contemplated by the Development Plan and/or application.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed buildings,
and the design, improvement, occupancy and construction standards and specifications
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applicable to development of the Property shall be the Development Plan and/or
application. Provided, however, that in approving tentative subdivision maps, if any, the
City may impose ordinary and necessary dedications for rights-of-way or easements for
public access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the Project
or Development Approvals may be appropriate and mutually desirable. The City shall act
on such applications, if any, in accordance with the Existing Land Use Regulations,
subject to the Reservations of Authority, or except as otherwise provided by this
STATUTORY AGREEMENT. If approved, any such change in the Existing Development
Approvals shall be considered an additional Existing Development Approval.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City.
(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new development
projects of the same uses within the City; and
(v) Regulations that do not conflict with the Development Plan. The term
"do not conflict" means new rules, regulations, and policies which: (a) do not modify the
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Development Plan, including, without limitation, the permitted land uses, the density or
intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying or
conditionally approving any Subsequent Development applications on the basis of such
subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
reasonably cooperate with other public agencies processing Development Approvals for
the Project.
4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term
of any tentative subdivision map shall be in effect for a period of fifteen (15) years, and
may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within one (1) year from the
Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means the
issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns. The City has
the power and authority to examine such books and records at any reasonable time,
including but not limited to, during normal business hours. If the City wishes to inspect
the areas of the Property where the cannabis is being cultivated or manufactured, City
may do so at any time with no prior notice to Owner. In addition, City agrees that all of
N
its employees or agents which enter the cultivation, manufacturing, and curing areas shall
follow all of the policies and guidelines imposed on Owner's employees, including without
limitation, the wearing of any clothing or equipment to insure that no pests or impurities
shall enter the cultivation and curing areas.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project.
5.2 For the first year, Owner will pay the City a total of $220,000 as a Fee. This
fee is calculated based on $10.00 a square foot of permit space and a permit which allows
up to 22,000 sq. feet, among other factors.
5.3 In year two and year three, the Fee will increase to $12.50 per sq. foot for
a total of $275,000 per year, among other factors.
5.4 At the beginning of year four and year five, Owner will pay a Fee of $15.00
per sq. foot for a total of $330,000 per year, among other factors.
5.5 The Fee schedule is as follows: The first Fee payment is due at the close
of the second quarter. Therefore, the first payment will be due on the last day of June
2018, the second and last payment for the first year is due on the last day of December
2018. For the years 2 through 15, the Fee schedule is as follows: divide the total Fee for
the respective year into four and make four equal payments due at the end of each quarter
of the respective year.
5.6 The Fee is subject to reassessment by the City every five years. At the end
of year five, the City will set a new Fee which will be applied in years 6 through 10. At
the end of year 10, the City will set new Fee which will be applied in years 11 through 15.
No one factor is dispositive in the City's determination of the new Fee. The Cannabis
permit will expire at the close of the 15th year and will require the Owner to reapply with
the City for a new permit. If Owner and City cannot agree to a new Fee or Fees by
December 22, 2022, this STATUTORY AGREEMENT will automatically terminate on
December 23, 2022.
5.7 Further, Owner will pay a yearly payment of $50,000 to the City that can be
used to mitigate the impact of the cannabis business on the City and its resources which
includes but is not limited to, to use to pay a part of a police officer's salary and/or benefits.
This $50,000 amount will be due at the time the permit is issued. Subsequent annual
payments will be due on the permit issuance anniversary date. This payment is due within
thirty (30) days of issuance of permit and thereafter on the anniversary of the issuance of
the permit.
5.8 Jobs and Wage Creation.
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5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the City or
who employ a significant number of City residents. At least 20 percent of the Project's
workforce shall consist of residents of the City. Job announcements shall be posted at City
Hall, along with proof that the job announcements were advertised in at least two
newspapers published, printed or distributed in the City and on various social media sites
accessible to the general public. In addition, Owner shall make a good faith effort to advertise
job announcements at local job fairs, on local radio and through public agencies and
organizations.
5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses and all
documents evidencing compliance with state and local law. As such, upon issuance of
its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the
City for any associated costs with processing the Project, as detailed above and
reimbursing the City for its actual costs incurred in drafting and processing this
STATUTORY AGREEMENT. Owner will be liable for the City's actual costs incurred in
processing future Development Approval applications. City acknowledges and agrees
that this payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 . Transportation of Cannabis. All pick ups and drop offs of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity, arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. During
the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
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7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council may automatically terminate this
STATUTORY AGREEMENT notwithstanding any other provision of this STATUTORY
AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT and impose
such conditions as are reasonably necessary to protect the interests of the City. The
decision of the City Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special
review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City would
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings.
In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
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provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
or to any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest, if successors in interest are
permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof,
not to sue for damages or claim any damages:
(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application or request for a permit for cultivation, manufacturing and/or
distribution or interpretation or effect of the provisions of this STATUTORY AGREEMENT.
Owner hereby agrees to waive and/or release the City of Baldwin Park for any claim or
claims or cause of action, not specifically and expressly reserved herein, which Owner
may have at the time of execution of this STATUTORY AGREEMENT relating to any
application to the City of Baldwin Park including but not limited to, any application for any
type of distribution, cultivation or manufacturing permit, any application for any
distribution, cultivation or manufacturing rights, or any application for any distribution,
cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTORY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged.
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Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
shall modify or abridge any defenses or immunities available to the City and its employees
pursuant to the Government Tort Liability Act and all other applicable statutes and
decisional law.
Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8.1, Section 8.2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money damages and
remedies at law are inadequate, and specific performance and other non -monetary relief
are particularly appropriate remedies for the enforcement of this STATUTORY
AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Sections 8.1 and 8.5, money damages are
unavailable against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of STATUTORY AGREEMENT for Default of the City. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default.
8.4 Owner Default. No building permit shall be issued or building permit
application accepted for any structure on the Property after Owner is determined by the
City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
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this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
as the result of a judicial determination that the General Plan, or portions thereof, are
invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that any STATUTORY AGREEMENT or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees), which the City or its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the environmental impact report, mitigated negative
declaration or negative declaration, as the case may be, prepared in connection with the
development of the Property; and (iii) the proceedings or procedure undertaken in
connection with the adoption or approval of any permit or any of the above. In the event
of any legal or equitable action or other proceeding instituted by anyone against the City
or its City Council, any third party (including a governmental entity or official) challenging
the validity of any provision of this STATUTORY AGREEMENT or the procedure upon
which the permit was issued, or any portion thereof as set forth herein, the parties shall
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mutually cooperate with each other in defense of said action or proceeding.
Notwithstanding the above, the City, at is sole option, may tender to Owner and Owner
agrees to accept any such tender of the complete defense of any third party challenge as
described herein. In the event the City elects to contract with special counsel to provide
for such a defense, the City may do so in its sole discretion and Owner will be required to
pay the defense costs of the City as the costs are incurred. Owner agrees to pay any
and all attorneys' fees or retainer regarding the selection of counsel, and Owner shall pay
all costs and all attorneys' fees related to retention of such counsel.
9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers, agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9.4 do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
settlement offer, City shall notify Owner of the offer and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
in connection with Owner's development, operation and use of the Property (collectively,
"Actions"). The City shall not disclose information and documents to the Federal
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Government or State Government, its officers, or agents regarding any party to this
STATUTORY AGREEMENT absent a grand jury subpoena, civil or administrative
subpoena, warrant, discovery request, summons, court order or similar process
authorized under law hereinafter called "Governmental Notice". If any Action is brought
by either the Federal or State Government, City shall immediately notify Owner of the
nature of the Claim including all correspondence or documents submitted to the City.
Prior to responding to the Governmental Notice, City shall provide Owner ten (10) days
from the date of such notice subpoena or the like to serve and obtain on the City a
protective order, or the like, from a court of competent jurisdiction.
9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this Agreement, until such time as the uses of the Property
established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or modification is consistent with the intent and purposes of this STATUTORY
AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or
any way limit City's rights under this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly contained herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
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AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein, are essential elements
of this STATUTORY AGREEMENT and the City would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at the City's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever. The foregoing notwithstanding, the
development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential
elements of this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Owner's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel in the
negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure by a party
to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms
of this STATUTORY AGREEMENT thereafter.
11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
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11.9 This STATUTORY AGREEMENT when signed and executed by Owner and
the Mayor of Baldwin Park supercedes and renders null and void that certain non -
statutory municipal Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
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AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto.
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter and bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
claim that the terms in this STATUTORY AGREEMENT constitute an abuse of the police
power, violate substantive due process, deny equal protection of the laws, effect a taking
of property without payment of just compensation, and/or impose an unlawful tax.
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11.20 [RESERVED]
11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply with all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of BPMC.
11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits and/or
licenses are attached hereto and incorporated herein by this reference.
11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK 428 CLOVERLEAF, LLC
By:
Manuel Lozano, Mayor
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
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By:
Ming Yong Huang
CEO
APPROVED AS TO FORM:
By:
Legal Counsel for
428 CLOVERLEAF, LLC
By:
Robert N. Tafoya,
City Attorney
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
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1*7:11:1k9:1
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
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ITEM: E (Casa Verde Group)
ATTACHMENT #5 DA 18-05
CASA VERDE GROUP
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-05
Location 15117 Calmview Ave. APN 8413-007-062
Zoning of Subject Location I, Industrial
Principal Names Victor Chevez and Helen Chau
Company Names Casa Verde Group
Term of Development Fifteen (15) years from 12/29/17
Agreement
June 30 and December 31 for Year #1
Payment Schedule Quarterly for Years #2 through #15—Four equal
Year #1--$220,000
Years #2 and #3--$275,000
Payment Amount Years #4 and #5--$330,000—The Mitigation Fee is
subject to reassessment by the City every five (5)
ears.
Floor Area of Buildings 10,410 s.f. per City Records
Employee Requirements At least 20% of the Project's workforce shall consist
of residents of the City.
VICINITY MAP
CASE NUMBER: DA 18-05
LOCATION: 5117 Calmview Avenue
DATE: April 12, 2018
IRWINDALE
DA 18-05
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I, Industrial Zone, it is anticipated that the use of the
property is consistent with the other light industrial uses within the area.
The adoption of cannabis cultivation and manufacturing activities is also
consistent with Goal 1.0 of the City's Economic development Element in
the General Plan in that the City encourages and facilitates activities that
expand the City's revenue base. Furthermore, Goal 6.0 of the same
element encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement requires
that a minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I, Industrial Zone surrounded by
lighter industrial uses. The use exceeds the distance requirement of fifty
(50) feet between cannabis uses and the closest residential zone;
furthermore, pursuant to Section 127.07.E.1 of the City's Municipal Code,
the cannabis use is not nearby any sensitive uses such as schools, day
care centers, parks or youth centers.
As part of the Applicant's Community Engagement program, they are
committed to supporting local law enforcement, educational programs,
and local community and business programs. It is their intention to
DA 18-05
exceed the 20% minimum Baldwin Park resident workforce to 50% as they
indicate they are committed to the City.
To be a positive influence on the community and City as a whole, Casa
Verde Group intends to implement a comprehensive security plan that
addresses all levels of product and facility security through alarm systems,
CCN monitoring, and employee training programs. They also want to
implement systems that facilitate access by the City's Police Department,
thereby not impacting the surrounding area and city as a whole.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1414
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
CASA VERDE GROUP FOR THE CULTIVATION
AND/OR MANUFACTURING OF CANNABIS AT THE
REAL PROPERTY LOCATED AT 5117 CALMVIEW
AVENUE (APN: 8413-007-062) WITHIN THE CITY
OF BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
, WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code H
65864 - 65869.5.
Ordinance 1414
Page 2
WHEREAS, as required by law, the City Council gave first reading to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore each of the
locations is proposed within an existing building
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I, Industrial Zone, it is anticipated that
the use of the property is consistent with the other light industrial
uses within the area. The adoption of cannabis cultivation and
manufacturing activities is also consistent with Goal 1.0 of the City's
Economic development Element in the General Plan in that the City
encourages and facilitates activities that expand the City's revenue
base. Furthermore, Goal 6.0 of the same element encourages the
expansion of the City's diverse industrial base. Policy 6.5 of Goal
6.0 encourages an on-going campaign with local businesses to hire
local residents. This Development Agreement requires that a.
minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August .
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances)
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
Ordinance 1414
Page 3
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general,
area and City as a whole as it is located within the I, Industrial Zone
surrounded by lighter industrial uses. The use exceeds the distance .
requirement of fifty (50) feet between cannabis uses and the closest
residential zone; furthermore, pursuant to Section 127.07.E.1 of the
City's Municipal Code, the cannabis use is not nearby any sensitive
uses such as schools, day care centers, parks or youth centers.
As part of the Applicant's Community Engagement program, they are,
committed to supporting local law enforcement, educational
programs, and local community and business programs. It is their
intention to exceed the 20% minimum Baldwin Park resident
workforce to 50% as they indicate they are committed to the City.
To be a positive influence on the community and City as a whole,
Casa Verde Group intends to implement a comprehensive security
plan that addresses all levels of product and facility security through .
alarm systems, CCTV monitoring, and employee training programs.
They also want to implement systems that facilitate access by the
City's Police Department, thereby not impacting the surrounding
area and city as a whole.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full force and
operation from and after thirty (30) days after its final reading and adoption.
Ordinance 1414
Page 4
PASSED AND APPROVED ON THE _ day of , 2018
MANUEL LOZANO, MAYOR
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1414 was duly approved and adopted at a regular
meeting of the City Council on , 2018 by the following vote:
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND CASA VERDE GROUP
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("STATUTORY
AGREEMENT") is intended to replace the previous non -statutory municipal Development
Agreement, and is dated April , 2018 for references purposes only and is entered into
between (i) the City of Baldwin Park ("City"), a California municipal corporation, and
(ii) Casa Verde Group, a California limited liability company ("Owner"). This
STATUTORY AGREEMENT shall become effective on the Effective Date defined in
Section 3.1.9 below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and Casa Verde Group previously entered into a non -
statutory municipal Development Agreement that was not intended to be a Government
Code Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be a Statutory Development Agreement under and
through Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code Section
65864 et seq. to enter into binding statutory development agreements with persons
having legal or equitable interests in real property for the development of such property;
and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture medical and adult use cannabis in September
2017; and at that time the City determined that the uses authorized in this STATUTORY
AGREEMENT were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of various entitlements, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
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2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map and the Baldwin Park Municipal Code as of the Agreement
Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements for notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or Property, ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Manufacturing and
Cultivation Facility pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127
and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture cannabis and cannabis related products at its facility or facilities up to 22,000
square feet.
2.14 WHEREAS, the City entered into a Development Agreement with Rukli, Inc.
to be the exclusive distributor of cannabis and cannabis related products in the City of
Baldwin Park. The City is entering into development agreements with owners for permits
for cultivation and manufacturing of cannabis and cannabis related products in the City of
Baldwin Park. The City prohibits the sale of cannabis and cannabis related products within
the City of Baldwin Park so the cannabis and cannabis related products must be
distributed to and sold in cities where it is legal to do so. Rukli, Inc. shall be the exclusive
distributor for the cultivation and/or manufacturing permit holders within the City of
Baldwin Park and City conditions the cultivation and/or manufacturing permits on Rukli,
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Inc. being the exclusive distributor for any permit issued by Baldwin Park for cultivation or
manufacturing.
ARTICLE 3. GENERAL TERMS.
3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows:
3.1.1 "Agreement" means this STATUTORY AGREEMENT pursuant to
Government Code Section 65864.
3.1.2 "City" means the City of Baldwin Park, a California municipal
corporation.
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" If applicable, means other entitlements for
the Development of the Property, including any and all conditions of approval, subject to
approval or issuance by the City in connection with Development of the Property.
"Development Approvals" also include both the Existing Development Approvals and the
Subsequent Development Approvals approved or issued by the City that are consistent
with this STATUTORY AGREEMENT.
3.1.7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code.
3.1.9 "Effective Date" means the day this STATUTORY AGREEMENT is
approved and adopted by the Baldwin Park City Council and signed by the Mayor of
Baldwin Park or his designee.
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved or issued prior to or on the Effective Date. Existing
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Development Approvals include the approvals set forth in Section 3.1.6 and all other
approvals which are a matter of public record prior to or on the Effective Date.
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
3.1.12 "Land Use Regulations" If and where applicable means all
ordinances, resolutions and codes adopted by the City governing the development and
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.14 "Owner" means Casa Verde Group, a limited liability company.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City.
3.1.16 "Project" If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, the application, any and all entitlements, licenses, and permits
related to the Project.
3.1.17 "Property" means the real property described in Owner's application
and incorporated herein by this reference. Owner may modify the location or locations or
add locations to the Property subject to City approval and all applicable zoning and
distance requirements.
3.1.18 "Reasonable" means using due diligence to accomplish a stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives of the
STATUTORY AGREEMENT.
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3.1.19 "Reservations of Authority" means the rights and authority excepted
from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.20 "Space or Canopy Space" shall mean any space or ground, floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing and/or harvesting
phases, including without limitation any space used for activities such as growing,
planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering,
irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used
for storing any cannabis, no matter where such storage may take place or such storage
space may be located.
3.1.21 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times and in
such sequences as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.22 "Subsequent Land Use Regulations" If applicable means any Land
Use Regulations defined in Section 3.1.12 that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents are attached to and, by this
reference, made part of this STATUTORY AGREEMENT:
No. 1 — Legal Description of the Property.
No. 2 — Map showing Property and its location.
No. 3 — Application.
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is hereby
made subject to this STATUTORY AGREEMENT. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of the Property is hereby
authorized and shall, except as otherwise provided in this STATUTORY AGREEMENT,
be carried out only in accordance with the terms of this STATUTORY AGREEMENT and
the Development Plan, if any. In the event of conflict or uncertainty between this
STATUTORY AGREEMENT and the Development Plan, the provisions of this
STATUTORY AGREEMENT shall control.
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3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of 8413-
007-062 and is more particularly described in the application and document "No. 1" in
Section 3.2 and incorporated herein.
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
expressly stated in this STATUTORY AGREEMENT to survive termination without the
need of further documentation from the parties hereto. The STATUTORY
AGREEMENT's Fee is subject to renegotiation after the first term, and every five year
term thereafter.
3.5.1 Term Extension. This STATUTORY AGREEMENT may only be
extended by mutual agreement of City and Owner in writing and signed by Owner and
the Mayor of Baldwin Park. If the Mayor of Baldwin Park does not sign the agreement or
renegotiated agreement any such agreement is null and void.
3.6 Automatic Termination. This STATUTORY AGREEMENT shall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY AGREEMENT as set
forth in Section 3.5;
(ii) The entry of a final judgment (or a decision on any appeal therefrom)
voiding the City's General Plan or any element thereof, which judgment or decision would
preclude development of the Project, but only if the City is unable to cure such defect in
the General Plan or element within one hundred and eighty (180) days from the later of
entry of final judgment or decision on appeal.
(iii) Failure to timely pay the Fee or Fees. Failure to timely pay the
$50,000 towards the police salary or benefits. Failure to pay any fees due to the City
under this STATUTORY AGREEMENT.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements and permits
approved for the Owner or Property. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to any default in the performance of the provisions of this STATUTORY AGREEMENT
which has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
n
3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
(iii) on the date of personal delivery shown in the records of the
delivery company after delivery to the recipient named below; or
(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: Victor M. Chevez
316 W. 3rd. St.
San Dimas, CA 91773
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9. Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's cost to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
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process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
r1:Vt1941l=9311111117=01 =111077Ti, I=I`1111119121:1=1;W- 4
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property with a commercial cannabis facility in accordance
with and to the extent of the Development Plan and/or application. The Property shall
remain subject to all Subsequent Development Approvals required to complete the
Project as contemplated by the Development Plan and/or application.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed buildings,
and the design, improvement, occupancy and construction standards and specifications
applicable to development of the Property shall be the Development Plan and/or
application. Provided, however, that in approving tentative subdivision maps, if any, the
City may impose ordinary and necessary dedications for rights-of-way or easements for
public access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the Project
or Development Approvals may be appropriate and mutually desirable. The City shall act
on such applications, if any, in accordance with the Existing Land Use Regulations,
subject to the Reservations of Authority, or except as otherwise provided by this
STATUTORY AGREEMENT. If approved, any such change in the Existing Development
Approvals shall be considered an additional Existing Development Approval.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City.
(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new development
projects of the same uses within the City; and
(v) Regulations that do not conflict with the Development Plan. The term
"do not conflict" means new rules, regulations, and policies which: (a) do not modify the
Development Plan, including, without limitation, the permitted land uses, the density or
intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying or
conditionally approving any Subsequent Development applications on the basis of such
subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
reasonably cooperate with other public agencies processing Development Approvals for
the Project.
W
4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term
of any tentative subdivision map shall be in effect for a period of fifteen (15) years, and
may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within one (1) year from the
Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means the
issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns. The City has
the power and authority to examine such books and records at any reasonable time,
including but not limited to, during normal business hours. If the City wishes to inspect
the areas of the Property where the cannabis is being cultivated or manufactured, City
may do so at any time with no prior notice to Owner. In addition, City agrees that all of
its employees or agents which enter the cultivation, manufacturing, and curing areas shall
follow all of the policies and guidelines imposed on Owner's employees, including without
limitation, the wearing of any clothing or equipment to insure that no pests or impurities
shall enter the cultivation and curing areas.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project.
5.2 For the first year, Owner will pay the City a total of $220,000 as a Fee. This
fee is calculated based on $10.00 a square foot of permit space and a permit which allows
up to 22,000 sq. feet among other factors.
5.3 In year two and year three, the Fee will increase to $12.50 per sq. foot for
a total of $275,000 per year, among other factors.
5.4 At the beginning of year four and year five, Owner will pay a Fee of $15.00
per sq. foot for a total of $330,000 per year, among other factors.
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5.5 The Fee schedule is as follows: The first Fee payment is due at the close
of the second quarter. Therefore, the first payment will be due on the last day of June
2018, the second and last payment for the first year is due on the last day of December
2018. For the years 2 through 15, the Fee schedule is as follows: divide the total Fee for
the respective year into four and make four equal payments due at the end of the each
quarter of the respective year.
5.6 The Fee is subject to reassessment by the City every five years. At the end
of year five, the City will set a new Fee which will be applied in years 6 through 10. At
the end of year 10, the City will set new Fee which will be applied in years 11 through 15.
No one factor is dispositive in the City's determination of the new Fee. The Cannabis
permit will expire at the close of the 15th year and will require the Owner to reapply with
the City for a new permit. If Owner and City cannot agree to a new Fee or Fees by
December 22, 2022, this STATUTORY AGREEMENT will automatically terminate on
December 23, 2022.
5.7 Further, Owner will pay a yearly payment of $50,000 to the City that can be
used to mitigate the impact of the cannabis business on the City and its resources which
includes but is not limited to, to use to pay a part of a police officer's salary and/or benefits.
This $50,000 amount will be due at the time the permit is issued. Subsequent annual
payments will be due on the permit issuance anniversary date. This payment is due
within thirty (30) days of issuance of permit and thereafter on the anniversary of the
issuance of the permit.
5.8 Jobs and Wage Creation.
5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the City or
who employ a significant number of City residents. At least 20 percent of the Project's
workforce shall consist of residents of the City. Job announcements shall be posted at City
Hall, along with proof that the job announcements were advertised in at least two
newspapers published, printed or distributed in the City and on various social media sites
accessible to the general public. In addition, Owner shall make a good faith effort to advertise
job announcements at local job fairs, on local radio and through public agencies and
organizations.
5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses and all
documents evidencing compliance with state and local law. As such, upon issuance of
its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the
City for any associated costs with processing the Project, as detailed above and
reimbursing the City for its actual costs incurred in drafting and processing this
STATUTORY AGREEMENT. Owner will be liable for the City's actual costs incurred in
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processing future Development Approval applications. City acknowledges and agrees
that this payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 Transportation of Cannabis. All pick ups and drop offs of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity, arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. During
the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council may automatically terminate this
STATUTORY AGREEMENT notwithstanding any other provision of this STATUTORY
AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT and impose
such conditions as are reasonably necessary to protect the interests of the City. The
decision of the City Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special
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review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City would
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings.
In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
or to any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest, if successors in interest are
permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof,
not to sue for damages or claim any damages:
(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application or request for a permit for cultivation, manufacturing and/or
distribution or interpretation or effect of the provisions of this STATUTORY AGREEMENT.
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Owner hereby agrees to waive and/or release the City of Baldwin Park for any claim or
claims or cause of action, not specifically and expressly reserved herein, which Owner
may have at the time of execution of this STATUTORY AGREEMENT relating to any
application to the City of Baldwin Park including but not limited to, any application for any
type of distribution, cultivation or manufacturing permit, any application for any
distribution, cultivation or manufacturing rights, or any application for any distribution,
cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTORY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged.
Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
shall modify or abridge any defenses or immunities available to the City and its employees
pursuant to the Government Tort Liability Act and all other applicable statutes and
decisional law.
Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8.1, Section 8.2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money damages and
remedies at law are inadequate, and specific performance and other non -monetary relief
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are particularly appropriate remedies for the enforcement of this STATUTORY
AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Section 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of STATUTORY AGREEMENT for Default of the City. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default.
8.4 Owner Default. No building permit shall be issued or building permit
application accepted for any structure on the Property after Owner is determined by the
City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
as the result of a judicial determination that the General Plan, or portions thereof, are
invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
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in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that any STATUTORY AGREEMENT or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees), which the City or its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the environmental impact report, mitigated negative
declaration or negative declaration, as the case may be, prepared in connection with the
development of the Property; and (iii) the proceedings or procedure undertaken in
connection with the adoption or approval of any permit or any of the above. In the event
of any legal or equitable action or other proceeding instituted by anyone against the City
or its City Council, any third party (including a governmental entity or official) challenging
the validity of any provision of this STATUTORY AGREEMENT or the procedure upon
which the permit was issued, or any portion thereof as set forth herein, the parties shall
mutually cooperate with each other in defense of said action or proceeding.
Notwithstanding the above, the City, at is sole option, may tender to Owner and Owner
agrees to accept any such tender of the complete defense of any third party challenge as
described herein. In the event the City elects to contract with special counsel to provide
for such a defense, the City may do so in its sole discretion and Owner will be required to
pay the defense costs of the City as the costs are incurred. Owner agrees to pay any
and all attorneys' fees or retainer regarding the selection of counsel, and Owner shall pay
all costs and all attorneys' fees related to retention of such counsel.
9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
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predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers, agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9.4 do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
settlement offer, City shall notify Owner of the offer and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
in connection with Owner's development, operation and use of the Property (collectively,
"Actions"). The City shall not disclose information and documents to the Federal
Government or State Government, its officers, or agents regarding any party to this
STATUTORY AGREEMENT absent a grand jury subpoena, civil or administrative
subpoena, warrant, discovery request, summons, court order or similar process
authorized under law hereinafter called "Governmental Notice". If any Action is brought
by either the Federal or State Government, City shall immediately notify Owner of the
nature of the Claim including all correspondence or documents submitted to the City.
Prior to responding to the Governmental Notice, City shall provide Owner ten (10) days
from the date of such notice subpoena or the like to serve and obtain on the City a
protective order, or the like, from a court of competent jurisdiction.
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9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or modification is consistent with the intent and purposes of this STATUTORY
AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or
in any way limit City's rights in this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly contained herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein, are essential elements
of this STATUTORY AGREEMENT and the City would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at the City's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever. The foregoing notwithstanding, the
development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential
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elements of this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Owner's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel in the
negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine. gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure by a party
to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms
of this STATUTORY AGREEMENT thereafter.
11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
11.9 This STATUTORY AGREEMENT when signed and executed by Owner and
the Mayor of Baldwin Park supercedes and renders null and void that certain non -
statutory municipal Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
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11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
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AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto.
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter and bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
claim that the terms in this STATUTORY AGREEMENT constitute an abuse of the police
power, violate substantive due process, deny equal protection of the laws, effect a taking
of property without payment of just compensation, and/or impose an unlawful tax.
11.20 [RESERVED]
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11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply with all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of BPMC.
11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits and/or
licenses are attached hereto and incorporated herein by this reference.
11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK CASA VERDE GROUP
By:
Manuel Lozano, Mayor
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
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By:
Helen Chau
Manager
By:
Victor Chevez
Manager
APPROVED AS TO FORM:
By:
By: Legal Counsel for
Robert N. Tafoya, CASA VERDE GROUP
City Attorney
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
se
EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
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ITEM: F (RD Baldwin Park)
ATTACHMENT #6 -DA 18-06
RD BALDWIN PARK
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-06
Location
13467 Dalewood St. APN 8559-003-018
Zoning of Subject Location
I -C, Industrial Commercial
Principal Names
Darrin and Ryan O anesian
Company Name
RD Baldwin Park
Term of Development
Fifteen (15) years from 12/29/17
Agreement
Year #1— payments commence six (6) months from
issuance of the project's first Certificate of
Payment Schedule
Occupancy.
Years #2 through #5—thirty (30) days following the
close of each quarter.
Year #1--$220,000
Years #2 and #3--$275,000
Payment Amount
Years #4 and #5--$330,000—The Mitigation Fee is
subject to reassessment by the City every five (5)
ears.
Floor Area of Buildings
20,355 s.f. per City Records
Employee Requirements
At least 20% of the Project's workforce shall consist
of residents of the City.
VICINITY MAP
CASE NUMBER: DA 18-06
LOCATION: 13467 Dalewood Street
DATE: April 12, 2018
DA 18-06
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I -C, Industrial Commercial Zone, it is anticipated that the
use of the property is consistent with the other light industrial uses within
the area. The adoption of cannabis cultivation and manufacturing
activities is also consistent with Goal 1.0 of the City's Economic
development Element in the General Plan in that the City encourages and
facilitates activities that expand the City's revenue base. Furthermore,
Goal 6.0 of the same element encourages the expansion of the City's
diverse industrial base. Policy 6.5 of Goal 6.0 encourages an on-going
campaign with local businesses to hire local residents. This Development
Agreement requires that a minimum of 20% of the businesses workforce
shall consist of Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I -C, Industrial Commercial Zone
surrounded by lighter industrial uses. The use exceeds the distance
requirement of fifty (50) feet between cannabis uses and the closest
residential zone; furthermore, pursuant to Section 127.07.E.1 of the City's
Municipal Code, the cannabis use is not nearby any sensitive uses such
as schools, day care centers, parks or youth centers.
RD Baldwin Park has made it a priority to ensure that the Community and
the surrounding area benefits from the cannabis business. Local hiring is
a priority and RD Baldwin Park is committed to reaching a goal of 50% of
DA 18-06
new hires from Baldwin Park, which exceeds the 20% minimum in the
Development Agreement. Charitable giving includes 1-5% of pretax
profits back to the community including local organizations such as the
community center, Women's Club, and educational partnerships.
RD Baldwin Park's vision is to provide a safe and secure environment for
not only it's employees, staff and visitors, but also the surrounding
community. Typical of most facilities, 24-hour video surveillance is
provided for both the interior and exterior of the building, security alarm
systems, and motion detectors are provided to ensure the minimization of
any potential impacts on not only the surrounding neighborhood, but
Citywide.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1415
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
RD BALDWIN PARK FOR THE CULTIVATION
AND/OR MANUFACTURING OF CANNABIS AT THE
REAL PROPERTY LOCATED AT 13467 DALEWOOD
STREET (APN 8559-003-018) WITHIN THE CITY OF
BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code §§
65864 - 65869.5.
Ordinance 1415
Page 2
WHEREAS, as required by law, the City Council gave first reading to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore eachof the
locations is proposed within an existing building
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I -C, Industrial Commercial Zone, it is
anticipated that the use of the property is consistent with the other
light industrial uses within the area. The adoption of cannabis
cultivation and manufacturing activities is also consistent with Goal
1.0 of the City's Economic development Element in the General Plan
in that the City encourages and facilitates activities that expand the
City's revenue base. Furthermore, Goal 6.0 of the same element
encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement
requires that a minimum of 20% of the businesses workforce shall
consist of Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances)
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
Ordinance 1415
Page 3
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general
area and City as a whole as it is located within the I -C, Industrial
Commercial Zone surrounded by lighter industrial uses. The use
exceeds the distance requirement of fifty (50) feet between cannabis
uses and the closest residential zone; furthermore, pursuant to
Section 127.07.E.1 of the City's Municipal Code, the cannabis use is
not nearby any sensitive uses such as schools, day care centers,
parks or youth centers.
RD Baldwin Park has made it a priority to ensure that the Community
and the surrounding area benefits from the cannabis business. Local
hiring is a priority and RD Baldwin Park is committed to reaching a
goal of 50% of new hires from Baldwin Park, which exceeds the 20%
minimum in the Development Agreement. Charitable giving includes
1-5% of pretax profits back to the community including local
organizations such as the community center, Women's Club, and
educational partnerships.
RD Baldwin Park's vision is to provide a safe and secure
environment for not only its employees, staff and visitors, but also
the surrounding community. Typical of most facilities, 24-hour video
surveillance is provided for both the interior and exterior of the
building, security alarm systems, and motion detectors are provided
to ensure the minimization of any potential impacts on not only the
surrounding neighborhood, but Citywide.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
Ordinance 1415
Page 4
SECTION 4. This ordinance shall go into effect and be in full force and
operation from and after thirty (30) days after its final reading and adoption.
PASSED AND APPROVED ON THE _ day of , 2018
MANUEL LOZANO, MAYOR
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1415 was duly approved and adopted at a regular
meeting of the City Council on , 2018 by the following vote:
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND RD BALDWIN PARK / TROPICANA
ENTERPRISES LLC
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("STATUTORY
AGREEMENT") is intended to replace the previous non -statutory municipal Development
Agreement, and is dated April , 2018 ("Agreement Date") for reference purposes only
and is entered into between (i) the City of Baldwin Park ("City"), a California municipal
corporation, and (ii) RD Baldwin Park / Tropicana Enterprises LLC, a California limited
liability company ("Owner"). This STATUTORY AGREEMENT shall become effective on
the Effective Date defined in Section 3.1.9 below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and RD Baldwin Park / Tropicana Enterprises LLC
previously entered into a non -statutory municipal Development Agreement that was not
intended to be a Government Code Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be Statutory Agreement under and through
Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code Section
65864 et seq. to enter into binding statutory development agreements with persons
having legal or equitable interests in real property for the development of such property;
and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture (volatile and non-volatile), medical and adult use
cannabis in September 2017; and at that time the City determined that Owner's proposed
cannabis uses were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of a Cannabis Permit and this STATUTORY
AGREEMENT, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
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the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map and the Baldwin Park Municipal Code as of the Agreement
Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements for notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Proper and/or Property, ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Manufacturing and
Cultivation Facility pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127
and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, Owner intends to cultivate and manufacture (volatile and non-
volatile) cannabis and cannabis related products pursuant to the Baldwin Park Municipal
Code ("BPMC") Chapter 127 and all applicable state laws, rules, and regulations; and
2.14 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture cannabis and cannabis related products at its facility orfacilities up to 22,000
square feet.
