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HomeMy WebLinkAbout2018 04 18 Staff Reports Version 2NOTICE AND CALL OF A SPECIAL MEETING OF THE CI Y COUNCIL TO THE MEMBERS OF THE AFOREMENTIONED AGENCIES AND THE CITY CLERK OF THE CITY OF BALDWIN PARK NOTICE IS HEREBY GIVEN that a Special Meeting is hereby called to be held on WEDNESDAY, APRIL 18, 2018 at 5:30 PM. at City Hall — 31d Floor Conference Room 307, 14403 East Pacific Avenue, Baldwin Park, CA 91706. Said Special Meeting shall be for the purpose of conducting business in accordance with the attached Agenda. NO OTHER BUSINESS WILL BE DISCUSSED Dated: April 12, 2018 Manuel Lozano Mayor AFFIDAVIT OF POSTING Alejandra of 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 prior1 Alejandra Avila City Clerk CITY COUNCIL, SPECIAL E °TI; G CP17easeote d 11 Z 1 g n 5:30 P 1 CITY HALL - 31 Floor, Conference Room 307 14403 EAST PACIFIC AVENUE BALDWIN PARK, CA 91706 (626) 960-4011 II HE A REL `�' ALL " ti JAW 0 Manuel Lozano - Mayor Ricardo Pacheco - Mayor Pro Tem Cruz Baca - Council member Monica Garcia - Council member Susan Rubio - Council member PLEASE TURN OFF CELL PHONES AND PAGERS WHILE MEETING IS IN PROCESS POR FAVOR DE APA GAR SUS TELEFONOS CELULARES Y BEEPERS DURANTE LA JUNTA —�PUBLIC COMMENTS The public is encouraged to address the City Council or any of its Agencies listed on this agenda, but only on any matter posted on this agenda. 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, m _ COMENTARIOS DEL PUBLICO Se invita al publico a dirigirse al Concilio o cualquiera otra de sus Agencias nombradas en esta agenda, para hablar solamente sobre asunto publicado en esta agenda. Si usted desea la oportunidad de dirigirse al Concilio o alguna de sus Agencias, podrd hacerlo durante el perlodo de Comentarios del Publico (Public Communications) anunciado en la agenda. A cada persona se le permite hablar por tres (3) minutos. l lay un intdr art to ;ara su conveniencia. �...... e t Ji . _-_____— CITY COUNCIL SPECIAL MEETING — 5:30 P.M. CALL TO ORDER ROLL CALL: Council Members: Cruz Baca, Monica Garcia, Susan Rubio, Mayor Pro Tem Ricardo Pacheco and Mayor Manuel Lozano PUBLIC COMMUNICATIONS Three (3) minute speaking time limit Tres (3) minutos sere 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 n'leeting. (Government Code §54954.21 ESTE ES EL PERIODO DESIGNADO PARA DIRIGIRSE AL CONCILIO FAVOR DE NOTIFICAR A LA SECRETARIA SI REQUIERE LOS SERVICIOS DEL INTERPRETE No se podra tomar acci6n en algun asunto a menos que sea incluido en la agenda, o a menos que exists alguna emergencia o circunstancia especial. EI cuerpo legislativo y su personal podran: 1) Responder brevemente a declaraci6nes o preguntas hechas por personas; o 2) Dirigir personal a investigar y/o fijar asuntos para tomar en consideraci6n en juntas proximas. [Codigo de Gobierno §54954.2] 1. Increasing PERS Costs & Options Presentation by Rose Tam, Finance Director and Suzanne Harrell, Harrell & Company Advisors 2. Public Relations Presentation Presentation by David Vela, Lee Andres Group RECESS TO CLOSED SESSION 3. CONFERENCE WITH LABOR NEGOTIATORS (GC §54957.6) Pursuant to Government Code Section 54957.6: ,A gagy Desi nated rgp e entatives: Shannon Yauchzee, Chief Executive Officer, and Robert Tafoya, City Attorney E toq rg�aniat on: Police Management Employees Association, Unrepresented: CEO, City Attorney. 4. CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Government Code Section 54956.9: Potential Case(s): Two (2) 5. REAL PROPERTY NEGOTIATIONS Pursuant to Government Code §54956.8: A. Property: 13057, 13061, 13065 Garvey Avenue, Baldwin Park, CA (APN# 8556-022-906, 8556-022-907, 8556-022-908) Agency Negotiators: Shannon Yauchzee, Chief Executive Officer, and Robert Tafoya, City Attorney Negotiating Parties: Owner City of Baldwin Park Under Negotiation: Price and terms of payment 6. CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION Pursuant to paragraph (1) of subdivision (d) of Government Code Section 54956.9: 0 Case Name: City of Baldwin Park v. City of Irwindale Case Name: Arakelian Enterprises, Inc. v. Baldwin Park CERTIFICATION Case No. BS163400 Case No. BS173098 I, Alejandra Avila, City Clerk of the City of Baldwin Park hereby that, certify 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 on April 18, 2018. PLEASE NOTE: Copies of staff reports and supporting documerxtation pertainirig to each itern on this agenda are available for public viewing and inspection at City 1.1ali', 22111 Floor Lobby Area or at the Los Angeles Counly Public Library in the City of Baldwin Patk. For further inforrnatioti regarding agenda items, please contact the office of the City Clerk at (626) 960-4011 ext. 466 or e-mail aavila rxbtcwirar.prr,t. In compliance with (lie Americans with Disabilities Act, if you creed special assistance to participate it) 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 11) Alejandra, Avila City Clerk PLEASE NOTE: Copies of staff reports and supporting documerxtation pertainirig to each itern on this agenda are available for public viewing and inspection at City 1.1ali', 22111 Floor Lobby Area or at the Los Angeles Counly Public Library in the City of Baldwin Patk. For further inforrnatioti regarding agenda items, please contact the office of the City Clerk at (626) 960-4011 ext. 466 or e-mail aavila rxbtcwirar.prr,t. In compliance with (lie Americans with Disabilities Act, if you creed special assistance to participate it) 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 11) AGENDA BALDWIN PARK CITY COUNCIL REGULAR MEETING APRIL 18, 2018 7:00 PM COUNCIL CHAMBER 14403 E. Pacific Avenue Baldwin Park, CA 91706 (626) 960-4011 �►. .6 H U B O W f. 3 Pttt l C ` � � 3 • Cap►6R.lEL JY 0 'Z Manuel Lozano - Mayor Ricardo Pacheco - Mayor Pro Tem Cruz Baca - Council Member Monica Garcia - Council Member Susan Rubio - Council Member PLEASE TURN OFF CELL PHONES AND PAGERS WHILE MEETING IS IN PROCESS POR FAVOR DE APAGAR SUS TELEFONOS CELULARES Y BEEPERS DURANTE LA JUNTA 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 otre de sus Agencias nombradas en esta agenda, para hablar sobre cualquier asunto publicado en la agenda o cualquier tema que est6 bajo su jurisdiccion. Si usted desea la oportunidad de dirigirse al Concilio o alguna de sus Agencias, podr.J 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 con veniencia. Any writt611 public, record rp'l ating ro an agenda iters for at) opeo session cf s regular meeting of the City Council that is di *ibuted to the City C"ouncil les,,, than 72 i otos prior to that meotin wii/ be sv;aileiblp for pubfir inspection at 'ity Hall in d10 City clnrir.5 office at 14403 F. Pacific Av�.',m.zo, 3rd Fioor during norrnai busines ,' hours (Mond -ay CITY COUNCIL REGULAR MEETING — 7:00 PM CALL TO ORDER INVOCATION PLEDGE OF ALLEGIANCE ROLL CALL Council Members: Cruz Baca, Monica Garcia, Susan Rubio, Mayor Pro Tem Ricardo Pacheco and Mayor Manuel Lozano REPORT FROM CLOSED SESSION ANNOUNCEMENTS This is to announce, as required by Government Code section 54952.3, members of the City Council are also members of the Board of Directors of the Housing Authority, and Finance Authority, which are concurrently convening with the City Council this evening and each Council Member is paid an additional stipend of $30 for attending the Housing Authority meeting and $50 for attending the Finance Authority meeting. PROCLAMATIONS, COMMENDATIONS & PRESENTATIONS • Certificate Presentation to Annastasia Phan for being selected as a 2018 Emerging Leader for the 22nd District by the Office of Senator Ed Hernandez, O.D. • Certificate Presentation to Cynthia Espinoza, Baldwin Park Police Department for her selection as 2018 Women of the Year by the Office of Assemblywoman Blanca E. Rubio. • Certificate Presentation to Mary Poblano, City of Baldwin Park for her selection as 2018 Women of the Year by the Office of Senator Ed Hernandez, O.D. • Certificate Presentation to Esperanza Herrera, Baldwin Park Unified School District for her selection as 2018 Women of the Year by the office of Congresswoman Grace F. Napolitano. • Military Banner Presentation to Lieutenant Colonel Ariel Abuel for his Retirement from the United States Army. • Presentation of Proclamation in recognition of National Child Abuse Prevention Month. • Presentation of Proclamation in recognition of National Arbor Day. • Presentation of Proclamation in recognition of National Public Safety Telecommunicators Week April 8-14. • Vehicle Leasing Program Presentation. City Council Agenda Page 2 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 SECRE'TARIA SI REQUIERE LOS SERVICIOS DEL INTERPRETS No se podra tome accion en a]gun asunto a menos que sea incluido en la agenda, o a menos que exista alguna emergencia a 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 Gobiemo §54954.2] CONSENT CALENDAR All items listed are considered to be routine business by the City Council and will be approved with one motion. There will be no separate discussion of these items unless a City Councilmember so requests, in which case, the item will be removed from the general order of business and considered in its normal sequence on the agenda. 1. Warrants and Demands Staff recommends that Council ratify the attached Warrants and Demands Register. 2. Treasurer's Report— February 2018 Staff recommends that the City Council receive and file the Treasurer's Report for February 2018. 3. Meeting Minutes Staff recommends that Council receive and file the following Meeting Minutes: 3A. Meeting Minutes of the Housing Authority, Finance Authority, and Regular City Council Meetings held on March 21, 2018. 313. Meeting Minutes of the Special and Regular City Council Meetings held on April 4, 2018. 4. Award of Contract for 4th of July Pyrotechnic Show with Pyro Spectaculars, Inc. Staff recommends that the City Council: 1. Authorize the Director of Finance to allocate funding for the event; and 2. Award contract with Pyro Spectaculars, Inc. for professional pyrotechnic services; and 3. Authorize the Director of Recreation & Community Services to execute the agreement with Pyro Spectaculars, Inc. City Council Agenda Page 3 1. Award a contract for printing of the Baldwin Park NOW to iColor Printing & Mailing for the duration of one year with an additional period of three (3) years prior to expiration of this Agreement; and 2. Authorize the Director of Finance to allocate and approve funding sources; and 3. Authorize the Mayor to execute the enclosed Agreement. 6. Ratify and Adopt Resolutions to Approve the Memorandum of Understanding Between the City of Baldwin Park and the Baldwin Park Police Management Employees Association (BPPMEA); and Adopt Resolutions Amending the Executive and Unclassified Managers Benefit Matrices; and Approve Resolutions to Update the Pay Schedule Reflecting Salary and Benefit Adjustments Staff recommends that the City Council approve, ratify and adopt: 1. Resolution No. 2018-250, to approve the MOU with the Baldwin Park Police Management Employee Association (BPPMEA); and 2. Resolution No. 2018-251, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments effective January 1, 2018, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 3. Resolution No. 2018-252, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments retroactive to January 14, 2018, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 4. Resolution No. 2018-253, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments retroactive to March 25, 2018, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 5. Resolution No. 2018-254, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments retroactive to October 4, 2017, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and City Council Agenda Page 4 6. Resolution No. 2018-255, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments retroactive to December 1, 2017, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 7. Resolution No. 2018-256, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments retroactive to September 1, 2017, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 8. Resolution No. 2018-257, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments retroactive to July 1, 2017, in accordance with approved Memorandum of Understandings,' respectively, amended benefit matrices and State mandated wage adjustments; and 9. Resolution No. 2018-258, amending the Executive Employees and Unclassified Managers Benefits Matrices; and 10. Authorize the Finance Director to complete budget amendments and appropriations. 7. Second Reading of Ordinance No. 1406, "An ordinance of the City Council of the City of Baldwin Park, California, Amending Chapter 50 of the Baldwin Park Municipal Code and Enacting a New Section in Chapter 50 Related to Mandatory Commercial and Multi -Family Recycling." Staff recommends that the City Council adopt Ordinance No. 1406 on second reading, read by title only, and waive further reading thereof. 8. Second Reading of Ordinance No. 1409, "An ordinance of the City Council of the City of Baldwin Park, California, Adopting the Findings of Fact and Approving Zoning Designations on Properties Within Specific Plan Areas, Which are Consistent Edits that Have Been Previously Approved by the City Council (Locations: Plan 13-01 (Roem Project -Ramona Blvd./Bogart Street); Plan 14-01 (Indigo Project -Baldwin Park Blvd./Merced Avenue), Plan 15-01 (Downtown Transit Oriented Specific Plan), and Plan 16-01 (Pacific Villas - Pacific Avenue); Applicant: City of Baldwin Park; Case Number: Z-556." Staff recommends that the City Council adopt Ordinance No. 1409 on second reading, read by title only, and waive further reading thereof. 9. Approval of an Agreement for a Contract for Public Information. Officer with Lee Andrews Group Staff recommends that the City Council: City Council Agenda Page 5 1. Approve the Agreement with Lee Andrews Group for one year with the option to renew for one additional year; and 2. Direct the Chief Executive Officer (CEO) and City Attorney to prepare a standard consultant agreement to be executed by the Mayor; and 3. Authorize the Finance Director to appropriate the funding from the B1T account subject to the proper Public Hearing process. 