2.15 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has received a Cannabis Permit from the
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City to cultivate and manufacture (volatile and non-volatile) cannabis related products at
the Property up to 22,000 square feet.
2.16 WHEREAS, the City entered into a Development Agreement with Rukli, Inc.
to be the exclusive distributor of cannabis and cannabis related products in the City of
Baldwin Park. The City is entering into development agreements with owners for permits
for cultivation and manufacturing of cannabis and cannabis related products in the City of
Baldwin Park. The City prohibits the sale of cannabis and cannabis related products within
the City of Baldwin Park so the cannabis and cannabis related products must be
distributed to and sold in cities where it is legal to do so. Rukli, Inc. shall be the exclusive
distributor for the cultivation and/or manufacturing permit holders within the City of
Baldwin Park and City conditions the cultivation and/or manufacturing permits on Rukli,
Inc. being the exclusive distributor for any permit issued by Baldwin Park for cultivation or
manufacturing.
ARTICLE 3. GENERAL TERMS.
3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows:
3.1.1 "Agreement" means this STATUTORY AGREEMENT pursuant to
Government Code Section 65864.
corporation.
3.1.2 "City" means the City of Baldwin Park, a California municipal
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" If applicable, means other entitlements for
the Development of the Property, including the Cannabis Permit and any and all
conditions of approval, subject to approval or issuance by the City in connection with
Development of the Property. "Development Approvals" also include both the Existing
Development Approvals and the Subsequent Development Approvals approved or issued
by the City that are consistent with this STATUTORY AGREEMENT.
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3.1.7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code.
3.1.9 "Effective Date" means the day this STATUTORY AGREEMENT is
approved and adopted by the Baldwin Park City Council, and has been signed by Owner.
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved or issued prior to or on the Effective Date, including
but not limited to Owner's Cannabis Permit. Existing Development Approvals include the
approvals set forth in Section 3.1.6 and all other approvals which are a matter of public
record prior to or on the Effective Date.
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
3.1.12 "Land Use Regulations" If and where applicable means all
ordinances, resolutions and codes adopted by the City governing the development and
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.14 "Owner" means RD Baldwin Park / Tropicana Enterprises LLC, a
California limited liability company.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City. In the
event of an inconsistency, the fees, charges and exactions associated with Owner's
Cannabis Permit and this Agreement as set forth in this Agreement shall control.
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3.1.16 "Project" If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, any and all entitlements, licenses, and permits related thereto.
3.1.17 "Property" means the real property described in Owner's application
and incorporated herein by this reference. Nothing in this STATUTORY AGREEMENT
or its Exhibits shall prohibit City and Owner from mutually agreeing, in writing, to modify
the location or locations or add locations to the Property, subject to all applicable zoning
and distance requirements and the Planning Director's approval.
3.1.18" Reasonable" means using due diligence to accomplish a stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives of the
STATUTORY AGREEMENT.
3.1.19 "Reservations of Authority" means the rights and authority excepted
from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.20 "Space" shall mean any surface area (whether horizontal or vertical)
which is used during the marijuana flowering phase (e.g., a table or tray). Ground, floor
or other surface areas not used for marijuana flowering (e.g., office, back -room, and
mechanical/utility rooms) are excluded from this definition.
3.1.21 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times and in
such sequences as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.22 "Subsequent Land Use Regulations" If applicable means any Land
Use Regulations defined in Section 3.1.12 that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents are attached to and, by this
reference, made part of this STATUTORY AGREEMENT:
No. 1— Legal Description of the Property.
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No. 2— Map showing Property and its location.
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is hereby
made subject to this STATUTORY AGREEMENET. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of the Property with the Project
is hereby authorized and shall, except as otherwise provided in this STATUTORY
AGREEMENT, be carried out only in accordance with the terms of this STATUTORY
AGREEMENT and the Development Plan. In the event of conflict or uncertainty between
this STATUTORY AGREEMENT and the Development Plan, the provisions of this
STATUTORY AGREEMENT shall control.
3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of 8559-
003-018 and is more particularly described in the application and document "No. 1 in
Section 3.2 and incorporated herein.
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
expressly stated in this STATUTORY AGREEMENT to survive termination without the
need of further documentation from the parties hereto. The STATUTORY AGREEMENT's
fee is subject to renegotiation after the first term, and every five years thereafter.
Term. The parties agree that the Term of this Agreement shall be fifteen (15) years
commencing on the Effective Date subject to the extension and early termination
provisions described in this Agreement, with the Term subject to possible tolling pursuant
to Section 11.10 of this Agreement. Upon termination of this Agreement, this Agreement
shall be deemed terminated and of no further force and effect without the need of further
documentation from the parties hereto.
3.5.1 Term Extension. This STATUTORY AGREEMENT may only be
extended by mutual agreement of City's authorized representative and Owner in writing
and signed by Owner and the Mayor of Baldwin Park. If the Mayor of Baldwin Park does
not sign the agreement or renegotiated agreement any such agreement is null and void.
Upon extension, this Agreement shall continue in full force and effect until termination of
any extension period.
3.6 Automatic Termination. This STATUTORY AGREEMENT shall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY AGREEMENT as set
forth in Section 3.5;
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(ii) The entry of a final judgment (or a final, non -appealable decision on
any appeal therefrom) voiding the City's General Plan or any element thereof, which
judgment or decision would preclude development of the Project, but only if the City is
unable to cure such defect in the General Plan or element within one hundred and eighty
(180) days from the later of entry of final judgment or decision on appeal.
(iii) Failure to timely pay the Fee or Fees. Failure to timely pay the
$50,000 towards the police salary or benefits. Failure to pay any fees due to the City
under this STATUTORY AGREEMENT.
3.6.1 Effect of Termination. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to any default in the performance of the provisions of this STATUTORY AGREEMENT
which has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
(iii) on the date of delivery shown in the records of the delivery
company after delivery to the recipient named below; or
(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: RD Baldwin Park/ Tropicana LLC
c/o Ryan Oganesian
P.O. Box 6579
Corona, CA 92878
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With a courtesy copy to Owner's counsel:
Sean Matsler, Esq.
Manatt, Phelps & Phillips, LLP
695 Town Center Drive, 14th Floor
Costa Mesa, CA 92626
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City Commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's cost to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY,
develop the Property with a commercial cannabis facility in accordance with and to the
extent of the Development Plan and/or application. Said commercial cannabis facility may
be constructed in one or more phases, and Owner reserves the right to modify the facility's
interior features (e.g., size and location of lights, tables, and demising walls) from the
Development Plan. The Property shall remain subject to all Subsequent Development
Approvals required to complete the Project as contemplated by the Development Plan
and/or application.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed buildings,
and the design, improvement, occupancy and construction standards and specifications
applicable to development of the Property shall be the Development Plan and/or
application. Provided, however, that in approving tentative subdivision maps, if any, the
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City may impose ordinary and necessary dedications for rights-of-way or easements for
public access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the Project
or Development Approvals beyond those contemplated in Section 4.1 may be appropriate
and mutually desirable. The City shall act on such applications, if any, in accordance with
the Existing Land Use Regulations, subject to the Reservations of Authority, or except as
otherwise provided by this STATUTORY AGREEMENT. If approved, any such change
to the Project or Development Approvals shall be considered an additional Existing
Development Approval. In the event that the BPMC is amended in the future to allow
retail or delivery licenses, this STATUTORY AGREEMENT shall be interpreted to grant
Owner first priority to obtain those retail or delivery licenses with no further action required
by City or Owner to reserve that priority. In the event California or federal law is amended
in the future to expand allowed commercial cannabis activity, this STATUTORY
AGREEMENT shall be interpreted to allow as a permitted use any activities that are legal
under federal, state, and local law.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City. In the event of an inconsistency, the Processing Fees associated
with Owner's Cannabis Permit and this Agreement as set forth in this Agreement shall
control.
(ii) Procedural regulations relating to the Development Approvals'
hearing bodies, petitions, applications, notices, findings, records, hearings, reports,
recommendations, appeals and any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations that do not conflict with the Development Plan. The term
"do not conflict" means new rules, regulations, and policies which: (a) do not modify the
Development Plan, including, without limitation, the permitted land uses, the density or
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intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(v) The City shall not be prohibited from applying to the Project
Subsequent Land Use Regulations that do not affect permitted uses of the land, density,
design, or public improvements (including construction standards and specifications), nor
shall the City be prohibited from denying or conditionally approving any Subsequent
Development applications on the basis of such subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
reasonably cooperate with other public agencies processing Development Approvals for
the Project.
4.6 Development Approvals Lifespan. The Development Approvals shall not
expire if Owner commences substantial construction of the Project within three (3) years
from the Effective Date of this STATUTORY AGREEMENT. "Substantial Construction"
means the issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns. The City has
the power and authority to examine such books and records at any reasonable time,
including but not limited to, during normal business hours, with reasonable notice being
provided at least 24 hours prior to any inspection of such books and records. If the City
wishes to inspect the areas of the Property where the cannabis is being cultivated or
manufactured, City may do so at any time with no prior notice to Owner. In addition, City
agrees that all of its employees or agents who enter the cultivation, manufacturing and
curing areas shall follow all of the policies and guidelines imposed on Owner's employees,
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including without limitation, the wearing of any clothing or equipment to insure that no
pests or impurities shall enter the cultivation and curing areas.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project.
5.2 For the first year, Owner will pay the City a total of $220,000 as a Mitigation
Fee. This fee is calculated based on $10.00 a square foot of permit space and a permit
which allows up to 22,000 sq. feet, among other factors.
5.3 In year two and year three, the Mitigation Fee will increase to $12.50 per
sq. foot for a total of $275,000 per year, among other factors.
5.4 At the beginning of year four and year five, Owner will pay a Mitigation Fee
of $15.00 per sq. foot for a total of $330,000 per year, among other factors.
5.5 The Fee schedule is as follows: The first Fee payment is due at the close of
the second quarter. Therefore, the first payment will be due on the last day of June 2018, the
second and last payment for the first year is due on the last day of December 2018. For the
years 2 through 15, the Fee schedule is as follows: divide the total Fee for the respective
year into four and make four equal payments due at the end of each quarter of the respective
year.
Payment is due no later than thirty (30) days following the close of each quarter.
Owner's responsibility for the Fees set forth in Sections 5.2 shall commence six (6) months
following the City's issuance of the Project's first Certificate of Occupancy.
5.6 The Fee is subject to reassessment by the City every five years. At the end
of year five, the City will set a new Fee which will be applied in years 6 through 10. At
the end of year 10, the City will set new Fee which will be applied in years 11 through 15.
No one factor is dispositive in the City's determination of the new Fee. The Cannabis
permit will expire at the close of the 15th year and will require the Owner to reapply with
the City for a new permit. If Owner and City cannot agree to a new Fee or Fees by
December 22, 2022, this STATUTORY AGREEMENT will automatically terminate on
December 23, 2022. City and Owner agree to negotiate in good faith.
5.7 Further, Owner will pay a yearly payment of $50,000 to the City that can be
used to mitigate the impact of the cannabis business on the City and its resources which
includes but is not limited to, to use to pay a part of a police officer's salary and/or benefits.
This payment is due within thirty (30) days of issuance of permit and thereafter on the
anniversary of the issuance of the permit.
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5.8 Jobs and Wage Creation.
5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the City or
who employ a significant number of City residents. Unless otherwise agreed to in writing
by the City's CEO, at least 20 percent of the Project's workforce shall consist of residents of
the Citv. Job announcements shall be posted at City Hall, along with proof that the job
announcements were advertised in at least two newspapers published, printed or
distributed in the City and on various social media sites accessible to the general public. In
addition, Owner shall make a good faith effort to advertise job announcements at local job
fairs, on local radio and through public agencies and organizations.
5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for up to $15,000 of the City's actual costs associated with processing
Development Approvals for the Project including, but not limited to, costs associated with
the City's review and processing of the Project, including but not limited to reviewing the
Project's entitlements, including all environmental clearance documents, permits,
licenses and all documents evidencing compliance with state and local law. As such,
upon issuance of its permit, Owner must deposit $15,000 with the City for the purpose of
reimbursing the City for any associated costs with processing the Project, as detailed
above. Owner will be liable for the City's actual costs incurred in processing future
Development Approval applications. City acknowledges and agrees that this one-time
$15,000 payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT. Within 30 days of the
Effective Date, City shall provide an accounting of its actual costs to Owner and return
any excess funds to Owner.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 Transportation of Cannabis. All pick ups and drop offs of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity, arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
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ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. During
the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council may automatically terminate this
STATUTORY AGREEMENT notwithstanding any other provision of this STATUTORY
AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT and impose
such conditions as are reasonably necessary to protect the interests of the City. The
decision of the City Council shall be final, subject only to judicial review pursuant to Code
of Civil Procedure Section 1094.5.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special
review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City would
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
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to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings.
In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
or to any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest, if successors in interest are
permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof,
not to sue for damages or claim any damages:
(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application for cultivation, manufacturing and/or distribution or interpretation
or effect of the provisions of this STATUTORY AGREEMENT.
Owner hereby agrees to waive and/or release the City of Baldwin Park for any claim or
claims or cause of action, not specifically and expressly reserved herein, which Owner
may have at the time of execution of this STATUTORY AGREEMENT relating to any
application to the City of Baldwin Park including but not limited to, any application for any
type of distribution, cultivation or manufacturing permit, any application for any
distribution, cultivation or manufacturing rights, or any application for any distribution,
cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTURY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
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releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:
" A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged.
Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
shall modify or abridge any defenses or immunities available to the City and its employees
pursuant to the Government Tort Liability Act and all other applicable statutes and
decisional law.
Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8.1, Section 8.2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money damages and
remedies at law are inadequate, and specific performance and other non -monetary relief
are particularly appropriate remedies for the enforcement of this Agreement and should
be available to all parties for the following reasons:
(i) Except as provided in Sections 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
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8.3 Termination of STATUTORY AGREEMENT for Default of the City. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default.
8.4 Owner Default. No building permit shall be issued or building permit
application accepted for any structure on the Property after Owner is determined by the
City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
as the result of a final, non -appealable judicial determination that the General Plan, or
portions thereof, are invalid or inadequate or not in compliance with law, or that this
STATUTORY AGREEMENT or any of the City's actions in adopting it were invalid,
inadequate, or not in compliance with law. Notwithstanding the foregoing, neither party
shall contend in any administrative or judicial proceeding that any STATUTORY
AGREEMENT or any Development Approval is unenforceable based upon federal, state
or local statutes, ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
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9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees), which the City or its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the California Environmental Quality Act compliance
document prepared in connection with the development of the Property; and (iii) the
proceedings or procedure undertaken in connection with the adoption or approval of, any
permit or any of the above. In the event of any legal or equitable action or other
proceeding instituted by anyone against the City or its City Council, any third party
(including a governmental entity or official) challenging the validity of any provision of this
STATUTORY AGREEMENT or the procedure upon which the permit was issued, or any
portion thereof as set forth herein, the parties shall mutually cooperate with each other in
defense of said action or proceeding. Notwithstanding the above, the City, at is sole
option, may tender to Owner and Owner agrees to accept any such tender of the complete
defense of any third party challenge as described herein. In the event the City elects to
contract with special counsel to provide for such a defense, the City may do so in its sole
discretion and Owner will be required to pay the defense costs of the City as the costs
are incurred. Owner agrees to pay any and all attorneys' fees or retainer regarding the
selection of counsel, and Owner shall pay all costs and all attorneys' fees related to
retention of such counsel.
9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers, agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9.4 do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
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settlement offer, City shall notify Owner of the offer and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
in connection with Owner's development, operation and use of the Property (collectively,
"Actions"). The City shall not disclose information and documents to the Federal
Government or State Government, its officers, or agents regarding any party to this
STATUTORY AGREEMENT absent a grand jury subpoena, civil or administrative
subpoena, warrant, discovery request, summons, court order or similar process
authorized under law hereinafter called "Governmental Notice". If any Action is brought
by either the Federal or State Government, City shall immediately notify Owner of the
nature of the Claim including all correspondence or documents submitted to the City.
Prior to responding to the Governmental Notice, City shall provide Owner ten (10) days
from the date of such notice subpoena or the like to serve and obtain on the City a
protective order, or the like, from a court of competent jurisdiction.
9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or modification is consistent with the intent and purposes of this STATUTORY
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AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or
in any way limit the City's rights under this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly referred to herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this Agreement. The
foregoing notwithstanding, the provision of the public benefits set forth in Article 5,
including the payment of the fees set forth therein, are essential elements of this
STATUTORY AGREEMENT and the City would not have entered into this STATUTORY
AGREEMENT but for such provisions, and therefore in the event that any portion of such
provisions are determined to be invalid, void or unenforceable, at the City's option this
entire STATUTORY AGREEMENT shall terminate and from that point on be null and void
and of no force and effect whatsoever. The foregoing notwithstanding, the development
rights set forth in Article 4 of this STATUTORY AGREEMENT are essential elements of
this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Owner's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel in the
negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this
STATUTORY AGREEMENT.
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11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure by a party
to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms
of this STATUTORY AGREEMENT thereafter.
11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
11.9 This STATUTORY AGREEMENT when signed and executed by Owner and
Mayor of Baldwin Park supercedes and renders null and void that certain non -statutory
municipal Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and agreed
by and between the parties hereto that the development of the Project is a private
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development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this Agreement.
11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto.
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
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(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter and bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
claim that the terms in this STATUTORY AGREEMENT constitute an abuse of the police
power, violate substantive due process, deny equal protection of the laws, effect a taking
of property without payment of just compensation, and/or impose an unlawful tax.
11.20 [RESERVED]
11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply with all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of BPMC.
11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits and/or
licenses are incorporated herein by this reference.
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11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
IN WITNESS WHEREOF, ' the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK RD BALDWIN PARK / TROPICANA
ENTERPRISES LLC
By:
Manual Lozano, Mayor
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
Robert N. Tafoya,
City Attorney
By:
President
APPROVED AS TO FORM:
By:
Legal Counsel for
RD Baldwin Park
Enterprises
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/ Tropicana
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
*:1;11:1
de
EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
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ITEM: G (Organic Management Solutions)
ATTACHMENT #7 DA 18-07
ORGANIC MANAGEMENT
SOLUTIONS, LLC
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-07
Location 14837 Ramona Blvd. APN: 8437-018-002 & 14841
Ramona Blvd. APN: 8437-018-001
Zoning of Subject Locations I -C, Industrial Commercial (both)
Principal Name(s) Phil Reyes and Alexis Reyes
Company Name Organic Management Solutions, LLC
Term of Development Fifteen (15) years from 12/29/17
Aareement
June 30 and December 31 for Year #1
Payment Schedule Quarterly for Years #2 through #15—Four equal
payments.
Year #1--$220,000
Years #2 and #3--$275,000
Payment Amount Years #4 and #5--$330,000—The Mitigation Fee is
subject to reassessment by the City every five (5)
ears.
Floor Area of Buildings 480 s.f. and 980 s.f. per City Records, respective)
Employee Requirements At least 20% of the project's workforce shall consist
of residents of the City.
R1
VICINITY MAP
CASE NUMBER: DA 18-07
LOCATION: 14837 Ramona Boulevard
DATE: April 12, 2018
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JANV%
VICINITY MAP
CASE NUMBER: DA 18-07
LOCATION: 14841 Ramona Boulevard
DATE: April 12, 2018
DA 18-07
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I -C, Industrial Commercial Zone, it is anticipated that the
use of the property is consistent with the other light industrial uses within
the area. The adoption of cannabis cultivation and manufacturing
activities is also consistent with Goal 1.0 of the City's Economic
development Element in the General Plan in that the City encourages and
facilitates activities that expand the City's revenue base. Furthermore,
Goal 6.0 of the same element encourages the expansion of the City's
diverse industrial base. Policy 6.5 of Goal 6.0 encourages an on-going
campaign with local businesses to hire local residents. This Development
Agreement requires that a minimum of 20% of the businesses workforce
shall consist of Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located. '
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I -C, Industrial Commercial Zone
surrounded by lighter industrial uses. The use exceeds the distance
requirement of fifty (50) feet between cannabis uses and the closest
residential zone; furthermore, pursuant to Section 127.07.E.1 of the City's
Municipal Code, the cannabis use is not nearby any sensitive uses such
as schools, day care centers, parks or youth centers.
The Applicant is committed to providing a positive visual impact to the
surrounding neighborhood and City including landscaping, painting and
DA 18-07
other housekeeping measures to ensure that they do not become a
nuisance in the adjacent neighborhood or to the City.
Security measures for the facility include, alarms, video surveillance, and
a comprehensive employee training program.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1416
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
ORGANIC MANAGEMENT SOLUTIONS FOR THE
CULTIVATION AND/OR MANUFACTURING OF
CANNABIS AT THE REAL PROPERTY LOCATED AT
14837 AND 14841 RAMONA BLVD. (APN: 8437-018-
002 and 8437-018-001) WITHIN THE CITY OF
BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code H
65864 - 65869.5.
Ordinance 1416
Page 2
WHEREAS, as required by law, the City Council gave first reading to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore each of the
locations is proposed within an existing building
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I -C, Industrial Commercial Zone, it is
anticipated that the use of the property is consistent with the other,
light industrial uses within the area. The adoption of cannabis
cultivation and manufacturing activities is also consistent with Goal
1.0 of the City's Economic development Element in the General Plan
in that the City encourages and facilitates activities that expand the
City's revenue base. Furthermore, Goal 6.0 of the same element
encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement
requires that a minimum of 20% of the businesses workforce shall
consist of Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances)
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
Ordinance 1416
Page 3
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general
area and City as a whole as it is located within the I -C, Industrial
Commercial Zone surrounded by lighter industrial uses. The use
exceeds the distance requirement of fifty (50) feet between cannabis
uses and the closest residential zone; furthermore, pursuant to
Section 127.07.E.1 of the City's Municipal Code, the cannabis use is
not nearby any sensitive uses such as schools, day care centers,
parks or youth centers.
The Applicant is committed to providing a positive visual impact to
the surrounding neighborhood and City including landscaping,
painting and other housekeeping measures to ensure that they do
not become a nuisance in the adjacent neighborhood or to the City.
Security measures for the facility include, alarms, video surveillance,
and a comprehensive employee training program.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full force and
operation from and after thirty (30) days after its final reading and adoption.
PASSED AND APPROVED ON THE _ day of , 2018
MANUEL LOZANO, MAYOR
Ordinance 1416
Page 4
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1416 was duly approved and adopted at a regular
meeting of the City Council on , 2018 by the following vote:
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND ORGANIC MANAGEMENT SOLUTIONS, LLC.
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("STATUTORY
AGREEMENT") is intended to replace the previous non -statutory municipal Development
Agreement, and is dated April , 2018 for references purposes only and is entered into
between (i) the City of Baldwin Park ("City"), a California municipal corporation, and
(ii) Organic Management Solutions, a California Limited Liability Company ("Owner").
This STATUTORY AGREEMENT shall become effective on the Effective Date defined in
Section 3.1.9 below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and Jenome Research previously entered into a non -
statutory municipal Development Agreement that was not intended to be a Government
Code Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be a Statutory Development Agreement under and
through Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code Section
65864 et seq. to enter into binding development agreements with persons having legal or
equitable interests in real property for the development of such property; and
.2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture medical and adult use cannabis in September
2017; and at that time the City determined that the uses authorized in this STATUTORY
AGREEMENT were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of various entitlements, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
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2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistept with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map and the Baldwin Park Municipal Code as of the Agreement
Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements for notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or Property, ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Manufacturing, and
Cultivation Facility pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127
and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture cannabis and cannabis related products at its facility or facilities up to 22,000
square feet.
2.14 WHEREAS, the City entered into a Development STATUTORY
AGREEMENT with Rukli, Inc. to be the exclusive distributor of cannabis and cannabis
related products in the City of Baldwin Park. The City is entering into development
agreements with owners for permits for cultivation and manufacturing of cannabis and
cannabis related products in the City of Baldwin Park. The City prohibits the sale of
cannabis and cannabis related products within the City of Baldwin Park so the cannabis
and cannabis related products must be distributed to and sold in cities where it is legal to
do so. Rukli, Inc. shall be the exclusive distributor for the cultivation and/or manufacturing
permit holders within the City of Baldwin Park and City conditions the cultivation and/or
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manufacturing permits on Rukli, Inc. being the exclusive distributor for any permit issued
by Baldwin Park for cultivation or manufacturing.
ARTICLE 3. GENERAL TERMS.
3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows:
3.1.1 "Agreement" means this Development Agreement pursuant to
Government Code Section 65864 et seq.
corporation.
3.1.2 "City" means the City of Baldwin Park, a California municipal
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within -the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" If applicable, means other entitlements for
the Development of the Property, including any and all conditions of approval, subject to
approval or issuance by the City in connection with Development of the Property.
"Development Approvals" also include both the Existing Development Approvals and the
Subsequent Development Approvals approved or issued by the City that are consistent
with this STATUTORY AGREEMENT.
3.1:7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code.
3.1.9 "Effective Date" means the day this STATUTORY AGREEMENT is
approved and adopted by the Baldwin Park City Council and signed by the Mayor of
Baldwin Park or his designee.
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved or issued prior to or on the Effective Date. Existing
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Development Approvals include the approvals set forth in Section 3.1.6 and all, other
approvals which are a matter of public record prior to or on the Effective Date.
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
3.1.12 "Land Use Regulations" If and where applicable means all
ordinances, resolutions and codes adopted by the City governing the development and
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.14 "Owner" means Organic Management Solutions, a California Limited
Liability Company.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City.
3.1.16 "Project" If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, the application, any and all entitlements, licenses, and permits
related to the Project.
3.1.17 "Property" means the real property described in Owner's application
and incorporated herein by this reference. Owner may modify the location or locations or
add locations to the Property subject to City approval and all applicable zoning and
distance requirements.
3.1.19 "Reasonable" means using due diligence to accomplish a stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives of the
STATUTORY AGREEMENT.
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3.1.20 "Reservations of Authority" means the rights and authority excepted
from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.21 "Space or Canopy Space" shall mean any space or ground, floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing and/or harvesting
phases, including without limitation any space used for activities such as growing,
planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering,
irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used
for storing cannabis, no matter where such storage may take place or such storage space
may be located.
3.1.22 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times and in
such sequences as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.23 "Subsequent Land Use Regulations" If applicable means any Land
Use Regulations defined in Section 3.1.12 that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents are attached to and, by this
reference, made part of this STATUTORY AGREEMENT:
No. 1 — Legal Description of the Property.
No. 2 — Map showing Property and its location.
No. 3 — Application.
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is hereby
made subject to this STATUTORY AGREEMENT. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of the Property is hereby
authorized and shall, except as otherwise provided in this STATUTORY AGREEMENT,
be carried out only in accordance with the terms of this STATUTORY AGREEMENT and
the Development Plan, if any. In the event of conflict or uncertainty between this
STATUTORY AGREEMENT and the Development Plan, the provisions of this
STATUTORY AGREEMENT shall control.
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3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of
8437016005, 8437016016 and 8437016015 and is more particularly described in the
application and document "No. 1" in Section 3.2 and incorporated herein.
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
expressly stated in this STATUTORY AGREEMENT to survive termination without the
need of further documentation from the parties hereto. The STATUTORY
AGREEMENT's Fee is subject to renegotiation after the first term, and every five year
term thereafter.
3.5.1 Term Extension. This STATUTORY AGREEMENT may be
extended by mutual agreement of City and Owner in writing and signed by Owner and
the Mayor of Baldwin Park. If the Mayor of Baldwin Park does not sign the agreement or
renegotiated agreement any such agreement is null and void.
3.6 Automatic Termination. This STATUTORY AGREEMENT shall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY AGREEMENT- as set
forth in Section 3.5;
(ii) The entry of a final judgment (or a decision on any appeal therefrom)
voiding the City's General Plan or any element thereof, which judgment or decision would
preclude development of the Project, but only if the City is unable to cure such defect in
the General Plan or element within one hundred and eighty (180) days from the later of
entry of final judgment or decision on appeal. ,
(iii) Failure to timely pay the Fee or Fees. Failure to timely pay the
$50,000 towards the police salary or benefits. Failure to pay any fees due to the City
under this STATUTORY AGREEMENT.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements and permits
approved for the Owner or Property. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to any default in -the performance of the provisions of this STATUTORY AGREEMENT
which has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
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3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below;. or
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
(iii) on the date of personal delivery shown in the records of the
delivery company after delivery to the recipient named below; or
(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: Phillip R. Reyes
2918 Treefern Drive
Duarte, CA 91010
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's costs to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
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process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property with a commercial cannabis facility in accordance
with and to the extent of the Development Plan and/or application. The Property shall
remain subject to all Subsequent Development Approvals required to complete the
Project as contemplated by the Development Plan and/or application.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed buildings,
and the design, improvement, occupancy and construction standards and specifications
applicable to development of the Property shall be the Development Plan and/or
application. Provided, however, that in approving tentative subdivision maps, if any, the
City may impose ordinary and necessary dedications for rights-of-way or easements for
public access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the Project
or Development Approvals may be appropriate and mutually desirable. The City shall act
on such applications, if any, in accordance with the Existing Land Use Regulations,
subject to the Reservations of Authority, or except as otherwise provided by this
STATUTORY AGREEMENT. If approved, any such change in the Existing Development
Approvals shall be considered an additional Existing Development Approval.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City.
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(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new development
projects of the same uses within the City; and
(v) Regulations that do not conflict with the Development Plan. The term
"do not conflict" means new rules, regulations, and policies which: (a) do not modify the
Development Plan, including, without limitation, the permitted land uses, the density or
intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying or
conditionally approving any Subsequent Development applications on the basis of such
subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
reasonably cooperate with other public agencies processing Development Approvals for
the Project.
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4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term
of any tentative subdivision map shall be in effect for a period of fifteen (15) years, and
may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within one (1) year from the
Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means the
issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns. The City has
the power and authority to examine such books and records at any reasonable time,
including but not limited to, during normal business hours. If the City wishes to inspect
the areas of the Property where the cannabis is being cultivated or manufactured, City
may do so at any time with no prior notice to Owner. In addition, City agrees that all of
its employees or agents which enter the cultivation, manufacturing and curing areas shall
follow all of the policies and guidelines imposed on Owner's employees, including without
limitation, the wearing of any clothing or equipment to insure that no pests or impurities
shall enter the cultivation and curing areas.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by -commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project.
5.2 For the first year, Owner will pay the City a total of $220,000 as a Fee. This
fee is calculated based on $10.00 a square foot of permit space and a permit which allows
up to 22,000 sq. feet, among other factors.
5.3 In year two and year three, the Fee will increase to $12.50 per sq. foot for
a total of $275,000 per year. This fee is calculated based on $12.50 a square' foot of
permit space and a permit which allows up to 22,000 sq. feet, among other factors.
5.4 At the beginning of year four and year five, Owner will pay a Fee of $15.00
per sq. foot for a total of $330,000 per year. This fee is calculated based on $15.00 a
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square foot of permit space and a permit which allows up to 22,000 sq. feet, among other
factors.
5.5 The Fee schedule is as follows: The first Fee payment is due at the close
of the second quarter. Therefore, the first payment will be due on the last day of June
2018, the second and last payment for the first year is due on the last day of December
2018. For the years 2 through 15, if the permit remains valid for the entire 15 years, the
Fee schedule is as follows: divide the total Fee for the respective year into four and make
four equal payments due at the end of each quarter of the respective year.
5.6 The Fee is subject to reassessment by the City every five years. At the end
of year five, the City will set a new Fee which will be applied in years 6 through 10. At
the end of year 10, the City will set new Fee which will be applied in years 11 through 15.
No one factor is dispositive in the City's determination of the new Fee. The Cannabis
permit will expire at the close of the 15th year and will require the Owner to reapply with
the City for a new permit. If Owner and City cannot agree to a new Fee or Fees by
December 22, 2022, this STATUTORY AGREEMENT will automatically terminate on
December 23, 2022.
5.7 Further, Owner will pay a yearly payment of $50,000 each year to the City
that can be used to mitigate the impact of the cannabis business on the City and its
resources which includes but is not limited to, paying a part of a police officer's salary
and/or benefits. This payment is due within thirty (30) days of issuance of permit and
thereafter on the anniversary of the issuance of the permit.
5.8 Jobs and Wage Creation.
5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the City or
who employ a significant number of City residents. At least 20 percent of the Project's
workforce shall consist of residents of the City. Job announcements shall be posted at City
Hall, along with proof that the job announcements were advertised in at least two
newspapers published, printed or distributed in the City and on various social media sites
accessible to the general public. In addition, Owner shall make a good faith effort to advertise
job announcements at local job fairs, on local radio and through public agencies and
organizations.
5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses -and all
documents evidencing compliance with state and local law. As such, upon issuance of
its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the
City for any associated costs with processing the Project, as detailed above and
reimbursing the City for its actual costs incurred in drafting and processing this
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STATUTORY AGREEMENT. Owner will be liable for the City's actual costs incurred in
processing future Development Approval applications. City acknowledges and agrees
that this payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 Transportation of Cannabis. All pick ups and drop offs of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity, arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. During
the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council may automatically terminate this
STATUTORY AGREEMENT notwithstanding any other provision of this STATUTORY
AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT and impose
such conditions as are reasonably necessary to protect the interests of the City. The
decision of the City Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
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shall not be bound by a Certificate if a default existed at the time of the periodic or special
review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City would
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings.
In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
or to any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest, if successors in interest are
permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof,
not to sue for damages or claim any damages:
(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
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(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application or request for a permit for cultivation, manufacturing and/or
distribution or interpretation or effect of the provisions of this STATUTORY AGREEMENT.
Owner hereby agrees to waive and/or release the City of Baldwin Park for any claim or
claims or cause of action, not specifically and expressly reserved herein, which. Owner
may have at the time of execution of this STATUTORY AGREEMENT relating to any
application to the City of Baldwin Park including but not limited to, any application for any
type of distribution, cultivation or manufacturing permit, any application for any
distribution, cultivation or manufacturing rights, or any application for any distribution,
cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTORY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:
" A general release does not extend to claims which the creditor does not.
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged.
Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
shall modify or abridge any defenses or immunities available to the City and its employees
pursuant to the Government Tort Liability Act and all other applicable statutes and
decisional law.
Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8. 1, Section 8.2, and
Section 8.3.
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8.2 Specific Performance. The parties acknowledge that money damages and
remedies at law are inadequate, and specific performance and other non -monetary relief
are particularly appropriate remedies for the enforcement of this STATUTORY
AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Section 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of STATUTORY AGREEMENT for Default of the City.. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default.
8.4 Owner Default. No building permit shall be issued or building permit
application accepted for any structure on the Property after Owner is determined by the
City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of .Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
as- the result of a judicial determination that the General Plan, or portions thereof, are
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invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that any STATUTORY AGREEMENT .or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees), which the City or its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the environmental impact report, mitigated negative
declaration or negative declaration, as the case may be, prepared in connection with the
development of the Property; and (iii) the proceedings or procedure undertaken in
connection with the adoption or approval of any permit or any of the above. In the event
of any legal or equitable action or other proceeding instituted by anyone against the City
or its City Council, any third party (including a governmental entity or official) challenging
the validity of any provision of this STATUTORY AGREEMENT or procedure upon which
the permit was issued, or any portion thereof as set forth herein, the parties shall mutually
cooperate with each other in defense of said action or proceeding. Notwithstanding the
above, the City, at is sole option, may tender to Owner and Owner agrees to accept any
such tender of the complete defense of any third party challenge as described herein. In
the event the City elects to contract with special counsel to provide for such a defense,
the City may do so in its sole discretion and Owner will be required to pay the defense
costs of the City as the costs are incurred. Owner agrees to pay any and all attorneys'
fees or retainer regarding the selection of counsel, and Owner shall pay all costs and all
attorneys' fees related to retention of such counsel.
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9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers, agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9.4 do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
settlement offer, City shall notify Owner of the offer and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such' action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
in connection with Owner's development, operation and use of the Property (collectively,
"Actions"). The City shall not disclose information and documents to the Federal
Government or State Government, its officers, or agents regarding any party to this
STATUTORY AGREEMENT absent a grand jury subpoena, civil or administrative
subpoena, warrant, discovery request, summons, court order or similar process
authorized under law hereinafter called "Governmental Notice". If any Action is brought
by either the Federal or State Government, City shall immediately notify Owner of the
nature of the Claim including all correspondence or documents submitted to the City.
Prior to responding to the Governmental Notice, City shall provide Owner ten (10) days
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from the date of such notice subpoena or the like to serve and obtain on the City a
protective order, or the like, from a court of competent jurisdiction.
9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or modification is consistent with the intent and purposes of this STATUTORY
AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or
in any way limit City's rights under this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly contained herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein; are essential elements
of. this STATUTORY AGREEMENT and the City would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at the City's
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option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever. The foregoing notwithstanding, the
development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential
elements of this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Owner's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance With the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel in the
negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure by a party
to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms
of this STATUTORY AGREEMENT thereafter.
11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
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11.9 This STATUTORY AGREEMENT when signed and executed by Owner and
the Mayor of Baldwin Park supercedes and renders null and void that certain non -
statutory municipal Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint"venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident :of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
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then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto.
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body -and in
accordance with that company's or entity's articles of incorporation or charter and bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
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claim that the terms in this STATUTORY AGREEMENT constitute an abuse of tha police
power, violate substantive due process, deny equal protection of the laws, effect a taking
of property without payment of just compensation, and/or impose an unlawful tax.
11.20 [RESERVED]
11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply with all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of BPMC.
11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits and/or
licenses are attached hereto and incorporated herein by this reference.
11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
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IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK
By:
Manuel Lozano, Mayor
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
Robert N. Tafoya,
City Attorney
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ORGANIC MANAGEMENT SOLUTIONS,
LLC.
By:
Philip R. Reyes
CEO
APPROVED AS TO FORM:
By:
Legal Counsel for
ORGANIC MANAGEMENT
SOLUTIONS, LLC.
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
-1-
EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
-1-
ITEM: H (Medical Grade Farms BP)
ATTACHMENT #8 DA 18-08
MEDICAL GRADE FARMS BP
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-08
Location 5148 Bleecker St. APN 8414-004-005
Zoning of Subject Location I, Industrial
Principal Name(s) Sergio Torres, Enrique Vega, and Moses Acosta
Company Name Medical Grade Farms BP
Term of Development Fifteen years from 12/29/17
Aareement
June 30 and December 31 for Year #1
Payment Schedule Quarterly for years #2 through #15—Four equal
payments.
Year #1--$220,000
Years #2 and #3--$275,000
Payment Amount Years #4 and #5--$330,000—The Mitigation Fee is
subject to reassessment by the City every five (5)
Floor Area of Buildings 9,963 s.f. per City Records
Employee Requirements At 40% of the Project's workforce shall consist of
residents of the City.
VICINITY MAP
CASE NUMBER: DA 18-08
LOCATION: 5148 Bleecker Street
DATE: April 12, 2018
DA 18-08
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I, Industrial Zone, it is anticipated that the use of the
property is consistent with the other light industrial uses within the area.
The adoption of cannabis cultivation and manufacturing activities is also
consistent with Goal 1.0 of the City's Economic development Element in
the General Plan in that the City encourages and facilitates activities that
expand the City's revenue base. Furthermore, Goal 6.0 of the same
element encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement requires
that a minimum of 40% of the businesses workforce shall consist of
Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I, Industrial Zone surrounded by
lighter industrial uses. The use exceeds the distance requirement of fifty
(50) feet between cannabis uses and the closest residential zone;
furthermore, pursuant to Section 127.07.E.1 of the City's Municipal Code,
the cannabis use is not nearby any sensitive uses such as schools, day
care centers, parks or youth centers.
17_I
Medical Grade Farms BP plans to be an active member of the Community
and a socially responsible corporate citizen. Their focus is on the
following key areas: Education, volunteerism, Corporate Community
Engagement and Training and Development.
Security of their facility is of utmost importance in order to not have a
negative impact upon the surrounding neighborhood and community as a
whole. Exterior and interior video surveillance is proposed in addition to
collaborating with the City's Police Department.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1417
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
MEDICAL GRADE FARMS BP FOR THE
CULTIVATION AND/OR MANUFACTURING OF
CANNABIS AT THE REAL PROPERTY LOCATED AT
5148 BLEECKER STREET (APN 8414-004-005)
WITHIN THE CITY OF BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code §§
65864 - 65869.5.
Ordinance 1417
Page 2
WHEREAS, as required by law, the City Council gave first reading to the proposed
ordinance on April 12, 2018.
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore each of the
locations is proposed within an existing building.
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I, Industrial Zone, it is anticipated that
the use of the property is consistent with the other light industrial
uses within the area. The adoption of cannabis cultivation and
manufacturing activities is also consistent with Goal 1.0 of the City's
Economic development Element in the General Plan in that the City
encourages and facilitates activities that expand the City's revenue
base. Furthermore, Goal 6.0 of the same element encourages the
expansion of the City's diverse industrial base. Policy 6.5 of Goal
6.0 encourages an on-going campaign with local businesses to hire
local residents. This Development Agreement requires that a
minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances)
cannabis cultivation, manufacturing and distribution activities are
allowed .within the City provided all of the development standards in
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
Ordinance 1417
Page 3
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
Will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general
area and City as a whole as it is located within the I, Industrial Zone
surrounded by lighter industrial uses. The use exceeds the distance
requirement of fifty (50) feet between cannabis uses and the closest
residential zone; furthermore, pursuant to Section 127.07.E.1 of the
City's Municipal Code, the cannabis use is not nearby any sensitive
uses such as schools, day care centers, parks or youth centers.
Medical Grade Farms BP plans to be an active member of the
Community and a socially responsible corporate citizen. Their focus
is on the following key areas: Education, volunteerism, Corporate
Community Engagement and Training and Development.
Security of their facility is of utmost importance in order to not have
a negative impact upon the surrounding neighborhood and
community as a whole. Exterior and interior video surveillance is
proposed in addition to collaborating with the City's Police
Department.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full force and
operation from and after thirty (30) days after its final reading and adoption.
PASSED AND APPROVED ON THE — day of , 2018
Ordinance 1417
Page 4
MANUEL LOZANO, MAYOR
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1417 was duly approved and adopted at a regular
meeting of the City Council on , 2018 by the following vote:
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND MEDICAL GRADE FARMS, BP
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("STATUTORY
AGREEMENT") is intended to replace the previous non -statutory municipal Development
Agreement, and is dated April , 2018 for references purposes only and is entered into
between (i) the City of Baldwin Park ("City"), a California municipal corporation, and
(ii) Medical Grade Farms, BP, a California Cooperative Corporation ("Owner"). This
STATUTORY AGREEMENT shall become effective on the Effective Date defined in
Section 3.1.9 below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and Jenome Research previously entered into a non -
statutory municipal Development Agreement that was not intended to be a Government
Code Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be a Statutory Development Agreement under and
through Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code Section
65864 et seq. to enter into binding statutory development agreements with persons
having legal or equitable interests in real property for the development of such property;
and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture medical and adult use cannabis in September
2017; and at that time the City determined that the uses authorized in this STATUTORY
AGREEMENT were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of various entitlements, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map and the Baldwin Park Municipal Code as of the Agreement
Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements for notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or Property, ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Manufacturing and
Cultivation Facility pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127
and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture cannabis and cannabis related products, at or from its facility or facilities up
to 22,000 square feet.
2.14 WHEREAS, the City entered into a Development Agreement with Rukli, Inc.
to be the exclusive distributor of cannabis and cannabis related products in the City of
Baldwin Park. The City is entering into development agreements with owners for permits
for cultivation and manufacturing of cannabis and cannabis related products in the City of
Baldwin Park. The City prohibits the sale of cannabis and cannabis related products within
the City of Baldwin Park so the cannabis and cannabis related products must be
distributed to and sold in cities where it is legal to do so. Rukli, Inc. shall be the exclusive
distributor for the cultivation and/or manufacturing permit holders within the City of
Baldwin Park and City conditions the cultivation and/or manufacturing permits on Rukli,
Inc. being the exclusive distributor for any permit issued by Baldwin Park for cultivation or
manufacturing.
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ARTICLE 3. GENERAL TERMS.
3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows:
3.1.1 "Agreement" means this STATUTORY AGREEMENT pursuant to
Government Code Section 65864 et seq.
corporation.
3.1.2 "City" means the City of Baldwin Park, a California municipal
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" If applicable, means other entitlements for
the Development of the Property, including any and all conditions of approval, subject to
approval or issuance by the City in connection with Development of the Property.
"Development Approvals" also include both the Existing Development Approvals and the
Subsequent Development Approvals approved or issued by the City that are consistent
with this STATUTORY AGREEMENT.
3.1.7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code.
3.1.9 "Effective Date" means the day this STATUTORY AGREEMENT is
approved and adopted by the Baldwin Park City Council.
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved or issued prior to or on the Effective Date. Existing
Development Approvals include the approvals set forth in Section 3.1.6 and all other
approvals which are a matter of public record prior to or on the Effective Date.
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
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include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
3.1.12 "Land Use Regulations" If and where applicable means all
ordinances, resolutions and codes adopted by the City governing the development and
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.14 "Owner" means Medical Grade Farms, BP, a California Cooperative
Corporation.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City.
3.1.16 "Project" If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, the application, any and all entitlements, licenses, and permits
related to the Project.
3.1.17 "Property" means the real property described in Owner's application
and incorporated herein by this reference. Owner may modify or add to the location or
locations or add locations to the Property subject to City approval and all applicable
zoning and distance requirements.
3.1.18 "Reasonable" means using due diligence to accomplish a stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives of the
STATUTORY AGREEMENT.
3.1.19 "Reservations of Authority" means the rights and authority excepted
from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.20 "Space or Canopy Space" shall mean any space or ground, floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing, and/or harvesting
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phases, including without limitation any space used for activities such as growing,
planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering,
irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used
for storing any products, supplies or equipment related to any such activities, no matter
where such storage may take place or such storage space may be located.
3.1.21 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times and in
such sequences as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.22 "Subsequent Land Use Regulations" If applicable means any Land
Use Regulations defined in Section 3.1.12 that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents, by this reference, are made part of
this STATUTORY AGREEMENT:
No. 1 — Legal Description of the Property.
No. 2 — Map showing Property and its location.
NO. 3 —Application.
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is hereby
made subject to this STATUTORY AGREEMENT. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of the Property is hereby
authorized and shall, except as otherwise provided in this Agreement, be carried out only
in accordance with the terms of this STATUTORY AGREEMENT and the Development
Plan, if any. In the event of conflict or uncertainty between this STATUTORY
AGREEMENT and the Development Plan, the provisions of this STATUTORY
AGREEMENT shall control.
3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of 8414-
004-005 and is more particularly described in the application and document "No. 1" in
Section 3.2 and incorporated herein.
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
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expressly stated in this STATUTORY AGREEMENT to survive termination without the
need of further documentation from the parties hereto. The STATUTORY
AGREEMENT's Fee is subject to renegotiation after the first term, and every five year
term thereafter.
3.5.1 Term Extension. This STATUTORY AGREEMENT may be
extended by mutual agreement of City and Owner in writing and signed by Owner and
the Mayor of Baldwin Park. If the Mayor of Baldwin Park does not sign the agreement or
renegotiated agreement any such agreement is null and void.
3.6 Automatic Termination. This STATUTORY AGREEMENT shall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY AGREEMENT as set
forth in Section 3.5;
(ii) The entry of a final judgment (or a decision on any appeal therefrom)
voidingthe City's General Plan or any element thereof, which judgment or decision would
preclude development of the Project, but only if the City is unable to cure such defect in
the General Plan or element within one hundred and eighty (180) days from the later of
entry of final judgment or decision on appeal.
(iii) Failure to timely pay the Fee or Fees. Failure to timely pay the
Mitigation Fee and failure to timely pay the $50,000 towards the police salary or benefits.
Failure to pay any fees due to the City under this STATUTORY AGREEMENT.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements and permits
approved for the Owner and/or the Property. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to any default in the performance of the provisions of this STATUTORY AGREEMENT
which has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
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(iii) on the date of personal delivery shown in the records of the
delivery company after delivery to the recipient named below; or
(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner:
Sergio Torres, CEO
5148 Bleecker St.
Baldwin Park, CA 91706
With a copy to:
Jade Effect, LLC
4424 Huntington Dr. South
Los Angeles, CA 90032.
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's cost to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property with a commercial cannabis facility in accordance
with and to the extent of the Development Plan and/or application. The Property shall
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remain subject to all Subsequent Development Approvals required to complete the
Project as contemplated by the Development Plan and/or application.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed buildings,
and the design, improvement, occupancy and construction standards and specifications
applicable to development of the Property shall be the Development Plan. Provided,
however, that in approving tentative subdivision maps, if any, the City may impose
ordinary and necessary dedications for rights-of-way or easements for public access,
utilities, water, sewers and drainage, having a nexus with the particular subdivision;
provided, further, that the City may impose and will require normal and customary
subdivision improvement agreements and commensurate security to secure performance
of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the Project
or Development Approvals may be appropriate and mutually desirable. The City shall act
on such applications, if any, in accordance with the Existing Land Use Regulations,
subject to the Reservations of Authority, or except as otherwise provided by this
STATUTORY AGREEMENT. Such changes shall include a modification or addition to
the present location of Owner's Property. If approved, any such change in the Existing
Development Approvals shall be considered an additional Existing Development
Approval.
Further, should City amend its Municipal Code or Land Use Regulations to allow the
issuance of cannabis permits for uses other than those presently permitted by the City,
for example to allow for retail sales, retail delivery, microbusinesses, or other cannabis
operations allowed under State law, City shall give priority for such permits to Owner.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City.
(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
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(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new development
projects of the same uses within the City; and
(v) Regulations that do not conflict with the Development Plan. The term
"do not conflict" means new rules, regulations, and policies which: (a) do not modify the
Development Plan, including, without limitation, the permitted land uses, the density or
intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying or
conditionally approving any Subsequent Development applications on the basis of such
subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
reasonably cooperate with other public agencies processing Development Approvals for
the Project.
4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term
of any tentative subdivision map shall be in effect for a period of fifteen (15) years, and
may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within one (1) year from the
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Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means the
issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns, provided the
City maintains the confidentiality of Owner's private financial information to the furthest
extent permitted by law. The City has the power and authority to examine such books and
records at any reasonable time, including but not limited to, during normal business hours.
If the City wishes to inspect the areas of the Property where the cannabis is being
cultivated or manufactured, City may do so at any time with no prior notice to Owner. In
addition, City agrees that all of its employees or agents which enter the cultivation,
manufacturing, and curing areas shall follow all of the policies and guidelines imposed on
Owner's employees, including without limitation, the wearing of any clothing or equipment
to insure that no pests or impurities shall enter the cultivation and curing areas.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project. Due to prevailing real
estate market conditions, Owner's Property is limited to Canopy Space of less than 5,000
square feet, but Owner is seeking opportunities to increase Canopy Space to the
maximum 22,000 square feet allowed by the City.
5.2 For the first year, Owner will pay the City a total of $220,000 as a Fee. This
fee is calculated based on $10.00 a square foot of permit space and a permit which allows
up to 22,000 sq. feet, among other factors.
5.3 In year two and year three, the Fee will increase to $12.50 per sq. foot for
a total of $275,000 per year, among other factors.
5.4 At the beginning of year four and year five, Owner will pay a Fee of $15.00
per sq. foot for a total of $330,000 per year, among other factors.
5.5 The Fee schedule is as follows: The first Fee payment is due at the close
of the second quarter. Therefore, the first payment will be due on the last day of June
2018, the second and last payment for the first year is due on the last day of December
2018. For the years 2 through 15, the Fee schedule is as follows: divide the total Fee for
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the respective year into four and make four equal payments due at the end of each quarter
of the respective year.
5.6 The Fee is subject to reassessment by the City every five years. At the end
of year five, the City will set a new Fee which will be applied in years 6 through 10. At
the end of year 10, the City will set new Fee which will be applied in years 11 through 15.
No one factor is dispositive in the City's determination of the new Fee. The Cannabis
permit will expire at the close of the 15th year and will require the Owner to reapply with
the City for a new permit. If Owner and City cannot agree to a new Fee or Fees by
December 22, 2022, this STATUTORY AGREEMENT will automatically terminate on
December 23, 2022.
Given the present State and Federal regulatory fluctuations and uncertainty
over regulations governing cannabis businesses, as well as the present
price volatility of cannabis products, Owner reserves the right to request
from the City a reassessment of the Mitigation Fee before the end of years
5 and 10. The City shall give reasonable consideration to the request and
to make a good -faith assessment of the regulatory or market conditions that
prompt such request by Owner.
5.7 Further, Owner will pay a yearly payment of $50,000 each year to the City
that can be used to mitigate the impact of the cannabis business on the City and its
resources which includes but is not limited to, pay a part of a police officer's salary and/or
benefits. A police officer so funded shall have as part of his/her specifically assigned
duties to patrol and secure the Property and surrounding area and to reasonably assist
in and facilitate the enforcement of City ordinances, rules or regulations that prohibit
unpermitted cannabis businesses from operating in the City. The first $50,000 amount
will be due within 30 days from the time the permit is issued. Subsequent annual
payments will be due on the permit issuance anniversary date. This payment is due within
thirty (30) days of issuance of permit and thereafter on the anniversary of the issuance of
the permit.
5.8 Jobs and Wage Creation.
5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the City or
who employ a significant number of City residents. Owner is committed to local hiring
and will aggressively recruit local residents to fill available positions, such that at least 40
(forty) percent of the Project's workforce shall consist of residents of the City. Job
announcements shall be posted at City Hall, along with proof that the job announcements
were advertised in at least two newspapers published, printed or distributed in the City
and on various social media sites accessible to the general public. In addition, Owner shall
make a good faith effort to advertise job announcements at local job fairs, on local radio and
through public agencies and organizations.
5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
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review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses and all
documents evidencing compliance with state and local law. As such, upon issuance of
its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the
City for any associated costs with processing the Project, as detailed above and
reimbursing the City for its actual costs incurred in drafting and processing this
STATUTORY AGREEMENT. Owner will be liable for the City's actual costs incurred in
processing future Development Approval applications. City acknowledges and agrees
that this payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT. The City shall refund to
Owner that portion of the $15,000 deposit, if any, not actually incurred by the City.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 Transportation of Cannabis. All pick ups and drop off of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity; arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. During
the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time, if the City determines that Owner is in
breach of this STATUTORY AGREEMENT. Such determination shall be made in
accordance with compliance review standards and processes uniformly and consistently
applied to all cannabis operators in the City.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council may automatically terminate this
STATUTORY AGREEMENT notwithstanding any other provision of this STATUTORY
AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT and impose
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such conditions as are reasonably necessary to protect the interests of the City. The
decision of the City Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special
review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City would
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings.
In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
or to any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest if successors in interest are
permitted under this STATUTORY AGREEMENT to the Property or any portion thereof,
not to sue for damages or claim any damages:
(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
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(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application or request for a permit for cultivation, manufacturing and/or
distribution or interpretation or effect of the provisions of this STATUTORY AGREEMENT.
Owner hereby agrees to waive and/or release the City of Baldwin Park for any claim or
claims or cause of action, not specifically and expressly reserved herein, which Owner
may have at the time of execution of this STATUTORY AGREEMENT relating to any
application to the City of Baldwin Park including but not limited to, any application for any
type of distribution, cultivation or manufacturing permit, any application for any
distribution, cultivation or manufacturing rights, or any application for any distribution,
cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTORY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:
" A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged.
Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
shall modify or abridge any defenses or immunities available to the City and its employees
pursuant to the Government Tort Liability Act and all other applicable statutes and
decisional law.
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Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8.1, Section 8.2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money damages and
remedies at law are inadequate, and specific performance and other non -monetary relief
are particularly appropriate remedies for the enforcement of this STATUTORY
AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Section 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of STATUTORY AGREEMENT for Default of the City. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default.
8.4 Owner Default. No building permit shall be issued or building permit
application accepted for any structure on the Property after Owner is determined by the
City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
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contemplated by the Development Plan, which failure to perform or inability to develop is
as the result of a judicial determination that the General Plan, or portions thereof, are
invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that any STATUTORY AGREEMENT or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees), which the City or its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the environmental impact report, mitigated negative
declaration or negative declaration, as the case may be, prepared in connection with the
development of the Property; and (iii) the proceedings or procedure undertaken in
connection with the adoption or approval of any permit or any of the above. In the event
of any legal or equitable action or other proceeding instituted by anyone against the City
or its City Council, any third party (including a governmental entity or official) challenging
the validity of any provision of this STATUTORY AGREEMENT or the procedure upon
which the permit was issued, or any portion thereof as set forth herein, the parties shall
mutually cooperate with each other in defense of said action or proceeding.
Notwithstanding the above, the City, at is sole option, may tender to Owner and Owner
agrees to accept any such tender of the complete defense of any third party challenge as
described herein. In the event the City elects to contract with special counsel to provide
for such a defense, the City may do so in its sole discretion and Owner will be required to
pay the defense costs of the City as the costs are incurred. Owner agrees to pay any
and all attorneys' fees or retainer regarding the selection of counsel, and Owner shall pay
all costs and all attorneys' fees related to retention of such counsel.
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9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers, agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9.4 do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
settlement offer, City shall notify Owner of the offer and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
in connection with Owner's development, operation and use of the Property (collectively,
"Actions"). The City shall not disclose information and documents to the Federal
Government or State Government, its officers, or agents regarding any party to this
STATUTORY AGREEMENT absent a grand jury subpoena, civil or administrative
subpoena, warrant, discovery request, summons, court order or similar process
authorized under law hereinafter called "Governmental Notice". If any Action is brought
by either the Federal or State Government, City shall immediately notify Owner of the
nature of the Claim including all correspondence or documents submitted to the City.
Prior to responding to the Governmental Notice, City shall provide Owner ten (10) days
from the date of such notice subpoena or the like to serve and obtain a protective order,
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or the like, from a court of competent jurisdiction that prevents or limits the disclosure
sought by the Governmental Notice.
9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or modification is consistent with the intent and purposes of this STATUTORY
AGREEMENT and as long as such requests do not minimize, reduce, curtain, negate, or
in anyway limit City's rights under this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly contained herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein, are essential elements
of this STATUTORY AGREEMENT and the City would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at the City's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever. The foregoing notwithstanding, the
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development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential
elements of this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Owner's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel or
representative of its choosing in the negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure by a party
to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms
of this STATUTORY AGREEMENT thereafter.
11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
11.9 This STATUTORY AGREEMENT when signed and executed by Owner and
the Mayor of Baldwin Park supercedes and renders null and void that certain non -
statutory municipal Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
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11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
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such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto.
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter and bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
claim that the terms in this STATUTORY AGREEMENT constitute an abuse of the police
power, violate substantive due process, deny equal protection of the laws, effect a taking
of property without payment of just compensation, and/or impose an unlawful tax.
11.20 [RESERVED]
11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
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acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply with all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of BPMC.
11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits and/or
licenses are attached hereto and incorporated herein by this reference.
11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK MEDICAL GRADE FARMS, BP
By:
By:
Manuel Lozano, Mayor Sergio Torres
CEO
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
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APPROVED AS TO FORM:
By:
Jade Effect, LLC
Cristeta Summers, Consultant for
Medical Grade Farms, BP
Robert N. Tafoya,
City Attorney
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Real Property depicted on Tract 8706 Lot 11, Map Coordinates 39-F2, Census Tract
405002, Los Angeles County Assessor's Parcel No. 8414-004-005, located at 5148
Bleecker St., Baldwin Park, CA 91706.
EXHIBIT A
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EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
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ITEM: I (Kultiv8 Group, LLC)
ATTACHMENT #9 DA 18-09
KULTIV8 GROUP, LLC
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-09
Location 15023 Ramona Blvd. APN 8437-021-006
Zoning of Subject Location I -C, Industrial Commercial
Principal Name(s) Shaun Szameit, Joshua Pierce, and Kevin Huebner
Company Names Kultiv8 Group LLC
Term of Development Fifteen (15) years from 12/29/17
Aareement
Payment Schedule
June 30 and December 31 for Year #1
Quarterly for Years #2 through #15—Four equal
Year #1--$220,000
Years #2 and #3--$275,000
Payment Amount Years #4 and #5--$330,000—The Mitigation Fee is
subject to reassessment by the City every five (5)
ears.
Floor Area of Buildings 17,420 s.f. per City Records
Employee Requirements At least 20% of the Projects workforce shall consist
of residents of the City.
VICINITY MAP
CASE NUMBER: DA 18-09
LOCATION: 15023 Ramona Boulevard
DATE: April 12, 2018
DA 18-09
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I -C, Industrial Commercial Zone, it is anticipated that the
use of the property is consistent with the other light industrial uses within
the area. The adoption of cannabis cultivation and manufacturing
activities is also consistent with Goal 1.0 of the City's Economic
development Element in the General Plan in that the City encourages and
facilitates activities that expand the City's revenue base. Furthermore,
Goal 6.0 of the same element encourages the expansion of the City's
diverse industrial base. Policy 6.5 of Goal 6.0 encourages an on-going
campaign with local businesses to hire local residents. This Development
Agreement requires that a minimum of 20% of the businesses workforce
shall consist of Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I -C, Industrial Commercial Zone
surrounded by lighter industrial uses. The use exceeds the distance
requirement of fifty (50) feet between cannabis uses and the closest
residential zone; furthermore, pursuant to Section 127.07.E.1 of the City's
Municipal Code, the cannabis use is not nearby any sensitive uses such
as schools, day care centers, parks or youth centers.
Kultiv8 Group wants to build on its local relationships by focusing on being
an equal opportunity employer and by exceeding the minimum 20% city
resident workforce to 50%. They are committed to maintaining a neat
DA 18-09
and orderly operation with no negative impact upon surrounding
businesses or residents.
The entire property and all buildings will be kept and maintained in a
manner that does not detract from the appearance of the immediate
neighborhood. Furthermore, security is a big priority with focus on
external security as the first line. of defense. Video surveillance, both
interior and exterior are provided as well as 24-hour manned security
personnel. All these features combined will keep the property and the use
from being detrimental to the surrounding neighborhood and the City as a
whole.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1418
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
KULTIV8 GROUP, LLC FOR THE CULTIVATION
AND/OR MANUFACTURING OF CANNABIS AT THE
REAL PROPERTY LOCATED AT 15023 RAMONA
BLVD. (APN 8437-021-006) WITHIN THE CITY OF
BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code §§
65864 - 65869.5.
Ordinance 1418
Page 2
WHEREAS, as required by law, the City Council gave first reading to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore each of the
locations is proposed within an existing building
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I -C, Industrial Commercial Zone, it is
anticipated that the use of the property is consistent with the other
light industrial uses within the area. The adoption of cannabis
cultivation and manufacturing activities is also consistent with Goal
1.0 of the City's Economic development Element in the General Plan
in that the City encourages and facilitates activities that expand the
City's revenue base. Furthermore, Goal 6.0 of the same element .
encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement
requires that a minimum of 20% of the businesses workforce shall
consist of Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances)
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Chapter 127 of the City's Municipal Code are met. Dispensaries,
remain prohibited throughout the City.
Ordinance 1418
Page 3
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general
area and City as a whole as it is located within the I -C, Industrial
Commercial Zone surrounded by lighter industrial uses. The use
exceeds the distance requirement of fifty (50) feet between cannabis
uses and the closest residential zone; furthermore, pursuant to
Section 127.07.E.1 of the City's Municipal Code, the cannabis use is
not nearby any sensitive uses such as schools, day care centers,
parks or youth centers.
Kultiv8 Group wants to build on its local relationships by focusing on
being an equal opportunity employer and by exceeding the minimum
20% city resident workforce to 50%. They are committed to
maintaining a neat and orderly operation with no negative impact
upon surrounding businesses or residents.
The entire property and all buildings will be kept and maintained in a
manner that does not detract from the appearance of the immediate
neighborhood. Furthermore, security is a big priority with focus on
external security as the first line of defense. Video surveillance, both
interior and exterior are provided as well as 24-hour manned security
personnel. All these features combined will keep the property and
the use from being detrimental to the surrounding neighborhood and
the City as a whole.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with `
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full force and
operation from.and after thirty (30) days after its final reading and adoption."
Ordinance 1418
Page 4
PASSED AND APPROVED ON THE _ day of , 2018
MANUEL LOZANO, MAYOR
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1418 was duly approved and adopted at a regular
meeting of the City Council on 1 2018 by the following vote:
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND KULTIV8 GROUP, LLC
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("Agreement") is
intended to replace the previous non -statutory municipal Development Agreement, and
is dated April , 2018 for references purposes only and is entered into between ;(i) the
City of Baldwin Park ("City"), a California municipal corporation, and (ii) Kultiv8 Group, a
California limited liability company ("Owner").. This Agreement shall become effective on
the Effective Date defined in Section 3.1.11 below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and Kultiv8 Group, LLC previously entered into a non -
statutory municipal Development Agreement that was not intended to be a Government
Code Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be Statutory Agreement under and through
Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code Section
65864 et seq. to enter into binding development agreements with persons having legal or
equitable interests in real property for the development of such property; and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture medical and adult use cannabis in September
2017; and at that time the City determined that the uses authorized in this STATUTORY
AGREEMENT were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of various entitlements, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map and the Baldwin Park Municipal Code as of the Agreement
Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements for notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or Property,. ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
Agreement; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Manufacturing and
Cultivation Facility or facilities pursuant to the Baldwin Park Municipal Code ("BPMC")
Chapter 127 and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture cannabis and cannabis related products at its facility or facilities up to -22,000
square feet for each separate authorized use (Manufacturing, Cultivation and
Distribution).
2.14 WHEREAS, the City entered into a Development Agreement with Rukli,
Inc. to be the exclusive distributor of cannabis and cannabis related products in the City
of Baldwin Park. The City is entering into development agreements with owners for
permits for cultivation and manufacturing of cannabis and cannabis related products in
the City of Baldwin Park. The City prohibits the sale of cannabis and cannabis. related
products within the City of Baldwin Park so the cannabis and cannabis related products
must be distributed to and sold in cities where it is legal to do so. Rukli, Inc. shall be the
exclusive distributor for the cultivation and/or manufacturing permit holders within the City
of Baldwin Park and City conditions the cultivation and/or manufacturing permits on Rukli,
Inc. being the exclusive distributor for any permit issued by Baldwin Park for cultivation or
manufacturing.
ARTICLE 3. GENERAL TERMS.
3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows:
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3.1.1 "Agreement" means this Development Agreement pursuant to
Government Code Section 65864 et seq.
corporation.
3.1.2 "City" means the City of Baldwin Park, a California municipal
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" If applicable, means and/or other
entitlements for the Development of the Property, including any and all conditions of
approval, subject to approval or issuance by the City in connection with Development of
the Property. "Development Approvals" also include both the Existing Development
Approvals and the Subsequent Development Approvals approved or issued by the City
that are consistent with this STATUTORY AGREEMENT.
3.1.7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code.
3.1.9 "Effective Date" means the day this STATUTORY AGREEMENT is
approved and adopted by the Baldwin Park City Council and signed by the Mayor of
Baldwin Park of his designee.
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved or issued prior to or on the Effective Date. Existing
Development Approvals include the approvals set forth in Section 3.1.6 and all other
approvals which are a matter of public record prior to or on the Effective Date.
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
3.1.12 "Land Use Regulations" If and where applicable means all
ordinances, resolutions and codes adopted by the City governing the development and
-3-
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1:14 "Owner" means Kultiv8 Group, a member managed limited liability
company.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City.
3.1.16 "Project" If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, the application any and all entitlements licenses, and permits related
to the Project.
3.1.17 "Property" means the real property described Owner's application
and incorporated herein by this reference. Owner may modify the location or locations or
add locations to the Property subject to City approval and all applicable zoning and
distance requirements up to a total of 22000 square feet for each separate authorized
use (Manufacturing, Cultivation and Distribution).
3.1.18 "Reasonable" means using due diligence to accomplish a stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives of the
STATUTORY AGREEMENT.
3.1.19 "Reservations of Authority" means the rights and authority excepted
from :the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.20 "Space or Canopy Space" shall mean any space or ground, floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing and/or harvesting
phases, including without limitation any space used for activities such as growing,
planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering,
irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used
-4-
for storing any cannabis, no matter where such storage may take place or such storage
space may be located.
3.1.21 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited. to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times and in
such sequences as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.22 "Subsequent Land Use Regulations" If applicable, means any Land
Use Regulations defined in Section 3.1.12that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents, by this reference, are made part of
this STATUTORY AGREEMENT:
No. 1 — Legal Description of the Property.
No. 2 — Map showing Property and its location.