10. Resolution of the City Council of the City of Baldwin Park; Supporting "California Proposition 68, Parks, Environment, and Water Bond." Staff recommends that the City Council: 1. Adopt Resolution No. 2018-248, entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWING PARK, CALIFORNIA, SUPPORTING CALIFORNIA PROPOSITION 68, PARKS, ENVIRONMENT, AND WATER BOND"; and 2. Authorize the Mayor to execute resolution, letters of support as needed and appropriate to demonstrate the City Council's support of the California Proposition 68, Parks, Environment, and Water Bond on behalf of the City Council. CITY COUNCIL ACTING AS SUCCESSOR AGENCY OF THE COMMUNITY DEVELOPMENT COMMISSION CONSENT CALENDAR All items listed are considered to be routine business by the City Council and will be approved with one motion. There will be no separate discussion of these items unless a City Councilmember so requests, in which case, the item will be removed from the general order of business and considered in its normal sequence on the agenda. SA -1 Successor Agency to the Dissolved Community Development Commission of the City of Baldwin Park Warrants and Demands Staff recommends that Council, acting as governing body of the Successor Agency, ratify the attached Warrants and Demands Register. PUBLIC HEARINGS 11. 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.) 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 6 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 City Council Agenda Page 7 µ.l Park." 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." 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." City Council Agenda Page 8 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." 12. Update the Cost of City Service Fees Based on Consumer Price Index (CPI) Adjustment Staff recommends the Public Hearing be opened and continued to the next regular City Council meeting for review and approval. 13. A Resolution of the City Council of the City of Baldwin Park, California, Confirming the Advisory Committee's Report and Levying the Assessment in the Baldwin Park Citywide Business Improvement District for Fiscal Year 2018-19. Staff recommends that the City Council: 1. Approve the Fiscal Year 2018-19 BIT allocation budget; and 2. Restore the full rate and approve Resolution No. 2018-259„ entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, CONFIRMING THE ADVISORY COMMITTEE'S REPORT AND LEVYING THE ASSESSMENT IN THE BALDWIN PARK CITYWIDE BUSINESS IMPROVEMENT DISTRICT FOR FISCAL YEAR 2018-19"; and 3. Provide staff direction on the appointment of a member of the public or business community to the Committee. REPORTS OF OFFICERS 14. Credit Card Integration Services with Tyler Accounting and Permit Software Systems. Staff recommends that the City Council: 1.. Accept credit card as an alternative payment method for receiving City taxes and service fees; and 2. Use OpenEdge as the credit card merchant provider; and 3. Pass -on the credit card fees to the customers as a convenience fee as allowed by California State Government Code Section 6159(h); and 4. Repeal and replace Resolution No. 2016-152 with Resolution No. 2018-249, entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, REPEALING AND REPLACING RESOLUTION NO. 2016-152 AND ADOPTING SUBSTITUTE RESOLUTION ALLOWING FOR THE USE OF CREDIT CARD AS ALTERNATIVE METHOD FOR PAYMENT OF CITY TAXES AND FEES." City Council Agenda Page 9 CITY COUNCIL I CITY CLERK I CITY TREASURER I STAFF REQUESTS & COMMUNICATIONS None 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 72 hours prior to the meeting. Dated this 12th day of April, 218. -N . �1l j t' k .I✓ Alejandra Avila Uiv UIerK 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, 2"d 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 aavila 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 10 E ITEM NO. STAFF REPORT K[6 ,,� TO: Honorable Mayor and City Councilmembers .` U 7r FROM: Rose Tam, Director of Finance • 6is� ; ' ` DATE: April 18, 2018 ELLE , SUBJECT: WARRANTS AND DEMANDS SUMMARY Attached is the Warrants and Demands Register for the City of Baldwin Park to be ratified by the City Council. FISCAL IMPACT The payroll for the last period was $483,544.97 and the attached General Warrants Register were $842,432.58 for a total amount of $1,325,977.55. LEGAL REVIEW None required. RECOMMENDATION Staff recommends that the City Council ratify the attached Warrants and Demands Register. BACKGROUND The attached Claims and Demands report format meets the required information as set out in the California Government Code. Staff has reviewed the requests for expenditures for the appropriate budgetary approval and for the authorization from the department head or its designee. Pursuant to Section 37208 of the California Government Code, the Chief Executive Officer or his/her designee does hereby certify to the accuracy of the demands hereinafter referred. Payments released since the previous City Council meeting and the following is a summary of the payment released: The payroll of the City of Baldwin Park consist of check numbers 199357 to 199386. Additionally, Automated Clearing House (ACH) Payroll deposits were made on behalf of City Employees from control number 5946 to 6195 for the period of March 11, 2018 through March 24, 2018, inclusive; these are presented and hereby ratified in the amount of $483,544.97. 2. General Warrants, including bank drafts and checks, with bank draft numbers 733 to 737, 807 to 811, 847 to 896 and check numbers from 218886 to 219036 in the total amount of $842,432.58 constituting of claims and demands against the City of Baldwin Park, are herewith presented to the City Council as required by law, and the same hereby ratified. } Z O m z h z w z W x O N o J W J >: oo " > a O O u Z O ® O W h h J LL LL mm v) w m m ? 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L, 0 0 0 v m a i ITEM NO. STAFF REPORT TO: Honorable Mayor and City Councilmembers i 1i tj o 1z FROM: Rose Tam, Director of Finance f IWd 'DATE: Ari �r�,r��ss��. �; � � April 18, 2018 JA FEBRUARY 2018 SUBJECT: TREASURER'S REPORT — SUMMARY Attached is the Treasurer's Report for the month of February 2018. The Treasurer's Report lists all cash for the City which includes the Baldwin Park Financing Authority, the Housing Authority, and the Successor Agency to the Community Development Commission (CDC). All investments are in compliance with the City's Investment Policy and the California Government Code. FISCAL IMPACT None LEGAL REVIEW None required. RECOMMENDATION Staff recommends that Council receive and file the Treasurer's Report for February 2018. BACKGROUND The City's Investment Policy requires the Treasurer's Report be submitted to the Mayor and City Council on a monthly basis. CITY OF BALDWIN PARK TREASURER'S REPORT 2/2812018 INVESTMENT INTEREST PURCHASE MATURITY PAR CURRENT BOOK MARKET DESCRIPTION . RAPE DATE DATE VALUE. PRINCIPAL tN�'gPAp. VinLUE. .... VALUE State of California Local Agency Investment Fund (LAIF) City -Including General Fund & all other Special Revenue Funds 1.41% Varies Varies $ 27,291,047.43 $ 27,291,047.43 $ 27,291,047.43 $ 27,291,047.43 Housing Authority 1.41% Varies Varies 13,302.96 13,302.96 13,302.96 13,302.96 27,304,350.39- -27,304,350.39 27,304,350,39 - 27, 304,350.39 Certificate of Deposit Capital One Bank USA NATL ASSN 1.15% 9/1412016 911412018 245,000.00 245,000.00 245,000.00 244,037.15 Wells Fargo Bank NA SIOUX Falls 115% 911412016 911412018 245,000.00 245,000-00 245,000.00 244,046.95 JP Morgan Chase Bank NA Columbus 1.15% 911612016 9/1612018 245,000.00 245,000.00 245,000.00 244,034.70 Ally Bank Midvale CTF DEP ACT/365 1.15% 9/1712016 9/1712018 245,000.00 245,000.00 245,000.00 244,017.55 American Express Centurion 1.60% 4/1212017 4/1212019 250,000.00 250,000.00 250,000.00 248,875.00 Everbank-Jacksonville 1.55% 4/1612017 4/1612019 250,000.00 250,000.00 250,000,00 248,755.00 Citibank National Association 1.80% 112512018 1125/2019 250,000.00 250,000.00 250,000.00 249,835.00 Goldman Sachs Bk USA NY 2.25% 112412018 1124/2020 250,000.00 250,000.00 250,000.00 249,570.00 Sallie Mae Bk SLT Lake City UT 2.25% 112412018 1/2412020 250,000.00 250,000.00 250,000.00 249,570.00 .- ...............2,230,000.00 2,230,000.002,230,000.00 2,222,'7"41.35 Fiscal Agent Funds (Trust/Debt Service Fund) Varies Varies Varies 1,851,666.30 1,851,666.30 1,851,666.30 1,851,666.30 Fiscal Agent Funds - Successor Agency (Trust/Debt Service Fund) Varies Varies Varies 170,813.97 170,813.97 170,813.97 170,813.97 .............2,022,480.27 2,022,480.27 ......2,022,480.27 0.27 2.. .................,022,480.27..... $ 31,556,830.66 $ 31,556,830.66 1 _...,.....,.,.,�...,...�,,.,...... 31,556,830.66 $ 31,549,.572.0....._ 1 549 572.01 Total Investments $ 31,556,830.66 Cash with Bank of the West City Checking 2,300,566.95 Money Market Plus 192,042.02 City Miscellaneous Cash 534,832.85 Successor Agency 44,833.96 Housing Authority 165,404.07 Financing Authority 1,719.08 Investment Brokerage 9,520.54 Total Cash with Bank of the West 3,248,919.47 Total Cash and Investments $ 34,805,750.13 Schedule of Cash and Investments includes city-wide assets as included in the Comprehensive Annual Financial Report. There was no investment maturity/purchase transaction made for the month of February 2018 and several deposits/withdrawals were made through the Local Agency Investment Fund. In compliance with the California Government Code Section 53646 at seq., I hereby certify that sufficient investment liquidity and anticipated revenues are available to meet the City's expenditure requirements for the next six months that all investments are in compliance to the City's Statement of Investment Policy. Approved by: Rose Tam - Director of Finance MINUTES BALDWIN PARK HOUSING AUTHORITY MARCH 21, 2018,7:00 P.M. COUNCIL CHAMBER - 14403 E. Pacific Avenue, Baldwin Park, 91706 CALL TO ORDER The meeting was called to order by Chair Lozano at 8:49 p.m. ROLL CALL Board Members resent: Board Member Cruz Baca Board Member Monica Garcia Board Member Susan Rubio Vice Chair Ricardo Pacheco Chair Manuel Lozano PUBLIC COMMUNICATIONS Chair Lozano opened Public Communications at 8:49 p.m. and seeing no one wishing to speak, Public Communications closed at 8:49 p.m. CONSENT CALENDAR 1. WARRANTS AND DEMANDS Staff recommends that the Board ratify the attached Warrants and Demands Registers. A motion was made by Lozano, seconded by Rubio, and carried (5 --0) to receive and file the Treasurer's Report. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. 2. TREASURER'S REPORT: JANUARY 2018 Staff recommends that the Board receive and file the Treasurer's Report for January 2018. A motion was made by Lozano, seconded by Rubio, and carried (5 — 0) to receive and file the Treasurer's Report. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. ADJOURNMENT There being no other business to discuss, and all other matters having been addressed, a motion was made by Lozano, seconded by Pacheco, to adjourn the meeting at 8:50 p.m. Chair ATTEST: Secretary APPROVED: MINUTES BALDWIN PARK FINANCE AUTHORITY MARCH 21, 2018,7:00 P.M. COUNCIL CHAMBER -14403 E. Pacific Avenue, Baldwin Park, 91706 CALL TO ORDER The meeting was called to order by Mayor Lozano at 8:49 p.m. ROLL CALL Board Members resent: Board Member Cruz Baca Board Member Monica Garcia Board Member Susan Rubio Vice Chair Ricardo Pacheco Chair Manuel Lozano PUBLIC COMMUNICATIONS Chair Lozano opened Public Communications at 8:49 p.m. and seeing no one wishing to speak, Public Communications closed at 8:49 p.m. 1. TREASURER'S REPORT: JANUARY 2018 Staff recommends that the Board receive and file the Treasurer's Report for January 2018. A motion was made by Lozano, seconded by Pacheco, and carried (5 — 0) to receive and file the Treasurer's Report. AYES: NOES: ABSENT: ABSTAIN: ADJOURNMENT Baca, Garcia, Lozano, Pacheco, Rubio. None. None. None. There being no other business to discuss, and all other matters having been addressed, a motion was made by Lozano, seconded by Pacheco, to adjourn the meeting at 8:50 p.m. Chair ATTEST: Secretary APPROVED: MINUTES BALDWIN PARK CITY COUNCIL REGULAR MEETING MARCH 21, 2018,7:00 P.M. COUNCIL CHAMBER -14403 E. Pacific Avenue, Baldwin Park, 91706 These minutes are presented in Agenda order. Various announcements or discussions may have occurred before or after the title under which they are presented. CALL TO ORDER The meeting was called to order by Mayor Lozano at 7:03 p.m. INVOCATION The invocation was provided by Pastor Jackson. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was led by Mayor Lozano.. ROLL CALL MEMBERS PRESENT: Council Member Cruz Baca Council Member Monica Garcia Council Member Ricardo Pacheco (Arrived 7:25 p.m.) Mayor Pro Tem Susan Rubio (Arrived 8:02 p.m.) Mayor Manuel Lozano A motion was made by Lozano, seconded by Garcia, and carried -(3 - 0) to excuse Council Member Susan Rubio and Mayor Pro Tem Ricardo Pacheco. AYES: Baca, Garcia, Lozano. NOES: None. ABSENT: Pacheco, Rubio. ABSTAIN: None. Mayor Lozano reported out of Closed Session that no action was taken on items discussed. ANNOUNCEMENTS This is to announce, as required by Government Code section 54952.3, members of the City Council are also members of the Board of Directors of the Housing Authority and Finance Authority, which are concurrently convening with the City Council this evening and each Council Member is paid an additional stipend of $30 for attending the Housing Authority meeting and $50 for attending the Finance Authority meeting. Council Member Cruz Baca requested that the meeting be closed in memory of: Officer Gregory Casillas from Pomona and requested that a letter of condolences be sent to the family; Rudy Escalera who passed away recently; Isabel De La O Hernandez long time Baldwin Park resident who passed away last week; Susie Harper (Nora) from Baldwin Park High School; and Mayor Cynthia Sternquist from the City of Temple City whose mother passed away. Council Member Baca offered her congratulations to Sierra Vista High School for having won the robotics contest and were going to the Nationals in Kansas City. Mayor Lozano thanked all the folks involved in the planning of the Homeless workshops and commented they did a terrific job. City Clerk Avila reported Jerry D. Holland Middle School had also made it to the finals, were given an award and were also competing; and offered her congratulations. PROCLAMATIONS COMMENDATIONS & PRESENTATIONS • Proclamation Presentation recognizing March 12 — 16, 2018, as Adult Education Week. A proclamation was presented declaring the week of March 12-16 as Adult Education week. • Certificate Presentation recognizing the Winning Students in the Adult Education Essay Contest. Students from the Adult Education program were presented with certificates of recognition and were offered congratulations. Dr. Kirk made brief remarks regarding the adult education program and thanked the Council for the great partnership between the two agencies. • Plaque Presentation to the Baldwin Park Housing Authority for being awarded the Distinction of High Performing Agency for the 5t" time in 6 years. Employees from the Housing Authority