No. 3 — Application
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is hereby
made subject to this STATUTORY AGREEMENT. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of the Property is hereby
authorized and shall, except as otherwise provided in this Agreement, be carried out only
in accordance with the terms of this STATUTORY AGREEMENT and the Development
Plan, if any. In the event of conflict or uncertainty between this STATUTORY
AGREEMENT and the Development Plan, the provisions of this STATUTORY
AGREEMENT shall control.
3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of 8437-
021-006 and is more particularly described in the application and document "No. 1" in
Section 3.2 and incorporated herein.
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
expressly stated in this STATUTORY AGREEMENT to survive termination without the
need of further documentation from the parties hereto. The STATUTORY
-5-
AGREEMENT's Fee is subject to renegotiation after the first term, and every five year
term thereafter.
3.5.1 Term Extension. This STATUTORY AGREEMENT may be
extended by mutual agreement of City and Owner in writing and signed by Owner and
the Mayor of Baldwin Park. If the Mayor of Baldwin Park does not sign the agreement or
renegotiated agreement any such agreement is null and void.
3.6 Automatic Termination. This STATUTORY AGREEMENT shall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY Agreements set forth in
Section 3.5;
(ii) The entry of a final judgment (or a decision on any appeal therefrom)
voiding the City's General Plan or any element thereof, which judgment or decision would
preclude development of the Project, but only if the City is unable to cure such defect in
the General Plan or element within one hundred and eighty (180) days from the -later of
entry of final judgment or decision on appeal.
(iii) Failure to timely pay the Fee. Failure to timely pay the $50,000
towards the police salary or benefits. Failure to pay any fees due to the City under this
STATUTORY AGREEMENT.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements and permits
approved for the Owner and/or Property. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to any default in the performance of the provisions of this STATUTORY AGREEMENT
which has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
(iii) on the date of personal delivery shown in the records of the
delivery company after delivery to the recipient named below; or
(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: Shaun Szameit
4042 Harlan Avenue
Baldwin Park, CA 91706
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's cost to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property or Properties with a commercial cannabis facility in
accordance with and to the extent of the Development Plan and/or application. The
Property shall remain subject to all Subsequent Development Approvals required to
complete the Project as contemplated by the Development Plan and/or application.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed buildings,
and the design, improvement, occupancy and construction standards and specifications
-7-
applicable to development of the Property shall be the Development Plan and/or
application. Provided, however, that in approving tentative subdivision maps, if any, the
City may impose ordinary and necessary dedications for rights-of-way or easements for
public access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the -Project
or Development Approvals may be appropriate and mutually desirable, including but not
limited to expanding the Project to additional properties up to 22,000 square feet per
separate authorized use (Manufacturing, Cultivation and Distribution). The City shall act
on such applications, if any, in accordance with the Existing Land Use Regulations,
subject to the Reservations of Authority, or except as otherwise provided by this
STATUTORY AGREEMENT. If approved, any such change in the Existing Development
Approvals shall be considered an additional Existing Development Approval.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City.
(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new development
projects of the same uses within the City; and
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(v) Regulations that do not conflict with the Development Plan. The term
"do not conflict" means new rules, regulations, and policies which: (a) do not modify the
Development Plan, including, without limitation, the permitted land uses, the density or
intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying or
conditionally approving any Subsequent Development applications on the basis of such
subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
reasonably cooperate with other public agencies processing Development Approvals for
the Project.
4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term
of any tentative subdivision map shall be in effect for a period of fifteen (15) years, and
may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within one (1) years from the
Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means the
issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns. The City has
the power and authority to examine such books and records at any reasonable time,
including but not limited to, during normal business hours. If the City wishes to inspect
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the areas of the Property where the cannabis is being cultivated or manufactured, City
may do so at any time with no prior notice to Owner. In addition, City agrees that all of
its employees or agents which enter the cultivation, manufacturing, and curing areas shall
follow all of the policies and guidelines imposed on Owner's employees, including without
limitation, the wearing of any clothing or equipment to insure that no pests or impurities
shall enter the cultivation and curing areas.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project.
5.2 For the first year, Owner will pay the City a total of $220,000 as a Fee. This
fee is calculated based on $10.00 a square foot of permit space and a permit which allows
up to 22,000 sq. feet, among other factors.
5.3 In year two and year three, the Fee will increase to $12.50 per sq. foot for
a total of $275,000 per year, among other factors.
5.4 At the beginning of year four and year five, Owner will pay a Fee of,$15.00
per sq. foot for a total of $330,000 per year, among other factors.
5.5 The Fee schedule is as follows: The first Fee payment is due at the close
of the second quarter. Therefore, the first payment will be due on the last day of June
2018, the second and last payment for the first year is due on the last day of December
2018. For the years 2 through 15, the fee schedule is as follows: divide the total Fee for
the respective year into four and make four equal payments due at the end of each quarter
of the respective year.
5.6 The Fee is subject to reassessment by the City every five years. At the end
of year five, the City will set a new Fee which will be applied in years 6 through 10. At
the end of year 10, the City will set new Fee which will be applied in years 11 through 15.
No one factor is dispositive in the City's determination of the new Fee. The Cannabis
permit will expire at the close of the 15th year and will require the Owner to reapply with
the City for a new permit. If Owner and City cannot agree to a new Fee or Fees by
December 22, 2022, this STATUTORY AGREEMENT will automatically terminate on
December 23, 2022.
5.7 Further, Owner will pay a yearly payment of $50,000 to the City that can be
used to mitigate the impact of the cannabis business on the City and its resources which
includes but is not limited to, to use to pay a part of a police officer's salary and/or benefits.
This $50,000 amount will be due at the time the permit is issued. Subsequent annual
payments will be due on the permit issuance anniversary date. This payment is due within
thirty (30) days of issuance of permit and thereafter on the anniversary of the issuance of
the permit.
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5.8 Jobs and Wage Creation.
5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the City or
who employ a significant number of City residents. At least 20 percent of the Project's
workforce shall consist of residents of the City. Job announcements shall be posted at City
Hall, along with proof that the job announcements were advertised in at least two
newspapers published, printed or distributed in the City and on various social media sites
accessible to the general public. In addition, Owner shall make a good faith effort to advertise
job announcements at local job fairs, on local radio and through public agencies and
organizations.
5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses and all
documents evidencing compliance with state and local law. As such, upon issuance of
its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the
City for any associated costs with processing the Project, as detailed above and
reimbursing the City for its actual costs incurred in drafting and processing this
STATUTORY AGREEMENT. Owner will be liable for the City's actual costs incurred in
processing future Development Approval applications. City acknowledges and .agrees
that this payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 Transportation of Cannabis. All pick ups and drop offs of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity, arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. During
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the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time, if the City determines that Owner is in
breach of this STATUTORY AGREEMENT.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council automatically terminate this STATUTORY
AGREEMENT notwithstanding any other provision of this STATUTORY AGREEMENT to
the contrary, or modify this STATUTORY AGREEMENT and impose such conditions as
are reasonably necessary to protect the interests of the City. The decision of the City
Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special
review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City would
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under. this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings.
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In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
provided for in this STATUTORY AGREEMENT , to Owner, to any mortgagee or lender,
or to any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest, if successors in interest are
permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof,
not to sue for damages or claim any damages:
(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application or request for a permit for cultivation, manufacturing and/or
distribution or interpretation or effect of the provisions of this STATUTORY AGREEMENT.
Owner hereby agrees to waive and/or release the City of Baldwin Park for any claim or
claims or cause of action, not specifically and expressly reserved herein, which Owner
may have at the time of execution of STATUTORY AGREEMENT relating to any
application to the City of Baldwin Park including but not limited to, any application for any
type of distribution, cultivation or manufacturing permit, any application for any
distribution, cultivation or manufacturing rights, or any application for any distribution,
cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTORY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:
" A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor.
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
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or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged.
Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
shall modify or abridge any defenses or immunities available to the City and its employees
pursuant to the Government Tort Liability Act and all other applicable statutes and
decisional law.
Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8.1, Section 8.2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money
damages and remedies at law are inadequate, and specific performance and other non -
monetary relief are particularly appropriate remedies for the enforcement of this
STATUTORY AGREEMENT and should be available to all parties for the following
reasons:
(i) Except as provided in Sections 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of STATUTORY AGREEMENT for Default of the City. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default
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8.4 Owner Default. No building permit shall be issued or building permit
application accepted for any structure on the Property after Owner is determined by the
City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
as the result of a judicial determination that the General Plan, or portions thereof, are
invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that any STATUTORY AGREEMENT or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees), which the City or its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the environmental impact report, mitigated negative
declaration or negative declaration; as the case may be, prepared in connection with the
development of the Property; and (iii) the proceedings or procedure undertaken in
connection with the adoption or approval of any permit any of the above. In the event of
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any legal or equitable action or other proceeding instituted by anyone against the City or
its City Council, any third party (including a governmental entity or official) challenging the
validity of any provision of this STATUTORY AGREEMENT or the procedure upon which
the permit was issued, or any portion thereof as set forth herein, the parties shall mutually
cooperate with each other in defense of said action or proceeding. Notwithstanding the
above, the City, at is sole option, may tender to Owner and Owner agrees to accept any
such tender of the complete defense of any third party challenge as described herein. In
the event the City elects to contract with special counsel to provide for such a defense,
the City may do so in its sole discretion and Owner will be required to pay the defense
costs of the City as the costs are incurred. Owner agrees to pay any and all attorneys'
fees or retainer regarding the selection of counsel, and Owner shall pay all costs and all
attorneys' fees related to retention of such counsel.
9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers,• agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9.4 do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the . City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
settlement offer, City shall notify Owner of the offer and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
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9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
in connection with Owner's development, operation and use of the Property (collectively,
"Actions"). The City shall not disclose information and documents to the Federal
Government or State Government, its officers, or agents regarding any party to this
STATUTORY AGREEMENT absent a grand jury subpoena, civil or administrative
subpoena, warrant, discovery request, summons, court order or similar process
authorized under law hereinafter called "Governmental Notice". If any Action is brought
by either the Federal or State Government, City shall immediately notify Owner of the
nature of the Claim including all correspondence or documents submitted to the City.
Prior to responding to the Governmental Notice, City shall provide Owner ten (10) days
from the date of such notice subpoena or the like to serve and obtain on the City a
protective order, or the like, from a court of competent jurisdiction.
9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or modification is consistent with the intent and purposes of this STATUTORY
AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or
in any way limit City's rights under this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly contained herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any: proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
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11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein, are essential elements
of this STATUTORY AGREEMENT and the City would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at the City's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever. The foregoing notwithstanding, the
development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential
elements of this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Owner's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel in the
negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance* of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure by a party
to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms
of this STATUTORY AGREEMENT thereafter.
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11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
11.9 This STATUTORY AGREEMENT when signed and executed by Owner and
the Mayor of Baldwin Park supercedes and renders null and void that certain non -
statutory municipal. Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and -agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
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11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto.
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter and bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
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11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
claim that the terms in this STATUTORY AGREEMENT constitute an abuse of the police
power, violate substantive due process, deny equal protection of the laws, effect a taking
of property without payment of just compensation, and/or impose an unlawful tax.
11.20 [RESERVED]
11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply with all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of BPMC.
11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits and/or
licenses are attached hereto and incorporated herein by this reference.
11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
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IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK
By:
Manuel Lozano, Mayor
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
Robert N. Tafoya,
City Attorney
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KULTIV8 GROUP, LLC.
By:
President
APPROVED AS TO FORM:
By:
Legal Counsel for
KULTIV8 GROUP, LLC.
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
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EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
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ITEM: J (GSC Capital Group)
ATTACHMENT #10 DA 18-10
GSC CAPITAL GROUP
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-10
Location 4621 Littlejohn St. APN: 8535-023-033
Zoning of Location I, Industrial
Principal Names Teresa Tsai
Company Name GSC Capital Group
Term of Development Fifteen (15) years from 12/29/17
Agreement
June 30 and December 31 for Year #1
Payment Schedule Quarterly for Years #2 through #15—Four equal
payments.
Year #1--$220,000
Years #2 and #3--$275,000
Payment Amount Years #4 and #5--$330,000—The Mitigation Fee is
subject to reassessment by the City every five (5)
Floor Area of Buildings 6,377 s.f. per City Records
Employee Requirements At least 20% of the Project's workforce shall consist
of residents of the City.
VICINITY MAP
CASE NUMBER: DA 18-10
LOCATION: 4621 Littlejohn Street
DATE: April 12, 2018
DA 18-10
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I, Industrial Zone, it is anticipated that the use of the
property is consistent with the other light industrial uses within the area.
The adoption of cannabis cultivation and manufacturing activities is also
consistent with Goal 1.0 of the City's Economic development Element in
the General Plan in that the City encourages and facilitates activities that
expand the City's revenue base. Furthermore, Goal 6.0 of the same
element encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement requires
that a minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I, Industrial Zone surrounded by
lighter industrial uses. The use exceeds the distance requirement of fifty
(50) feet between cannabis uses and the closest residential zone;
furthermore, pursuant to Section 127.07.E.1 of the City's Municipal Code,
the cannabis use is not nearby any sensitive uses such as schools, day
care centers, parks or youth centers.
GSC Capital Group, LLC takes pride in being a good neighbor and being
active members of the community. Their community engagement
activities focus on Employer sponsored volunteerism and Corporate
Community Engagement. They want to focus on those efforts that are
most meaningful to the employees, such as national Night Out, community
clean ups, and holiday toy/food drives.
GSC Capital Group, LLC is providing both exterior and interior video
surveillance, limited points of access and manned security 7 -days per
week in addition to off-site monitoring. They have an extensive workforce
security program so that everyone understands their role in keeping the
facility, themselves and products safe and secure thereby reducing any
potential for negative impacts that would be detrimental to the welfare of
not only the nearby neighborhood but the City as a whole.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1419
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
GSC CAPITAL GROUP FOR THE CULTIVATION
AND/OR MANUFACTURING OF CANNABIS AT THE
REAL PROPERTY LOCATED AT 4621 LITTLEJOHN
STREET (APN: 8535-023-033) WITHIN THE CITY OF
BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code §§
65864 - 65869.5.
Ordinance 1419
Page 2
WHEREAS, as required by law, the City Council gave first reading to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore each of the
locations is proposed within an existing building. °
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I, Industrial Zone, it is anticipated that
the use of the property is consistent with the other light industrial
uses within the area. The adoption of cannabis cultivation and
manufacturing activities is also consistent with Goal 1.0 of the City's
Economic development Element in the General Plan in that the City
encourages and facilitates activities that expand the City's revenue -
base. Furthermore, Goal 6.0 of the same element encourages the
expansion of the City's diverse industrial base. Policy 6.5 of Goal
6.0 encourages an on-going campaign with local businesses to hire
local residents. This Development Agreement requires that a
minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances)
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
Ordinance 1419
Page 3
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general
area and City as a whole as it is located within the I -C, Industrial
Commercial Zone surrounded by lighter industrial uses. The use
exceeds the distance requirement of fifty (50) feet between cannabis
uses and the closest residential zone; furthermore, pursuant to
Section 127.07.E.1 of the City's Municipal Code, the cannabis use is
not nearby any sensitive uses such as schools, day care centers,
parks or youth centers.
GSC Capital Group, LLC takes pride in being a good neighbor and
being active members of the community. Their community
engagement activities focus on Employer sponsored volunteerism
and Corporate Community Engagement. They want to focus on
those efforts that are most meaningful to the employees, such as,
national Night Out, community clean ups, and holiday toy/food
drives.
GSC Capital Group, LLC is providing both exterior and interior video
surveillance, limited points of access and manned security 7 -days
per week in addition to off-site monitoring. They have an extensive
workforce security program so that everyone understands their role
in keeping the facility, themselves and products safe and secure.
thereby reducing any potential for negative impacts that would be
detrimental to the welfare of not only the nearby neighborhood but
the City as a whole.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the .
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full force and
operation from and after thirty (30) days after its final reading and adoption.
Ordinance 1419
Page 4
PASSED AND APPROVED ON THE _ day of , 2018
MANUEL LOZANO, MAYOR
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1419 was duly approved and adopted at a regular
meeting of the City Council on , 2018 by the following vote:
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND GSC CAPITAL GROUP, LLC
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("STATUTORY
AGREEMENT") is intended to replace the previous non -statutory municipal Development
Agreement, and is dated April , 2018 for references purposes only and is entered into
between (i) the City of Baldwin Park ("City"), a California municipal corporation, and
(ii) GSC Capital Group, LLC ("Owner"). This STATUTORY AGREEMENT shall become
effective on the Effective Date defined in Section 3.1.9 below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and GSC Capital Group, LLC previously entered into
a non -statutory municipal Development Agreement that was not intended to be a
Government Code Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be a Statutory Development Agreement under and
through Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code Section
65864 et seq. to enter into binding statutory development agreements with persons
having legal or equitable interests in real property for the development of such property;
and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture, medical and adult use cannabis in September
2017; and at that time the City determined that the uses authorized in this STATUTORY
AGREEMENT were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of various entitlements, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provision&of the
City's applicable Zoning Map and the Baldwin Park Municipal Code as of the Agreement
Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements fora notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or Property, ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Manufacturing and
Cultivation Facility pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127
and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture, cannabis and cannabis related products at its facility or facilities up to
22,000 square feet.
2.14 WHEREAS, the City entered into a Development Agreement with Rukli, Inc.
to be the exclusive distributor of cannabis and cannabis related products in the City of
Baldwin Park. The City is entering into development agreements with owners for permits
for cultivation and manufacturing of cannabis and cannabis related products in the City of
Baldwin Park. The City prohibits the sale of cannabis and cannabis related products within
the City of Baldwin Park so the cannabis and cannabis related products must be
distributed to and sold in cities where it is legal to do so. Rukli, Inc. shall be the exclusive
distributor for the cultivation and/or manufacturing permit holders within the City of
Baldwin Park and City conditions the cultivation and/or manufacturing permits on Rukli,
Inc. being the exclusive distributor for any permit issued by Baldwin Park for cultivation or
manufacturing.
ARTICLE 3. GENERAL TERMS.
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3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows:
3.1.1 "Agreement" means this STATUTORY AGREEMENT pursuant to
Government Code Section 65864 et seq.
corporation.
3.1.2 "City" means the City of Baldwin Park, a California municipal
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" If applicable, means other entitlements for
the Development of the Property, including any and all conditions of approval, subject to
approval or issuance by the City in connection with Development of the Property.
"Development Approvals" also include both the Existing Development Approvals and the
Subsequent Development Approvals approved or issued by the City that are consistent
with this STATUTORY AGREEMENT.
3.1.7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code.
3.1.9 "Effective Date" means the day this Development STATUTORY
AGREEMENT is approved and adopted by the Baldwin Park City Council and signed by
the Mayor of Baldwin Park or his designee
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved or issued prior to or on the Effective Date. Existing
Development Approvals include the approvals set forth in Section 3.1.6 and all other
approvals which are a matter of public record prior to or on the Effective Date.
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
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3.1.12 "Land Use Regulations" If and where applicable means all
ordinances, resolutions and codes adopted by the City governing the development and
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.14 "Owner" means GSC Capital Group, LLC.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City.
3.1.16 "Project" If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, the application, any and all entitlements licenses, and permits related
to the Project.
3.1.17 "Property" means the real property described in Owner's application
and incorporated. herein by this reference. Owner may modify the location or locations or
add locations to of the Property subject to City approval and all applicable zoning and
distance requirements.
3.1.18 "Reasonable" means using due diligence to accomplish a stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that , is consistent with the intent and objectives of the
STATUTORY AGREEMENT.
3.1:19 "Reservations of Authority" means the rights and authority excepted
from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.20 "Space or Canopy Space" shall mean any space or ground, floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing, and/or harvesting
phases, including without limitation any space used for activities such as growing,
planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering,
irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used
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for storing any cannabis, no matter where such storage may take place or such storage
space may be located.
3.1.21 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times and in
such sequences as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.22 "Subsequent Land Use Regulations" If applicable means any Land
Use Regulations defined in Section 3.1.12 that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents, by this reference, are made part of
this STATUTORY AGREEMENT:
No. 1 — Legal Description of the Property.
No. 2 — Map showing Property and its location.
No. 3 - Application.
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is hereby
made subject to. this STATUTORY AGREEMENT. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of the Property is hereby
authorized and shall, except as otherwise provided in this STATUTORY AGREEMENT,
be carried out only in accordance with the terms of this STATUTORY AGREEMENT and
the Development Plan, if any. In the event of conflict or uncertainty between this
STATUTORY AGREEMENT and the Development Plan, the provisions of this
STATUTORY AGREEMENT shall control.
3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of 8535-
023-033 and is more particularly described in the application and document "No. 1" in
Section 3.2 and incorporated herein.
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
expressly stated in this STATUTORY AGREEMENT to survive termination without the
need of further documentation from the parties hereto. The STATUTORY
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AGREEMENT's Fee is subject to renegotiation after the first term, and every five year
term thereafter.
3.5.1 Term Extension. This STATUTORY AGREEMENT may only be
extended by mutual agreement of City and Owner in writing and signed by Owner and
the Mayor of Baldwin Park. If the Mayor of Baldwin Park does not sign the agreement or
renegotiated agreement any such agreement is null and void.
3.6 Automatic Termination. This STATUTORY AGREEMENT shall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY AGREEMENT as set
forth in Section 3.5;
(ii) The entry of a final judgment (or a decision on any appeal therefrom)
voiding the City's General Plan or any element thereof, which judgment or decision would
preclude development of the Project, but only if the City is unable to cure such defect in
the General Plan or element within one hundred and eighty (180) days from the later of
entry of final judgment or decision on appeal.
(iii) Failure to timely pay the Fee or Fees. Failure to timely pay the
$50,000 towards the police salary or benefits. Failure to pay any fees due to the City
under this STATUTORY AGREEMENT.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements and permits
approved for the Owner and/or the Property. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to 'any default in the performance of the provisions of this STATUTORY AGREEMENT
which has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
(iii) on the date of personal delivery shown in the records ,of the
delivery company after delivery to the recipient named below; or
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(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as' follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: Teresa Tsai
9659 Las Tunas Drive, #708
Temple City, CA 91780
With a copy to: Jade Effect, LLC
4424 Huntington Dr. South
Los Angeles, CA 90032
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's cost to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property with a commercial cannabis facility in accordance
with and to the extent of the Development Plan. The Property shall remain subject to all
Subsequent Development Approvals required to complete the Project as contemplated
by the Development Plan.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed buildings,
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and the design, improvement, occupancy and construction standards and specifications
applicable to development of the Property shall be the Development Plan. and/or
application. Provided, however, that in approving tentative subdivision maps, if any, the
City may impose ordinary and necessary dedications for rights-of-way or easements for
public access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the Project
or -Development Approvals may be appropriate and mutually desirable. The City shall act
on such applications, if any, in accordance with the Existing Land Use Regulations,
subject to the Reservations of Authority, or except as otherwise provided by this
STATUTORY AGREEMENT. If approved, any such change in the Existing Development
Approvals shall be considered an additional Existing Development Approval.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City.
(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new development
projects of the same uses within the City; and
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(v) Regulations that do not conflict with the Development Plan. The term
"do not conflict" means new rules, regulations, and policies which: (a) do not modify the
Development Plan, including, without limitation, the permitted land uses, the density or
intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and . private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying or
conditionally approving any Subsequent Development applications on the basis of such
subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
reasonably cooperate with other public agencies processing Development Appro.vals for
the Project.
4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term
of any tentative subdivision map shall be in effect for a period of fifteen (15) years, and
may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within one (1) year from the
Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means the
issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns. The City has
the power and authority to examine such books and records at any reasonable time,
including but not limited to, during normal business hours. If the City wishes to inspect
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the areas of the Property where the cannabis is being cultivated or manufactured, City
may do so at any time with no prior notice to Owner. In addition, City agrees that all of
its employees or agents which enter the cultivation, manufacturing, and curing areas shall
follow all of the policies and guidelines imposed on Owner's employees, including without
limitation, the wearing of any clothing or equipment to insure that no pests or impurities
shall enter the cultivation and curing areas.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development. of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project.
5.2 For the first year, Owner will pay the City a total of $220,000 as a Fee. This
fee is calculated based on $10.00 a square foot of permit space and a permit which allows
up to 22,000 sq. feet, among other factors.
5.3 In year two and year three, the Fee will increase to $12.50 per sq. foot for
a total of $275,000 per year, among other factors.
5.4 At the beginning of year four and year five, Owner will pay a Fee of $15.00
per sq. foot for a total of $330,000 per year, among other factors.
5.5 The Fee schedule is as follows: The first Fee payment is due at the close
of the second quarter. Therefore, the first payment will be due on the last day of June
2018, the second and last payment for the first year is due on the last day of December
2018. For the years 2 through 15, the Fee schedule is as follows: divide the total Fee for
the respective year into four and make four equal payments due at the end of each quarter
of the.respective year.
. 5.6 The Fee is subject to reassessment by the City every five years. At the end
of .year five, the City will set a new Fee which will be applied in years 6 through. 1.0. At
the end of year 10, the City will set new Fee which will be applied in years 11 through 15.
No one factor is dispositive in the City's determination of the new Fee. The Cannabis
permit will expire at the close of the 15th year and will require the Owner to reapply with
the City for a new permit. If Owner and City cannot agree to a new Fee or Fees by
December 22, 2022, then this STATUTORY AGREEMENT will terminate on December
23, 2022.
5.7 Further, Owner will pay a yearly payment of $50,000 to the City that can be
used to mitigate the impact of the cannabis business on the City and its resources which
includes but is not limited to, to use to pay a part of a police officer's salary and/or benefits.
This $50,000 amount will be due at the time the permit is issued. Subsequent annual
payments will be due on the permit issuance anniversary date. This payment is due within
thirty (30) days of issuance of permit and thereafter on the anniversary of the issuance of
the permit.
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5.8 Jobs and Wage Creation.
5.8.1 - Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the City or
who employ a significant number of City residents. At least 20 percent of the Project's
workforce shall consist of residents of the City. Job announcements shall be posted at City
Hall, along with proof that the job announcements were advertised in at least two
newspapers published, printed or distributed in the City and on various social media sites
accessible to the general public. In addition, Owner shall make a good faith effort to advertise
job announcements at local job fairs, on local radio and through public agencies and
organizations.
5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses and all
documents evidencing compliance with state and local law. As such, upon issuance of
its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the
City for any associated costs with processing the Project, as detailed above and
reimbursing the City for its actual costs incurred in drafting and processing this
STATUTORY AGREEMENT. Owner will be liable for the City's actual costs incurred in
processing future Development Approval applications. City acknowledges and agrees
that this payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 Transportation of Cannabis. All pick ups and drop offs of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the City's exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity, arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. During
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the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council may automatically terminate this
STATUTORY AGREEMENT notwithstanding any other provision of this STATUTORY
AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT and impose
such conditions as are reasonably necessary to protect the interests of the City. The
decision of the City Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special
review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City would
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings.
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In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
or to any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest, if successors in interest are
permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof,
not to sue for damages or claim any damages:
(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application for cultivation, manufacturing or interpretation or effect of the
provisions of this STATUTORY AGREEMENT.
Owner hereby agrees to waive and/or release the City of Baldwin Park for any claim or
claims or cause of action, not specifically and expressly reserved herein, which Owner
may have at the time of execution of this Development STATUTORY AGREEMENT
relating to any application to the City of Baldwin Park including but not limited to, any
application for any type of distribution, cultivation or manufacturing permit, any application
for any distribution, cultivation or manufacturing rights, or any application for any
distribution, cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTORY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:
" A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
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or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged.
Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
shall modify or abridge any defenses or immunities available to the City and its employees
pursuant to the Government Tort Liability Act and all other applicable statutes and
decisional law.
Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8.1, Section 8.2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money damages and
remedies at law are inadequate, and specific performance and other non -monetary relief
are particularly appropriate remedies for the enforcement of this STATUTORY
AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Section 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of STATUTORY AGREEMENT for Default of the City. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the:performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default.
8.4 Owner Default. No building permit shall be issued or building permit
application accepted for any structure on the Property after Owner is determined by the
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City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is.consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
as the result of a judicial determination that the General Plan, or portions thereof, are
invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that any STATUTORY AGREEMENT or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees), which the City or its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the environmental impact report, mitigated negative
declaration or negative declaration, as the case may be, prepared in connection with the
development of the Property; and (iii) the proceedings or procedure undertaken in
connection with the adoption or approval of any permit or any of the above. In the event
of any legal or equitable action or other proceeding instituted by anyone against the City
or its City Council, any third party (including a governmental entity or official) challenging
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the validity of any provision of this STATUTORY AGREEMENT or the procedure upon
which the permit was issued, or any portion thereof as set forth herein, the parties shall
mutually cooperate with each other in defense of said action or proceeding.
Notwithstanding the above, the City, at is sole option, may tender to Owner and Owner
agrees to accept any such tender of the complete defense of any third party challenge as
described herein. In the event the City elects to contract with special counsel to provide
for such a defense, the City may do so in its sole discretion and Owner will be required to
pay the defense costs of the City as the costs are incurred. Owner agrees to pay any
and all attorneys'- fees or retainer regarding the selection of counsel, and Owner shall pay
all costs and all attorneys' fees related to retention of such counsel.
9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers, agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9.4 do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify, any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
settlement offer, City shall notify Owner of the offer and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
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in connection with Owner's development, operation and use of the Property (collectively,
"Actions"). The City shall not disclose information and documents to the Federal
Government or State Government, its officers, or agents regarding any party to this
STATUTORY AGREEMENT absent a grand jury subpoena, civil or administrative
subpoena, warrant, discovery request, summons, court order or similar process
authorized under law hereinafter called "Governmental Notice". If any Action is brought
by either the Federal or State Government, City shall immediately notify Owner of the
nature of the Claim including all correspondence or documents submitted to the City.
Prior to responding to the Governmental Notice, City shall provide Owner ten (10) days
from the date of such notice subpoena or the like to serve and obtain on the City a
protective order, or the like, from a court of competent jurisdiction.
9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or modification is consistent with the intent and purposes of this STATUTORY
AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or
in any way limit City's rights under this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly containted herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may 'rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
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not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein, are essential elements
of this STATUTORY AGREEMENT and the City would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at the City's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever. The foregoing notwithstanding, the
development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential
elements of this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Owner's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel or
representative of its choosing in the negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any, of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure by a party
to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms
of this STATUTORY AGREEMENT thereafter.
11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
-18-
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
11.9 This STATUTORY AGREEMENT supercedes that certain non -statutory
municipal Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions• of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
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then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto.
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter and bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound. I
11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
claim that the terms in this STATUTORY AGREEMENT constitute an abuse of the police
-20-
power, violate substantive due process, deny equal protection of the laws, effect a taking
of property without payment of just compensation, and/or impose an unlawful tax.
11.20 [RESERVED]
11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
acting. on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply.with all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of BPMC.
11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits and/or
licenses are attached hereto and incorporated herein by this reference.
11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
-21-
IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK
By:
Manuel Lozano, Mayor
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
Robert N. Tafoya,
City Attorney
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GSC CAPITAL GROUP, LLC
By:
Teresa Tsai
President
APPROVED AS TO FORM:
By:
Jade Effect, LLC
Cristeta Summers, Consultant for
GSC Capital Group, LLC
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
51
EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
se
ITEM: K (Elite Green Cultivators)
ATTACHMENT #11 DA 18-11
ELITE GREEN CULTIVATORS
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-11
Location 5157 Azusa Canyon Rd. APN: 8413-001-030
Zoning of Subject Location I -C, Industrial Commercial
Principal Names Mike Sandoval and Ed Barraza
Company Names Elite Green Cultivators
Term of Development Fifteen (15) years from 12/29/17
Aareement
Payment Schedule
June 30 and December 31 for Year #1
Quarterly for Years #2 through #15—Four equal
Year #1--$220,000
Years #2 and #3--$275,000
Payment Amount Years #4 and #5--$330,000—The Mitigation Fee is
subject to reassessment by the City every five (5)
ears.
Floor Area of Buildings 5,000 s.f. pera plication
Employee Requirements At least 20% of the Projects workforce shall consist
of residents of the City.
VICINITY MAP
CASE NUMBER: DA 18-11
LOCATION: 5157 Azusa Canyon Road
DATE: April 12, 2018
DA 18-11
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I -C, Industrial Commercial Zone, it is anticipated that the
use of the property is consistent with the other light industrial uses within
the area. The adoption of cannabis cultivation and manufacturing
activities is also consistent with Goal 1.0 of the City's Economic
development Element in the General Plan in that the City encourages and
facilitates activities that expand the City's revenue base. Furthermore,
Goal 6.0 of the same element encourages the expansion of the City's
diverse industrial base. Policy 6.5 of Goal 6.0 encourages an on-going
campaign with local businesses to hire local residents. This Development
Agreement requires that a minimum of 20% of the businesses workforce
shall consist of Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I -C, Industrial Commercial Zone
surrounded by lighter industrial uses. The use exceeds the distance
requirement of fifty (50) feet between cannabis uses and the closest
residential zone; furthermore, pursuant to Section 127.07.E.1 of the City's
Municipal Code, the cannabis use is not nearby any sensitive uses such
as schools, day care centers, parks or youth centers.
In order to
promote the general
welfare of the community and
not be
detrimental
to the neighborhood
or surrounding community, Elite
Green
Cultivators
application indicates
they want to be very involved
in the
DA 18-11
community through sponsorships of youth team sports and programs and
scholarships. Their Community Engagement Plan indicates they are
committed to hiring more Baldwin Park residents that the minimum
required 20%.
Furthermore, the submitted security plan includes licensed private security
company personnel on premise 24 -hours per day and on-going video
surveillance monitoring around the clock.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1420
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
ELITE GREEN CULTIVATORS FOR THE
CULTIVATION AND/OR MANUFACTURING OF
CANNABIS AT THE REAL PROPERTY LOCATED AT
5157 AZUSA CANYON ROAD (APN: 8413-001-030)
WITHIN THE CITY OF BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code §§
65864 - 65869.5.
Ordinance 1420
Page 2
WHEREAS, as required by law, the City Council gave first reading to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore each'of the
locations is proposed within an existing building.
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I -C, Industrial Commercial Zone, it is
anticipated that the use of the property is consistent with the other
light industrial uses within the area. The adoption of cannabis
cultivation and manufacturing activities is also consistent with Goal
1.0 of the City's Economic development Element in the General Plan
in that the City encourages and facilitates activities that expand the
City's revenue base. Furthermore, Goal 6.0 of the same element
encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement
requires that a minimum of 20% of the businesses workforce shall
consist of Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances) ,
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
Ordinance 1420
Page 3
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole:.