were recognized for their hard work and dedication in providing decent and affordable housing programs to Baldwin Park residents. Director Romo stated that these accomplishments to date were only possible because of its employees and their commitment to the community they serve. PUBLIC COMMUNICATIONS Mayor Lozano opened Public Communications at 7:25 p.m. and noted that each speaker is permitted a total of three (3) minutes to speak. Steve Cham thanked the Council for considering opening the process for the issuance of a few more cannabis licenses. Regular Meeting of 3/21/18 Page 2 of 13 Eduardo Sauceda resides at 3600 Van Wig and spoke about a tree that is between the yards and that there was a hospital behind it more like a convalescent home Ramona, he stated that the tree was encroaching on his property and it needed maintenance. Thomas Kerd spoke against services for the homeless because the more services you offer, the more homeless people will come into the community. Roger Maganq stated that he was in favor of the additional permits the Council was considering issuing regarding cannabis; made comments relative to the homeless stating that he pledged to establish the first Nichen Technologies Company in Baldwin Park and as such have a chance to help with the issue of housing for the homeless. Christina Larios announced that there will be a decluttering workshop on Saturday, March 31 at 2:00 p.m. by professional organizer Laura Alice. Seeing no others wishing to speak, Public Communications closed at 7:32 p.m. Mayor Pro Tem Pacheco commented and highlighted some of the more recent city accomplishments. Mayor Lozano entertained a motion to move the audit report item No. 15 ahead on the agenda. A motion was made by Lozano, seconded by Paces and carried (4 — 0) to move Item No. 15, the Comprehensive Annual Financial Report ahead on the agenda. AYES: Baca, Garcia, Lozano, Pacheco. NOES: None. ABSENT: Rubio. ABSTAIN: None. REPORTS OF OFFICERS 15. THE COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) FOR FISCAL YEAR 2016-2017. (ITEM TAKEN OUT OF ORDER) Staff recommends that the City Council receive and file the City of Baldwin Park's CAFR for fiscal year ended June 30, 2017 and all accompanying reports. A motion was made by Lozano, seconded by Pacheco_, and carried (4 — 0) to move Item No. 15, the Comprehensive Annual Financial Report ahead on the agenda. AYES: Baca, Garcia, Lozano, Pacheco. NOES: None. ABSENT: Rubio. ABSTAIN: None. Regular Meeting of 3/21/18 Page 3 of 13 Rose Tam, Director of Finance introduced Independent Auditors Vasquez & Company. Peggy McBride Concurrent Review and Quality Control partner for the City's audit with Vasquez & Company presented the Comprehensive Annual Financial Report summary and highlights. A motion was made by Lozano, seconded by Baca, and carried (5 — 0) to receive and file the Comprehensive Annual Financial Report and to bring back the Accounting Policies and Procedures item. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. CONSENT CALENDAR Mayor Lozano requested that items Nos.5 and 12 be pulled from the Consent Calendar for further discussion. 1, WARRANTS AND DEMANDS Staff recommends that Council ratify the attached Warrants and Demands Register. A motion was made by lac_ seconded by Garcia, and carried (4 —0) to ratify the Warrants and Demands Register. AYES: Baca, Garcia, Lozano, Pacheco. NOES: None. ABSENT: Rubio. ABSTAIN: None. 2. TREASURER'S REPORT — JANUARY 2018 Staff recommends that the City Council receive and file the Treasurer's Report: A motion was made by }aceo, seconded by Garcia, and carried (4 — 0) to receive and file the Treasurer's Report. AYES: Baca, Garcia, Lozano, Pacheco. NOES: None. ABSENT: Rubio. ABSTAIN: None. 3. REJECTION OF CLAIMS Staff recommends that the City Council reject the following claim(s) and direct staff to send appropriate notice of rejection to claimant(s): Huerta, Hector Claimant alleges property damage by the BPPD. Regular Meeting of 3/21/18 Page 4 of 13 4. Pittman, James Claimant alleges property damage by the BPPD. A motion was made by Pacheco, seconded by Garcia, and carried (4 — 0) to reject claim and direct staff to send appropriate notice of rejection to claimants. AYES: Baca, Garcia, Lozano, Pacheco. NOES: None. ABSENT: Rubio. ABSTAIN: None. MEETING MINUTES Staff recommends that Council receive and file the following Meeting Minutes: 4A. Meeting Minutes of the Regular Housing Authority and Finance Authority Meetings held on February 21, 2018. 4B. Meeting Minutes of the Special and Regular City Council Meetings held on March 7, 2018. A motion was made by Pacheco seconded by Garcia, and carried (4 —0) to receive and file the minutes. AYES: Baca, Garcia, Lozano, Pacheco. NOES: None. ABSENT: Rubio. ABSTAIN: None. 5. ACCOUNTING RELATED POLICIES & PROCEDURES. (PULLED) Staff recommends that the City Council review and approve the following accounting policies and procedures: Mayor Lozano stated that there was a correction to be made on this item. City Attorney Tafoya read a statement of correction on this item for the record. 1. Purchasing Policy and Procedures 2. Credit Card Policy and Procedures 3. Travel Policy and Procedures 4. Federal Awards Administration Policy and Procedures 5. ACH and Wire Transfer Policy and Procedures A motion was made by Pacheco,. seconded by Garcia, and carried (3 — 1) to move this item to the next meeting. AYES: NOES: ABSENT: ABSTAIN: Garcia, Lozano, Pacheco. Baca. Rubio. None. Regular Meeting of 3/21/18 Page 5 of 13 Council Member Baca inquired as to whether or not this was time sensitive as this was the third time this item was presented on the agenda. Finance Director Tam indicated that this was one of the recommendations of the Audit and as such it can't be delay past April 4. 6. ACCEPT PLANS AND SPECIFICATIONS, AND AUTHORIZE PUBLISHING NOTICE INVITING BIDS FOR CITY PROJECT NO. 2018-0239- CONCRETE IMPROVEMENTS VARIOUS LOCATIONS CITYWIDE. Staff recommends that the City Council accept the plans and specifications and authorize publication of a Notice Inviting Bids for the construction of City Project No. 2018-0239 Sidewalk and Concrete Improvements, Various Locations Citywide. A motion was made by I " chew seconded by Garcia, and carried (4 —0) to approve the item as presented. AYES: Baca, Garcia, Lozano, Pacheco. NOES: None. ABSENT: Rubio. ABSTAIN: None. 7. ACCEPT PLANS AND SPECIFICATIONS, AND AUTHORIZE PUBLISHING NOTICE INVITING BIDS FOR CITY PROJECT NO. 2018-0221- BUS IMPROVEMENTS PROJECT — PHASE II. Staff recommends that the City Council approve plans and specifications for the Bus Stop Improvement Project Phase II (City Project No. 2018-0221) and authorize staff to advertise the Notice Inviting Bids. A motion was made byEachecLo, seconded by Garcia, and carried (4 — 0) to approve the item as presented. AYES: Baca, Garcia, Lozano, Pacheco. NOES: None. ABSENT: Rubio. ABSTAIN: None. 8. RESOLUTION NO. 2018-232 INITIATING THE PROCEEDINGS AND ORDERING PREPARATION OF THE ENGINEER'S REPORT FOR THE CITYWIDE LANDSCAPING AND LIGHTING MAINTENANCE ASSESSMENT DISTRICT FOR FY 2018-2019. Staff recommends that the City Council adopt City Council Resolution No. 2018- 232 entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, AUTHORIZING THE INITIATION OF THE PROCEEDINGS AND ORDERING THE PREPARATION OF THE ENGINEER'S REPORT FOR THE FY2018-19 LEVY OF ANNUAL ASSESSMENTS FOR THE CITY OF BALDWIN PARK LANDSCAPING AND LIGHTING MAINTENANCE DISTRICT PURSUANT TO THE PROVISIONS OF DIVISION 15, PART 2 OF THE STATE OF CALIFORNIA STREETS AND HIGHWAYS CODE" Regular Meeting of 3/21/18 Page 6 of 13 A motion was made by Pacheco, seconded by Garcia, and carried (4 — 0) to approve the items as presented. AYES: Baca, Garcia, Lozano, Pacheco. NOES: None. ABSENT: Rubio. ABSTAIN: None. 9. RESOLUTION NO. 2018-233 INITIATING PROCEEDINGS AND ORDERING PREPARATION OF THE ENGINEER'S REPORT FOR THE PARKS MAINTENANCE ASSESSMENT DISTRICT FOR THE FY 2018-2019. Staff recommends that the City Council adopt City Council Resolution No. 2018- 233 entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, AUTHORIZING THE INITIATION OF THE PROCEEDINGS AND ORDERING THE PREPARATION OF THE ENGINEER'S REPORT FOR THE FY2018-19 LEVY OF ANNUAL ASSESSMENTS FOR THE CITY OF BALDWIN PARK PARKS MAINTENANCE ASSESSMENT DISTRICT" A motion was made by Pachecoseconded by Garcia, and carried (4 —0) to approve the item as presented. AYES: Baca, Garcia, Lozano, Pacheco. NOES: None. ABSENT: Rubio. ABSTAIN: None. 10. RENEWAL OF GRANT WRITING SERVICES CONTRACT WITH CALIFORNIA CONSULTING, LLC. Staff recommends the City Council to: 1. Approve the Consultant Services Agreement with California Consulting, LLC; and 2. Authorize the Director of Finance to appropriate funds to cover the cost related to the grants applied for including but not limited to General Fund, Prop A Fund, or Future Development Fund; or 3. Provide staff direction. A motion was made by Icheo, seconded by Garcia, and carried (4 — 0) to approve renewal of grant writing services contract with California Consulting. AYES: Baca, Garcia, Lozano, Pacheco. NOES: None. ABSENT: Rubio. ABSTAIN: None. Regular Meeting of 3/21/18 Page 7 of 13 11. SECOND READING OF ORDINANCE NO. 1405, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, ADDING SECTION 153.170.090.C, AMENDING TABLE 153.170.080 AND AMENDING THE TITLE OF SUBSECTION 153.170.090 RELATING TO ELECTRONIC READERBOARD SIGNS. Staff recommends that the City Council adopt Ordinance No. 1405 on second reading, read by title only, and waive further reading thereof. A motion was made by Pacheco, seconded by Garcia, and carried (4 — 0) to adopt Ordinance No. 1405 on second reading, read by title only, and waive further reading thereof. AYES: Baca, Garcia, Lozano, Pacheco NOES: None. ABSENT: Rubio. ABSTAIN: None. 12. RATIFY AND ADOPT RESOLUTIONS APPROVING THE MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN THE CITY OF BALDWIN PARK AND THE BALDWIN PARK POLICE ASSOCIATION (BPPA); AND APPROVE RESOLUTIONS UPDATING THE PAY SCHEDULES REFLECTING SALARY AND BENEFIT ADJUSTMENTS IN ACCORDANCE WITH CALPERS ESTABLISHED GUIDELINES. (PULLED) Staff recommends that the City Council City Council approve, ratify and adopt: 1. Adopt City Council Resolution No. 2018-234, entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, APPROVING THE MEMORADUMN OF UNDERSTANDING (MOU) WITH BALDWIN PARK POLICE ASSOCIATION (BPPA)"; AND 2. Adopt City Council Resolution No. 2018-235, entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, UPDATING THE COMPREHENSIVE CITY OF BALDWIN PARK PAY SCHEDULE TO REFLECT SALARY ADJUSTMENTS EFFECTIVE JANUARY 1, 2018, IN ACCORDANCE WITH APPROVED MEMORANDUM OF UNDERSTANDINGS, RESPECTIVELY, AMENDED BENEFIT MATRICES AND STATE MANDATED WAGE ADJUSTMENTS"; AND 3. Adopt City Council Resolution No. 2018-236, entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, UPDATING THE COMPREHENSIVE CITY OF BALDWIN PARK PAY SCHEDULE TO REFLECT SALARY ADJUSTMENTS EFFECTIVE MARCH 25, 2018, IN ACCORDANCE WITH APPROVED MEMORANDUM OF UNDERSTANDINGS, RESPECTIVELY, AMENDED BENEFIT MATRICES AND STATE MANDATED WAGE ADJUSTMENTS"; AND Regular Meeting of 3/21/18 Page 8 of 13 4. Adopt City Council Resolution No. 2018-237, entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, UPDATING THE COMPREHENSIVE CITY OF BALDWIN PARK PAY SCHEDULE TO REFLECT SALARY ADJUSTMENTS EFFECTIVE JULY 1, 2017, IN ACCORDANCE WITH APPROVED MEMORANDUM OF UNDERSTANDINGS, RESPECTIVELY, AMENDED BENEFIT MATRICES AND STATE MANDATED WAGE ADJUSTMENTS"; AND 5. Adopt City Council Resolution No. 2018-238, entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, UPDATING THE COMPREHENSIVE CITY OF BALDWIN PARK PAY SCHEDULE TO REFLECT SALARY ADJUSTMENTS EFFECTIVE DECEMBER 1, 2017, IN ACCORDANCE WITH APPROVED MEMORANDUM OF UNDERSTANDINGS, RESPECTIVELY, AMENDED BENEFIT MATRICES AND STATE MANDATED WAGE ADJUSTMENTS"; AND 6. Adopt City Council Resolution No. 2018-239, entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, UPDATING THE COMPREHENSIVE CITY OF BALDWIN PARK PAY SCHEDULE TO REFLECT SALARY ADJUSTMENTS EFFECTIVE OCTOBER 4, 2017, IN ACCORDANCE WITH APPROVED MEMORANDUM OF UNDERSTANDINGS, RESPECTIVELY, AMENDED BENEFIT MATRICES AND, STATE MANDATED WAGE ADJUSTMENTS"; AND 7. Authorize the Finance Director to complete budget amendments and appropriations. City Attorney Tafoya read a statement of correction on this item for the record. A motion was made by Lozano, seconded by Baca, and carried (4 — 0) to approve item with the correction presented for the record. AYES: Baca, Garcia, Lozano, Pacheco. NOES: None. ABSENT: Rubio. ABSTAIN: None. CITY COUNCIL ACTING AS SUCCESSOR AGENCY OF THE COMMUNITY DEVELOPMENT COMMISSION CONSENT CALENDAR All items listed are considered to be routine business by the City Council and will be approved with one motion. There will be no separate discussion of these items unless a City Councilmember so requests, in which case, the item will be removed from the general order of business and considered in its normal sequence on the agenda. Council Member Rubio arrived at 8:02 p.m. Regular Meeting of 3/21/18 Page 9 of 13 Mayor Pro Tem Pacheco, Council Member Rubio and Council Member Baca thanked the POA leadership for their patience and working collaboratively with the City to craft a good compromise for the next three years. SA -1 SUCCESSOR AGENCY TO THE DISSOLVED COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF BALDWIN PARK WARRANTS AND DEMANDS. Staff recommends that Council, acting as governing body of the Successor Agency, ratify the attached Warrants and Demands Register. Council Member Baca inquired as to the status of the Successor Agency and its associated funding. Rose Tam, Director Finance stated that after the dissolution law was passed, the directive for RDA agencies was that if they had any on-going projects bonds that they needed to continue and take care of said project until such time as when all the outstanding debts were paid off. A motion was made by Lozano, seconded by Baca, and carried (5 — 0) to receive and file the Successor Agency's Warrants and Demands. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. PUBLIC HEARINGS 13. A REQUEST FOR CONSIDERATION OF A MUNICIPAL (ZONING) CODE AMENDMENT BY ORDINANCE TO MODIFY CHAPTER 127 (COMMERCIAL CANNABIS) BY INCREASING THE NUMBER OF PERMITS PERMITTED FROM FIFTEEN TO TWENTY-FIVE. Staff recommends that the City Council conduct a Public Hearing and, thereafter, waive the first reading and adopt by title only, Ordinance No. 1408, entitled, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK CALIFORNIA, AMENDING THE MUNICIPAL CODE CHAPTER 127 — MEDICAL AND ADULT USE OF COMMERCIAL CANNABIS" Mayor Lozano opened the public hearing at 8:05 p.m. and entertained public comment first on anyone opposing the proposal. Thomas Kerri spoke against approving additional cannabis permits. Mayor Lozano asked for public comment from anyone in favor of the proposal. Seeing no other speakers, Mayor Lozano closed the public hearing at 8:10 pm. A lengthy discussion ensued relative to the proposed ordinance and centered around Tier 1 and Tier 2 applicants and allowing them also to participate; and Regular Meeting of 3/21/18 Page 10 of 13 adding more of the Tier 3 businesses; postponing approval until the second meeting in April; the number of sites that were still in question, which had not been approved. Mayor Pro Tem Pacheco suggested for staff to come up with a plan to be able to manage all the work associated with the buildings to be used for cannabis as well as all the other new buildings in the city and the workload that these issues represent for staff. A motion was made by Pacheco seconded by Garcia, and carried (4 — 1) to waive further reading and adopt by title only Ordinance No. 1408 increasing the number of permits permitted from Fifteen to Twenty. AYES: Garcia, Lozano, Pacheco, Rubio. NOES: Baca. ABSENT: None. ABSTAIN: None. Council Member Baca stated for the record that as a small business friendly person that she was in favor of including Tier 1 and Tier 2; and that the Council was making a mistake by not including them. 14. A REQUEST FOR CONSIDERATION OF A RECOMMENDATION OF APPROVAL BY THE PLANNING COMMISSION TO THE CITY COUNCIL ON MULTIPLE ZONING AND GENERAL PLAN LAND USE CHANGES WHICH WOULD ACHIEVE CONSISTENCY BETWEEN THE GENERAL PLAN LAND USE MAP AND ZONING MAP FOR SPECIFIC PLAN 13-01 (ROEM PROJECT-RAMONA BLVD./BOGART STREET), SPECIFIC PLAN 14-01 (INDIGO PROJECT-BALDWIN PARK BLVD./MERCED AVENUE), SPECIFIC PLAN 15-01 (DOWNTOWN TRANSIT ORIENTED SPECIFIC PLAN) AND SPECIFIC PLAN 16-01 (PACIFIC VILLAS -PACIFIC AVENUE) (LOCATION: VARIOUS: CASE NUMBERS: AGP-119 AND Z-556). Staff and the Planning Commission recommend that the City Council open the public hearing, accept testimony and following the public hearing: 1. Adopt City Council Resolution No. 2018-230, entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, ADOPTING THE FINDINGS OF FACT AND APPROVING GENERAL PLAN LAND USE AMENDMENTS TO ACHIEVE CONSISTENCY (LOCATION: SP 13-01, SP 14-01, SP 15-01, AND SP 16-01; APPLICANT: CITY OF BALDWIN PARK; CASE NUMBER: AGP- 119)" 2. Introduce for first reading, by title only and waive further reading, Ordinance No. 1409, entitled, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, AQOPTING THE FINDINGS OF FACT AND APPROVING ZONING DESIGNATIONS Regular Meeting of 3/21/18 Page 11 of 13 ON PROPERTIES WITHIN SPECIFIC PLAN AREAS WHICH ARE CONSISTENCY EDITS THAT HAVE BEEN PREVIOUSLY APPROVED BY THE CITY COUNCIL (LOCATIONS: PLAN 13-01 (ROEM PROJECT- RAMONA BLVD./BOGART STREET), SPECIFIC PLAN 14-01 (INDIGO PROJECT- BALDWIN PARK BLVD./MERCED AVENUE), SP 15-01 (DOWNTOWN TRANSIT ORIENTED SPECIFIC PLAN) AND SPECIFIC PLAN 16-01 (PACIFIC VILLAS -PACIFIC AVENUE); APPLICANT CITY OF BALDWIN PARK; CASE NUMBER Z-556). Amy Harbin, City Planner presented the staff report. Mayor Lozano opened the public hearing at 8:23 p.m. and entertained public comment. Seeing no one wishing to speak, Mayor Lozano closed the public hearing at 8:23 pm. A motion was made by Garcia, seconded by Lozano, and carried (5 — 0) to bring item back at the meeting of April 4. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. Council Member Garcia left the dais at 8:25 p.m, CITY COUNCIL / CITY CLERK / CITY TREASURER / STAFF REQUESTS & COMMUNICATIONS Request by Council Member Susan Rubio for discussion and consideration: 00 Direction for staff to start a planning process for aging members of our community covering topics such as transportation, housing, and in-home care. Council Member Rubio stated that this was an issue the City was not prepared to handle and given the statistics with the baby boomer population, it was appropriate to engage and look into putting together a master plan to address these issues such as transportation, access to health care, etc.; directed staff to move forward with such master plan. Council Member Baca commented that she was in favor of such proposal with the caveat that staff [city employees] would need to exercise caution in terms of the legal ramifications of providing such level of help due to the exposure to fraud and someone taking advantage of these vulnerable populations. Regular Meeting of 3/21/18 Page 12 of 13 Establish a City partnership with the School District in an intervention program for returning Veterans and for students in regards to education, employment, and housing. Council Member Rubio stated that there was a crisis in jobs available as well as funding for education; that her proposal had to do more with the population that had been out of the armed forces such as those between 25 — 30 years old who end up without a job and subsequently on the street; she stated that she wanted to build a partnership with the School District to fill the educational need of these individuals and have the School District subsidize the cost. She spoke about the issue of the kids of homeless individuals who have a hard time to attend school, which attributes to the high drop-out rate; that they move around often and became transients. She asked if the City Could reach out to organizations such as Lift and Uber and partner with them to. provide transportation to these kids on a temporary basis until the family figures out their situation. Council Member Rubio commented that we need to be moving on the issue of jobs resulting from the Cannabis operations in Baldwin Park because she had not seen any movement in that respect. Council Member Baca commented on the issue of scams that vulnerable populations and seniors were subject to and caution that there were scams currently going on in the area. Mayor Pro Tem Pacheco also commented on the issue of jobs in relation to the cannabis operators and he too stated that we need to see more progress in that regard; stated that we need to have a process to review their plans timely and that we need to do what we can to assist in this process so that they can start hiring folks. ADJOURNMENT There being no other business to discuss, and all other matters having been addressed, a motion was made by Lozano, seconded by Baca, to adjourn the meeting at 8:48 p.m. Mayor ATTEST: Manuel Lozano, Mayor Alejandra Avila, City Clerk APPROVED: Regular Meeting of 3/21/18 Page 13 of 13 MINUTES BALDWIN PARK CITY COUNCIL STUDY SESSION AND SPECIAL MEETING APRIL 4, 2018, 5:30 P.M. COUNCIL CHAMBER -14403 E. Pacific Avenue, Baldwin Park, 91706 CALL TO ORDER The meeting was called to order at 5:35 p.m. by Mayor Lozano, ROLL CALL PRESENT: Council Member Cruz Baca Council Member Monica Garcia Council Member Susan Rubio Mayor Pro Tem Ricardo Pacheco Mayor Manuel Lozano PUBLIC COMMUNICATIONS Mayor Lozano opened Public Communications at 5:36 p.m. Seeing no one wishing to speak, Public Communications closed at 5:36 p.m. OPEN SESSION 1. GENERAL PLAN/ZONING CONSISTENCY CHANGES (CITYWIDE) Presentation by City Planner Amy Harbin City Planner Harbin presented the staff report and stated that this action was simply a clean-up of zoning code amendments that had taken place in the past; answered Council's questions as to the specific elements in the different plans that were not consistent. 2. 13057 —13065 GARVEY AVENUE PRESENTATION Presentation by MG Development Group, LLC. Michael Galanakis, President of MG Development Group, LLC, made a presentation detailing the architectural renderings at the proposed site. Members of the City Council commented on the aesthetics shown on the architectural concept and indicated that they would have liked to have seen a more pleasing design; stated that the design looked too industrial and that additional enhancements such as landscaping would be appropriate to incorporate. There were additional Council comments related to utilizing the site for potential housing opportunities. Special Meeting of 4/4/18 Page 1 of 3 Mr. Galanakis indicated that this was simply a proposal and that the idea behind this meeting was to collect feedback from the City Council. RECESS TO CLOSED SESSION at 5:54 p.m. 3. CONFERENCE WITH LABOR NEGOTIATORS (GC §54957.6) Pursuant to Government Code Section 54957.6: enc designated representatives: Shannon Yauchzee, Chief Executive Officer, and Robert Tafoya, City Attorney ,LCL iyoye fctnization: Police Management Employees Association, Unrepresented: Executive Team, Management Team, City Attorney. 4. PUBLIC EMPLOYEE PERFORMANCE EVALUATION Pursuant to Government Code Section 54957: City Attorney 5. CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Government Code Section 54956.9: Potential Case(s): Three (3) 6. CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION Pursuant to paragraph (1) of subdivision (d) of Government Code Section 54956.9: Case Name: City of Baldwin Park v. City of Irwindale Case No. BS163400 Case Name: Cereceres et al., v. City of Baldwin Park, et al. Case No. BC697871 7. REAL PROPERTY NEGOTIATIONS Pursuant to Government Code §54956.8: A. Property: 001-003) Agency Negotiators Negotiating Parties: Under Negotiation: B. Property: Agency Negotiators Negotiating Parties: Under Negotiation: 14626 Dalewood Street, Baldwin Park, CA (APN# 8463 - Shannon Yauchzee, Chief Executive Officer, and Robert Tafoya, City Attorney Pelaez, Orieta Price and terms of payment 13057, 13061, 13065 Garvey Avenue, Baldwin Park, CA (APN# 8556-022-906, 8556-022-907, 8556-022-908) Shannon Yauchzee, Chief Executive Officer, and Robert Tafoya, City Attorney Owner City of Baldwin Park Price and terms of payment Special Meeting of 4/4/18 Page 2 of 3 RECONVENE 1N OPEN SESSION' at 6:55 p.m. Mayor Lozano noted that no action was taken on items discussed in Closed Session. ADJOURNMENT There being no further business, motion was made by Lozano, seconded by Garcia, to adjourn the meeting at 6:58 p.m. Mayor ATTEST: City Clerk APPROVED: Special Meeting of 4/4/18 Page 3 of 3 MINUTES BALDWIN PARK CITY COUNCIL REGULAR MEETING APRIL 4, 2018, 7:00 P.M. COUNCIL CHAMBER - 14403 E. Pacific Avenue, Baldwin Park, 91706 These minutes are presented in Agenda order. Various announcements or discussions may have occurred before or after the title under which they are presented. CALL TO ORDER The meeting was called to order by Mayor Lozano at 7:01 p.m,. INVOCATION The invocation was provided by Pastor Jackson. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was led by Mayor Lozano. ROLL CALL MEMBERS PRESENT: Council Member Cruz Baca Council Member Monica Garcia Council Member Ricardo Pacheco Mayor Pro Tem Susan Rubio Mayor Manuel Lozano REPORT ON CLOSED SESSION Mayor Lozano reported out of Closed Session that no action was taken on items discussed. ANNOUNCEMENTS Council Member Baca requested that the meeting be adjourned in memory of Julia Gonzalez; thanked staff in the Recreation Department for the wonderful Easter egg hunt event, Which was well attended; recognized Cesar Chavez's Birthday on March 31. Ms. Baca further commented that the Vietnam War was also 50 years ago and subsequently thanked all those who have served and those who are currently serving including many Baldwin Park Residents. Mayor Lozano requested that the meeting be adjourned in memory of Jack Litter who recently passed away. He requested that a letter be sent to the Baldwin Park Association to George Silva for hosting the joint State of the City event. Council Member Rubio commented that Dr. Martin Luther King, Jr. was assassinated 50 years ago on this day and that today, it was a significant day to remember; she asked that the meeting be closed on Dr. MLK's behalf; spoke about National Child Abuse Awareness Month and asked staff to look into preparing a proclamation to be presented at the next meeting proclaiming April as National Child Abuse prevention month. PROCLAMATIO S CO.M ENIDATIONS & PRESENTATIONS • Presentation of Proclamation recognizing April as DMV/Donate Life California Month. Jolene Vargas received the proclamation on behalf of One Legacy. • Certificate Presentation to Juana Mata, La Puente and Cynthia Espinoza, Baldwin Park for their selection as 2018 Women of the Year by the Office of Assemblywoman Blanca E. Rubio. Ms. Mata thanked the Council for this recognition. Mayor Lozano stated that Cynthia Espinoza was not able to attend the meeting to receive the certificate but will be present at the next meeting. • City of Baldwin Park Homeless Plan Overview and Next Steps — Presentation by LeSar Development Consultant- Jessica Ripper Jessica Ripper made a presentation regarding homelessness and its planning process and thanked the Council for having dedicated staff to work with and that it had been a pleasure working collaborative with City staff; spoke of the Measure H funding distribution; the elements of the planning process, which was more broadly; spoke of 6 key areas such as prevention; subsidizing housing; increasing income; case management; coordinated entry -system and affordable housing. PUBLIC COMMUNICATIONS " UNICATION'S Mayor Lozano opened Public Communications at 7:35 p.m. and noted that each speaker is permitted a total of three (3) minutes to speak. Margarita Var as — Spoke relative to the lack of parking to attend the meeting. Bertha Avedra — Made comments relative to the cannabis applications approved and the impact upon the community. Mr. Luna — stated that he was opposed to the raises for staff. Julie McCasland — from the Baldwin Park Library made an announcement regarding the dia de los ninos event scheduled for April 14 and Shakespeare for Kids scheduled for April 28; stated that they were looking for teen volunteers. John Rios — Stated that the CEO should have given the residents more information about what was happening in the City; spoke against raises for city staff; spoke about the City Attorney and how he should be replaced; made comments relative, to Royal Coaches. Regular Meeting of 4/4/18 Page 2 of 11 Mayor Pro Tem Pacheco made comments relative to the more recent city accomplishments including recent alley street improvements; read for the record a series of cases in support of the City Attorney stating that the City Attorney had achieved much success for the City and saved the City a lot of money in legal fees. Seeing no others wishing to speak, Public Communications closed at 7:48 p.m. CONSENT CALENDAR Council pulled Item Nos. 4, 7, 9 and 11 from Consent Calendar for further discussion. 