The Development Agreement is in conformance with the general
area and City as a whole as it is located within the I -C, Industrial
Commercial Zone surrounded by lighter industrial uses. The use
exceeds the distance requirement of fifty (50) feet between cannabis
uses and the closest residential zone; furthermore, pursuant to
Section 127.07.E.1 of the City's Municipal Code, the cannabis use is
not nearby any sensitive uses such as schools, day care centers,
parks or youth centers.
In order to promote the general welfare of the community and not be
detrimental to the neighborhood or surrounding community, Elite
Green Cultivators application indicates they want to be very involved
in the community through sponsorships of youth team sports and
programs and scholarships. Their Community Engagement Plan
indicates they are committed to hiring more Baldwin Park residents
that the minimum required 20%.
Furthermore, the submitted security plan includes licensed private
security company personnel on premise 24 -hours per day and on-
going video surveillance monitoring around the clock.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full force and
operation from and after thirty (30) days after its final reading and adoption..
PASSED AND APPROVED ON THE — day of , 2018
Ordinance 1420
Page 4
MANUEL LOZANO, MAYOR
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1420 was duly approved and adopted at a regular
meeting of the City Council on , 2018 by the following vote:
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND ELITE GREEN CULTIVATORS
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("STATUTORY
AGREEMENT") is intended to replace the previous non -statutory municipal Development
Agreement, and is dated April , 2018 for references purposes only and is entered into
between (i) the City of Baldwin Park ("City"), a California municipal corporation, and
(ii) Elite Green Cultivators, a California limited liability company ("Owner"). This
STATUTORY AGREEMENT shall become effective on the Effective Date defined in
Section 3.1.9 below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and Elite Green Cultivators previously entered into a
non -statutory municipal Development Agreement that was not intended to be a
Government Code Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be a Statutory Development Agreement under and
through Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code Section
65864 et seq. to enter into binding statutory development agreements with persons
having legal or equitable interests in real property for the development of such property;
and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture medical and adult use cannabis in September
2017; and at that time the City determined that the uses authorized in this STATUTORY
AGREEMENT were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of various entitlements, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map and Baldwin Park Municipal Code as of the Agreement
Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements for. notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or Property, ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Manufacturing and
Cultivation Facility pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127
and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture cannabis and cannabis related products at its facility or facilities up to 22,000
square feet.
2.14 WHEREAS, the City entered into a Development Agreement with Rukli,
Inc. to be the exclusive distributor of cannabis and cannabis related products in the City
of Baldwin Park. The City is entering into development agreements with owners for
permits for cultivation and manufacturing of cannabis and cannabis related products in
the City of Baldwin Park. The City prohibits the sale of cannabis and cannabis related
products within the City of Baldwin Park so the cannabis and cannabis related products
must be distributed to and sold in cities where it is legal to do so. Rukli, Inc. shall be the
exclusive distributor for the cultivation and/or manufacturing permit holders within the City
of Baldwin Park and City conditions the cultivation and/or manufacturing permits on Rukli,
Inc. being the exclusive distributor for any permit issued by Baldwin Park for cultivation or
manufacturing.
ARTICLE 3. GENERAL TERMS.
-2-
3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows:
3.1.1 "Agreement" means this STATUTORY AGREEMENT pursuant to
Government Code Section 65864 et seq.
3.1.2 "City" means the City of Baldwin Park, a California municipal
corporation.
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within the Term of this STATUTORY AGREEMENT on the Property.
3.116 "Development Approvals" If applicable, means all permits, licenses,
and/or other entitlements for the Development of the Property, including any and all
conditions of approval, subject to approval or issuance by the City in connection with
Development of the Property. "Development Approvals" also include both the Existing
Development Approvals and the Subsequent Development Approvals approved or issued
by the City that are consistent with this STATUTORY AGREEMENT.
3.1.7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code.
3.1.9 "Effective Date" means the day this Development STATUTORY
AGREEMENT is approved and adopted by the Baldwin Park City Council and signed by
the Mayor of Baldwin Park or his designee
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved or issued prior to or on the Effective Date. Existing
Development Approvals include the approvals set forth in Section 3.1.6 and all other
approvals which are a matter of public record prior to or on the Effective Date.
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
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3.1.12 "Land Use Regulations" If and where applicable means all
ordinances, resolutions and codes adopted by the City governing the development and
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.14 "Owner" means Elite Green Cultivators, a limited liability company.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City.
3.1.16 "Project' If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, the application, any and all entitlements licenses, and permits related
to the Project.
3.1.17 "Property" means the real property described in Owner's application
and incorporated herein by this reference. Owner may modify the location or locations or
add locations to the Property subject to City approval and all applicable zoning and
distance requirements.
3.1.18 "Reasonable" means using due diligence to accomplish a stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives of the
STATUTORY AGREEMENT.
3.1.19 "Reservations of Authority" means the rights and authority excepted
from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.20 "Space or Canopy Space" shall mean any space or ground, floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing and/or harvesting
phases, including without limitation any space used for activities such as growing,
planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering,
irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used
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for storing any cannabis, no matter where such storage may take place or such storage
space may be located.
3.1.21 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times and in
such sequences.as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.22 "Subsequent Land Use Regulations" If applicable means any Land
Use Regulations defined in Section 3.1.12 that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents, by this reference, are made part of
this STATUTORY AGREEMENT:
No. 1 — Legal Description of the Property.
No. 2 — Map showing Property and its location.
No. 3 —Application.
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is hereby
made subject to this STATUTORY AGREEMENT. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of ,the Property is hereby
authorized and shall, except as otherwise provided in this STATUTORY AGREEMENT,
be carried out only in accordance with the terms of this STATUTORY AGREEMENT and
the Development Plan, if any. In the event of conflict or uncertainty between this
STATUTORY AGREEMENT and the Development Plan, the provisions of this
STATUTORY AGREEMENT shall control.
3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of
8413001030 and is more particularly described in the application and document "No. 1"
in Section 3.2 and incorporated herein. The proposed location of the business is 5157
Azusa Canyon Rd., Baldwin Park, CA 91706.
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
expressly stated in this STATUTORY AGREEMENT to survive termination without the
need of further documentation from the parties hereto. The STATUTORY
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AGREEMENT's Fee is subject to renegotiation after the first term, and every five year
term thereafter.
3.5.1 Term Extension. This STATUTORY AGREEMENT may only be
extended by mutual agreement of City and Owner in writing and signed by Owner and
the Mayor of Baldwin Park. If the Mayor of Baldwin Park does not sign the agreement or
renegotiated agreement any such agreement is null and void.
3.6 Automatic Termination. This STATUTORY AGREEMENT shall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY AGREEMENT as set
forth in Section 3.5;
(ii) The entry of a final judgment (or a decision on any appeal therefrom)
voiding the City's General Plan or any element thereof, which judgment or decision would
preclude development of the Project, but only if the City is unable to cure such defect in
the General Plan or element within one hundred and eighty (180) days from the later of
entry of final judgment or decision on appeal.
(iii) Failure to timely pay the Fee. Failure to timely pay the $50,000
towards the police salary or benefits. Failure to pay any fees due to the City under this
STATUTORY AGREEMENT.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements and permits
approved for the Owner and/or the Property. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to .any default in the performance of the provisions of this STATUTORY AGREEMENT
which. has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
(iii) on the date of personal delivery shown in the records of the
delivery company after delivery to the recipient named below; or
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(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: Mike Sandoval
11884 Mt. Everett Court
Alta Loma, CA 91737
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's cost to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property with a commercial cannabis facility in accordance
with and to the extent of the Development Plan and/or application. The Property shall
remain subject to all Subsequent Development Approvals required to complete the
Project as contemplated by the Development Plan and/or application.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed buildings,
and the design, improvement, occupancy and construction standards and specifications
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applicable to development of the Property shall be the Development Plan and/or
application. Provided, however, that in approving tentative subdivision maps, if any, the
City may impose ordinary and necessary dedications for rights-of-way or easements for
public access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the Project
or Development Approvals may be appropriate and mutually desirable. The City shall act
on such applications, if any, in accordance with the Existing Land Use Regulations,
subject to the Reservations of Authority, or except as otherwise provided by this
STATUTORY AGREEMENT. If approved, any such change in the Existing Development
Approvals shall be considered an additional Existing Development Approval.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City.
(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new development
projects of the same uses within the City; and
(v) Regulations that do not conflict with the Development Plan. The term
"do not conflict' means new rules, regulations, and policies which: (a) do not modify the
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Development Plan, including, without limitation, the permitted land uses, the density or
intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying or
conditionally approving any Subsequent Development applications on the basis of such
subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
reasonably cooperate with other public agencies processing Development Approvals for
the Project.
4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term
of any tentative subdivision map shall be in effect for a period of fifteen(15) years, and
may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within one (1) year from the
Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means the
issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns. The City has
the power and authority to examine such books and records at any reasonable time,
including but not limited to, during normal business hours. If the City wishes to inspect
the areas of the Property where the cannabis is being cultivated or manufactured, City
may do so at any time with no prior notice to Owner. In addition, City agrees that all of
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its employees or agents which enter the cultivation, manufacturing, and curing areas shall
follow all of the policies and guidelines imposed on Owner's employees, including without
limitation, the wearing of any clothing or equipment to insure that no pests or impurities
shall enter the cultivation and curing areas.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project.
5.2 For the first year, Owner will pay the City a total of $220,000 as a Fee. This
fee is calculated based on $10.00 a square foot of permit space and a permit which allows
up to 22,000 sq. feet, among other factors.
5.3 In year two and year three, the Fee will increase to $12.50 per sq. foot for
a total of $275,000 per year, among other factors.
5.4 At the beginning of year four and year five, Owner will pay a Fee of $15.00
per sq. foot for a total of $330,000 per year, among other factors.
5.5 The Fee schedule is as follows: The first Fee payment is due at the close
of the second quarter. Therefore, the first payment will be due on the last day of June
2018, the second and last payment for the first year is due on the last day of December
2018. For the years 2 through 15, the Fee schedule is as follows: divide the total Fee for
the respective year into four and make four equal payments due at the end of each quarter
of the respective year.
5.6 The Fee is subject to reassessment by the City every five years. At the end
of year five, the City will set a new Fee which will be applied in years 6 through 10. At
the end of year 10, the City will set new Fee which will be applied in years 11 through 15.
No one factor is dispositive in the City's determination of the new Fee. The Cannabis
permit will expire at the close of the 15th year and will require the Owner to reapply with
the City for a new permit. If Owner and City cannot agree to a new Fee or Fees by
December 22, 2022, this STATUTORY AGREEMENT will automatically terminate on
December 23, 2022.
5.7 Further, Owner will pay a yearly payment of $50,000 to the City that can be
used to mitigate the impact of the cannabis business on the City and its resources which
includes but is not limited to, to use to pay a part of a police officer's salary and/or benefits.
This $50,000 amount will be due at the time the permit is issued. Subsequent annual
payments will be due on the permit issuance anniversary date. This payment is due within
thirty (30) days of issuance of permit and thereafter on the anniversary of the issuance of
the permit.
5.8 Jobs and Wage Creation.
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5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the" City or
who employ a significant number of City residents. At least 20 percent of the Project's
workforce shall consist of residents of the City. Job announcements shall be posted at City
Hall, along with proof that the job announcements were advertised in at least two
newspapers published, printed or distributed in the City and on various social media sites
accessible to the general public. In addition, Owner shall make a good faith effort to
advertise job announcements at local job fairs, on local radio and through public agencies
and organizations.
5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses and all
documents evidencing compliance with state and local law. As such, upon issuance of
its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the
City for any associated costs with processing the Project, as detailed above and
reimbursing the. City for its actual costs incurred in drafting and processing this
STATUTORY AGREEMENT. Owner will be liable for the City's actual costs incurred in
processing future Development Approval applications. City acknowledges and agrees
that this payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 Transportation of Cannabis. All pick ups and drop offs of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity, arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. During
the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
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7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council may automatically terminate this
STATUTORY AGREEMENT notwithstanding any other provision of this STATUTORY
AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT and impose
such conditions as are reasonably necessary to protect the interests of the City, The
decision of the City Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special
review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the Citywould
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings.
In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
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provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
orto any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest, if successors in interest are
permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof,
not to sue for damages or claim any damages:
(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application or request for a permit for cultivation, manufacturing and/or
distribution or interpretation or effect of the provisions of this STATUTORY AGREEMENT.
Owner hereby agrees to waive and/or release the City of Baldwin Park for any
claim or claims or cause of action, not specifically and expressly reserved herein, which
Owner may have at the time of execution of this STATUTORY AGREEMENT relating to
any application to the City of Baldwin Park including but not limited to, any application for
any type of distribution, cultivation or manufacturing permit, any application for any
distribution, cultivation or manufacturing rights, or any application for any distribution,
cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTORY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged.
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Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
shall modify or abridge any defenses or immunities available to the City and its employees
pursuant to the Government Tort Liability Act and all other applicable statutes and
decisional law.
Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8.1, Section 8.2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money damages and
remedies at law are inadequate, and specific performance and other non -monetary relief
are particularly appropriate remedies for the enforcement of this STATUTORY
AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Section 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of STATUTORY AGREEMENT for Default of the City. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default.
8.4 Owner Default. No building permit shall be issued or building permit
application accepted for any structure on the Property after Owner is determined by the
City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
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this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
as the result of a judicial determination that the General Plan, or portions thereof, are
invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that any STATUTORY AGREEMENT or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees), which the City or its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the environmental impact report, mitigated negative
declaration or negative declaration, as the case may be, prepared in connection with the
development of the Property; and (iii) the proceedings or procedure undertaken in
connection with the adoption or approval of any permit or any of the above. In the event
of any legal or equitable action or other proceeding instituted by anyone against the City
or its City Council, any third party (including a governmental entity or official) challenging
the validity of any provision of this STATUTORY AGREEMENT or the procedure upon
which the permit was issued, or any portion thereof as set forth herein, the parties shall
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mutually cooperate with each other in defense of said action or proceeding.
Notwithstanding the above, the City, at is sole option, may tender to Owner and Owner
agrees to accept any such tender of the complete defense of any third party challenge as
described herein. In the event the City elects to contract with special counsel to provide
for such a defense, the City may do so in its sole discretion and Owner will be required to
pay the defense costs of the City as the costs are incurred. Owner agrees to pay any and
all attorneys' fees or retainer regarding the selection of counsel, and Owner shall pay all
costs and all attorneys' fees related to retention of such counsel.
9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers,' agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9.4 do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the -City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
settlement offer, City shall notify Owner of the offer and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
in connection with Owner's development, operation and use of the Property (collectively,
"Actions"). The City shall not disclose information and documents to the Federal
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Government or State Government, its officers, or agents regarding any party to this
STATUTORY AGREEMENT absent a grand jury subpoena, civil or administrative
subpoena, warrant, discovery request, summons, court order or similar process
authorized under law hereinafter called "Governmental Notice". If any Action is brought
by either the Federal or State Government, City shall immediately notify Owner of the
nature of the Claim including all correspondence or documents submitted to the City.
Prior to responding to the Governmental Notice, City shall provide Owner ten (10) days
from the date of such notice subpoena or the like to serve and obtain on the City a
protective order, or the like, from a court of competent jurisdiction.
9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or modification is consistent with the intent and purposes of this STATUTORY
AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or
in any way limit City's rights under this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly contained herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition Iof this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
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AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein, are essential elements
of this STATUTORY AGREEMENT and the City would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at the City's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever. The foregoing notwithstanding, the
development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential
elements of this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Owner's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel in the
negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation 'of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure by a party
to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms
of this STATUTORY AGREEMENT thereafter.
11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
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11.9 This STATUTORY AGREEMENT supercedes that certain non -statutory
municipal Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited. party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
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his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto.
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter andbylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
claim that the terms in this STATUTORY AGREEMENT constitute an abuse of the police
power, violate substantive due process, deny equal protection of the laws, effect a taking
of property without payment of just compensation, or impose an unlawful tax.
11.20 [RESERVED]
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11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply With all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of BPMC.
11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits and/or
licenses are attached hereto and incorporated herein by this reference.
11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK
By:
Manuel Lozano, Mayor
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
1pie
ELITE GREEN CULTIVATORS
By:
President
APPROVED AS TO FORM:
By:
Legal Counsel for
ELITE GREEN CULTIVATORS
Robert N. Tafoya,
City Attorney
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
-1-
EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
-1-
ITEM: L (Pacific Cultivation,. LLC)
ATTACHMENT #12 DA 18-12
PACIFIC CULTIVATION, LLC
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-12
Location 5175 Commerce Dr. APN: 8535-002-041
Zoning of Subject Location I, Industrial
Principal Name(s) Linda Thong
Company Name Pacific Cultivation, LLC
Term of Development Fifteen years from 12/29/17
Aqreement
June 30 and December 31 for Year #1
Payment Schedule Quarterly for Years #2 through #15—Four equal
payments.
Year #1--$220,000
Years #2 and #3--$275,000
Payment Amount Years #4 and #5--$330,000—The Mitigation Fee is
subject to reassessment by the City every five (5)
Floor Area of Buildings 30,341 s.f. per City Records
Employee Requirements At least 20% of the Project's workforce shall consist
of residents of the City.
VICINITY MAP
CASE NUMBER: DA 18-12
LOCATION: 5175 Commerce Drive
DATE: April 12, 2018
JANuj
DA 18-12
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I, Industrial Zone, it is anticipated that the use of the
property is consistent with the other light industrial uses within the area.
The adoption of cannabis cultivation and manufacturing activities is also
consistent with Goal 1.0 of the City's Economic development Element in
the General Plan in that the City encourages and facilitates activities that
expand the City's revenue base. Furthermore, Goal 6.0 of the same
element encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement requires
that a minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I, Industrial Zone surrounded by
lighter industrial uses. The use exceeds the distance requirement of fifty
(50) feet between cannabis uses and the closest residential zone;
furthermore, pursuant to Section 127.07.E.1 of the City's Municipal Code,
the cannabis use is not nearby any sensitive uses such as schools, day
care centers, parks or youth centers.
Pacific Cultivation believes that community engagement is a responsibility
and they seek to enhance community sustainability. Their focus is
education and social programs as well as community/environmental
DA 18-12
projects. They believe that these are fundamental aspects of a thriving
community. They are looking to incorporate financial, in-kind, or volunteer
contributions.
In order to reduce the potential for any negative impacts upon the
surrounding neighborhood and City resources, the security plan provides
for video surveillance and on-site security. They also have off-site
monitoring through a licensed alarm company.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1421
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
PACIFIC CULTIVATION, LLC FOR THE
CULTIVATION AND/OR MANUFACTURING OF
CANNABIS AT THE REAL PROPERTY LOCATED AT
5175 COMMERCE DRIVE (APN: 8535-002-041)
WITHIN THE CITY OF BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code §§
65864 - 65869.5.
Ordinance 1421
Page 2
WHEREAS, as required by law, the City Council gave first reading to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore each 'of the
locations is proposed within an existing building.
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any' other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I, Industrial Zone, it is anticipated that
the use of the property is consistent with the other light industrial
uses within the area. The adoption of cannabis cultivation and
manufacturing activities is also consistent with Goal 1.0 of the City's
Economic development Element in the General Plan in that the City
encourages and facilitates activities that expand the City's revenue
base. Furthermore, Goal 6.0 of the same element encourages the
expansion of the City's diverse industrial base. Policy 6.5 of Goal
6.0 encourages an on-going campaign with local businesses to hire
local residents. This Development Agreement requires that a
minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances) ,
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
Ordinance 1421
Page 3
3. The Development Agreement is in conformance with the ,public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general
area and City as a whole as it is located within the I -C, Industrial
Commercial Zone surrounded by lighter industrial uses. The use
exceeds the distance requirement of fifty (50) feet between cannabis
uses and the closest residential zone; furthermore, pursuant to
Section 127.07.E.1 of the City's Municipal Code, the cannabis use is
not nearby any sensitive uses such as schools, day care centers,
parks or youth centers.
Pacific Cultivation believes that community engagement is a
responsibility and they seek to enhance community sustainability.
Their focus is education and social programs as well as
community/environmental projects. They believe that these are
fundamental aspects of a thriving community. They are looking to
incorporate financial, in-kind, or volunteer contributions.
In order to reduce the potential for any negative impacts upon the
surrounding neighborhood and City resources, the security plan
provides for video surveillance and on-site security. They also have
off-site monitoring through a licensed alarm company.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full force and
operation from and after thirty (30) days after its final reading and adoption.
PASSED AND APPROVED ON THE — day of , 2018
Ordinance 1421
Page 4
MANUEL LOZANO, MAYOR
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1421 was duly approved and adopted at a regular
meeting of the City Council on , 2018 by the following vote:
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND PACIFIC CULTIVATION, LLC
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("STATUTORY
AGREEMENT") is intended to replace the previous non -statutory municipal Development
Agreement and, is dated April , 2018 for references purposes only and is entered into
between (i) the City of Baldwin Park ("City"), a California municipal corporation, and
(ii) Pacific Cultivation, a California limited liability company ("Owner"). This STATUTORY
AGREEMENT shall become effective on the Effective Date defined in Section 3.1.9
below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and Pacific Cultivation previously entered into a non -
statutory municipal Development Agreement that was not intended to be a Government
Code Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be a Statutory Development Agreement under and
through Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code Section
65864 et seq. to enter into binding statutory development agreements with persons
having legal or equitable interests in real property for the development of such property;
and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture medical and adult use cannabis in September
2017; and at that time the City determined that the uses authorized in this STATUTORY
AGREEMENT were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of various entitlements, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
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2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map and Baldwin Park Municipal Code as of the Agreement
Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements for notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or Property, ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Manufacturing and
Cultivation Facility pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127
and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture cannabis and cannabis related products at its facility or facilities up to 22,000
square feet.
2.14 WHEREAS, the City entered into a Development Agreement with Rukli,
Inc. to be the exclusive distributor of cannabis and cannabis related products in the City
of Baldwin Park. The City is entering into development agreements with owners for
permits for cultivation and manufacturing of cannabis and cannabis related products in
the City of Baldwin Park. The City prohibits the sale of cannabis and cannabis related
products within the City of Baldwin Park so the cannabis and cannabis related products
must be distributed to and sold in cities where it is legal to do so. Rukli, Inc. shall be the
exclusive distributor for the cultivation and/or manufacturing permit holders within the City
of Baldwin Park and City conditions the cultivation and/or manufacturing permits on Rukli,
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Inc. being the exclusive distributor for any permit issued by Baldwin Park for cultivation or
manufacturing.
ARTICLE 3. GENERAL TERMS.
3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows:
3.1.1 "Agreement" means this STATUTORY AGREEMENT pursuant to
Government Code Section 65864 et seq.
3.1.2 "City" means the City of Baldwin Park, a California municipal
corporation.
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" If applicable, means all permits, licenses,
and/or other entitlements for the Development of the Property, including any and all
conditions of approval, subject to approval or issuance by the City in connection with
Development of the Property. "Development Approvals" also include both the Existing
Development Approvals and the Subsequent Development Approvals approved or issued
by the City that are consistent with this STATUTORY AGREEMENT.
3.1.7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code.
3.1.9 "Effective Date" means the day this Development STATUTORY
AGREEMENT is approved and adopted by the Baldwin Park City Council and signed by
the Mayor of Baldwin Park or his designee
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved or issued prior to or on the Effective Date. Existing
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Development Approvals include the approvals set forth in Section 3.1.6 and all other
approvals which are a matter of public record prior to or on the Effective Date.
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
3.1.12 "Land Use Regulations" If and where applicable, means all
ordinances, resolutions and codes adopted by the City governing the development and
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.14 "Owner" means Pacific Cultivation, a limited liability company.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City.
3.1.16 "Project" If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, the application, any and all entitlements licenses, and permits related
to the Project.
3.1.17 "Property" means the real property described in Owner's application
and incorporated herein by this reference. Owner may modify the location or locations or
add locations to the Property subject to City approval and all applicable zoning and
distance requirements.
3.1.18 "Reasonable" means using due diligence to accomplish a stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives of the
STATUTORY AGREEMENT.
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3.1.19 "Reservations of Authority" means the rights and authority excepted
from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.20 "Space or Canopy Space" shall mean any space or ground, floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing, and/or harvesting
phases, including without limitation any space used for activities such as growing,
planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering,
irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used
for storing any cannabis, no matter where such storage may take place or such storage
space may be located.
3.1.21 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times and in
such sequences as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.22 "Subsequent Land Use Regulations" If applicable means any Land
Use Regulations defined in Section 3.1.12 that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents, by this reference, are made part of
this STATUTORY AGREEMENT:
No. 1 — Legal Description of the Property.
No. 2 - Map showing Property and its location.
No. 3 - Application
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is hereby
made subject to this STATUTORY AGREEMENT. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of the Property is hereby
authorized and shall, except as otherwise provided in this STATUTORY AGREEMENT,
be carried out only in accordance with the terms of this STATUTORY AGREEMENT and
the Development Plan, if any. In the event of conflict or uncertainty between this
STATUTORY AGREEMENT and the Development Plan, the provisions of this
STATUTORY AGREEMENT shall control.
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3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of 8535-
002-041 & 8535-002-043 and is more particularly described in the application and
document "No.1" in Section 3.2 and incorporated herein.
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
expressly stated in this STATUTORY AGREEMENT to survive termination without the
need of further documentation from the parties hereto. The STATUTORY
AGREEMENT's Fee is subject to renegotiation after the first term, and every five year
term thereafter.
3.5.1 Term Extension. This STATUTORY AGREEMENT may only be
extended by mutual agreement of City and Owner in writing and signed by Owner and
the Mayor of Baldwin Park. If the Mayor of Baldwin Park does not sign the agreement or
renegotiated agreement any such agreement is null and void.
3.6 Automatic Termination. This STATUTORY AGREEMENT shall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY AGREEMENT as set
forth in Section 3.5;
(ii) The entry of a final judgment (or a decision on any appeal therefrom)
voiding the City's General Plan or any element thereof, which judgment or decision would
preclude development of the Project, but only if the City is unable to cure such defect in
the General Plan or element within one hundred and eighty (180) days from the later of
entry of final judgment or decision on appeal.
(iii) Failure to timely pay the Fee. Failure to timely pay the $50,000
towards the police salary or benefits. Failure to pay any fees due to the City under this
STATUTORY AGREEMENT.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements and permits
approved for the Owner and/or the Property. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to any default in the performance of the provisions of this STATUTORY AGREEMENT
which has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
(iii) on the date of personal delivery shown in the records of the
delivery company after delivery to the recipient named below; or
(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: Linda Thong
1005 E. Las Tunas Dr., STE. 333
San Gabriel, CA 91775
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's cost to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
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process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property with a commercial cannabis facility in accordance
with and to the extent of the Development Plan and/or application. The Property shall
remain subject to all Subsequent Development Approvals required to complete the
Project as contemplated by the Development Plan and/or application.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed buildings,
and the design, improvement, occupancy and construction standards and specifications
applicable to development of the Property shall be the Development Plan and/or
application. Provided, however, that in approving tentative subdivision maps, if any, the
City may impose ordinary and necessary dedications for rights-of-way or easements for
public access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the Project
or Development Approvals may be appropriate and mutually desirable. The City shall act
on such applications, if any, in accordance with the Existing Land Use Regulations,
subject to the Reservations of Authority, or except as otherwise provided by this
STATUTORY AGREEMENT. If approved, any such change in the Existing Development
Approvals shall be considered an additional Existing Development Approval.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City.
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(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new development
projects of the same uses within the City; and
(v) Regulations that do not conflict with the Development Plan. The term
"do not conflict" means new rules, regulations, and policies which: (a) do not modify the
Development Plan, including, without limitation, the permitted land uses, the density or
intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying or
conditionally approving any Subsequent Development applications on the basis of such
subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
reasonably cooperate with other public agencies processing Development Approvals for
the Project.
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4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term
of any tentative subdivision map shall be in effect for a period of fifteen (15) years, and
may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within one (1) year from the
Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means the
issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns. The City has
the power and authority to examine such books and records at any reasonable time,
including but not limited to, during normal business hours. If the City wishes to inspect
the areas of the Property where the cannabis is being cultivated or manufactured, City
may do so at any time with no prior notice to Owner. In addition, City agrees that all of
its employees or agents which enter the cultivation, manufacturing, and curing areas shall
follow all of the policies and guidelines imposed on Owner's employees, including without
limitation, the wearing of any clothing or equipment to insure that no pests or impurities
shall enter the cultivation and curing areas.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project.
5.2 For the first year, Owner will pay the City a total of $220,000 as a Fee. This
fee is calculated based on $10.00 a square foot of canopy space and a permit which
allows up to 22,000 sq. feet, among other factors.
5.3 In year two and year three, the Fee will increase to $12.50 per sq. foot of
canopy space for a total of $275,000 per year, among other factors.
5.4 At the beginning of year four and year five, Owner will pay a Fee of $15.00
per sq. foot of canopy space for a total of $330,000 per year, among other factors...
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5.5 The Fee schedule is as follows: The first Fee payment is due at the close
of the second quarter. Therefore, the first payment will be due on the last day of June
2018, the second and last payment for the first year is due on the last day of December
2018. For the years 2 through 15, the Fee schedule is as follows: divide the total Fee for
the respective year into four and make four equal payments due at the end of each quarter
of the respective year.
5.6 The Fee is subject to reassessment by the City every five years. At the end
of year five, the City will set a new Fee which will be applied in years 6 through 10. At
the end of year 10, the City will set new Fee which will be applied in years 11 through 15.
No one factor is dispositive in the City's determination of the new Fee. The Cannabis
permit will expire at the close of the 15th year and will require the Owner to reapply with
the City for a new permit. If Owner and City cannot agree to a new Fee or Fees by
December 22, 2022, this STATUTORY AGREEMENT will automatically terminate on
December 23, 2022.
5.7 Further, Owner will pay a yearly payment of $50,000 to the City that can be
used to mitigate the impact of the cannabis business on the City and its resources which
includes but is not limited to, to use to pay a part of a police officer's salary and/or benefits.
This $50,000 amount will be due within thirty (30) days of issuance of permit... This
payment is due within thirty (30) days of issuance of permit and thereafter on the
anniversary of the issuance of the permit.
5.8 Jobs and Wage Creation.
5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the City or
who employ a significant number of City residents. At least 20 percent of the Project's
workforce shall consist of residents of the City. Applicant will make best efforts to meet this
goal. Job announcements shall be posted at City Hall, along with proof that the job
announcements were advertised in at least two newspapers published, printed or
distributed in the City and on various social media sites accessible to the general public. In
addition, Owner shall make a good faith effort to advertise job announcements at local job
fairs, on local radio and through public agencies and organizations.
5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses and all
documents evidencing compliance with state and local law. As such, upon issuance of
its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the
City for any associated costs with processing the Project, as detailed above and
reimbursing the City for its actual costs incurred in drafting and processing this
STATUTORY AGREEMENT. Owner will be liable for the City's actual costs incurred in
processing future Development Approval applications. City acknowledges and agrees
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that this payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 Transportation of Cannabis. All pick ups and drop offs of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity, arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. During
the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council may automatically terminate this
STATUTORY AGREEMENT notwithstanding any other provision of this STATUTORY
AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT and impose
such conditions as are reasonably necessary to protect the interests of the City. The
decision of the City Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special
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review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City would
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings.
In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
or to any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest, if successors in interest are
permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof,
not to sue for damages or claim any damages:
(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application or request for a permit for cultivation, manufacturing and/or
distribution or interpretation or effect of the provisions of this STATUTORY AGREEMENT.
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Owner hereby agrees to waive and/or release the City of Baldwin Park for any claim or
claims or cause of action, not specifically and expressly reserved herein, which Owner
may have at the time of execution of this Development STATUTORY AGREEMENT
relating to any application to the City of Baldwin Park including but not limited to, any
application for any type of distribution, cultivation or manufacturing permit, any application
for any distribution, cultivation or manufacturing rights, or any application for any
distribution, cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTORY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:
" A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged.
Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
shall modify or abridge any defenses or immunities available to the City and its employees
pursuant to the Government Tort Liability Act and all other applicable statutes and
decisional law.
Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8.1, Section 8.2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money damages and
remedies at law are inadequate, and specific performance and other non -monetary relief
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are particularly appropriate remedies for the enforcement of this STATUTORY
AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Section 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of STATUTORY AGREEMENT for Default of the City. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default.
8.4 Owner Default. No building permit shall be issued or building permit
application accepted for any structure on the Property after Owner is determined by the
City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation, The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
as the result of a judicial determination that the General Plan, or portions thereof, are
invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
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in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that any STATUTORY AGREEMENT or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees), which the City or its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the environmental impact report, mitigated negative
declaration or negative declaration, as the case may be, prepared in connection with the
development of the Property; and (iii) the proceedings or procedure undertaken in
connection with the adoption or approval of any permit or any of the above. In the event
of any legal or equitable action or other proceeding instituted by anyone against the City
or its City Council, any third party (including a governmental entity or official) challenging
the validity of any provision of this STATUTORY AGREEMENT or the procedure upon
which the permit was issued, or any portion thereof as set forth herein, the parties shall
mutually cooperate with each other in defense of said action or proceeding.
Notwithstanding the above, the City, at is sole option, may tender to Owner and Owner
agrees to accept any such tender of the complete defense of any third party challenge as
described herein. In the event the City elects to contract with special counsel to provide
for such a defense, the City may do so in its sole discretion and Owner will be required to
pay the defense costs of the City as the costs are incurred. Owner agrees to pay any
and all attorneys' fees or retainer regarding the selection of counsel, and Owner shall pay
all costs and all attorneys' fees related to retention of such counsel.
9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
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predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers, agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9.4 do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
settlement offer, City shall notify Owner of the offer and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
in connection with Owner's development, operation and use of the Property (collectively,
"Actions"). The City shall not disclose information and documents to the Federal
Government or State Government, its officers, or agents regarding any party to this
STATUTORY AGREEMENT absent a grand jury subpoena, civil or administrative
subpoena, warrant, discovery request, summons, court order or similar process
authorized under law hereinafter called "Governmental Notice". If any Action is brought
by either the Federal or State Government, City shall immediately notify Owner of the
nature of the Claim including all correspondence or documents submitted to the City.
Prior to responding to the Governmental Notice, City shall provide Owner ten (10) days
from the date of such notice subpoena or the like to serve and obtain on the City a
protective order, or the like, from a court of competent jurisdiction.
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9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or modification is consistent with the intent and purposes of this STATUTORY
AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or
in any way limit City's rights under this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly contained herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein, are essential elements
of this STATUTORY AGREEMENT and the City would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at the City's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever. The foregoing notwithstanding, the
development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential
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elements of this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Owner's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel in the
negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure by a party
to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms
of this STATUTORY AGREEMENT thereafter.