1„ WARRANTS AND DEMANDS Staff recommends that Council ratify the attached Warrants and Demands Register. A motion was made by Lozano, seconded by Baca, and carried (5 — 0) to ratify the Warrants and Demands Register. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. 2. MEETING MINUTES Staff recommends that Council receive and file the following Meeting Minutes: 2A. Meeting Minutes of the Special Meeting held on March 21, 2018. Mayor Lozano read a statement of correction into the record indicating that the only set of minutes to be approved tonight were the minutes of March 21, 2018 only. A motion was made by Lozano, seconded by Baca, and carried (5 — 0) to ratify the Warrants and Demands Register. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. 3. NEIGHBORHOOD STABILIZATION PROGRAM (NSP) REVISED PROMISSORY NOTE Staff recommends the City Council approve the two revised NSP promissory notes. A motion was made by Lozano, seconded by Baca, and carried (5 — 0) to approve the item as presented. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. Regular Meeting of 4/4/18 Page 3 of 11 4. ACCOUNTING RELATED POLICIES & PROCEDURES (PULLED) Staff recommends that the City Council review and approve the following accounting policies and procedures: 1. Purchasing Policy and Procedures 2. Credit Card Policy and Procedures 3. Travel Policy and Procedures 4. Federal Awards Administration Policy and Procedures 5. ACH and Wire Transfer Policy and Procedures Council Member Baca commented on the urgency of approving this item as it related to the recent audit recommendations. A motion was made by Baca, seconded by Lozano, and carried (5 — 0) to ratify the Warrants and Demands Register. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. 5. ACCEPT PLANS AND SPECIFICATIONS AND AUTHORIZE PUBLISHING OF A NOTICE INVITING BIDS FOR CITY PROJECT NO. 2018-0241 — CONSTRUCTION OF A COMPRESSED NATURAL GAS (CNG) FACILITY TO BE LOCATED AT BADILLO STREET AND RAMONA BOULEVARD Staff recommends that the City Council accept the plans and specifications and authorize publication of a Notice Inviting Bids for the construction of City Project No. 2018-0241 — Construction of CNG Facility. A motion was made by Lozano, seconded by Baca, and carried (5 — 0) to approve the item as presented. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. 6. HOUSING ELEMENT PROGRESS REPORT 2017 Staff recommends that the City Council receive and file the report. A motion was made by Lozano, seconded by Baca, and carried (5 — 0) to receive and file the Housing Element Progress Report for 2017. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. Regular Meeting of 4/4/18 Page 4 of 11 7. APPROVAL OF A MEMORANDUM OF UNDERSTANDING (MOU) WITH THE LACMTA TO RECEIVE FUNDS FOR TRANSIT SERVICES (PULLED) Staff recommends that the City Council approve the attached MOU with LACMTA and authorize the Mayor to execute said agreement. Council Member Baca inquired whether or not dial -a -ride was included; asked if the issues with dial -a -ride were resolved. Sam Gutierrez, Interim Director of Public Works stated that the calculation mentioned in the report was a calculation that the City received from the Federal Government for reporting on the dial -a -ride; that staff was in the process of selecting a new service provider; that on April 11, the Council will be holding interviews with a number of providers. A motion was made by Baca, seconded by Lozano, and carried �5 — 0) to approve the MOU with the LACMTA. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. 8. APPROVAL OF AN AMENDMENT TO THE EMPLOYMENT AGREEMENT WITH MANUEL CARRILLO JR. DIRECTOR OF RECREATION AND COMMUNITY SERVICES AND APPROVE RESOLUTIONS TO UPDATE THE PAY SCHEDULE REFLECTING SALARY AND BENEFIT ADJUSTMENTS FOR THE CHIEF EXECUTIVE OFFICER (CEO) AND THE DIRECTOR OF RECREATION AND COMMUNITY SERVICES IN ACCORDANCE WITH CALPERS ESTABLISHED GUIDELINES It is recommended that the City Council approve and adopt: 1) The Amended Agreement with Manuel Carrillo Jr., Director of Recreation and Community Services (DRCS) effective September 9, 2017; and 2) Resolution No. 2018-242, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments effective January 1, 2018, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 3) Resolution No. 2018-243, updating i Park Pay Schedule to reflect salary 2018, in accordance with approved respectively, amended benefit mat adjustments and ie comprehensive City of Baldwin adjustments effective January 14, Memorandum of Understandings, ces and State mandated wage 4) Resolution No. 2018-244, updating the comprehensive City of Baldwin Park Pay Schedule to reflect a five step compensation plan effective March 25, 2018, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage Regular Meeting of 4/4/18 Page 5 of 11 adjustments; and 5) Resolution No. 2018-245, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments retroactive to December 1, 2017, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 6) Resolution No. 2018-246, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments retroactive to October 4, 2017, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 7) Resolution No. 2018-247, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments retroactive to September 9, 2017, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments and 8) Authorize the Finance Director to complete budget amendments and appropriations. A motion was made by Lozano, seconded by Baca, and carried (5 — 0) to approve the item as presented. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. 9. APPROVE RESOLUTION NO. 2018-2401 "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK APPROVING THE APPLICATION FOR GRANT FUNDS FOR CALIFORNIA CLIMATE INVESTMENTS URBAN GREENING PROGRAM" (PULLED) Staff recommends that the City Council: 1) Approve Resolution No. 2018-240 "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK APPROVING THE APPLICATION FOR GRANT FUNDS FOR CALIFORNIA CLIMATE INVESTMENTS URBAN GREENING PROGRAM". Council Member Baca inquired whether or not this will impact the Billboard agreement with Bulletin Displays, which proposed to do away with the landscaping in order to lower wall Sam Gutierrez, Interim Director of Public Works stated that it would not impact the Billboard Displays. Regular Meeting of 4/4/18 Page 6 of 11 A motion was made by Baca, seconded by Rubio, and carried (5 — 0) to ratify the Warrants and Demands Register. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. 10. INTRODUCTION AND FIRST READING OF ORDINANCE NO. 14069 "AN ORDINANCE OF THE CITY OF BALDWIN PARK, CALIFORNIA, AMENDING CHAPTER 50 OF THE BALDWIN PARK MUNICIPAL CODE AND ENACTING A NEW SECTION IN CHAPTER 50 RELATED TO MANDATORY COMMERCIAL AND MULTI -FAMILY RECYCLING." (FIRST READING AND INTRODUCTION) Staff recommends that the City Council introduce the attached Ordinance by reading its title only and waive further reading, ORDINANCE NO. 1406, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, AMENDING CHAPTER 50 OF THE BALDWIN PARK MUNICIPAL CODE AND ENACTING A NEW SECTION IN CHAPTER 50 RELATED TO MANDATORY COMMERCIAL AND MULTI -FAMILY RECYCLING'. A motion was made by Lozano, seconded by Baca, and carried (5 — 0) to introduce the ordinance by reading its title and waiving further reading. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. 11. A REQUEST FOR CONSIDERATION OF A MUNICIPAL (ZONING) CODE AMENDMENT BY ORDINANCE TO MODIFY CHAPTER 127 (COMMERCIAL CANNABIS) BY INCREASING THE NUMBER OF PERMITS PERMITTED FROM FIFTEEN TO TWENTY-FIVE. (SECOND READING AND ADOPTION) (PULLED) Staff recommends that the City Council waive further reading and adopt Ordinance No. 1408 by title only, entitled, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK CALIFORNIA, AMENDING THE MUNICIPAL CODE CHAPTER 127 — MEDICAL AND ADULT USE OF COMMERCIAL CANNABIS OF TITLE XI, BUSINESS REGULATIONS TO THE CITY OF BALDWIN PARK MUNICIPAL CODE" A brief discussion ensued relative to this proposal; Ms. Baca requested the item to be brought back after the Planning Commission review. A motion was made by Baca to reconsider approval and bring item back. Motion failed for a lack of a second. Regular Meeting of 4/4/18 Page 7 of 11 A motion was made by Pacheco seconded by Garcia, and carried (4 — 1) to waive further reading and adopt Ordinance No. 1408 as presented. AYES: Garcia, Lozano, Pacheco, Rubio. NOES: Baca. ABSENT: None. ABSTAIN: None. 12. RENEWAL OF POLICE HELICOPTER AGREEMENT WITH THE CITY OF EL MONTE. Staff recommends that the City Council approves the new agreement between the City of Baldwin Park and the City of EI Monte for the delivery of police helicopter services. City Attorney Tafoya indicated that this item needed to be reconsidered due to a couple of changes; one change on top of page 3 (2b) a check mark needed to be there to indicate the participating agency; and that also on the middle of page 3 the end date for the Agreement should be one year term. A motion was made by Baca, seconded by Garcia, and carried (5 — 0) to approve the new agreement between the City of Baldwin Park and the City of EI Monte with the additions entered into the record by the City Attorney. AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. ABSTAIN: None. PUBLIC HEARINGS 13. CONTINUED FROM MARCH 21, 2018. A REQUEST FOR CONSIDERATION OF A RECOMMENDATION OF APPROVAL BY THE PLANNING COMMISSION TO THE CITY COUNCIL ON MULTIPLE ZONING AND GENERAL PLAN LAND USE CHANGES WHICH WOULD ACHIEVE CONSISTENCY BETWEEN THE GENERAL PLAN LAND USE MAP AND ZONING MAP FOR SPECIFIC PLAN 13-01 (ROEM PROJECT- RAMONA BLVD./BOGART STREET), SPECIFIC PLAN 14-01 (INDIGO PROJECT-BALDWIN PARK BLVD./MERCED AVENUE), SPECIFIC PLAN 15-01 (DOWNTOWN TRANSIT ORIENTED SPECIFIC PLAN) AND SPECIFIC PLAN 16-01 (PACIFIC VILLAS -PACIFIC AVENUE) (LOCATION: VARIOUS: CASE NUMBERS: AGP-119 AND Z-556). Staff and the Planning Commission recommend that the City Council open the public hearing, accept testimony and following the public hearing: 1. Adopt City Council Resolution No. 2018-230, entitled, "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, ADOPTING THE FINDINGS OF FACT AND APPROVING GENERAL PLAN LAND USE AMENDMENTS TO ACHIEVE Regular Meeting of 4/4/18 Page 8 of 11 CONSISTENCY (LOCATION: SP 13-01, SP 14-01, SP 15-01, AND SP 16-01; APPLICANT: CITY OF BALDWIN PARK; CASE NUMBER: AGP- 119)" 2. Introduce for first reading, by title only and waive further"reading, Ordinance No. 1409, entitled, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, ADOPTING THE FINDINGS OF FACT AND APPROVING ZONING DESIGNATIONS ON PROPERTIES WITHIN SPECIFIC PLAN AREAS WHICH ARE CONSISTENCY EDITS THAT HAVE BEEN PREVIOUSLY APPROVED BY THE CITY COUNCIL (LOCATIONS: PLAN 13-01 (ROEM PROJECT- RAMONA BLVD./BOGART STREET), SPECIFIC PLAN 14-01 (INDIGO PROJECT- BALDWIN PARK BLVD./MERCED AVENUE), SP 15-01 (DOWNTOWN TRANSIT ORIENTED SPECIFIC PLAN) AND SPECIFIC PLAN 16-01 (PACIFIC VILLAS -PACIFIC AVENUE); APPLICANT CITY OF BALDWIN PARK; CASE NUMBER Z-556). Amy Harbin, City Planner presented the staff report and answered Council's question relative to the zoning designations and the inconsistencies Within the various specific plans as well as the entitlement plans and the fees derived from these in order to ensure the City did not miss out on any fees. Mayor Lozano opened the public hearing at 8:07 p.m. and entertained public comment first on anyone opposing the proposal. Mayor Lozano asked for public comment from anyone in favor of the proposal. Seeing no speakers, Mayor Lozano closed the public hearing at 8:11 pm,. A motion was made by Baca, seconded by Lozano, and carried (5 — 0) to approve the item as presented, to introduce for first reading by title only and waive further reading, Ordinance No. 1409. AYES: Baca, Garcia, Lozano, Pacheco, Rubio NOES: None. ABSENT: None. ABSTAIN: None. 14. BALDWIN PARK HOUSING AUTHORITY'S PUBLIC HOUSING AGENCY FY 2018-2019 ANNUAL PLAN. Staff recommends that the Housing Board conduct the public hearing, accept testimony and following the public hearing approve the: 1. The adoption and approval of the Public Housing Agency (PHA) FY 2018- 2019 PHA Annual Plan which includes the Enterprise Income Verification (EIV) and the Violence Against Women Act (VAWA) Policies (Attachment "A„ 2. Approval of Resolution No. HA -2018-014 establishing the adoption of the Plan as required by the U.S. Department of Housing and Urban Regular Meeting of 4/4/18 Page 9 of 11 Development (HUD) (Attachment "B"). 3. Authorize staff to begin the application process for disposition of Public Housing McNeill Manor units. Suzie Ruelas, Housing Manager presented the staff report. Mayor Lozano opened the public hearing at 8:11 p.m. and entertained public comment first on anyone opposing the proposal. Mayor Lozano asked for public comment from anyone in favor of the proposal. Seeing no speakers, Mayor Lozano closed the public hearing at 8:13 pm. Mayor Lozano read a statement of correction into the record indicating that on page 2 an incorrect page was inserted on the staff report and that the correct page 2 was attached. A motion was made by Garcia, seconded by Pacheco, and carried (5 — 0) to approve the item as presented. AYES: Baca, Garcia, Lozano, Pacheco, Rubio NOES: None. ABSENT: None. ABSTAIN: None. -0 r I1 0 15. FY 2017-18 MID -YEAR BUDGET PRESENTATION It is recommended that the City Council review the mid -year analysis and approve the mid -year revenue and expenditure projections for fiscal year ending June 30, 2018. Rose Tam, Finance Director presented the staff report and touched on the expenses and revenues year-end projections and addressed Council's questions relative to budget allocations; potential cannabis revenue distribution; staffing needs in various departments as a result of the cannabis permitting process as well as a mechanism to track and account for cannabis revenue. Members of the City Council expressed their gratitude to Ms. Tam and her team for the hard work put into the mid -year projections as well as for her diligence in keeping the Council informed on budget issues on a regular basis. The Council collectively thanked the executive team for assisting in this effort. A motion was made by Garcia, seconded by Baca, and carried (5 — 0) to approve the mid -year analysis and approve the mid -year revenue and expenditure projections for fiscal year ending June 30, 2018, AYES: Baca, Garcia, Lozano, Pacheco, Rubio. NOES: None. ABSENT: None. Regular Meeting of 4/4/18 Page 10 of 11 ABSTAIN: None. CITY COUNCIL 1 CITY CLERK / CITE' TREASURER 1 STAFF RE UE STS COMMUNICATIONS Request by Mayor Pro Tem Pacheco for discussion and consideration: • Direction to Staff to research leaving ICRMA Insurance Pool and to look at options for other insurance including the option for self -coverage. Council Member Pacheco stated that he would like to take a look at another option for self-insurance; he commented that the City had paid several million dollars into the pool and that it had not submitted any claims thus far. He directed the City Manager to work with staff to look into this and see what other options were out there for the City to consider. Mayor Lozano and Members of the City Council commented on several areas within the City that had code enforcement issues such: as the 99 cent store; the CVS on the corner of Baldwin Park Boulevard and Francisquito; corner of Pacific and Puente Avenue across from the 7 -Eleven„ the vacant fenced house of north of Puente Avenue next to the car wash. Council Member Garcia requested that the Council received a regular weekly or bi- weekly report on the All Square grocery store and its status located on Olive and Maine, which had some code enforcement and homeless issues. Council Member Baca also commented on the vacant house next to 4311 Alderson that burned; she stated that the vacant field had weeds growing from the rain; that she had received complaints due to the look of the area; she asked staff to see if this could be cleaned -up. City Clerk Avila reported that there was a lot of trash across the street from Morgan Park along Baldwin Park Boulevard; that on the medians some of the small trees planted were in bad condition west of Baldwin Park Boulevard; that on the corner of Ramona and Foster Avenue in the parking area there was a lot of trash there as well. ADJOURNMENT There being no other business to discuss, and all other matters having been addressed, a motion was made by Lozano, seconded by Pacheco, to adjourn the meeting at 8:40 P.m, Mayor ATTEST: Manuel Lozano, Mayor Alejandra Avila, City Clerk APPROVED: Regular Meeting of 4/4/18 Page 11 of 11 11 ITEM NO. STAFF REPORT r °%%,�,,;,�.