11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
11.9 This STATUTORY AGREEMENT supercedes that certain non -statutory
municipal Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
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11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
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AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto.
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter and bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
claim that the terms in this STATUTORY AGREEMENT constitute an abuse of the police
power, violate substantive due process, deny equal protection of the laws, effect a taking
of property without payment of just compensation, and/or impose an unlawful tax.
11.20 [RESERVED]
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11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply with all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of BPMC.
11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits and/or
licenses are attached hereto and incorporated herein by this reference.
11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK PACIFIC CULTIVATION, LLC
By:
Manuel Lozano, Mayor
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
Robert N. Tafoya,
City Attorney
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By:
President
APPROVED AS TO FORM:
By:
Legal Counsel for
PACIFIC CULTIVATION, LLC
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
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EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
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ITEM: M (Cloud Control Inc.)
ATTACHMENT #13 DA 18-13
CLOUD CONTROL, INC.
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-13
Location 13450 Brooks Drive, Unit A & C APN: 8535-023-
010
Zoning of Subject Location I, Industrial
Principal Name(s) Jonathan Yuan Kai Lee, Jefferson Liou, and Jerrell
Austin Shepp
Company Name Cloud Control, Inc.
Term of Development Fifteen (15) years from 12/29/17
Agreement
Payment Schedule
June 30 and December 31 for Year #1
Quarterly for Years #2 through #15—Four equal
Year #1--$220,000
Years #2 and #3--$275,000
Payment Amount Years #4 and #5--$330,000—The Mitigation Fee is
subject to reassessment by the City every five (5)
ears.
Floor Area of Buildings 15,000 s.f. approximate
Employee Requirements At least 20% of the project's workforce shall consist
of residents of the City.
_'
VICINITY MAP
CASE NUMBER: DA 18-13
LOCATION: ] 3450 Brooks Drive
DATE: April 1 2, 2 0 1 8
4J
J
DA 18-13
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I, Industrial Zone, it is anticipated that the use of the
property is consistent with the other light industrial uses within the area.
The adoption of cannabis cultivation and manufacturing activities is also
consistent with Goal 1.0 of the City's Economic development Element in
the General Plan in that the City encourages and facilitates activities that
expand the City's revenue base. Furthermore, Goal 6.0 of the same
element encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement requires
that a minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I, Industrial Zone surrounded by
lighter industrial uses. The use exceeds the distance requirement of fifty
(50) feet between cannabis uses and the closest residential zone;
furthermore, pursuant to Section 127.07.E.1 of the City's Municipal Code,
the cannabis use is not nearby any sensitive uses such as schools, day
care centers, parks or youth centers.
Cloud Control Inc. takes pride in being a good neighbor and being active
members of the community. Their community engagement activities focus
on Employer sponsored volunteerism and Corporate Community
DA 18-13
Engagement. They want to focus on those efforts that are most
meaningful to the employees, such as national Night Out, community
clean ups, and holiday toy/food drives.
Cloud Control Inc. is providing both exterior and interior video surveillance,
no exterior signage relating to cannabis, limited points of access and
manned security 7 -days per week in addition to off-site monitoring. Their
goal is to provide a comprehensive employee training program so that
everyone understands their role in keeping the facility, themselves and
products safe and secure thereby reducing any potential for negative
impacts that would be detrimental to the welfare of not only the nearby
neighborhood but the City as a whole.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1422
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
CLOUD CONTROL INC. FOR THE CULTIVATION
AND/OR MANUFACTURING OF CANNABIS AT THE
REAL PROPERTY LOCATED AT 13450 BROOKS
DRIVE, UNIT A & C (APN: 8535-023-010) WITHIN
THE CITY OF BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code §§
65864 - 65869.5.
Ordinance 1422
Page 2
WHEREAS, as required by law, the City Council gave first reading to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore each of the
locations is proposed within an existing building.
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I, Industrial Zone, it is anticipated that
the use of the property is consistent with the other light industrial .
uses within the area. The adoption of cannabis cultivation and
manufacturing activities is also consistent with Goal 1.0 of the City's
Economic development Element in the General Plan in that the City
encourages and facilitates activities that expand the City's revenue
base. Furthermore, Goal 6.0 of the same element encourages the
expansion of the City's diverse industrial base. Policy 6.5 of Goal
6.0 encourages an on-going campaign with local businesses to hire
local residents. This Development Agreement requires that a.
minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances)
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
Ordinance 1422
Page 3
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general
area and City as a whole as it is located within the I, Industrial Zone.
surrounded by lighter industrial uses. The use exceeds the distance
requirement of fifty (50) feet between cannabis uses and the closest
residential zone; furthermore, pursuant to Section 127.07.E.1 of the
City's Municipal Code, the cannabis use is not nearby any sensitive
uses such as schools, day care centers, parks or youth centers.
Cloud Control Inc. takes pride in being a good neighbor and being
active members of the community. Their community engagement .
activities focus on Employer sponsored volunteerism and Corporate
Community Engagement. They want to focus on those efforts that
are most meaningful to the employees, such as national Night Out,
community clean ups, and holiday toy/food drives.
Cloud Control Inc. is providing both exterior and interior video
surveillance, no exterior signage relating to cannabis, limited points
of access and manned security 7 -days per week in addition to off-
site monitoring. Their goal is to provide a comprehensive employee
training program so that everyone understands their role in keeping
the facility, themselves and products safe and secure thereby
reducing any potential for negative impacts that would be detrimental
to the welfare of not only the nearby neighborhood but the City as a
whole.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full force and
operation from and after thirty (30) days after its final reading and adoption.
Ordinance 1422
Page 4
PASSED AND APPROVED ON THE _ day of , 2018
MANUEL LOZANO, MAYOR
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1422 was duly approved and adopted at a regular
meeting of the City Council on 2018 by the following vote:
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT'
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND CLOUD CONTROL, INC.
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("STATUTORY
AGREEMENT") is intended to replace the previous non -statutory municipal Development
Agreement, and is dated April , 2018 for references purposes only and is entered into
between (i) the City of Baldwin Park ("City"), a California municipal corporation, and
(ii) Cloud Control, Inc., a California corporation ("Owner"). This STATUTORY
AGREEMENT shall become effective on the Effective Date defined in Section 3.1.9
below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and Cloud Control, Inc. previously entered into a non -
statutory municipal Development Agreement that was not intended to be a Government
Code Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be a Statutory Development Agreement under and
through Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code Section
65864 et seq. to enter into binding statutory development agreements with persons
having legal or equitable interests in real property for the development of such property;
and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture medical and adult use cannabis, in September
20.17; and at that time the City determined that the uses authorized in this STATUTORY
AGREEMENT were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of various entitlements, as discussed herein; and .
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map and the Baldwin Park Municipal Code as of the Agreement
Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements for notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or Property, ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Manufacturing and
Cultivation Facility pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127
and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture cannabis and cannabis related products, at or from its facility or facilities up
to 22,000 square feet.
2.14 WHEREAS, the City entered into a Development Agreement with Rukli, Inc.
to be the exclusive distributor of cannabis and cannabis related products in the City of
Baldwin Park. The City is entering into development agreements with owners for permits
for cultivation and manufacturing of cannabis and cannabis related products in the City of
Baldwin Park. The City prohibits the sale of cannabis and cannabis related products within
the City of Baldwin Park so the cannabis and cannabis related products must be
distributed to and sold in cities where it is legal to do so. Rukli, Inc. shall be the exclusive
distributor for the cultivation and/or manufacturing permit holders within the City of
Baldwin Park and City conditions the cultivation and/or manufacturing permits on Rukli,
Inc. being the exclusive distributor for any permit issued by Baldwin Park for cultivation or
manufacturing.
ARTICLE 3. GENERAL TERMS.
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3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows:
3.1.1 "Agreement" means this STATUTORY AGREEMENT pursuant to
Government Code Section 65864 et seq.
corporation.
3.1.2 "City" means the City of Baldwin Park, a California municipal
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" If applicable, means other entitlements for
the Development of the Property, including any and all conditions of approval, subject to
approval or issuance by the City in connection with Development of the Property.
"Development Approvals" also include both the Existing Development Approvals and the
Subsequent Development Approvals approved or issued by the City that are consistent
with this STATUTORY AGREEMENT.
3.1.7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code. .
3.1.9 "Effective Date" means the day this Development STATUTORY
AGREEMENT is approved and adopted by the Baldwin Park City Council and signed by
the Mayor of Baldwin Park or his designee
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved or issued prior to or on the Effective Date. Existing
Development Approvals include the approvals set forth in Section 3.1.6 and all other
approvals which are a matter of public record prior to or on the Effective Date.
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
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3.1.12 "Land Use Regulations" If and where applicable means all
ordinances, resolutions and codes adopted by the City governing the development and
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.14 "Owner" means Cloud Control, Inc., a California corporation.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City.
3.1.16 "Project" If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, the application, and any and all entitlements licenses, and permits
related to the Project.
3.1.17 "Property" means the real property described in Owner's application
and incorporated herein by this reference. Owner may modify or add to the location or
locations or add locations to of the Property subject to City approval and all applicable
zoning and distance requirements.
3.1.18 "Reasonable" means using due diligence to accomplish a. stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives. of the
STATUTORY AGREEMENT.
3.1.19 "Reservations of Authority" means the rights and authority excepted
from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.20 "Space or Canopy Space" shall mean any space or ground, -floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing, and/or harvesting
phases, including without limitation any space used for activities such as growing,
planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering,
irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used
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for storing any cannabis, no matter where such storage may take place or such storage
space may be located.
3.1.21 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times and in
such sequences as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.22 "Subsequent Land Use Regulations" If applicable means any Land
Use Regulations defined in Section 3.1.12 that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents, by this reference, are made part of
this STATUTORY AGREEMENT:
No. 1 — Legal Description of the Property.
No. 2 — Map showing Property and its location.
No. 3 - Application
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is hereby
made subject to this STATUTORY AGREEMENT. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of the Property is hereby
authorized and shall, except as otherwise provided in this STATUTORY AGREEMENT,
be carried out only in accordance with the terms of this STATUTORY AGREEMENT and
the Development Plan, if any. In the event of conflict or uncertainty between this
STATUTORY AGREEMENT and the Development Plan, the provisions of this
STATUTORY AGREEMENT shall control.
3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of 8535-
023-010 and is more particularly described in the applications and document "No.1 ° in
Section 3.2 and incorporated herein, of which Owner has leased 2 of 4 units (other units
are not available for lease), with approximately 8,000 total square feet of Space.
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the ' written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
expressly stated in this STATUTORY AGREEMENT to survive termination without the
need of further documentation from the parties hereto. The STATUTORY
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AGREEMENT's Fee is subject to renegotiation after the first term, and every five year
term thereafter.
3.5.1 Term Extension. This STATUTORY AGREEMENT may be
extended by mutual agreement of City and Owner in writing and signed by Owner and
the Mayor of Baldwin Park. If the Mayor of Baldwin Park does not sign the agreement or
renegotiated agreement any such agreement is null and void.
3.6 Automatic Termination. This STATUTORY AGREEMENTshall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY AGREEMENT as set
forth in Section 3.5;
(ii) The entry of a final judgment (or a decision on any appeal therefrom)
voiding the City's General Plan or any element thereof, which judgment or decision would
preclude development of the Project, but only if the City is unable to cure such defect in
the General Plan or element within one hundred and eighty (180) days from the later of
entry of final judgment or decision on appeal.
(iii) Failure to timely pay Fee or Fees. Failure to timely pay the Fee and
failure to timely pay the $50,000 towards the police salary or benefits. Failure to pay any
fees due to the City under this STATUTORY AGREEMENT.
(iv) Applicable regulations or law enacted subsequent to this
STATUTORY AGREEMENT render this STATUTORY AGREEMENT • illegal,
unenforceable or void.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements and permits
approved for the Owner and/or the Property. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to any default in the performance of the provisions of this STATUTORY AGREEMENT
which has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
s:M
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
(iii) on the date of personal delivery shown in the records of the
delivery company after delivery to the recipient named below; or
(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: Jefferson Liou, CEO
13450 Brooks Drive
Baldwin Park, CA 91706
With a copy to:
Jade Effect, LLC
4424 Huntington Dr. South
Los Angeles, CA 90032
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's cost to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property with a commercial cannabis facility in accordance
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with and to the extent of the Development Plan and/or application. The Property shall
remain subject to all Subsequent Development Approvals required to complete the
Project as contemplated by the Development Plan and/or application.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed bqildings,
and the design, improvement, occupancy and construction standards and specifications
applicable to development of the Property shall be the Development Plan. and/or
application. Provided, however, that in approving tentative subdivision maps, if any, the
City may impose ordinary and necessary dedications for rights-of-way or easements for
public access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the Project
or Development Approvals may be appropriate and mutually desirable. The City shall act
on such applications, if any, in accordance with the Existing Land Use Regulations,
subject to the Reservations of Authority, or except as otherwise provided by this
STATUTORY AGREEMENT. Such changes shall include a modification or addition to
the present location of Owner's Property. If approved, any such change in the Existing
Development Approvals shall be considered an additional Existing Development
Approval.
Further, should City amend its Municipal Code or Land Use Regulations to allow the
issuance of cannabis permits for uses other than those presently permitted by the City,
for example to allow for retail sales, retail delivery, microbusinesses, or other cannabis
operations allowed under State law, City shall give priority for such permits to Owner.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City.
(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new development
projects of the same uses within the City; and
(v) Regulations that do not conflict with the Development Plan. The term
"do not conflict' means new rules, regulations, and policies which: (a) do not modify the
Development Plan, including, without limitation, the permitted land uses, the density or
intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying or
conditionally approving any Subsequent Development applications on the basis of such
subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
reasonably cooperate with other public agencies processing Development Approvals for
the Project.
4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term
of any tentative subdivision map shall be in effect for a period of fifteen (15) years, and
may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within one (1) year from the
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Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means the
issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns, provided the
City maintains the confidentiality of Owner's private financial information to the furthest
extent permitted by law. The City has the power and authority to examine such books and
records at any reasonable time, including but not limited to, during normal business hours.
If the City wishes to inspect the areas of the Property where the cannabis is being
cultivated or manufactured, City may do so at any time with no prior notice to Owner. In
addition, City agrees that all of its employees or agents which enter the cultivation,
manufacturing, and curing areas shall follow all of the policies and guidelines imposed on
Owner's employees, including without limitation, the wearing of any clothing or equipment
to insure that no pests or impurities shall enter the cultivation and curing areas.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project. Due to prevailing real
estate market conditions, Owner's Property is limited to Canopy Space of less than 8,000
square feet, but Owner is seeking opportunities to increase Canopy Space to the
maximum 22,000 square feet allowed by the City.
5.2 For the first year, Owner will pay the City a total of $220,000 as a Fee. This
fee is calculated based on $10.00 a square foot of permit space and a permit which allows
up to 22,000 sq. feet, among other factors.
5.3 In year two and year three, the Fee will increase to $12.50 per sq. foot for
a total of $275,000 per year, among other factors.
5.4 At the beginning of year four and year five, Owner will pay a Fee of $15.00
per sq. foot for a total of $330,000 per year, among other factors.
5.5 The Fee schedule is as follows: The first Fee payment is due at the close
of the second quarter. Therefore, the first payment will be due on the last day of June
2018, ,the second and last payment for the first year is due on the last day of December
2018. For the years 2 through 15, the Fee schedule is as follows: divide the total Fee for
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the respective year into four and make four equal payments due at the end of each quarter
of the respective year.
5.6 The Fee is subject to reassessment by the City every five years. At the end
of year five, the City will set a new Fee which will be applied in years 6 through 10. At
the end of year 10, the City will set new Fee which will be applied in years 11 through 15.
No one factor is .dispositive in the City's determination of the new Fee. The Cannabis
permit will expire at the close of the 15th year and will require the Owner to reapply with
the City for a new permit. If Owner and City cannot agree to a new Fee or Fees by
December 22, 2022, this STATUTORY AGREEMENT will automatically terminate on
December 23, 2022.
Given the present State and Federal regulatory fluctuations and uncertainty over
regulations governing cannabis businesses, as well as the present price
volatility of cannabis products, Owner reserves the right to request from the City
a reassessment of the Fee before the end of years 5 and 10. The City shall give
reasonable consideration to the request and to make a good -faith assessment
of the regulatory or market conditions that prompt such request by Owner.
5.7 Further, Owner will pay a yearly payment of $50,000 to the City that can be
used to mitigate the impact of the cannabis business on the City and its resources which
includes but is not limited to, pay a part of a police officer's salary and/or benefits. A police
officer so funded shall have as part of his/her specifically assigned duties to patrol and
secure the Property and surrounding area and to reasonably assist in and facilitate the
enforcement of City ordinances, rules or regulations that prohibit unpermitted cannabis
businesses from operating in the City. This first $50,000 amount will be due within 30
days from the time the permit is issued. Subsequent annual payments will be due on the
permit issuance anniversary date. This payment is due within thirty (30) days of issuance
of permit and thereafter on the anniversary of the issuance of the permit.
5.8 Jobs and Wage Creation.
5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the City or
who employ a significant number of City residents. At least 20 percent of the Project's
workforce shall consist of residents of the City. Job announcements shall be posted at City
Hall, along with proof that the job announcements were advertised in at least two
newspapers published, printed or distributed in the City and on various social media sites
accessible to the general public. In addition, Owner shall make a good faith effort to advertise
job announcements at local job fairs, on local radio and through public agencies and
organizations.
5.8.2 Living Wage. Owner will implement a policy to provide all of its
employees a living wage, including a policy under which Owner will pay its employees a
minimum wage of $13/hour beginning January 1, 2018 (California law requires $10.50/hour),
with reasonable cost of living adjustments in subsequent years. Owner also will offer to its
eligible employee's participation in health and 401K benefit plans, in addition to providing
those benefits required by law.
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5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses and all
documents evidencing compliance with state and local law. 'As such, upon issuonce of
its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the
City for any associated costs with processing the Project, as detailed above and
reimbursing the City for its actual costs incurred in drafting and processing this
STATUTORY AGREEMENT. Owner will be liable for the City's actual costs incurred in
processing future Development Approval applications. City acknowledges and agrees
that this payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT. The City shall refund to
Owner that portion of the $15,000 deposit, if any, not actually incurred by the City.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 Transportation of Cannabis. All pick ups and drop offs of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity, arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's, exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. During
the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time. Such determination shall be made in
accordance with compliance review standards and processes uniformly and consistently
applied to all cannabis operators in the City.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council may automatically terminate this
STATUTORY AGREEMENT notwithstanding any other provision of this STATUTORY
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AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT and impose
such conditions as are reasonably necessary to protect the interests of the City. The
decision of the City Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special
review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City would
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions' of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings.
In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
or to any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest, if successors in interest are
permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof,
not to sue for damages or claim any damages:
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(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application for cultivation, manufacturing and/or distribution or interpretation
or effect of the provisions of this STATUTORY AGREEMENT.
Owner hereby agrees to waive and/or release the City of Baldwin Park for any
claim or claims or cause of action, not specifically and expressly reserved herein, which
Owner may have at the time of execution of this STATUTORY AGREEMENT relating to
any application to the City of Baldwin Park including but not limited to, any application for
any type of distribution, cultivation or manufacturing permit, any application for any
distribution, cultivation or manufacturing rights, or any application for any distribution,
cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTORY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor.
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged
Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
shall modify or abridge any defenses or immunities available to the City and its employees
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pursuant to the Government Tort Liability Act and all other applicable statutes and
decisional law.
Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8. 1, Section 8.2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money damages and
remedies at law are inadequate, and specific performance and other non -monetary relief
are particularly appropriate remedies for the enforcement of this STATUTORY
AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Section 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may, not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of STATUTORY AGREEMENT for Default of the City. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default.
8.4 Owner Default. No building permit shall be issued or building permit
application accepted for any structure on the Property after Owner is determined by the
City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
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STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
as the result of a judicial determination that the General Plan, or portions thereof, are
invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that any STATUTORY AGREEMENT or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees), which the City or its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the environmental impact report, mitigated negative
declaration or negative declaration, as the case may be, prepared in connection with the
development of the Property; and (iii) the proceedings or procedure undertaken in
connection with the adoption or approval of any permit or any of the above. In the event
of any legal or equitable action or other proceeding instituted by anyone against the City
or.its City Council, any third party (including a governmental entity or official) challenging
the validity of any provision of this STATUTORY AGREEMENT or the procedure upon
which the permit was issued, or any portion thereof as set forth herein, the parties shall
mutually cooperate with each other in defense of said action or proceeding.
Notwithstanding the above, the City, at is sole option, may tender to Owner and Owner
agrees to accept any such tender of the complete defense of any third party challenge as
described herein. In the event the City elects to contract with special counsel to provide
for such a defense, the City may do so in its sole discretion and Owner will be required to
pay the defense costs of the City as the costs are incurred. Owner agrees to pay any
and all attorneys' fees or retainer regarding the selection of counsel, and Owner shall pay
all costs and all attorneys' fees related to retention of such counsel.
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9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers, agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9.4 do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
settlement offer, City shall notify Owner of the offer and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such„ action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
9.7 Administrative Actions. The parties acknowledge that in the future. there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
in connection with Owner's development, operation and use of the Property (collectively,
"Actions"). The City shall not disclose information and documents to the Federal
Government or State Government, its officers, or agents regarding any party to this
STATUTORY AGREEMENT absent a grand jury subpoena, civil or administrative
subpoena, warrant, discovery request, summons, court order or similar process
authorized under law hereinafter called "Governmental Notice". If any Action is brought
by either the Federal or State Government, City shall immediately notify Owner of the
nature of the Claim including all correspondence or documents submitted to the City.
Prior to responding to the Governmental Notice, City shall provide Owner ten (10) days
from the date of such notice subpoena or the like to serve and obtain a protective order,
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or the like, from a court of competent jurisdiction that prevents or limits the disclosure
sought by the Governmental Notice.
9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or- modification is consistent with the intent and purposes of this STATUTORY
AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or
in any way limit City's rights under this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that. are not contained or expressly contained herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable; by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein, are essential elements
of this STATUTORY AGREEMENT and the City would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at the City's
option this entire. STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever. The foregoing notwithstanding, the
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development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential
elements of this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Owner's
option. this entire. STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel or
representative of its choosing in the negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure by a party
to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms
of this STATUTORY AGREEMENT thereafter.
11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
11.9 This STATUTORY AGREEMENT supercedes that certain non -statutory
municipal Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
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11. 11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited,party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
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such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto."
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter and"bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv). The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
claim that the terms in this STATUTORY AGREEMENT constitute an abuse of the ,police
power, violate substantive due process, deny equal protection of the laws, effect a taking
of property without payment of just compensation, and/or impose an unlawful tax.
11.20 [RESERVED]
11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
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acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply with all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of BPMC.
. 11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits- and/or
licenses are attached hereto and incorporated herein by this reference.
11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK CLOUD CONTROL, INC.
By:
Manuel Lozano, Mayor
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
Robert N. Tafoya,
City Attorney
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By:_
Jefferson Liou
CEO
APPROVED AS TO FORM:
By:
Jade Effect, LLC
Cristeta Summers, Consultant for
Cloud Control, Inc.
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
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No. 1
LEGAL DESCRIPTION OF PROPERTY
Real property depicted on Parcel Map 308-73-76, Lot 8, Census Tract 404901, Map
Coordinates 39-C3, Los Angeles County Assessor's Parcel No. 8535-023-010, with a
situs address of 13450 Brooks Dr., Baldwin Park, CA 91706.
No. 1
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EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
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ITEM: N (VRD,, Inc.)
ATTACHMENT #14 DA 18-14
VRD, INC.
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-14
Location
4802 Littlejohn St. APN 8535-023-011
Zoning of Subject Location
I, Industrial
Principal Names
Marco Perez and Ren Yoneyama
Company Names
VRD, Inc.
Term of Development
Fifteen (15) years from 12/29/17
Agreement
June 30 and December 31for year #1
Payment Schedule
Quarterly for years #2 through #15—Four equal
payments.
Year #1--$220,000
Years #2 and #3--$275,000
Payment Amount
Years #4 and #5--$330,000—The Mitigation Fee is
subject to reassessment by the City every five (5)
Floor Area of Buildings 17,804 s.f. per City Records
Employee Requirements At least 40% of the Projects workforce shall consist
of residents of the City.
VICINITY MAP
CASE NUMBER: DA 18-14
LOCATION: 4802 Littlejohn Street
DATE: April 12, 2018
DA 18-14
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I, Industrial Zone, it is anticipated that the use of the
property is consistent with the other light industrial uses within the area.
The adoption of cannabis cultivation and manufacturing activities is also
consistent with Goal 1.0 of the City's Economic development Element in
the General Plan in that the City encourages and facilitates activities that
expand the City's revenue base. Furthermore, Goal 6.0 of the same
element encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement requires
that a minimum of 40% of the businesses workforce shall consist of
Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I, Industrial Zone surrounded by
lighter industrial uses. The use exceeds the distance requirement of fifty
(50) feet between cannabis uses and the closest residential zone;
furthermore, pursuant to Section 127.07.E.1 of the City's Municipal Code,
the cannabis use is not nearby any sensitive uses such as schools, day
care centers, parks or youth centers.
Pursuant to the Community Engagement Plan submitted by the Applicant,
VRD, Inc, they plan to form and engage with local partnerships including,
but not limited to business organizations, holiday toy drives, and youth
DA 18-14
sports leagues. They are also committed to working with the local high
schools in creating an annual scholarship program. They strongly believe
in committing to improving and strengthening the community.
Furthermore, their security plan includes a variety of camera surveillance
systems and manned areas, thereby significantly reducing the potential for
any negative impacts upon the general neighborhood or city as a whole.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
ORDINANCE 1423
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
VRD, INC. FOR THE CULTIVATION AND/OR
MANUFACTURING OF CANNABIS AT THE REAL
PROPERTY LOCATED AT 4802 LITTLEJOHN
STREET (APN 8535-023-011) WITHIN THE CITY OF
BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has .reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
. WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code §§
65864 - 65869.5.
Ordinance 1423
Page 2
WHEREAS, as required by law, the City Council gave first reading to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore each of the
locations is proposed within an existing building.
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I, Industrial Zone, it is anticipated that
the use of the property is consistent with the other light industrial
uses within the area. The adoption of cannabis cultivation and
manufacturing activities is also consistent with Goal 1.0 of the City's
Economic development Element in the General Plan in that the City
encourages and facilitates activities that expand the City's revenue
base. Furthermore, Goal 6.0 of the same element encourages the
expansion of the City's diverse industrial base. Policy 6.5 of Goal
6.0 encourages an on-going campaign with local businesses to hire
local residents. This Development Agreement requires that a
minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances)
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
Ordinance 1423
Page 3
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general
area and City as a whole as it is located within the I -C, Industrial
Commercial Zone surrounded by lighter industrial uses. The use
exceeds the distance requirement of fifty (50) feet between cannabis
uses and the closest residential zone; furthermore, pursuant to
Section 127.07.E.1 of the City's Municipal Code, the cannabis use is,
not nearby any sensitive uses such as schools, day care centers,
parks or youth centers.
Pursuant to the Community Engagement Plan submitted by the
Applicant, VRD, Inc., they plan to form and engage with local
partnerships including, but not limited to business organizations,
holiday toy drives, and youth sports leagues. They are also
committed to working with the local high schools in creating an .
annual scholarship program. They strongly believe in committing to
improving and strengthening the community. Furthermore, their
security plan includes a variety of camera surveillance systems and
manned areas, thereby significantly reducing the potential for any
negative impacts upon the general neighborhood or city as a whole.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full force and
operation from and after thirty (30) days after its final reading and adoption.
PASSED AND APPROVED ON THE _ day of , 2018
MANUEL LOZANO, MAYOR
Ordinance 1423
Page 4
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1423 was duly approved and adopted at a regular
meeting of the City Council on , 2018 by the following vote:
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND VRD, INC.
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("STATUTORY
AGREEMENT") is intended to replace the previous non -statutory municipal Development
Agreement, and is dated April , 2018 for references purposes only and is entered into
between (i) the City of Baldwin Park ("City"), a California municipal corporation, and
(ii) VRD, Inc., a California corporation ("Owner"). This STATUTORY AGREEMENT shall
become effective on the Effective Date defined in Section 3.1.9 below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and VRD, Inc. previously entered into a non -statutory
municipal Development Agreement that was not intended to be a Government Code
Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be a Statutory Development Agreement under and
through Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code Section
65864 et seq. to enter into binding statutory development agreements with persons
having legal or equitable interests in real property for the development of such property;
and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture medical and adult use cannabis, in September
2017; and at that time the City determined that the uses authorized in this STATUTORY
AGREEMENT were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of various entitlements, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map and the Baldwin Park Municipal Code as of the
STATUTORY AGREEMENT Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements for notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or Property, ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Manufacturing and
Cultivation Facility pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127
and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture cannabis and cannabis related products, at or from its facility or facilities up
to 22,000 square feet.
2.14 WHEREAS, the City entered into a Development Agreement with Rukli, Inc.
to be the exclusive distributor of cannabis and cannabis related products in the City of
Baldwin Park. The City is entering into development agreements with owners for permits
for cultivation and manufacturing of cannabis and cannabis related products in the City of
Baldwin Park. The City prohibits the sale of cannabis and cannabis related products within
the City of Baldwin Park so the cannabis and cannabis related products must be
distributed to and sold in cities where it is legal to do so. Rukli, Inc. shall be the exclusive
distributor for the cultivation and/or manufacturing permit holders within the City of
Baldwin Park and City conditions the cultivation and/or manufacturing permits on Rukli,
Inc. being the exclusive distributor for any permit issued by Baldwin Park for cultivation or
manufacturing.
ARTICLE 3. GENERAL TERMS.
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3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows:
3.1.1 "Agreement" means this STATUTORY AGREEMENT pursuant to
Government Code Section 65864 et seq.
corporation.
3.1.2 "City" means the City of Baldwin Park, a California municipal
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" If applicable, means all permits, licenses,
and/or other entitlements for the Development of the Property, including any and all
conditions of approval, subject to approval or issuance by the City in connection with
Development of the Property. "Development Approvals" If applicable, specifically
includes this STATUTORY AGREEMENT. "Development Approvals" also include both
the Existing Development Approvals and the Subsequent Development Approvals
approved or issued by the City that are consistent with this STATUTORY AGREEMENT.
3.1.7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code.
3.1.9 "Effective Date" means the day this Development STATUTORY
AGREEMENT is approved and adopted by the Baldwin Park City Council and signed by
the Mayor of Baldwin Park or his designee
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved or issued prior to or on the Effective Date. Existing
Development Approvals include the approvals set forth in Section 3.1.6 and all other
approvals which are a matter of public record prior to or on the Effective Date.
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
IC11
include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
3.1.12 "Land Use Regulations" If and where applicable means all
ordinances, resolutions and codes adopted by the City governing the development and
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.14 "Owner" means VRD, Inc., a California corporation.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City.
3.1.16 "Project" If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, the application, any and all entitlements licenses, and permits related
to the Project.
3.1.17 "Property" means the real property described in Owner's application
and incorporated herein by this reference. Owner may modify or add to the location or
locations or add locations to the Property subject to City approval and all applicable
zoning and distance requirements.
3.1.18 "Reasonable" means using due diligence to accomplish a stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives of the
STATUTORY AGREEMENT.
3. 1.19 "Reservations of Authority" means the rights and authority excepted
from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.20 "Space or Canopy Space" shall mean any space or ground, floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing, and/or harvesting
phases, including without limitation any space used for activities such as growing,
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planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering,
irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used
for storing any cannabis, no matter where such storage may take place or such storage
space may be located.
3.1.21 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times and in
such sequences as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.22 "Subsequent Land Use Regulations" If applicable means any Land
Use Regulations defined in Section 3.1.12 that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents, by this reference, are made part of
this STATUTORY AGREEMENT:
No. 1 — Legal Description of the Property.
No. 2 — Map showing Property and its location.
No. 3 - Application
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is hereby
made subject to this STATUTORY AGREEMENT. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of the Property is hereby
authorized and shall, except as otherwise provided in this STATUTORY AGREEMENT,
be carried out only in accordance with the terms of this STATUTORY AGREEMENT and
the Development Plan, if any. In the event of conflict or uncertainty between this
STATUTORY AGREEMENT and the Development Plan, the provisions of this
STATUTORY AGREEMENT shall control.
3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of 8525-
023-011 and is more particularly described in the application and document "No. 1" in
Section 3.2 and incorporated herein, of which Owner has leased 2 of 3 units (other unit
is not available for lease), with approximately 7,700 total square feet of Space..
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
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expressly stated in this STATUTORY AGREEMENT to survive termination without the
need of further documentation from the parties hereto. The STATUTORY
AGREEMENT's Fee is subject to renegotiation after the first term, and every five year
term thereafter.
3.5.1 Term Extension. This STATUTORY AGREEMENT may only be
extended by mutual agreement of City and Owner in writing and signed by Owner and
the Mayor of Baldwin Park. If the Mayor of Baldwin Park does not sign the agreement or
renegotiated agreement any such agreement is null and void.
3.6 Automatic Termination. This STATUTORY AGREEMENT shall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY AGREEMENT as set
forth in Section 3.5;
(ii) The entry of a final judgment (or a decision on any appeal therefrom)
voiding the City's General Plan or any element thereof, which judgment or decision would
preclude development of the Project, but only if the City is unable to cure such defect in
the General Plan or element within one hundred and eighty (180) days from the later of
entry of final judgment or decision on appeal.
(iii) Failure to timely pay the Fee and failure to timely pay the $50,000
towards the police salary or benefits, subject to the defaults and remedies provisions in
Article 8. Failure to pay any fees due to the City under this STATUTORY AGREEMENT.
(iv) Applicable regulations or law enacted subsequent to this
STATUTORY AGREEMENT render this STATUTORY AGREEMENT or its material
provisions illegal, unenforceable or void.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements and permits
approved for the Owner and/or the Property. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to any default in the performance of the provisions of this STATUTORY AGREEMENT
which has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
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(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
(iii) on the date of personal delivery shown in the records of the
delivery company after delivery to the recipient named below; or
(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: Ren Yoneyama, CEO
4802 Littlejohn Street
Baldwin Park, CA 91706
With a copy to:
Buraq Investment Group, LLC
1614 Potrero Ave.
South EI Monte, CA 92733
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual receipt of notice of change shall not be invalidated by the change.