� TO: Honorable Mayor and Members of the City Council aP1 I 'V THE'/' �"�t FROM: Manuel Carrillo Jr., Director of Recreation & Community Sey�i r€ A /,6AaRrr�EL DATE: April 18, 2018 c v,�� iry r SUBJECT: AWARD OF CONTRACT FOR 4 rr' OF JULY PHYROTECNIC SHOW WITH PYRO SPECTACULARS, INC. SIJMMAI ," The purpose of this report is to award the contract to Pyro Spectaculars, Inc. for professional pyrotechnic services related to the 4th of July Fireworks Celebration. hIS(','AL IMPACT 1 liere is rao impact to the general fund at this time. The cost will be funded by the BIT Fund and Gas Tax Fund (for street closure and traffic control) pending public hearing and approval of the City Council. The overall event cost is approximately $60,016 including; pyrotechnic show, operational costs, contract services (band, games, and sound technician), as well as city staff overtime pay. Itti,' 'OMMENDATIiIN It is recommended the City Council to: 1) Authorize the Director of Finance to appropriate funding for the event; and 2) Award contract with Pyro Spectaculars, Inc. for professional pyrotechnic services; and 3) Authorize the Director of Recreation & Community Services to execute the agreement with Pyro Spectaculars, Inc. LEGAL REVIEW The City Attorney has reviewed the contract agreement and approved it as to form. BACKGROUND At their March 7, 2018 City Council meeting, the Council approved a Request for Proposal (RFP) to solicit bids froaaa paotessioraal pyrotechnic conapanies. 'l"Ire. RFP stated all bids had to include a quote for a firework show to l,)c p erforined raga Jrrly 4, 2,01& Only three companies in the United States exist to provide professional pyrotechnic ser -vices, they are Fireworks & Stage FX America, Pyro Spectaculars, Inc. and Zambelli Fireworks hie. Since p olessiorrtal pyrotechnic services is 11 specialized field, staff took an active approach to increase the bid pool by placing several phone calls, mailing and faxing letters to encourage the participation from these three companies in the bidding process. Despite several efforts to reach out to all three companies, Pyro Spectaculars, Inc. was the only contractor to submit a proposal, which met all the requirements set forth by the city, county, state and federal guidelines. Fireworks & Stage FX America and Zambelli Fireworks, Inc. did not submit any proposals by the March 29, 2018 deadline. 4"' of July Award of Contract April 18, 2018 Page 2 ALTERNATIVES 1) The City Council may elect not to approve the agreement at this time and consider the event during Fiscal Year 2018-2019 budget process. ATTACHMENT 1) Agreement and Pyrotechnic Proposal April 6, 2018 City of Baldwin Park Manuel Carrillo Jr. 4100 Baldwin Park Blvd. Baldwin Park, CA 91706 Dear Mr. Carrillo, Pyro Spectaculars, Inc, is happy to provide our pyrotechnic proposal for your July 4, 2018 event. The following proposal outlines your custom designed Sky Concerti"' Program "B" for the amount of $20,000.00. The various fireworks elements provided are prepared to shoot from Sierra Vista High School for approximately 18 minutes. Our full service program includes music production and choreography, the services of a licensed pyrotechnic operator, specialized crew, an electronic firing system, and safety equipment used for support and protection. The price also includes insurance coverage, sales tax and delivery. To help ensure public safety, we work directly with the local fire authority while we apply for all the necessary fire department and other fireworks related permits. Our winning combination of products, people and production capabilities help produce the safest fireworks entertainment package possible. Your organization will be responsible for payment of all Fire Department permit fees and/or standby firemen fees, if any. The Fire Department may bill you directly for any additional standby fees for inspections. Your organization will also be responsible for providing the display location and all necessary security for the display site. Enclosed you will find a Product Synopsis, Production Agreement for signature and Scope of Work. Please have one copy of this fully executed agreement returned to our office by May 1, 2018. Your deposit is due June 15, 2018. Please take the time to review this proposal in detail. If you wish to discuss any changes in your program or need more information, please call either myself or your Customer Service Representative Mark Andrade at (909) 355-8120 ext. 219. Sincerely, PYRD SPECTACULARS, INC. / 4a, Paul Souza PYRO Show Producer PS/da Enclosures gyro Spectaculars, Inc. P.O. Box 2329 • Rialto, CA 92377 • Phone: (909) 355-8120 or (888) 477-PYRO • Fax: (909) 355-9813 IwsiriorQuantity 3" Souza Designer Selections 375 Total of Main Body - Aerial Shells 375 Pyrotechnic Devices -0 C.4;tri ')Uqllti .1y Sousa Gold Line Custom Multishot Device 1000 Shots 4 Sousa Diamond Line Custom Multishot Device 1800 Shots 4 Sousa Pearl -Line Custom Multishot Device 200 Shots Total of Pyrotechnic Devices 3,000 Low -Level Pyrotechnic Devices Pp§qrip i Qq4(ifty .5" Red, White, Blue Roman Candle Batten 450 40mm Exhibition Candle 16 4 49mm Exhibition Candle 16 Total of Low -Level Pyrotechnic Devices 482 Grand Finale 9-p- 5� _q y _r ' i ' PLI Q-11, PIL� ILI U -t 4 2" Souza Designer Bombardment Shells 200 + 2.5" Souza Designer Bombardment Shells 90 4 3" Souza Designer Bombardment Shells 50 Total of Grand Finale 340 Pyro Spectaculars, Inc. P.O. Box 2329 Rialto, CA 92377 Tel: 909-355-8120 :::: Fax: 909-355-9813 PRODUCTION AGREEMENT (Special) City of Baldwin Park Program B, Rev. # 2 July 4, 2018 Page I of 4 This agreement ("Agreement") is made this day of .2018 by and between Pyro Spectaculars, Inc., a California corporation, hereinafter referred to as ("PYRO"), and City of Baldwin Park, hereinafter referred to as ("CLIENT"). PYRO and CLIENT are sometimes referred to as "Party" or collectively as "Parties" herein. I. Ui I the - CLIENT hereby engages PYRO to provide to CLIENT one fireworks production ("Production"), and PYRO accepts such engagement upon all of the promises, terms and conditions hereinafter set forth: The Production shall be substantially as outlined in Program 'B", attached hereto and incorporated herein by this reference, 1.1 YIft3 Lltatie — PYRO shall provide all pyrotechnic equipment, trained pyrotechnicians, shipping, pyrotechnic products, application for specific pyrotechnic permits (the cost of which, including standby fees, shall be paid by CLIENT) relating to the Production, insurance covering the Production and the other things on its part to be performed as more specifically set forth below in this Agreement and in the Scope of Work ("Scope of Work"), attached hereto, incorporated herein by this reference, and made a part of this Agreement as though set forth fully herein. 1.2 LLJ"i. T I)aslis— CLIENT shall provide to PYRO a suitable site ("Site") for the Production, security for the Site as set forth in Paragraph 6 hereof, access to the Site, any permission necessary to utilize the Site for the Production, and the other things on its part to be performed as more specifically set forth below in this Agreement and in the Scope of Work, All Site arrangements are subject to PYRO's reasonable approval as to pyrotechnic safety, suitability, and security. All other conditions of the Site shall be the responsibility of CLIENT, including, but not limited to, access, use, control, parking and general safety with respect to the public, CLIENT personnel and other contractors. 2, N'iim c tanrt 1 lace -The Production shall take place ons Ip y ft , at approximately 2A " i* ,&fo al &t a iM ;h'' clsrMol, �jt)qr Frtir er 4 Ilnttl+vin k*gfkr Site. 3. frees Interest,'skud x enaes- 3.1 Free - f*1 1LN f;a,groos,to pay �'YRQ a fee trf" t# tall tl:I1Sl3I f .3 113` "1"I f3 1513 M)diI:IL R i 1°a� ) for the frodrnctican t Lt'IN l" shall pay to PYRO ,sJM 0.00 LNII °f(1K, ;I R1+"1P� 64hj��6) of the Fee pious estimated permit and standby fms, specified production costs, mid other regulatory masts approximated at,for a total o $1QAP%0Q,, as a deposit) Depos'il") upon the execution of this Agreement by both parties but no later than !!qne.L5L20!& The balance ofthe Fee shall be paid no later than da 1yAl '201 it CLIENT authorizes PYRO to receive and verify credit and financial information concerning t,I,l'E'NT from any agency, person or entity including but not: limited to credit reporting agencies. The "PRICE FIRM" date, the date by which the executed Agreement must be delivered to Pyro, is set forth in paragraph 20. 3.2 Interes -In the event that the Fee is not paid in a timely manner, CLIENT will be responsible for the payment of 1.5% interest per month or 18% annually on the unpaid 'balance. If litigation arises out of this Agreement, the prevailing party shall be entitled to reasonable costs incurred in connection with the litigation, including, but not limited to attorneys' fees. 33 &` ) ,:.= PYRO shall pay all normal cxpenswi directly related to the Production including freight, insurance as outlined, pyrotechnic products, pyrotechnic equipment, experienced pyrotechnic personnel to set up anti discharge the pyrotechnics and those additional items as oullitred as PYRO's responsibility in the Scope of Work, CLIENT shall pay all costs related to the Production not supplied by PYROincluding, but swot Bintited'to, those items outlined as CLIENT's responsibility in this Agreement and Scope of Work. 4, Pr9liltiao II hts'- PYK0 represents and warrants that it owns all copyrights, including, perliarnance rights, to this, Production, except that PYK0 does not own CLIENT -owned amaterkil or third -party -owned material that has been included in tire Production, and as to such tw1.JENT-owned and third -party-, owned rnatt,,rial" CLIENT assumes fufl responsibility therc�rore, CLIENT agrees that PYRO shall retain ownership of, and all copyrights and othetr right. lo, the Production, excclrl that TYRO shall not acquire or retain any ownership cr other rights in or to CLIENT -owned material and third -party -owned material and shall not be responsible in any way for such material. If applicable, CL1EN'r consents to the use of CLIENT -owned material and represents that it has or will obtain any permission from appropriate third parties sufficient to authorize public exhibition of any such material in connection with this Production. PYRO reserves the ownership rights in its trade names that are used in or are a product of the Production. Any reproduction by sound, video or other duplication or recording process without the express written permission of PYRO is prohibited. 5. Safe - PYRO and CLIENT shall each comply with applicable federal, state and local laws and regulations and employ safety programs and measures consistent with recognized applicable industry standards and practices. At all times before and during the Production, it shall be within PYRO's sole discretion to determine whether or not the Production may be safely discharged or continued. It shall not constitute a breach of this Agreement by PYRO for fireworks to fail or malfunction, or for PYRO to determine that the Production cannot be discharged or continued as a result of any conditions or circumstances affecting safety beyond the reasonable control of PYRO, 6. Security - CLIENT shall provide adequate security personnel, barricades, and Police Department services as may be necessary to preclude individuals other than those authorized by PYRO from entering an area to be designated by PYRO as the area for the set-up and discharge of the Production, including a fallout area satisfactory to PYRO where the pyrotechnics may safely rise and any debris may safely fall. PYRO shall have no responsibility for monitoring or controlling CLIENT's other contractors, providers or volunteers; the public; areas to which the public or contractors have access; or any other public or contractor facilities associated with the Production. 7. Cleanup - PYRO shall be responsible for the removal of all equipment provided by PYRO and clean tip of any live pyrotechnic debris made necessary by PYRO. CLIENT shall be responsible for any other clean up which may be required of the Production or set-up, discharge and fallout areas including any environmental clean-up. Pyro Spectaculars, Inc. P.O. Box 2329 Rialto, CA 92377 Tel: 909-355-8120 :::: Fax: 909-355-9813 City of Baldwin Park Program B, Rev. # 2 July 4, 2018 Page 2 of 4 8. 14crna 1 (9- PYROagrees to apply for permits for the firing of pyrotechnics only from the LOS ANGELES COUNTY FIRE DEIPARTM ENT, FAA, and USCO, if'requilcd. CLIENT shall he responsible for obtaining any other necessary permits and making other appropriate tiMingemenils for Police Departments, other Fire Departments, road closures, even)/activity or land use permits or any permission or permit required by any Local, Regional, State or Federal Government. 