3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's cost to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
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4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property with a commercial cannabis facility in accordance
with and to the extent of the Development Plan and/or application. The Property shall
remain subject to all Subsequent Development Approvals required to complete the
Project as contemplated by the Development Plan and/or application.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed buildings,
and the design, improvement, occupancy and construction standards and specifications
applicable to development of the Property shall be the Development Plan and/or
application. Provided, however, that in approving tentative subdivision maps, if any, the
City may impose ordinary and necessary dedications for rights-of-way or easements for
public access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the Project
or Development Approvals may be appropriate and mutually desirable. The City shall act
on such applications, if any, in accordance with the Existing Land Use Regulations,
subject to the Reservations of Authority, or except as otherwise provided by this
STATUTORY AGREEMENT. Such changes shall include a modification or addition to
the present location of Owner's Property. If approved, any such change in the Existing
Development Approvals shall be considered an additional Existing Development
Approval.
Further, should City amend its Municipal Code or Land Use Regulations to allow the
issuance of cannabis permits for uses other than those presently permitted by the City,
for example to allow for retail sale, retail delivery, microbusinesses, or other cannabis
operations allowed under State law, City shall give priority for such permits to Owner.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City.
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(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new development
projects of the same uses within the City; and
(v) Regulations that do not conflict with the Development Plan. The term
"do not conflict" means new rules, regulations, and policies which: (a) do not modify the
Development Plan, including, without limitation, the permitted land uses, the density or
intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying or
conditionally approving any Subsequent Development applications on the basis of such
subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
reasonably cooperate with other public agencies processing Development Approvals for
the Project.
4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term
of any tentative subdivision map shall be in effect for a period of fifteen (15) years, and
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may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within one (1) year from the
Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means the
issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns, provided the
City maintains the confidentiality of Owner's private financial information to the furthest
extent permitted by law. The City has the power and authority to examine such books and
records at any reasonable time, including but not limited to, during normal business hours.
If the City wishes to inspect the areas of the Property where the cannabis is being
cultivated or manufactured, City may do so at any time with no prior notice to Owner. In
addition, City agrees that all of its employees or agents which enter the cultivation,
manufacturing, and curing areas shall follow all of the policies and guidelines imposed on
Owner's employees, including without limitation, the wearing of any clothing or equipment
to insure that no pests or impurities shall enter the cultivation and curing areas.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project. Due to prevailing real
estate market conditions, Owner's Property is limited to Canopy Space of less than 7,700
square feet, but Owner is seeking opportunities to increase Canopy Space to the
maximum 22,000 square feet allowed by the City.
5.2 For the first year, Owner will pay the City a total of $220,000 as a Fee. This
fee is calculated based on $10.00 a square foot of permit space and a permit which allows
up to 22,000 sq. feet, among other factors.
5.3 In year two and year three, the Fee will increase to $12.50 per sq. foot for
a total of $275,000 per year, among other factors.
5.4 At the beginning of year four and year five, Owner will pay a Fee of $15.00
per sq. foot for a total of $330,000 per year, among other factors.
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5.5 The Fee schedule is as follows: The first Fee payment is due at the close
of the second quarter. Therefore, the first payment will be due on the last day of June
2018, the second and last payment for the first year is due on the last day of December
2018. For the years 2 through 15, the Fee schedule is as follows: divide the total Fee for
the respective year into four and make four equal payments due at the end of each quarter
of the respective year.
5.6 The Fee is subject to reassessment by the City every five years. At the end
of year five, the City will set a new Fee which will be applied in years 6 through 10. At
the end of year 10, the City will set new Fee which will be applied in years 11 through 15.
No one factor is dispositive in the City's determination of the new Fee. The Cannabis
permit will expire at the close of the 15th year and will require the Owner to reapply with
the City for a new permit. If Owner and City cannot agree to a new Fee or Fees by
December 22, 2022, this STATUTORY AGREEMENT will automatically terminate on
December 23, 2022.
Given the present State and Federal regulatory fluctuations and uncertainty
over regulations governing cannabis businesses, as well as the present
price volatility of cannabis products, Owner reserves the right to request
from the City a reassessment of the Fee before the end of years 5 and 10.
The City shall give reasonable consideration to the request and to make a
good -faith assessment of the regulatory or market conditions that prompt
such request by Owner.
5.7 Further, Owner will pay a yearly payment of $50,000 to the City that can be
used to mitigate the impact of the cannabis business on the City and its resources which
includes but is not limited to, pay a part of a police officer's salary and/or benefits. A
police officer so funded shall have as part of his/her specifically assigned duties to patrol
and secure the Property and surrounding area and to reasonably assist in and facilitate
the enforcement of City ordinances, rules or regulations that prohibit unpermitted
cannabis businesses from operating in the City. The first $50,000 amount will be due
within 30 days from the time the permit is issued. Subsequent annual payments will be
due on the permit issuance anniversary date. This payment is due within thirty (30) days
of issuance of permit and thereafter on the anniversary of the issuance of the permit.
5.8 Jobs and Wage Creation.
5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the City or
who employ a significant number of City residents. Owner is committed to local hiring
and will aggressively recruit local residents to fill available positions, such that at least 40
(forty) percent of the Project's workforce shall consist of residents of the City. Job
announcements shall be posted at City Hall, along with proof that the job announcements
were advertised in at least two newspapers published, printed or distributed in the City
and on various social media sites accessible to the general public. In addition, Owner shall
make a good faith effort to advertise job announcements at local job fairs, on local radio and
through public agencies and organizations.
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5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses and all
documents evidencing compliance with state and local law. As such, upon issuance of
its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the
City for any associated costs with processing the Project, as detailed above and
reimbursing the City for its actual costs incurred in drafting and processing this
STATUTORY AGREEMENT. Owner will be liable for the City's actual costs incurred in
processing future Development Approval applications. City acknowledges and agrees
that this payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT. The City shall refund to
Owner that portion of the $15,000 deposit, if any, not actually incurred by the City.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 Transportation of Cannabis. All pick ups and drop offs of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity, arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. During
the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time. Such determination shall be made in
accordance with compliance review standards and processes uniformly and consistently
applied to all cannabis operators in the City.
7.3 Review Hearing. At the time and place set for the review hearing, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council may automatically terminate this
STATUTORY AGREEMENT notwithstanding any other provision of this STATUTORY
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AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT and impose
such conditions as are reasonably necessary to protect the interests of the City. The
decision of the City Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special
review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City would
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings
In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
or to any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest, if successors in interest are
permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof,
not to sue for damages or claim any damages:
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(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application for cultivation, manufacturing and/or distribution or interpretation
or effect of the provisions of this STATUTORY AGREEMENT.
Owner hereby agrees to waive and/or release the City of Baldwin Park for any claim or
claims or cause of action, not specifically and expressly reserved herein, which Owner
may have at the time of execution of this Development STATUTORY AGREEMENT
relating to any application to the City of Baldwin Park including but not limited to, any
application for any type of distribution, cultivation or manufacturing permit, any application
for any distribution, cultivation or manufacturing rights, or any application for any
distribution, cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTORY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:
" A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged
Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
shall modify or abridge any defenses or immunities available to the City and its employees
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pursuant to the Government Tort Liability Act and all other applicable statutes and
decisional law.
Except asset forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8.1, Section 8.2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money damages and
remedies at law are inadequate, and specific performance and other non -monetary relief
are particularly appropriate remedies for the enforcement of this STATUTORY
AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Section 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of STATUTORY AGREEMENT for Default of the City. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default.
8.4 Owner Default. No building permit shall be issued or building permit
application accepted for any structure on the Property after Owner is determined by the
City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
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STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
as the result of a judicial determination that the General Plan, or portions thereof, are
invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that any STATUTORY AGREEMENT or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees), which the City or its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the environmental impact report, mitigated negative
declaration or negative declaration, as the case may be, prepared in connection with the
development of the Property; and (iii) the proceedings or procedure undertaken in
connection with the adoption or approval of any permit or any of the above. In the event
of any legal or equitable action or other proceeding instituted by anyone against the City
or its City Council, any third party (including a governmental entity or official) challenging
the validity of any provision of this STATUTORY AGREEMENT or the procedure upon
which the permit was issued, or any portion thereof as set forth herein, the parties shall
mutually cooperate with each other in defense of said action or proceeding.
Notwithstanding the above, the City, at is sole option, may tender to Owner and Owner
agrees to accept any such tender of the complete defense of any third party challenge as
described herein. In the event the City elects to contract with special counsel to provide
for such a defense, the City may do so in its sole discretion and Owner will be required to
pay the defense costs of the City as the costs are incurred. Owner agrees to pay any
and all attorneys' fees or retainer regarding the selection of counsel, and Owner shall pay
all costs and all attorneys' fees related to retention of such counsel.
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9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers, agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9.4 do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
settlement offer, City shall notify Owner of the offer, and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
in connection with Owner's development, operation and use of the Property (collectively,
"Actions"). The City shall not disclose information and documents to the Federal
Government or State Government, its officers, or agents regarding any party to this
STATUTORY AGREEMENT absent a grand jury subpoena, civil or administrative
subpoena, warrant, discovery request, summons, court order or similar process
authorized under law hereinafter called "Governmental Notice". If any Action is brought
by either the Federal or State Government, City shall immediately notify Owner of the
nature of the Claim including all correspondence or documents submitted to the City.
Prior to responding to the Governmental Notice, City shall provide Owner ten (10) days
from the date of such notice subpoena or the like to serve and obtain a protective order,
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or the like, from a court of competent jurisdiction that prevents or limits the disclosure
sought by the Governmental Notice.
9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or modification is consistent with the intent and purposes of this STATUTORY
AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or
in any way limit City's rights under this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly contained herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein, are essential elements
of this STATUTORY AGREEMENT and the City would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at the City's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever. The foregoing notwithstanding, the
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development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential
elements of this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Owner's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel or
representative of its choosing in the negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure by a party
to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the terms
of this STATUTORY AGREEMENT thereafter.
11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
11.9 This STATUTORY AGREEMENT when signed and executed by Owner
and the Mayor of Baldwin Park supersedes and renders null and void that certain non -
statutory municipal Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
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11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
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such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto.
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter and bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
claim that the terms in this STATUTORY AGREEMENT constitute an abuse of the police
power, violate substantive due process, deny equal protection of the laws, effect a taking
of property without payment of just compensation, and/or impose an unlawful tax.
11.20 [RESERVED]
11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
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acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply with all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of BPMC.
11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits and/or
licenses are attached hereto and incorporated herein by this reference.
11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK VRD, INC.
By:
Manuel Lozano, Mayor
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
Robert N. Tafoya,
City Attorney
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By:
Ren Yoneyama
CEO
APPROVED AS TO FORM:
By:
Buraq Investment Group,
Cristeta Summers, Consultant for
VRD, Inc.
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
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EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
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ITEM: 0 (Green Health Industries, LLC)
ATTACHMENT #15 DA 18-15
GREEN HEALTH INDUSTRIES
INFORMATIONAL TABLE
VICINITY MAP
FINDINGS OF FACT
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE
DA 18-15
Location 13460 Brooks Dr. APN: 8535-024-018
Zoning of Subject Location I, Industrial
Principal Names Sigrid Lopez and Artem Karapet an
Company Name Green Health Industries, LLC
Term of Development Fifteen (15) years from 12/29/17
Aqreement
June 30 and December 31 for year #1
Payment Schedule Quarterly for Years #2 through #15—Four equal
Year #1--$220,000
Years #2 and #3--$275,000
Payment Amount Years #4 and #5--$330,000—The Mitigation Fee is
subject to reassessment by the City every five (5)
Floor Area of Buildings Approximately 18,520 s.f.
Employee Requirements At least 20% of the Projects workforce shall consist
of residents of the City.
VICINITY MAP
CASE NUMBER: DA 18-15
LOCATION: 13460 Brooks Drive
DATE: April 12, 2018
DA 18-15
FINDINGS OF FACT
1) The development agreement is consistent with the General Plan objectives, policies,
land uses and implementation programs and any other adopted plans or policies
applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing business is
located within the I, Industrial Zone, it is anticipated that the use of the
property is consistent with the other light industrial uses within the area.
The adoption of cannabis cultivation and manufacturing activities is also
consistent with Goal 1.0 of the City's Economic development Element in
the General Plan in that the City encourages and facilitates activities that
expand the City's revenue base. Furthermore, Goal 6.0 of the same
element encourages the expansion of the City's diverse industrial base.
Policy 6.5 of Goal 6.0 encourages an on-going campaign with local
businesses to hire local residents. This Development Agreement requires
that a minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2) The development agreement is compatible with the uses authorized in, and the
regulations prescribed for, the land use district in which the real property is located.
Pursuant to Ordinance 1401, adopted by the City Council on August 16,
2017, effective on September 16, 2017 (and as subsequently amended by
Ordinance 1403 refining the measurement of distances) cannabis
cultivation, manufacturing and distribution activities are allowed within the
City provided all of the development standards in Chapter 127 of the City's
Municipal Code are met. Dispensaries remain prohibited throughout the
City.
3) The development agreement is in conformance with the public convenience and
general welfare of persons residing in the immediate area and will not be detrimental
or injurious to property or persons in the general neighborhood or to the general
welfare of the residents of the city as a whole.
The development agreement is in conformance with the general area and
City as a whole as it is located within the I, Industrial Zone surrounded by
lighter industrial uses. The use exceeds the distance requirement of fifty
(50) feet between cannabis uses and the closest residential zone;
furthermore, pursuant to Section 127.07.E.1 of the City's Municipal Code,
the cannabis use is not nearby any sensitive uses such as schools, day
care centers, parks or youth centers.
Pursuant to the Community Engagement Plan submitted by the Applicant,
Green Health Industries plans to become an integral member of the
Baldwin Park community. They strongly believe in higher education and
DA 18-15
will strive to become a valuable resource for scholarships. They desire to
build a scholarship foundation to support the educational advancement of
the community. Furthermore, their security plan is extremely detailed and
includes a variety of camera surveillance systems and manned areas,
thereby significantly reducing the potential for any negative impacts upon
the general neighborhood or city as a whole.
4) The development agreement is consistent with the provisions of California
Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the Planning
Division Staff, the Development Agreement (Reference Attachments #1
through #15 to the Planning Commission and City Council staff reports
dated April 11 and 12, 2018) is consistent with California Government
Code Sections 65864-65869.5.
DEVELOPMENT AGREEMENT
DRAFT ORDINANCE WILL BE SENT UNDER
SEPARATE COVER
MONDAY, APRIL 9, 2018
ORDINANCE 1424
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK, CALIFORNIA,
AUTHORIZING THE CITY OF BALDWIN PARK TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH
GREEN HEALTH INDUSTRIES, LLC FOR THE
CULTIVATION AND/OR MANUFACTURING OF
CANNABIS AT THE REAL PROPERTY LOCATED AT
13460 BROOKS DRIVE (APN: 8535-024-018) WITHIN
THE CITY OF BALDWIN PARK
WHEREAS, a development agreement with the City of Baldwin Park will be
required; and
WHEREAS, a duly noticed public hearing was held by the Planning
Commission of the City of Baldwin Park on April 11,2018, to receive comments
and consider recommendation to City Council of the proposed Development
Agreement; and
WHEREAS, the Planning Commission at such hearing, did recommend that
the City Council approve the proposed Agreement; and
WHEREAS, the City Council held a duly noticed public hearing pursuant to
law on the Agreement on April 12, 2018; and
WHEREAS, the City Council has reviewed the Development Agreement
(attached as Exhibit "A" herewith and incorporated herein by reference) and finds
and declares that compliance with all notice, hearing, and procedural requirements
as set forth by law have been met, thus allowing the City Council to review and
consider the approval of the attached Development Agreement; and
WHEREAS, the City Council hereby specifically finds that the provisions of
the Development Agreement are consistent with the General Plan of the City; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is in conformance with the public convenience and general welfare of
persons residing in the immediate area and will not be detrimental or injurious to
property or persons in the general neighborhood or to the general welfare of the
residents of the city as a whole; and
WHEREAS, the City Council hereby specifically finds that the Development
Agreement is consistent with the provisions of California Government Code §§
65864 - 65869.5.
Ordinance 1424
Page 2
WHEREAS, as required by law, the City Council gave first reading to the
proposed ordinance on April 12, 2018.
NOW, THEREFORE BE IT ORDAINED by the City Council of the City of
Baldwin Park, California, as follows:
SECTION 1. In accordance with the provisions of the California
Environmental Quality Act (CEQA), it has been determined that the proposed
Development Agreement Projects (DA 18-01 through DA 18-15) will not have a
significant impact of the environment and are Categorically Exempt pursuant to
Article 19, Section 15301, Class 1, 'Existing Facilities'. Furthermore each of the
locations is proposed within an existing building.
SECTION 2. The City Council hereby adopts the following findings of fact
required by Subchapter 153.210.860 of the City's Municipal Code relating to
Development Agreements:
1. The Development Agreement is consistent with the General Plan
objectives, policies, land uses and implementation programs and any other
adopted plans or policies applicable to the agreement.
Because the location of the cannabis cultivation/manufacturing
business is located within the I, Industrial Zone, it is anticipated that
the use of the property is consistent with the other light industrial
uses within the area. The adoption of cannabis cultivation and
manufacturing activities is also consistent with Goal 1.0 of the City's
Economic development Element in the General Plan in that the City
encourages and facilitates activities that expand the City's revenue
base. Furthermore, Goal 6.0 of the same element encourages the
expansion of the City's diverse industrial base. Policy 6.5 of Goal
6.0 encourages an on-going campaign with local businesses to hire
local residents. This Development Agreement requires that a
minimum of 20% of the businesses workforce shall consist of
Baldwin Park residents.
2. The Development Agreement is compatible with the uses authorized
in, and the regulations prescribed for, the land use district in which the real property
is located.
Pursuant to Ordinance 1401, adopted by the City Council on August
16, 2017, effective on September 16, 2017 (and as subsequently
amended by Ordinance 1403 refining the measurement of distances)
cannabis cultivation, manufacturing and distribution activities are
allowed within the City provided all of the development standards in
Chapter 127 of the City's Municipal Code are met. Dispensaries
remain prohibited throughout the City.
Ordinance 1424
Page 3
3. The Development Agreement is in conformance with the public
convenience and general welfare of persons residing in the immediate area and
will not be detrimental or injurious to property or persons in the general
neighborhood or to the general welfare of the residents of the city as a whole.
The Development Agreement is in conformance with the general
area and City as a whole as it is located within the I -C, Industrial
Commercial Zone surrounded by lighter industrial uses. The use
exceeds the distance requirement of fifty (50) feet between cannabis
uses and the closest residential zone; furthermore, pursuant to
Section 127.07.E.1 of the City's Municipal Code, the cannabis use is
not nearby any sensitive uses such as schools, day care centers,
parks or youth centers.
Pursuant to the Community Engagement Plan submitted by the
Applicant, Green Health Industries plans to become an integral
member of the Baldwin Park community. They strongly believe in
higher education and will strive to become a valuable resource for
scholarships. They desire to build a scholarship foundation to
support the educational advancement of the community.
Furthermore, their security plan is extremely detailed and includes a -
variety of camera surveillance systems and manned areas, thereby
significantly reducing the potential for any negative impacts upon the
general neighborhood or city as a whole.
4. The Development Agreement is consistent with the provisions of
California Government Code §§ 65864 - 65869.5.
Pursuant to the City Attorney's Office along with review by the
Planning Division Staff, the Development Agreement (Reference
Attachments #1 through #15 to the Planning Commission and City
Council staff reports dated April 11 and 12, 2018) is consistent with
California Government Code Sections 65864-65869.5.
SECTION 3. The City Council hereby approves and adopts the
Development Agreement, in the form as attached hereto as Exhibit "A", and
authorizes and directs the Mayor to sign it in the name of the City of Baldwin Park.
SECTION 4. This ordinance shall go into effect and be in full force and
operation from and after thirty (30) days after its final reading and adoption.
PASSED AND APPROVED ON THE _ day of , 2018
MANUEL LOZANO, MAYOR
Ordinance 1424
Page 4
ATTEST:
ALEJANDRA AVILA,
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:
CITY OF BALDWIN PARK )
I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify
that the foregoing ordinance was regularly introduced and placed upon its first
reading at a regular meeting of the City Council on , 2018.
Thereafter, said Ordinance No. 1424 was duly approved and adopted at a regular
meeting of the City Council on , 2018 by the following vote:
AYES:
COUNCIL MEMBERS:
NOES:
COUNCIL MEMBERS:
ABSTAIN:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ALEJANDRA AVILA,
CITY CLERK
DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE CITY OF BALDWIN PARK AND GREEN HEALTH INDUSTRIES, LLC
ARTICLE 1. PARTIES AND DATE.
This Government Code Statutory Development Agreement ("STATUTORY
AGREEMENT") is intended to replace the previous non -statutory Development
Agreement, and is dated April , 2018 for references purposes only and is entered into
between (i) the City of Baldwin Park ("City"), a California municipal corporatidn, and
(ii) Green Health Industries, LLC ("Owner"). This STATUTORY AGREEMENT. shall
become effective on the Effective Date defined in Section 3.1.9 below.
ARTICLE 2. RECITALS.
2.1 WHEREAS, the City and Green Health Industries, LLC previously entered
into a non -statutory Development Agreement that was not intended to be a Government
Code Statutory Development Agreement; and
2.2 WHEREAS, the previous municipal Development Agreement was not
promulgated by or through the Government Code and did not contain necessary elements
for a Statutory Government Code Development Agreement; and
2.3 WHEREAS, this new Statutory Development Agreement is pursuant to
Government Code and is intended to be a Statutory Development Agreement under and
through Government Code Section 65864, et seq.; and
2.4 WHEREAS, the City is authorized pursuant to Government Code Section
65864 et seq. to enter into binding statutory development agreements with persons
having legal or equitable interests in real property for the development of such property;
and
2.5 WHEREAS, Owner commenced its efforts to obtain approvals and
clearances to cultivate and manufacture medical and adult use cannabis in September
2017; and at that time the City determined that the uses authorized in this STATUTORY
AGREEMENT were lawfully permitted and authorized to occur on Owner's Property,
subject to Owner's acquisition of various entitlements, as discussed herein; and
2.6 WHEREAS, Owner voluntarily enters into this STATUTORY AGREEMENT
and after extensive negotiations and proceedings have been taken in accordance with
the rules and regulations of the City, Owner has elected to execute this STATUTORY
AGREEMENT as it provides Owner with important economic and development benefits;
and
2.7 WHEREAS, this STATUTORY AGREEMENT and the Project are
consistent with the City's General Plan and Zoning Code and applicable provisions of the
City's applicable Zoning Map and the Baldwin Park Municipal Code as of the Agreement
Date; and
2.8 WHEREAS, all actions taken and approvals given by the City have been
duly taken or approved in accordance with all applicable legal requirements for notice,
public hearings, findings, votes, and other procedural matters; and
2.9 WHEREAS, this STATUTORY AGREEMENT will eliminate uncertainty in
planning and provide for the orderly development of the Project and/or Property, ensure
progressive installation of necessary improvements, and provide for public services
appropriate to the development of the Project; and
2.10 WHEREAS, in implementation of the promulgated state policy to promote
private participation in comprehensive planning and to strengthen the public planning
process and to reduce the economic risk of development, the City deems the
implementation of this STATUTORY AGREEMENT to be in the public interest and intends
that the adoption of this STATUTORY AGREEMENT be considered an exercise of the
City's police powers to regulate the development of the Property during the Term of this
STATUTORY AGREEMENT; and
2.11 WHEREAS, this STATUTORY AGREEMENT is consistent with the public
health, safety and welfare needs of the residents of the City and the surrounding region
and the City has specifically considered and approved the impact and benefits of the
development of the Property in accordance with this STATUTORY AGREEMENT upon
the welfare of the region; and
2.12 WHEREAS, Owner intends to develop a Cannabis Manufacturing and
Cultivation Facility pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127
and all applicable state laws, rules, and regulations; and
2.13 WHEREAS, concurrently with execution of this STATUTORY
AGREEMENT, City acknowledges that Owner has been authorized to cultivate and
manufacture cannabis and cannabis related products at its facility or facilities up to 22,000
square feet.
2.14 . WHEREAS, the City entered into a Development Agreement with Rukli,
Inc. to be the exclusive distributor of cannabis and cannabis related products in the City
of Baldwin Park. The City is entering into development agreements with owners for
permits for cultivation and manufacturing of cannabis and cannabis related products in
the City of Baldwin Park. The City prohibits the sale of cannabis and cannabis related
products within the City of Baldwin Park so the cannabis and cannabis related products
must be distributed to and sold in cities where it is legal to do so. Rukli, Inc. shall be the
exclusive distributor for the cultivation and/or manufacturing permit holders within the City
of Baldwin Park and City conditions the cultivation and/or manufacturing permits on Rukli,
Inc. being the exclusive distributor for any permit issued by Baldwin Park for cultivation or
manufacturing.
ARTICLE 3. GENERAL TERMS.
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3.1 Definitions and Exhibits. The following terms when used in this
STATUTORY AGREEMENT shall be defined as follows: °
3.1.1 "Agreement" means this STATUTORY AGREEMENT pursuant to
Government Code Section 65864 et seq.
corporation.
3.1.2 "City" means the City of Baldwin Park, a California municipal
3.1.3 "Days" mean calendar days unless otherwise specified.
3.1.4 "Dedicate" means to offer the subject land for dedication and to post
sufficient bonds or other security if necessary for the improvements to be constructed
including, but not limited to: grading, the construction of infrastructure and public facilities
related to the Project whether located within or outside the Property, the construction of
buildings and structures, and the installation of landscaping.
3.1.5 "Development" If applicable, includes grading, construction or
installation of public and private facilities and the right to maintain, repair or reconstruct
any private building, structure, improvement or facility after the construction and
completion thereof; provided, however, that such maintenance, repair, or reconstruction
take place within the Term of this STATUTORY AGREEMENT on the Property.
3.1.6 "Development Approvals" If applicable, means other entitlements for
the Development of the Property, including any and all conditions of approval, subject to
approval or issuance by the City in connection with Development of the Property.
"Development Approvals" also include both the Existing Development Approvals and the
Subsequent Development Approvals approved or issued by the City that are consistent
with this STATUTORY AGREEMENT.
3.1.7 "Development Plan" If applicable, means the Existing Development
Approvals and the Existing Land Use Regulations applicable to development of the
Property for the Project, as modified and supplemented by Subsequent Development
Approvals.
3.1.8 "BPMC" means the City of Baldwin Park Municipal Code.
3.1.9 "Effective Date" means the day this STATUTORY AGREEMENT is
approved and adopted by the Baldwin Park City Council and signed by the Mayor of
Baldwin Park or his designee
3.1.10 "Existing Development Approvals" If applicable, means all
Development Approvals approved I or issued prior to or on the Effective Date. Existing
Development Approvals include the approvals set forth in Section 3.1.6 and all other
approvals which are a matter of public record prior to or on the Effective Date. °
3.1.11 "Existing Land Use Regulations" If and where applicable, means all
Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations
include all regulations that are a matter of public record on the Effective Date as they may
be modified by the Existing Development Approvals.
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3.1.12 "Land Use Regulations" If and where applicable means all
ordinances, resolutions and codes adopted by the City governing the development and
use of land, including the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for
reservation or Dedication of land for public purposes, and the design, improvement and
construction and initial occupancy standards and specifications applicable to the
Development of the Property.
3.1.13 "Mortgagee" If applicable, means a mortgagee of a mortgage, a
beneficiary under a deed of trust or any other security -device lender and its successors -
in interest.
3.1.14 "Owner" means Green Health Industries LLC.
3.1.15 "Processing Fees" means the normal and customary application,
filing, plan check, permit fees for land use approvals, design review, tree removal permits,
building permits, demolition permits, grading permits, and other similar permits and
entitlements, and inspection fees, which fees are charged to reimburse the City's
expenses attributable to such applications, processing, permitting, review and inspection
and which are in force and effect on a general basis at such time as said approvals,
permits, review, inspection or entitlements are granted or conducted by the City.
3.1.16 "Project" If applicable means the Development of the Property
contemplated by the Development Plan, as such Development Plan may be further
defined, enhanced or modified pursuant to the provisions of this STATUTORY
AGREEMENT. The Project shall consist of this STATUTORY AGREEMENT, the
Development Plans, the application, any and all entitlements licenses, and permits related
to the Project.
3.1.17 "Property" means the real property described in Owner's application
and incorporated herein by this reference. Owner may modify the location or locations or
add locations to the Property subject to City approval and all applicable zoning and
distance requirements.
3.1.18 "Reasonable" means using due diligence to accomplish 4 stated
objective that the subject party is capable of performing or providing under the
circumstances in a manner that is consistent with the intent and objectives. of the
STATUTORY AGREEMENT.
3.1.19 "Reservations of Authority" means the rights and authority excepted
from the assurances and rights provided to Owner under this STATUTORY
AGREEMENT and reserved to the City as described in Section 4.4.
3.1.20 "Space or Canopy Space" shall mean any space or ground, -floor or
other surface area (whether horizontal or vertical) which is used during the marijuana
germination, seedling, vegetative, pre -flowering, flowering, curing, and/or harvesting
phases, including without limitation any space used for activities such as growing,
planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering,
irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used
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for storing any cannabis, no matter where such storage may take place or such storage
space may be located.
3.1.21 "Subsequent Development Approvals" If applicable, means all future
discretionary approvals and all ministerial Development Approvals required subsequent
to the Effective Date in connection with development of the Property, including without
limitation, subdivision improvement agreements that require the provision of bonds or
other securities. Subsequent Development Approvals include, but are not limited to, all
excavation, grading, building, construction, demolition, encroachment or street
improvement permits, occupancy certificates, utility connection authorizations, or other
permits or approvals necessary, convenient or appropriate for the grading, construction,
marketing, use and occupancy of the Project within the Property at such times and in
such sequences as Owner may choose consistent with the Development Plan and this
STATUTORY AGREEMENT.
3.1.22 "Subsequent Land Use Regulations" If applicable means any Land
Use Regulations defined in Section 3.1.12 that are adopted and effective after the
Effective Date of this STATUTORY AGREEMENT.
3.2 Documents. The following documents, by this reference, are made part of
this STATUTORY AGREEMENT:
No. 1 — Legal Description of the Property.
No. 2 — Map showing Property and its location.
No. 3 — Application
3.3 Binding Effect of STATUTORY AGREEMENT. The Property is .hereby
made subject to this STATUTORY AGREEMENT. Subject to Owner's receipt of all
Development Approvals relative thereto, the Development of the Property is hereby
authorized and shall, except as otherwise provided in this STATUTORY AGREEMENT,
be carried out only in accordance with the terms of this STATUTORY AGREEMENT and
the Development Plan, if any. In the event of conflict or uncertainty between this
STATUTORY AGREEMENT and the Development Plan, the provisions of this
STATUTORY AGREEMENT shall control.
3.4 Ownership of Property. Owner represents and covenants that it has a legal
or equitable interest in the Property, which has an Assessor's Parcel Number of 8535-
024-001 and is more particularly described in the application and document "No. 1" in
Section 3.2 and incorporated herein.
3.5 Term. The parties agree that the Term of this STATUTORY AGREEMENT
shall be fifteen (15) years commencing on the Effective Date subject to the, written
extension and early termination provisions described in this STATUTORY AGREEMENT.
Upon termination of this STATUTORY AGREEMENT, this STATUTORY AGREEMENT
shall be deemed terminated and of no further force and effect, except terms that are
expressly stated in this STATUTORY AGREEMENT to survive termination without the
need of further documentation from the parties hereto. The STATUTORY
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AGREEMENT's Fee is subject to renegotiation after the first term, and every five year
term thereafter.
3.5.1 Term Extension. This STATUTORY AGREEMENT may only be
extended by mutual agreement of City and Owner in writing and signed by Owner and
the Mayor of Baldwin Park. If the Mayor of Baldwin Park does not sign the agreement or
renegotiated agreement any such agreement is null and void.
3.6 Automatic Termination. This STATUTORY AGREEMENT shall
automatically terminate upon the occurrence of any of the following events:
(i) Expiration of the Term of this STATUTORY AGREEMENT as set
forth in Section 3.5;
(ii) The entry of a final judgment (or a decision on any appeal therefrom)
voiding the City's General Plan or any element thereof, which judgment or decision would
preclude development of the Project, but only if the City is unable to cure such defect in
the General Plan or element within one hundred and eighty (180) days from the later of
entry of final judgment or decision on appeal.
(iii) Failure to timely pay the Fee or Fees. Failure to timely pay the
$50,000 towards the police salary or benefits. Failure to pay any fees due to the City
under this STATUTORY AGREEMENT.
3.6.1 Effect of Termination. Termination of this STATUTORY
AGREEMENT shall constitute termination of all land use entitlements and permits
approved for the Owner and/or the Property. Upon the termination of this STATUTORY
AGREEMENT, no party shall have any further right or obligation hereunder except with
respect to any obligation to have been performed prior to such termination, or with respect
to any default in the performance of the provisions of this STATUTORY AGREEMENT
which has occurred prior to such termination, or with respect to any obligations which are
specifically and expressly set forth as surviving this STATUTORY AGREEMENT.
3.7 Notices.
3.7.1 Notice Defined. As used in this STATUTORY AGREEMENT, notice
includes, without limitation, the communication of notice, request, demand, approval,
statement, report, acceptance, consent, waiver, appointment or other communication
required or permitted hereunder.
3.7.2 Written Notice and Delivery. All notices shall be in writing and shall
be considered given:
(i) when delivered in person to the recipient named below; or
(ii) three days after deposit in the United States mail, postage
prepaid, addressed to the recipient named below; or
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(iii) on the date of personal delivery shown in the records of the
delivery company after delivery to the recipient named below; or
(iv) on the date of delivery by facsimile transmission to the
recipient named below if a hard copy of the notice is deposited in the United States mail,
postage prepaid, addressed to the recipient named below. All notices shall be addressed
as follows:
If to the City: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
If to Owner: Sigrid Lopez
13647 Jackson Street
Whittier, CA 90602
3.7.3 Address Changes. Either party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an
officer or representative of a party or to a different address, or both. Notices given before
actual receipt of notice of change shall not be invalidated by the change.
. 3.8 Validity of this STATUTORY AGREEMENT. Owner and the City each
acknowledge that neither party has made any representations to the other concerning the
enforceability or validity of any one or more provisions of this STATUTORY
AGREEMENT. The parties acknowledge and agree that neither party shall allege in any
administrative or judicial proceeding that the entering into or the performance of any
obligations created in this STATUTORY AGREEMENT violates federal or state law, with
respect to all federal, state and local statutes, ordinances or regulations in effect as of the
Effective Date.
3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to
provide City commensurate benefit based on a private benefit conferred upon Owner.
Fee shall include City's cost to research cannabis and cannabis laws and regulations,
draft cannabis ordinance, conduct public meetings, negotiate development agreements,
process applications, and any other acts taken by the City in furtherance of medical and
adult commercial use of cannabis.