9. 1_pau rkn SS - I1YR0 shalt at all 01110 during the PC1715MIUMCC nfScl-Vices herein ensure that the following insurance is maintained in connection with PYRO's performance orthis Agvecinwit: (1) continerchil general liability insurance, including products, completed operations, and contractual liability under this Agrcomeul, (2) automobile liability insurance, (3) woikcrs' "inipensalion insurance and employer liability insurance. Such insurance is to protect CLIENT from claims for bodily injury, including death, personal irljwy, and from claims of'property damage, which may arise from PYRO's performance of this Agreement, only, The types and anAoultIs orcoverage shall be as, so (brilh in the Scope of Work, Such insurance shall not include claims which arise from CLIENT's negligence or willful conduct or From fifliore of'CLlr.,NT to perfbim ll„; obligations under this Agreement, coverage for which shall be provided by CLIENT. The coverage ofthese policies shall be subject to reawriable inspection by CLiENT. Certificates of Insurance evidencing the required guncral liability coverage shall be furnished to CLIENT prior to the tendering cif services herrutider and shall include that the fbIlowing are named as additionally insured: CLIENT; Sponsors, Landowners, Barge Owners, if any;, and I"criiiining, Authorities, with respect to the operit6ons, ofPYR0 at the Production. Pyrotechnic subcontractors or providers, dally, not coveted lulder policies of Insurance Fecluned hereby, shall secure, maintain and provide their own insurance coverage witti respect to their respective operations and services. 10. PYRO represents and warrants that it is capable offurnkiiing the necessary experience, personnel, rtloilmient, materials, providers, and ext disc to produce lite Producliott in it safe and profirs6onal inanner. Notwithstanding anything in this Agreement to the contrary, PYRO shall indemnify, hold harmless, and defend CLIENT and the ridditional histiredl from and against any and all claims, actions, damages, liabilities and expenses, including but not limited to, attorney and other professional ties and court costs, in connection with the loss of life, personal injury, and/or damage to property, arising from or out ofthe Production and the presentation thereof to the extent such are ocetisioncd by any act or omission of PYRO, their ofl-wers, agents, conuaclorS, providers, or employce.%,CLUENT shall indemnify, hold harmless, and defend PYRO from and against any and all claims, actions, drunages, liability and expenses, including but not litrilled to, attorney and other professional fees and court costs in connection with the loss of life, personal injury, and/or damage I , o property, arising from or out ofthe Production and the presentation thereof to the extent such are occasioned by any act or omission of CLIENT, its officers, agents, contractors, p . roviders, or employees. In no event shall either party be liable for the consequential damages ofthe other party. Il. LLqJJj&t1qtor QtMagg fSLOrdlyn Ey Hreqeh - Except in the case of bodily injury and property damage as provided in the insurance and indemnification provisions of Piirsgsaphs 9 and 10, above, in the event CLIENT claims that PYRO has breached this Agreement or was oflierwiia negligent in performing the Production provided for herein, CLIENT shall not be entitled to claim or recover monetary damages from PYRO beyond the amount CLIENT has paid to PYRO under this Agreement, and shall not be entitled to claim or recover any consequential damages from PYRO Including, without limitation, damages for loss of income, business or profits. 12, EqEgtA!Ied` � CLI ENT agrees to a,"v nic the risks of wcalher, strike, civil little-,;(, tcrg)rism, milliary Action, governmental notion, and any other causes beyond the control ofpyl'�O which may prevent the Production front being safely discharged oil the scheduled date, which may cause of any event for which CLIENT has purchnscd the Production, orwIlith, inay affect or damage such portion ofthe exhibits as must be placed and exposed a necessary time before the Production, If, for any such reason, 11YRO is not reasonably able to iatiely discharge lite Pro(biclion on the schedulal date, or at the scheduled time, or should any event four which CLU."N'l, has porchawd the Production lie canceled as u result of such causes, CLIENT may (i) re.5chodule this Production and pay PYRO such sums as provided in Paragraph 13, or (ii) cancel The Production and pay PYRO such ,rums as provided in Paragraph 14, based upon when the Production is canceled. 11 - IFC LIENT clecis to reschedule the Production, PYRO shall be paid the original, Fee plus all additional expens" made necessary by ics0i'lididifigpliss it 10,0 service, fee on such additional eximrses, Said expenses will be invoiced iepanitely and payment will be due in hill within 5 days ofriaceipt. (' LIENTAnd PYRO shall agree upon the rosclicchiled date taking itito consideration availability of permits, materli ds, equiptricirl, transportation and labor, The Production shall be rescheduled for a date nol rnore than 90 Days subscquelil to the mate first set for the Production, ']'lie Prodnetkni shall, not be resollecluled to a dole, or for an event, that historically has involved a firewwks production, The Production shall not Inc resclieJoled between )unc 15th and July 15th unless the original date was July 4111 of that same ytiir, or between Do criliber 15tit and January 15th, unless the original date was December 31st ofthe earlier year unless PYRO� agroes: that such rescheduling will not advcrsely affect normal business operations during those periods. 14 , kl*l C !�� A]iLcel - CLIENT shall havc the option in till Hatera Hy Cancel the Production prior to the scheduled date. CLIENT agre6 , .4 to pay to PYRO, as liquidated damages, the fid towing percentages of the f,"ce asset forth in Paragraph 31 days prior to iheachedided date, 2) 75% ifcancelhitpoo cectirs t5 to 29 days prior to the scheduled date, :"I,') 100% lheroafter, I'n the event CLIENT cancels the Production, it will be impractical orextrcrnOy difficult to fix actual amount of'PYRO's damages. 'I*IictoregoirigreproseirtsuirLasovial)lce,,tiniateol'lhedatsisages PYRO will suffer if'CLIENT cancels the Production. It is agreed, notating iti this AV reemenil of in PYRO's performance of the Production shall be construed as forininga partnership Or joint venture between CLIENTand PYRO, PYRO ,Jmall be and is on independent contractor, with CLIENT and not an on'sployce ofCLIEN'r, The llarfle5 hereto shall be severally revoliNtb1c for their own Nepartac deiris and obligations and neither Party shall be held responsibic for any ligiverneno or obligations not expressly provided For hereiu: 16, jkflpjlcA1re, Lqjy -This Agreement and the rigbis and obligitfions ofthe Parties herclinder shall be construed in s,,iccordancc with the laws ofCalifoniiai It is further agreed that the Central Jodivini Di ria of San Ber-napdino County, California, shall be proper venue for any such aclion. In the event that die scope of the Production is reduce(] by aiiutltorities luivaigjm isdiclion or by either Party for safety concerns, The Colt dollar arriourts ouffined in this Agreement are enforceable; 17, M)HtLs- Any Notice to rise Parkes pti-mitied or requited under this Agrerment may be. given byrilailingsuch Notice hitthe. United Slates Moil, postage prviisid, first class, addteswd as foliomPYRX) - Pyro Specliculars, Inc., P.O, Box 2329, R.Jaho, California, 92377, or for overnight delivery to 3 196 N. Looust Avenue, Rialto, Calilbrnul 9237), -4 kk U4LV -epLq tL gmj (pl, �Gm lit s 11.). il Y.j; ry [P ll jit'kJ) k L, 4 Lk 1A l y fl] d lipwgc, 1d! 2,1-7 QQ , &111- M k 0 k te. L �Ir T 4 1 olt PS V 1-2c Pyro Spectaculars, Inc. P.O. Box 2329 Rialto, CA 92377 Tel: 909-355-8120 :::: Fax: 909-355-9813 City of Baldwin Park Program B, Rev. # 2 July 4, 2018 Page 3 of 4 18: N4 ,gjilieaturn nLJ'y,rjns —All terms of the Agreement are in writing and may only be modified by written agreement of both Parties hereto. Both Parties acknowledge they have received a copy of said written Agreement and agree to be bound by said terms of written Agreement only. 19. "sjK yklAt'sl — If there is more than one CLIENT, they shall be jointly and severally responsible to perform CLIENT's obligations under this Agreement. This Agreement shall become effective after it is executed and accepted by r:.1 IENT acrd after it k excctuled and occepted by PYRO ai I'"'YRO's offices in Rialto, Califom!a, This Agreement may be executed in several counteiparls, including fawd and emailcd copies, each one of which shall be dmns i an original against the Party executing same. This Agreement shall be binding upon the Pariies hereto and upon their heirs, successors, executors, administrators and assigns. 20. Pr Nee"irtrr — If any changes or alterations are made by CLIP NT to this Agreement or if this Agreement is not executed by CLIENT and delivered to PYRO on or before the PRICE FIRM date shown below, then the: price, agate, and scope of the Production are subject to review and acceptance by PYRO fora period of 15 days following delivery to PYRO of the executed Agreement. In the event it is not accepted by PYRO, PYRO shall give CLIENT written notice, and this Agreement shall be void. PRICE FIRM through May 1, 2018 EXECUTED AGREEMENT MUST BE DELIVERED TO PYRO BY THIS DATE. See PRICE FIRM conditions, paragraph 20, above. EXECUTED as of the date first written above: PYRO SPECTACULARS, INC. City of Baldwin Park By:._ Its: President Its: Print Name SHOW PRODUCER: Paul Souza ITEM NO. STAFF SPORT TO: Honorable Mayor and Members of the City Council 01 H a , O F " FiE FROM: Manuel Carrillo Jr., Director of Recreation & Community Ser ',s sANo�Nsb L . DATE: April 18, 2018 '5 ALi EYE, SUBJECT: AWARD OF CONTRACT FOR PRINTING OF THE BALDWIN PARK 4o JAW4 NOW WITH ICOLOR PRINTING AND MAILING SUMMARY The purpose of this staff report is for the City Council to award a printing contract for the Baldwin Park NOW to the current company and selected bidder iColor Printing and Mailing. FISCAL IMPACT The existing budget has an allocation of $43,000 for printing and postage of the BP NOW for FY2017-18 funded from the Business Improvement Tax. In addition, a request to appropriate an additional $3,050 is required to print the last issue for this fiscal year for May/June. The fiscal impact to the Business Improvement Tax is a total of approximately $53,432 for FY 2018-19 (pending the public hearing and approval of the City Council). RECOMMENDATION Staff recommends the City Council to: 1) Award a contract for printing of the Baldwin Park NOW to iColor Printing & Mailing for the duration of one year with an additional period of three (3) years prior to expiration of this Agreement; and 2) Authorize the Director of Finance to appropriate funding for the BP Now; and 3) Authorize the Mayor to execute the following agreement. LEGAL REVIEW The City Attorney approved the Agreement and approved it as to form. BACKGROUND At their February 21, 2018 City Council meeting, the Council approved the Request for Proposals (RFP) for the printing of the Baldwin Park NOW. The purpose of going out to bid was to obtain the best price for printing services. Opening the bidding process allows the Department to take advantage of any cost savings and ensure the City is receiving the highest quality of service at the best possible price. The RFP requested that bidders provide costs for the Baldwin Park NOW and the Summer Recreation Guide that is included as an insert in the Summer BP NOW publication. The RFP allowed staff to consider and evaluate costs to increase the number of issues of the Baldwin Park Now and include various paper weight options to determine if a cost savings could be achieved through the bidding process. A total of six (4) proposals arrived by the Monday, March 19, 2018 at 5:00pm. The RFP's were mailed out to local printing companies and the BP NOW Award of Contract was advertised on the City's website. All of the submitted proposals were evaluated and rated by three (3) staff members. The chart below summarizes the bids received: BP NOW Award of Contract April 18, 2018 Page 2 Company p Print/Rec Guide Total Cost — — ........ Color Printing & Mailing Inc. iColor_ �. _. $19,560/$8,860 _ __..m.. . -------------- $28,420 ting Inc. --PRO Printing $20,796/ $9,604.76 $30,400.76 A_ljon— Graphics ......... $26,088/$9,707 _ $35,797 ......— The PMg oup Powerful Media $27,378/$10,429 $37,807 Print Manp-ement ...