ARTICLE 4. DEVELOPMENT OF THE PROPERTY.
4.1 Right to Develop. Owner shall, subject to the terms of this STATUTORY
AGREEMENT, develop the Property with a commercial cannabis facility in accordance
with and to the extent of the Development Plan and/or application. The Property shall
remain subject to all Subsequent Development Approvals required to complete the
Project as contemplated by the Development Plan and/or application.
4.2 Effect of STATUTORY AGREEMENT on Land Use Regulations. Except as
otherwise provided by this STATUTORY AGREEMENT, the rules, regulations and official
policies and conditions of approval governing permitted uses of the Property, the density
and intensity of use of the Property, the maximum height and size of proposed buildings,
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and the design, improvement, occupancy and construction standards and specifications
applicable to development of the Property shall be the Development Plan. and/or
application. Provided, however, that in approving tentative subdivision maps, if any, the
City may impose ordinary and necessary dedications for rights-of-way or easements for
public access, utilities, water, sewers and drainage, having a nexus with the particular
subdivision; provided, further, that the City may impose and will require normal and
customary subdivision improvement agreements and commensurate security to secure
performance of Owner's obligations thereunder.
4.3 Changes to Project. The parties acknowledge that changes to the Project
or Development Approvals may be appropriate and mutually desirable. The City shall act
on such applications, if any, in accordance with the Existing Land Use Regulations,
subject to the Reservations of Authority, or except as otherwise provided by this
STATUTORY AGREEMENT. If approved, any such change in the Existing Development
Approvals shall be considered an additional Existing Development Approval.
4.4 Reservations of Authority. Any other provision of this STATUTORY
AGREEMENT to the contrary notwithstanding, the Development of the Property shall be
subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use
Regulations" or sometimes referred to as "Reservation of Authority") on the following
topics:
(i) Processing Fees imposed by the City to cover the estimated or actual
costs to the City of processing applications for Development Approvals or for monitoring
compliance with any Development Approvals granted or issued, which fees are charged
to -reimburse the City's lawful expenses attributable to such applications, processing,
permitting, review and inspection and which are in force and effect on a general basis at
such time as said approvals, permits, review, inspection or entitlement are granted or
conducted by the City.
(ii) Procedural regulations relating to hearing bodies, petitions,
applications, notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
(iii) Regulations governing engineering and construction standards and
specifications including, any and all uniform codes adopted by the State of California and
subsequently adopted by the City.
(iv) Regulations which may be in conflict with the Development Plan but
which are reasonably necessary to protect the public health and safety; provided,
however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied
and construed so as to provide Owner with the rights and assurances provided in this
STATUTORY AGREEMENT;
(b) That such regulations apply uniformly to all new development
projects of the same uses within the City; and
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(v) Regulations that do not conflict with the Development Plan. The term
"do not conflict" means new rules, regulations, and policies which: (a) do not modify the
Development Plan, including, without limitation, the permitted land uses, the density or
intensity of use, the phasing or timing of Development of the Project, the maximum height
and size of proposed buildings on the Property, provisions for Dedication of land for public
purposes and Development Exactions, except as expressly permitted elsewhere in this
STATUTORY AGREEMENT, and standards for design, development and construction of
the Project; (b) do not prevent Owner from obtaining any Subsequent Development
Approvals, including, without limitation, all necessary approvals, permits, certificates, and
the like, at such dates and under such circumstances as Owner would otherwise be
entitled by the Development Plan; or (c) do not prevent Owner from commencing,
prosecuting, and finishing grading of the land, constructing public and private
improvements, and occupying the Property, or any portion thereof, all at such dates and
schedules as Owner would otherwise be entitled to do so by the Development Plan.
(vi) The City shall not be prohibited from applying Project Subsequent
Land Use Regulations that do not affect permitted uses of the land, density, design, public
improvements (including construction standards and specifications) or the rate of
development of the Development, nor shall the City be prohibited from denying or
conditionally approving any Subsequent Development applications on the basis of such
subsequent Land Use Regulations.
4.5 Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of the City possess authority to regulate aspects of the
development of the Property separately from or jointly with the City, and this STATUTORY
AGREEMENT does not limit the authority of such other public agencies. The City shall
reasonably cooperate with other public agencies processing Development Approvals for
the Project.
4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term
of any tentative subdivision map shall be in effect for a period of fifteen (15) years, and
may be extended pursuant to the provisions of the California Subdivision Map Act
(Government Code §§ 66410 et seq.) All Development Approvals shall not expire if
Owner commences substantial construction of the Project within one (1) year from the
Effective Date of this STATUTORY AGREEMENT. "Substantial Construction" means the
issuance of a building permit in furtherance of the Project.
4.7 Satisfaction of Conditions of Approval. Owner shall comply with any and all
conditions of approval for any entitlement, permit, or license it receives from the City.
4.8 Subsequent Entitlements. Prior to commencement of construction :of the
Project, Owner shall be required to submit applications for any and all subsequent
entitlements, if any, consistent with the terms and conditions set forth in this STATUTORY
AGREEMENT.
4.9 City Records Inspection. Owner acknowledges and agrees that the City is
empowered to examine Owner's books and records, including tax returns. The City has
the power and authority to examine such books and records at any reasonable time,
including but not limited to, during normal business hours. If the City wishes to inspect
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the areas of the Property where the cannabis is being cultivated or manufactured, City
may do so at any time with no prior notice to Owner. In addition, City agrees that all of
its employees or agents which enter the cultivation, manufacturing, and curing areas shall
follow all of the policies and guidelines imposed on Owner's employees, including without
limitation, the wearing of any clothing or equipment to insure that no pests or impurities
shall enter the cultivation and curing areas.
ARTICLE 5. PUBLIC BENEFITS.
5.1 Intent. The parties acknowledge and agree that development of the
Property will result in substantial public needs which will not be fully met by the
Development Plan and further acknowledge and agree that this STATUTORY
AGREEMENT confers substantial private benefits on Owner which should be balanced
by commensurate public benefits. Accordingly, the parties intend to provide consideration
to the public to balance the private benefits conferred on Owner by providing more fully
for the satisfaction of the public needs resulting from the Project.
5.2 For the first year, Owner will pay the City a total of $220,000 as a Fee. This
fee is calculated based on $10.00 a square foot of permit space and a permit which allows
up to 22,000 sq. feet, among other factors.
5.3 In year two and year three, the Fee will increase to $12.50 per sq. foot for
a total of $275,000 per year, among other factors.
5.4 At the beginning of year four and year five, Owner will pay a Fee of'$15.00
per sq. foot for a total of $330,000 per year, among other factors.
5.5 The Fee schedule is as follows: The first Fee payment is due at the close
of the second quarter. Therefore, the first payment will be due on the last day of June
2018, the second and last payment for the first year is due on the last day of December
2018. For the years 2 through 15, the Fee schedule is as follows: divide the total Fee for
the respective year into four and make four equal payments due at the end of each quarter
of the respective year.
5.6 The Fee is subject to reassessment by the City every five years. At the end
of year five, the City will set a new Fee which will be applied in years 6 through 10. At
the end of year 10, the City will set new Fee which will be applied in years 11 through 15.
No one factor is dispositive in the City's determination of the new Fee. The Cannabis
permit will expire at the close of the 15th year and will require the Owner to reapply with
the City for a new permit. If Owner and City cannot agree to a new Fee or Fees by
December 22, 2022, then this STATUTORY AGREEMENT will automatically terminate
on December 23, 2022.
5.7 Further, Owner will pay a yearly payment of $50,000 each year to the City
that can be used to mitigate the impact of the cannabis business on the City and its
resources which includes but is not limited to, to use to pay a part of a police officer's
salary and/or benefits. This $50,000 amount will be due at the time the permit is issued.
Subsequent annual payments will be due on the permit issuance anniversary date. This
payment is due within thirty (30) days of issuance of permit and thereafter on the
anniversary of the issuance of permit.
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5.8 Jobs and Wage Creation.
5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire
qualified City residents for jobs at the Project. Owner shall also use reasonable efforts to
retain the services of qualified contractors and suppliers who are located in the City or
who employ a significant number of City residents. At least 20 percent of the Project's
workforce shall consist of residents of the City. Job announcements shall be posted at City
Hall, along with proof that the job announcements were advertised in at least two
newspapers published, printed or distributed in the City and on various social media sites
accessible to the general public. In addition, Owner shall make a good faith effort to advertise
job announcements at local job fairs, on local radio and through public agencies and
organizations.
5.9 Development Agreement Administrative Fee Deposit. Owner shall be
responsible for all of the City's actual costs associated with processing Development
Approvals for the Project including, but not limited to, costs associated with the City's
review and processing of the Project, including but not limited to reviewing the Project's
entitlements, including all environmental clearance documents, permits, licenses and all
documents evidencing compliance with state and local law. As such, upon issuance of
its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the
City for any associated costs with processing the Project, as detailed above and
reimbursing the City for its actual costs incurred in drafting and processing this
STATUTORY AGREEMENT. Owner will be liable for the City's actual costs incurred in
processing future Development Approval applications. City acknowledges and agrees
that this payment is not merely a deposit, but is a cap on the amount of the City's actual
costs incurred in processing this STATUTORY AGREEMENT.
ARTICLE 6. DISTRIBUTION AND TRANSPORTATION
6.1 Transportation of Cannabis. All pick ups and drop offs of cannabis and
cannabis products into and out of the City of Baldwin Park shall be by the exclusive
distributor, Rukli, Inc., or such other company should Rukli, Inc. no longer hold that right.
Owner shall not, on its own or through any person or entity, arrange for pick ups or drop
offs of cannabis or cannabis products into or out of the City of Baldwin Park for any
purpose, except by the exclusive distributor.
6.2 Distribution of Cannabis. Owner shall distribute its cannabis and cannabis
products only through the City's exclusive distributor. Owner shall cooperate fully with the
City's exclusive distributor regarding the accounting for product, revenue and tax
collection.
6.3 Owner and the City's exclusive distributor shall reach their own agreement
regarding fees for the exclusive distributor's services.
ARTICLE 7. REVIEW FOR COMPLIANCE.
7.1 Periodic Review. The City Council shall review this STATUTORY
AGREEMENT annually, on or before each anniversary of the Effective Date, in order to
ascertain Owner's good faith compliance with this STATUTORY AGREEMENT. ' During
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the periodic review, Owner shall be required to demonstrate good faith compliance with
all the terms of the STATUTORY AGREEMENT.
7.2 Special Review. The City Council may order a special review of compliance
with this STATUTORY AGREEMENT at any time.
7.3 Review Hearing. At the time and place set for the review hearing,, Owner
shall be given an opportunity to be heard. If the City Council finds, based upon substantial
evidence, that Owner has not complied in good faith with the terms or conditions of this
STATUTORY AGREEMENT, the City Council may automatically terminate this
STATUTORY AGREEMENT notwithstanding any other provision of this STATUTORY
AGREEMENT to the contrary, or modify this STATUTORY AGREEMENT and impose
such conditions as are reasonably necessary to protect the interests of the City. The
decision of the City Council shall be final, subject only to judicial review.
7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or
special review, the City Council determines that Owner is in compliance with this
STATUTORY AGREEMENT, the City shall issue a Certificate of Agreement Compliance
("Certificate") to Owner stating that after the most recent periodic or special review, and
based upon the information known or made known to the City Council, that (i) this
STATUTORY AGREEMENT remains in effect and (ii) Owner is not in default. The City
shall not be bound by a Certificate if a default existed at the time of the periodic or special
review, but was concealed from or otherwise not known to the City Council, regardless of
whether or not the Certificate is relied upon by assignees or other transferees or Owner.
7.5 Failure to Conduct Review. The City's failure to conduct a periodic review
of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY
AGREEMENT.
7.6 Cost of Review. The costs incurred by City in connection with the periodic
reviews shall be borne by the City. The Owner is not liable for any costs associated with
any City periodic review of this STATUTORY AGREEMENT. The Owner is not liable for
costs incurred for reviews.
ARTICLE 8. DEFAULTS AND REMEDIES.
8.1 Remedies in General. It is acknowledged by the parties that the City would
not have entered into this STATUTORY AGREEMENT if it were to be liable in damages
under this STATUTORY AGREEMENT, or with respect to this STATUTORY
AGREEMENT or the application thereof, except as hereinafter expressly provided.
Subject to extensions of time by mutual consent in writing, failure or delay by either party
to perform any term or provision of this STATUTORY AGREEMENT shall constitute a
default. In the event of alleged default or breach of any terms or conditions of this
STATUTORY AGREEMENT, the party alleging such default or breach shall give the other
party thirty (30) days' notice in writing specifying the nature of the alleged default and the
manner in which said default may be satisfactorily cured during any such thirty (30) day
period, the party charged shall not be considered in default for purposes of termination or
institution of legal proceedings.
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In general, each of the parties hereto may pursue any remedy at law or equity available
for the breach of any provision of this STATUTORY AGREEMENT through any state
court, except that the City shall not be liable in monetary damages, unless expressly
provided for in this STATUTORY AGREEMENT, to Owner, to any mortgagee or lender,
or to any successors in interest of Owner if successors in interest are permitted under this
STATUTORY AGREEMENT or mortgagee or lender, or to any other person, and Owner
covenants on behalf of itself and all successors in interest, if successors in intefest are
permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof,
not to sue for damages or claim any damages:
(i) For any breach of this STATUTORY AGREEMENT or for any cause
of action which arises out of this STATUTORY AGREEMENT; or
(ii) For the impairment or restriction of any right or interest conveyed or
provided under, with, or pursuant to this STATUTORY AGREEMENT, including, without
limitation, any impairment or restriction which Owner characterizes as a regulatory taking
or inverse condemnation; or
(iii) Arising out of or connected with any dispute, controversy or issue
regarding the application or request for a permit for cultivation, manufacturing and/or
distribution or interpretation or effect of the provisions of this STATUTORY AGREEMENT.
Owner hereby agrees to waive and/or release the City of Baldwin Park for any claim or
claims or cause of action, not specifically and expressly reserved herein, which- Owner
may have at the time of execution of this STATUTORY AGREEMENT relating to any
application to the City of Baldwin Park including but not limited to, any application for any
type of distribution, cultivation or manufacturing permit, any application for any
distribution, cultivation or manufacturing rights, or any application for any distribution,
cultivation or manufacturing license from the City of Baldwin Park.
CALIFORNIA CIVIL CODE SECTION 1542
The Owner expressly acknowledges that this STATUTORY AGREEMENT is
intended to include in its effect, a waiver without limitation, of all claims or causes of
actions which have arisen and of which each side knows or does not know, should have
known, had reason to know or suspects to exist in their respective favor at the time of
execution hereof, that this STATUTORY AGREEMENT contemplates the extinguishment
of any such Claim or Claims. The Owner specifically acknowledges and waives and
releases the rights granted to Owner under California Civil Code Section 1542, which
states as follows:
" A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
By expressly waiving the rights granted to Owner under California Civil Code
Section 1542, the Owner represents that they understand and acknowledge that if they
have suffered any injury, damage as a result of the application for or request for any permit
from the City of Baldwin Park and (i) they are not presently aware of any damage or injury,
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or (ii) any damage or injury has not yet manifested itself, any claims for any such damage
or injury are forever released and discharged.
Nothing contained herein shall modify or abridge Owner's rights or remedies
(including its rights for damages, if any) resulting from the exercise by the City of its power
of eminent domain. Nothing contained herein shall modify or abridge Owner's rights or
remedies (including its rights for damages, if any) resulting from the grossly negligent or
malicious acts of the City and its officials, officers, agents and employees. Nothing herein
shall modify or abridge any defenses or immunities available to the City and its employees
pursuant to the Government Tort Liability Act and all other applicable statutes and
decisional law.
Except as set forth in the preceding paragraph relating to eminent domain, Owner's
remedies shall be limited to those set forth in this Section 8.1, Section 8:2, and
Section 8.3.
8.2 Specific Performance. The parties acknowledge that money damages and
remedies at law are inadequate, and specific performance and other non-monetary relief
are particularly appropriate remedies for the enforcement of this STATUTORY
AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Section 8.1, money damages are unavailable
against the City as provided in Section 8.1 above.
(ii) Due to the size, nature and scope of the Project, it may not be
practical or possible to restore the Property to its natural condition once implementation
of this STATUTORY AGREEMENT has begun. After such implementation, Owner may
be foreclosed from other choices it may have had to use the Property or portions thereof.
Owner has invested significant time and resources and performed extensive planning and
processing of the Project in agreeing to the terms of this STATUTORY AGREEMENT and
will be investing even more significant time and resources in implementing the Project in
reliance upon the terms of this STATUTORY AGREEMENT, and it is not possible to
determine the sum of money which would adequately compensate Owner for such efforts;
the parties acknowledge and agree that any injunctive relief may be ordered on an
expedited, priority basis.
8.3 Termination of STATUTORY AGREEMENT for Default of the City. Owner
may terminate this STATUTORY AGREEMENT only in the event of a default by the City
in the performance of a material term of this STATUTORY AGREEMENT and only after
providing written notice to the City of default setting forth the nature of the default and the
actions, if any, required by the City to cure such default and, where the default can be
cured, the City has failed to take such actions and cure such default within sixty (60) days
after the effective date of such notice or, in the event that such default cannot be cured
within such sixty (60) day period but can be cured within a longer time, has failed to
commence the actions necessary to cure such default within such sixty (60) day period
and to diligently proceed to complete such actions and cure such default.
8.4 Owner Default. No building permit shall be issued or building. permit
application accepted for any structure on the Property after Owner is determined by the
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City to be in default of the terms and conditions of this STATUTORY AGREEMENT until
such default thereafter is cured by Owner or is waived by the City. If the City terminates
this STATUTORY AGREEMENT because of Owner's default, then the City shall retain
any and all benefits, including money or land received by the City hereunder.
ARTICLE 9. THIRD PARTY LITIGATION.
9.1 General Plan Litigation. The City has determined that this STATUTORY
AGREEMENT is consistent with its General Plan. Owner has reviewed the General Plan
and concurs with the City's determination. The City shall have no liability under this
STATUTORY AGREEMENT or otherwise for any failure of the City to perform under this
STATUTORY AGREEMENT, or for the inability of Owner to develop the Property as
contemplated by the Development Plan, which failure to perform or inability to develop is
as, the result of a judicial determination that the General Plan, or portions thereof, are
invalid or inadequate or not in compliance with law, or that this STATUTORY
AGREEMENT or any of the City's actions in adopting it were invalid, inadequate, or not
in compliance with law. Notwithstanding the foregoing, neither party shall contend in any
administrative or judicial proceeding that any STATUTORY AGREEMENT or any
Development Approval is unenforceable based upon federal, state or local statutes,
ordinances or regulations in effect on the Effective Date.
9.2 Hold Harmless Agreement. Owner hereby agrees to, and shall hold City,
its, elective and appointive boards, commissions, officers, agents, and employees
harmless from any liability for damage or claims for damage for personal injury, including
death, as well as from claims for property damage which may arise from Owner or
Owner's contractors, subcontractors, agents, or employees operations under this
STATUTORY AGREEMENT, whether such operations be by Owner, or by any of Owner's
contractors, subcontractors, agents, or employees operations under this STATUTORY
AGREEMENT, whether such operations be by Owner, or by any of Owner's contractors,
subcontractors, or by any one or more persons directly or indirectly employed by, or acting
as. agent for Owner or any of Owner's contractors or subcontractors. Owner agrees to
and shall defend City and its elective and appointive boards, commissions, officers,
agents and employees from any suits or actions at law or in equity for damage caused,
or alleged to have been caused, by reason of any of the aforesaid operations.
9.3 Indemnification. Owner shall defend, indemnify and hold harmless City and
defend its agents, officers and employees against and from any and all liabilities,
demands, lawsuits, claims, government claims, actions or proceedings and costs and
expenses incidental thereto (including costs of defense, settlement and reasonable
attorneys' fees), which the City or its City Council members may suffer, incur, be
responsible for or pay out as a result of or in connection with any challenge to the legality,
validity or adequacy of any of the following: (i) this STATUTORY AGREEMENT and the
concurrent and subsequent permits, licenses and entitlements approved for the Project
or Property; (ii) if applicable, the environmental impact report, mitigated negative
declaration or negative declaration, as the case may be, prepared in connection with the
development of the Property; and (iii) the proceedings or procedure undertaken in
connection with the adoption or approval of any permit or any of the above. In the event
of any legal or equitable action or other proceeding instituted by anyone against the City
or its City Council, any third party (including a governmental entity or official) challenging
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the validity of any provision of this STATUTORY AGREEMENT or the procedure.upon
which the permit was issued, or any portion thereof as set forth herein, the parties shall
mutually cooperate with each other in defense of said action or proceeding.
Notwithstanding the above, the City, at is sole option, may tender to Owner and Owner
agrees to accept any such tender of the complete defense of any third party challenge as
described herein. In the event the City elects to contract with special counsel to provide
for such a defense, the City may do so in its sole discretion and Owner will be required to
pay the defense costs of the City as the costs are incurred. Owner agrees to pay any
and all attorneys' fees or retainer regarding the selection of counsel, and Owner shall pay
all costs and all attorneys' fees related to retention of such counsel.
9.4 Environmental Contamination. Owner shall indemnify and hold the City, its
officers, agents, and employees free and harmless from any liability, based or asserted,
upon any act or omission of the Owner, its officers, agents, employees, subcontractors,
predecessors in interest, successors, assigns and independent contractors, excepting
any acts or omissions of City as successor to any portions of the Property dedicated or
transferred to City by Owner, for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and
Owner shall defend, at its expense, including attorneys' fees, the City, its officers, agents
and employees in any action based or asserted upon any such alleged act or omission.
The City may in, its discretion participate in the defense of any such claim, action or
proceeding. The provisions of this Section 9.4 do not apply to environmental conditions
that predate Owner's ownership or control of the Property or applicable portion; provided,
however, that the foregoing limitation shall not operate to bar, limit or modify any of
Owner's statutory or equitable obligations as an owner or seller of the Property.
9.5 The City May Choose its Own Counsel. With respect to Sections 9.1
through 9.4, the City reserves the right to select its own special counsel or otherwise
engages special counsel to defend the City hereunder, which fees will be paid by .Owner.
9.6 Accept Reasonable Good Faith Settlement. With respect to Article 9, the
City shall not reject any reasonable good faith settlement. Before accepting any such
settlement offer, City shall notify Owner of the offer and provide Owner with a copy of the
offer. If Owner disagrees with the City's intention to accept the offer, prior to the City's
response to any offer, the parties shall meet and confer in order to attempt to resolve the
parties' differences. If the City does reject a reasonable, good faith settlement that is
acceptable to Owner, Owner may enter into a settlement of the action, as it relates to
Owner, and the City shall thereafter defend such action (including appeals) at its own cost
and be solely responsible for any judgments rendered in connection with such action.
This Section 9.6 applies exclusively to settlements pertaining to monetary damages or
damages which are remedial by the payment of monetary compensation. Owner and the
City expressly agree that this Section 9.6 does not apply to any settlement that requires
an exercise of the City's police powers, limits the City's exercise of its police powers, or
affects the conduct of the City's municipal operations.
9.7 Administrative Actions. The parties acknowledge that in the future there
could be claims, enforcement actions, requests for information, subpoenas, criminal or
civil actions initiated or served by either the Federal Government or the State Government
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in connection with Owner's development, operation and use of the Property (collectively,
"Actions"). The City shall not disclose information and documents to the Federal
Government or State Government, its officers, or agents regarding any party to this
STATUTORY AGREEMENT absent a grand jury subpoena, civil or administrative
subpoena, warrant, discovery request, summons, court order or similar process
authorized under law hereinafter called "Governmental Notice". If any Action is brought
by either the Federal or State Government, City shall immediately notify Owner of the
nature of the Claim including all correspondence or documents submitted to the City.
Prior to responding to the Governmental Notice, City shall provide Owner ten (10) days
from the date of such notice subpoena or the like to serve and obtain on the City a
protective order, or the like, from a court of competent jurisdiction.
9.8 Survival. The provisions of Sections 9.1 through 9.7 inclusive, shall survive
the termination or expiration of this STATUTORY AGREEMENT, until such time as the
uses of the Property established in the Development Plan are permanently terminated.
ARTICLE 10. THIRD PARTY LENDERS, ASSIGNMENT & SALE.
10.1 Encumbrances. The parties hereto agree that this STATUTORY
AGREEMENT shall not prevent or limit Owner, in any manner, at Owner's sole discretion,
from encumbering the Property or any portion thereof or any improvement thereon by any
mortgage, deed of trust or other security device securing financing with respect .to the
Property.
10.2 Lender Requested Modification/Interpretation. The City acknowledges that
the lenders providing such financing may request certain interpretations and modifications
of this STATUTORY AGREEMENT and agrees upon request, from time to time, to. meet
with Owner and representatives of such lenders to negotiate in good faith any such
request for interpretation or modification. The City will not unreasonably withhold its
consent to any such requested interpretation or modification provided such interpretation
or modification is consistent with the intent and purposes of this STATUTORY
AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or
in any way limit City's rights under this STATUTORY AGREEMENT.
ARTICLE 11. MISCELLANEOUS PROVISIONS.
11.1 Entire Agreement. This STATUTORY AGREEMENT sets forth and
contains the entire understanding and agreement of the parties, and there are no oral or
written representations, understandings or ancillary covenants, undertakings or
agreements that are not contained or expressly contained herein. No testimony or
evidence of any such representations, understandings or covenants shall be admissible
in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this STATUTORY AGREEMENT, provided, however, City at its option may rely on
statements by Owner's agents at the public hearings leading to the City's approval of the
project or on written documents by Owner's agents that are a part of the public record.
11.2 Severability. If any term, provision, covenant or condition of this
STATUTORY AGREEMENT shall be determined invalid, void or unenforceable, by a
court of competent jurisdiction, the remainder of this STATUTORY AGREEMENT shall
bre
not be affected thereby to the extent such remaining provisions are not rendered
impractical to perform taking into consideration the purposes of this STATUTORY
AGREEMENT. The foregoing notwithstanding, the provision of the public benefits set
forth in Article 5, including the payment of the fees set forth therein, are essential elements
of, this STATUTORY AGREEMENT and the City would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at the City's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever. The foregoing notwithstanding, the
development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential
elements of this STATUTORY AGREEMENT and Owner would not have entered into this
STATUTORY AGREEMENT but for such provisions, and therefore in the event that any
portion of such provisions are determined to be invalid, void or unenforceable, at Qwner's
option this entire STATUTORY AGREEMENT shall terminate and from that point on be
null and void and of no force and effect whatsoever.
11.3 Interpretation and Governing Law. This STATUTORY AGREEMENT and
any dispute arising hereunder shall be governed and interpreted in accordance with the
laws of the State of California. This STATUTORY AGREEMENT shall be construed as a
whole according to its fair language and common meaning to achieve the objectives and
purposes of the parties hereto, and the rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not be employed in interpreting this
STATUTORY AGREEMENT, since all parties were represented by counsel in the
negotiation and preparation hereof.
11.4 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this
STATUTORY AGREEMENT.
11.5 Singular and Plural; Gender, and Person. Except where the context
requires otherwise, the singular of any word shall include the plural and vice versa, and
pronouns inferring the masculine gender shall include the feminine gender and neuter,
and vice versa, and a reference to "person" shall include, in addition to a natural person,
any governmental entity and any partnership, corporation, joint venture or any other form
of business entity.
11.6 Time of Essence. Time is of the essence in the performance of the
provisions of this STATUTORY AGREEMENT as to which time is an element.
11.7 Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this STATUTORY AGREEMENT by the other party, or the failure by a party
to exercise its rights upon the default of the other party, shall not constitute a waiver of
such party's right to insist and demand strict compliance by the other party with the.terms
of this STATUTORY AGREEMENT thereafter.
11.8 No Third Party Beneficiaries. The only parties to this STATUTORY
AGREEMENT are Owner and the City. This STATUTORY AGREEMENT is made and
entered into for the sole protection and benefit of the parties and their successors and
assigns. There are no third party beneficiaries and this STATUTORY AGREEMENT is
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not intended, and shall not be construed, to benefit, or be enforceable by any other person
whatsoever.
11.9 This STATUTORY AGREEMENT when signed and executed by Owner and
the Mayor of Baldwin Park supercedes and renders null and void that certain non -
statutory municipal Development Agreement executed on or about December 29, 2017.
11.10 INTENTIONALLY BLANK
11.11 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the party
benefited thereby of the covenants to be performed hereunder by such benefited,party.
11.12 Counterparts. This STATUTORY AGREEMENT may be executed by the
parties in counterparts, which counterparts shall be construed together and have the
same effect as if all of the parties had executed the same instrument.
11.13 Jurisdiction and Venue. Any action at law or in equity arising under this
STATUTORY AGREEMENT or brought by a party hereto for the purpose of enforcing,
construing or determining the validity of any provision of this STATUTORY AGREEMENT
shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of
California, and the parties hereto waive all provisions of federal or state law or judicial
decision providing for the filing, removal or change of venue to any other state or federal
court, including, without limitation, Code of Civil Procedure Section 394.
11.14 Project as a Private Undertaking. It is specifically understood and agreed
by and between the parties hereto that the development of the Project is a private
development, that neither party is acting as the agent of the other in any respect
hereunder, and that each party is an independent contracting entity with respect to the
terms, covenants and conditions contained in this STATUTORY AGREEMENT. No
partnership, joint venture or other association of any kind is formed by this STATUTORY
AGREEMENT. The only relationship between the City and Owner is that of a government
entity regulating the development of private property and the owner of such property.
11.15 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent contemplated hereunder in
the performance of all obligations under this STATUTORY AGREEMENT and the
satisfaction of the conditions of this STATUTORY AGREEMENT. Upon the request of
either party at any time, the other party shall promptly execute, with acknowledgment or
affidavit if reasonably required, and file or record such required instruments and writings
and take any actions as may be reasonably necessary under the terms of this
STATUTORY AGREEMENT to carry out the intent and to fulfill the provisions of this
STATUTORY AGREEMENT or to evidence or consummate the transactions
contemplated by this STATUTORY AGREEMENT.
11.16 Eminent Domain. No provision of this STATUTORY AGREEMENT shall be
construed to limit or restrict the exercise by the City of its power of eminent domain.
11.17 Agent for Service of Process. In the event Owner is not a resident of the
State of California or it is an association, partnership or joint venture without a member,
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partner or joint venturer, resident of the State of California, or if it is a foreign corporation,
then Owner shall file, upon its execution of this STATUTORY AGREEMENT, with the
Chief Executive Officer or his or her designee, upon its execution of this STATUTORY
AGREEMENT, a designation of a natural person residing in the State of California, giving
his or her name, residence and business addresses, as its agent for the purpose of
service of process in any court action arising out of or based upon this STATUTORY
AGREEMENT, and the delivery to such agent of a copy of any process in any such action
shall constitute valid service upon Owner. If for any reason service of such process upon
such agent is not feasible, then in such event Owner may be personally served with such
process out of the County of Los Angeles and such service shall constitute valid service
upon Owner. Owner is amenable to the process so described, submits to the jurisdiction
of the Court so obtained, and waives any and all objections and protests thereto..
11.18 Authority to Execute. The person or persons executing this STATUTORY
AGREEMENT on behalf of Owner warrants and represents that he/she/they have the
authority to execute this STATUTORY AGREEMENT on behalf of his/her/their
corporation, partnership or business entity and warrants and represents that he/she/they
has/have the authority to bind Owner to the performance of its obligations hereunder.
Owner shall each deliver to City on execution of this STATUTORY AGREEMENT a
certified copy of a resolution and or minute order of their respective board of directors or
appropriate governing body authorizing the execution of this STATUTORY AGREEMENT
and naming the officers that are authorized to execute this STATUTORY AGREEMENT
on its behalf. Each individual executing this STATUTORY AGREEMENT on behalf of his
or her respective company or entity shall represent and warrant that:
(i) The individual is authorized to execute and deliver this STATUTORY
AGREEMENT on behalf of that company or entity in accordance with a duly adopted
resolution of the company's board of directors or appropriate governing body and in
accordance with that company's or entity's articles of incorporation or charter and.bylaws
or applicable formation documents; and
(ii) This STATUTORY AGREEMENT is binding on that company or
entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing
company or entity in good standing; and
(iv) The execution and delivery of this STATUTORY AGREEMENT by
that company or entity shall not result in any breach of or constitute a default under any
mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or
other contract or instrument to which that company or entity is party or by which that
company or entity may be bound.
11.19 Nexus/Reasonable Relationship Challenges. Owner agrees that the fees
imposed are in fact reasonable and related to the mitigation of the negative impacts of
the business on the City and consents to, and waives any rights it may have now or in
the future to challenge the legal validity of, the conditions, requirements, policies or
programs set forth in this STATUTORY AGREEMENT including, without limitation, any
claim that the terms in this STATUTORY AGREEMENT constitute an abuse of the police
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power, violate substantive due process, deny equal protection of the laws, effect a taking
of property without payment of just compensation, and/or impose an unlawful tax.
11.20 [RESERVED]
11.21 No Damages Relief Against City. The parties acknowledge that the City
would not have entered into this STATUTORY AGREEMENT had it been exposed to
damage claims from Owner, or anyone acting on behalf of Owner for any breach thereof.
As such, the parties agree that in no event shall Owner, or Owners' partners, or anyone
acting on behalf of Owner be entitled to recover damages against City for breach of this
STATUTORY AGREEMENT.
11.22 Laws. Owner agrees to comply with all applicable state, regional, and local
laws, regulations, polices and rules. In addition, Owner further agrees to comply with all
issued entitlements, permits, licenses, including any and all applicable development
standards. Specifically, Owner agrees to comply with all applicable provisions of BPMC.
11.23 Compliance with Conditions of Approval. Owner agrees to comply with and
fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it
receives from the City. All conditions of approval for all entitlements, permits, and/or
licenses are attached hereto and incorporated herein by this reference.
11.24 The City acknowledges that this STATUTORY AGREEMENT shall be read
consistent with any statewide or national regulation of commercial cannabis that is
promulgated in the future, either by legislative action or voter approval. In the event
national or statewide regulations are promulgated which decriminalize or legalize the
adult -use of marijuana for recreational use, this STATUTORY AGREEMENT shall govern
the conduct of the property under such future regulations.
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IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY
AGREEMENT to be executed as of the dates written above.
CITY OF BALDWIN PARK GREEN HEALTH INDUSTRIES, LLC
By:
Manuel Lozano, Mayor By:
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
Robert N. Tafoya,
City Attorney
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Sigrid, Lopez, President
APPROVED AS TO FORM:
By:
Legal Counsel for
Green Health Industries, LLC
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT A
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EXHIBIT B
MAP DEPICTING PROPERTY
[TO BE ATTACHED]
EXHIBIT B
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