�. „ . — --- *Postage Not Included, approximately $25,012 is allocated to postage for (6) issues. Staff selected iColor Printing and Mailing as they provided the lowest and most responsible bid for the project and have experience in working with the City of Baldwin Park for the past (2) years and with other municipalities and public agencies. The selected vendor operates a full service printing facility headquartered in Los Angeles. Attachment -A highlights a breakdown of the printing and postage costs using the selected bidder. The Baldwin Park NOW is a bi-monthly publication that allows for consistent communication from the City to residents and business owners of Baldwin Park. The publication is a valuable tool that reaches 22,250 households and businesses. City staff have continuously worked to improve the style and content of the publication in order to increase awareness and positive image to the community. ALTERNATIVES There are no viable alternatives not to approve this agreement. ATTACHMENT 1) Agreement with iColor Printing & Mailing AGREEMENT THIS AGREEMENT made and entered into this 18th day of 6pdl 2018, by and between the CITY OF BALDWIN PARK, a municipal corporation (hereinafter "CITY") and jclor Printer Mailinlnc. a California Coraorati r (hereinafter" CONTRACTOR"): WITNESSETH: The parties hereto do agree as follows: (1) RECITALS- This Agreement is made and entered into with respect to the following facts: (a) CITY has heretofore solicited sealed public bids for printing services as specified herein and accordance with the plans and specifications in said City; and (b) CONTRACTOR has submitted a proposal to accomplish said work; and (c) The City Council of CITY has heretofore determined, in accordance with all applicable laws, CONTRACTOR'S said proposal constitutes the most qualified bid and has heretofore awarded said proposal to CONTRACTOR; and (d) CONTRACTOR is fully qualified to perform the work as hereinafter described. (2) CONTRACTOR DOCUMENTS: The following documents, incorporated herein by this reference shall constitute the contract documents referred to in this Agreement. (a) Request for Proposals (RFP) (b) Bid Proposal (c) General Liability Insurance Certificate (d) Workers Compensation Certificate (e) Business Automobile Liability Insurance Certificate (3) NATURE OF WORK: CONTRACTOR agrees to furnish all materials, tools, equipment, transportation, labor and service necessary to perform and complete in a good and workmanlike manner the services in the manner designated in this Agreement and the contract documents. CONTRACTOR shall provide printing and professional services, which would entail the following: • Coordinate delivery of City supplied art files • Providing proofs for review • Making final electronic changes • Printing of 22,250 copies • Delivery to the United States Postal Service (USPS) for distribution • Deliver copies to Esther Snyder Community Center • Follow printing and frequency specifications as per Attachment A (4) COMPENSATION: For work satisfactorily performed by CONTRACTOR, CITY shall pay CONTRACTOR a total amount as per Attachment A for all services rendered pursuant to this Agreement and based on a total not to exceed ten percent as per the amount on Attachment A for each issue of the NOW. Such compensation shall be paid in a per issue lump sum within thirty (30) days after CITY approves an invoice (i) submitted by CONTRACTOR after the satisfactory completion of the service required for each issue of the NOW and (ii) that describes satisfactory work performed to date and the lump sum to be paid, any and all amounts previously paid or invoiced and the remaining amount of the total not to exceed figure established by this Agreement. (5) TERM OF AGREEMENT: This Agreement shall commerce as of April 18, 2018 and shall be valid fora period of twelve (12) months thereafter, unless terminated earlier pursuant to this Agreement. CITY reserves the right to negotiate an extension to this Agreement for an additional period of three (3) years prior to expiration of this Agreement. (6) TERMINATIOI ASSIGNMENT: This Agreement may be terminated without cause at anytime by a majority vote of the City Council and upon ten -days (10 -days) written notice to CONTRACTOR. This Agreement shall not be assignable or transferable by either party without the express written consent of the other party. (7) INDEMNIFICATION: CONTRACTOR shall defend, indemnify and hold harmless CITY and CITY's officers, agents and employees against all claims, demands, actions, damages, cost (including reasonable attorney's fees and court cost) and suits brought against any of them arising from CONTRACTOR'S performance under this Agreement. (8) GOVERNING LAW: This Agreement shall be interpreted and construed according to the laws of the State of California and venue shall be in the County of Los Angeles, State of California. (9) ATTORNEY'S FEES: If litigation is reasonably required to enforce or interpret the provisions of this Agreement, then the prevailing party in such litigation shall be entitled to an award of reasonable attorney's fees in addition to any other relief to which it may be entitle. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day and year first above written. CITY OF BALDWIN PARK Mayor ATTEST City Clerk Date Date CONTRACTOR Signature Late Z Name &COUtUT 11% ,q -& CQ Title STAFF REPORT W pV HU[.o ` rHE - SAAE ABRIEL TO: FROM: D ATE: ITEM NO. Honorable Mayor and City Councilmembers Shannon Yauchzee, Chief Executive Officer Laura J. Thomas, Human Resources/Risk Manager April 18, 2018 91 SUBJECT: RATIFY AND ADOPT RESOLUTIONS TO APPROVE THE MEMORANDUM OF UNDERSTANDING BETWEEN CITY OF BALDWIN PARK AND THE BALDWIN PARK POLICE MANAGEMENT EMPLOYEES ASSOCIATION (BPPMEA); AND ADOPT RESOUTIONS AMENDING THE EXECUTIVE AND UNCLASSIFIED MANAGERS BENEFITS MATRICES; AND APPROVE RESOLUTIONS TO UPDATE THE PAY SCHEDULE REFLECTING SALARY AND BENEFIT ADJUSTMENTS TO THE BALDWIN PARK POLICE MANAGEMENT EMPLOYEES ASSOCIATION (BPPMEA) IN ACCORDANCE WITH CALPERS ESTABLISHED GUIDELINES SUMMARY This report seeks City Council consideration and adoption of Resolutions approving the Memorandum of Understanding (MOU) between the City of Baldwin Park and the Baldwin Park Police Management Employees Association (BPPMEA); approving updates to the Executive and Unclassified Managers Benefits Matrices; and updates to the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments and employee benefit changes due to the BPPMEA salary increases. FISCAL IMPACT The new MOtJ and Benefits schedule are structured and will be implemented over a three year period effective beginning July 1, 2017. The estimated fiscal impact to the General Fund in the next three years for the BPPMEA is $866,200. The General Fund impact for the Executive and Unclassified Managers is $250,100 and $123,400 to special revenue and other funds for the three year period. RECOMMENDATION Staff recommends that Council approve, ratify and adopt: 1. Resolution No. 2018-250, to approve the MOU with the Baldwin Park Police Management Employee Association (BPPMEA); and 2. Resolution No. 2018-251, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments effective January 1, 2018, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 3. Resolution No. 2018-252, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments effective January 14, 2018, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 4. Resolution No. 2018-253, updating the comprehensive City of Baldwin Park Pay Schedule to reflect a five step compensation plan effective March 25, 2018, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and [BPPMEA MOU Approval & Salary Resolution] [April 18, 2018] Page 2 5. Resolution No. 2018-254, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments retroactive to October 4, 2017, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 6. Resolution No. 2018-255, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments retroactive to December 1, 2017, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 7. Resolution No. 2018-256, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments retroactive to September 1, 2017, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 8. Resolution No. 2018-257, updating the comprehensive City of Baldwin Park Pay Schedule to reflect salary adjustments retroactive to July 1, 2017, in accordance with approved Memorandum of Understandings, respectively, amended benefit matrices and State mandated wage adjustments; and 9. Resolution No. 2018-258, amending the Executive Employees and Unclassified Managers Benefits Matrices; and 10. Authorize the Finance Director to complete budget amendments and appropriations. BACKGROUND Per the City Council's direction, staff met and conferred with representatives of the Baldwin Park Police Management Employees Association (BPPMEA). As approved by the City Council, the negotiation process has been concluded and a majority of the members of the subject bargaining group ratified the proposed changes in the respective Memorandum of Understanding. Upon adoption of Resolution No. 2018-250. the MOU with the Baldwin Park Police Management Employees Association (BPPMEA) will implement the terms and conditions of employment through and including June 30, 2020, as negotiated. The following are the significant changes to the City's current agreements in the proposed MOU: 1. Cost of Living Adjustment: +2% retroactive to the first full pay period of Fiscal Year 2017-18 +2% effective the first full pay period of Fiscal Year 2018-19 +2% effective the first full pay period of Fiscal Year 2019-2020 2. Bilingual Pay City to increase bilingual monthly premium by $50.00 effective the first full payroll period after MOU ratification. 3. Medical Insurance City to increase premium contribution by $200 a month $1,200 cap for cafeteria cash in lieu effective the first full payroll period after MOU ratification. 4. Incentive Pay City to increase Management POST by $550.00 City to add $560.00 for Advanced POST City to add $500.00 for Supervisory POST All effective for employees who meet eligibility requirements [BPPMEA MOU Approval & Salary Resolution] [April 18, 2018] Page 3 the first full payroll period after MOU ratification. 5. Administrative Leave City to increase administrative leave to 60 hours per fiscal year effective the first full payroll period after MOU ratification. 6. Probation Probationary period is 12 months. Executive and Unclassified 1t4an -wrs Upon adoption of Resolutions 2018-259, the City Council will amend Benefit Matrices to provide for the following effective July 1, 2017. C1a c°l: a r rc�mclmm,��lcxrrcr r l Lttd t .1fi—ft -r' 1. Medical Insurance: $1,200 cap for cafeteria cash in lieu City to increase premium contribution by $200 Vision plan up to a maximum of $37.55 2. Bilingual Pay City to increase bilingual pay by $50.00 3. Electronic Device Allowance City to increase electronic device allowance by $50.00 4. Deferred Compensation City to increase deferred compensation by $50.00 crtrP� �c� m I' rt J itjfc"t t� 1. Vehicle Allowance City to increase vehicle allowance by $100.00 2. Electronic Device Allowance City to increase electronic device allowance by $50.00 3. Medical Insurance City to increase premium contribution by $175 Vision plan up to a maximum of $37.55 4. Deferred Compensation City to increase deferred compensation by $400.00 Per Ca1PERS regulations, any changes to one or more pay rates require a Resolution be presented to City Council for review and approval of such updates. These Ca1PERS requirements are intended to enhance the disclosure and transparency of public employee compensation by requiring that the pay rates be listed on a single pay schedule or single document. [BPPMEA MOU Approval & Salary Resolution] [April 18, 2018] Page 4 Due to these requirements, Pay Schedule updates must be prepared individually to reflect each effective date (retroactive and future wage data), January 1, 2018, January 14, 2018, March 25, 2018, October 4, 2017, December 1, 2017, September 1, 2017, July 1, 2017, respectively. LEGAL REVIEW This report has been reviewed and approved by the City Attorney as to legal form and content. ALTERNATIVES Council may ck oose to provide staff alternatives or direct staff to negotiate further. This would likely require the item to be held over and discussed again in Closed Session. However, this is not recommended as the bargaining unit and the City have tentatively agreed upon these provisions. ATTACHMENTS #1. Resolution No. 2018-250 with attached BPPMEA Memorandum of Understanding #2. Resolution No. 2018-251 with attached Comprehensive Pay Schedule effective January 1, 2018 #3. Resolution No. 2018-252 with attached Comprehensive Pay Schedule effective January 14, 2018 #4. Resolution No. 2018-253 with attached Comprehensive Pay Schedule effective March 25, 2018 #5. Resolution No. 2018-254 with attached Comprehensive Pay Schedule effective October 4, 2017 #6. Resolution No. 2018-255 with attached Comprehensive Pay Schedule effective December 1, 2017 #7. Resolution No. 2018-256 with attached Comprehensive Pay Schedule effective September 1, 2017 #8. Resolution No. 2018-257 with attached Comprehensive Pay Schedule effective July 1, 2017 #9. Resolution No. 2018-258 with attached Executive and Unclassified Managers Benefits Matrices Resolution No. 2018-250 Page 1 RESOLUTION NO.2018-250 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, APPROVING THE MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF BALDWIN PARKAND THE BALDWIN PARK POLICE MANAGEMENT EMPLOYEES ASSOCIATION PROVIDING FOR EMPLOYEES REPRESENTED BY THE BALDWIN PARK POLICE MANAGEMENT EMPLOYEES ASSOCIATION. YEARS 20172020 WHEREAS, the representatives of the City Council of the City of Baldwin Park have met and conferred with duly authorized representatives of the Baldwin Park Police Management Employees Association to make equitable adjustments to wages and other terms and conditions of employment, and WHEREAS, a Memorandum of Understanding prepared by said representatives has been presented to the City Council for ratification, and WHEREAS, a majority of the unit members from this group voted to approve the Memorandum of Understanding. NOW, THEREFORE, the City Council of the City of Baldwin Park does hereby RESOLVE, DETERMINE AND ORDER as follows: SECTION 1. That this City Council does hereby approve and authorize the City of Baldwin Park's Mayor to sign the "Memorandum of Understanding between the Baldwin Park Police Management Employees Association and the City of Baldwin Park" attached hereto as ExhibitA. This Memorandum of Understanding abrogates _ o Understanding► dated applicable15, 2015, and this M'OiU is for the periodfrom • SECTION 2. Resolutions or portions thereof in conflict hereby are hereby repealed. SECTION 3. That the City Clerk shall certify to the adoption of this Resolution and shall forward a certified copy hereof to each Department Head and the Human Resources Manager. PASSED AND APPROVED this 18th day of April, 2018 Manuel Lozano, Mayor Resolution No. 2018-250 Page 2 ATTEST: STATE OF CALIFORNIA COUNTY OFLOSANGELES ss. CITY OF BALDWIN PARK I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park, do hereby certify that the foregoing Resolution was duly and regularly approved and adopted by the City Council of the City of Baldwin Park at its regular meeting of the by the following. EXHIBIT A Resolution No. 2018-250 Page 3 CITY OF BALDWIN PARK MEMORANDUM OF UNDERSTANDING 2017-2020 BYAND BETWEEN THE BALDWIN PARK POLICE MANAGEMENT EMPLOYEES ASSOCIATION AND THE CITY OF BALDWIN PARK Preamble The City of Baldwin Park, a municipal corporation, and the Baldwin Park Police Management Employees Association, a recognized employee organization, have been meeting and conferring consistent with Section 3500 et seq., of the Government Code and have reached agreement as a result of such meetings. It is the intent and purpose of the Memorandum to set forth the total and complete understanding and agreement between the parties regarding wages, hours, and other terms and conditions of employment. It is recognized the signatories to this Memorandum of Understanding and Agreement representing the City and the Association that they, in accordance with Section 3505.1 of the California Government Code, shall jointly prepare a written memorandum of such understanding which shall not be binding, and present it to the governing body or its statutory representative for determination". Section 1 - Rights and Recognition Resolution No. 2018-250 Page 4 In accordance with provisions of the Meyers-Milias-Brown Act of the State of California on provisions of the Employer -Employee Relations Resolution No. 96-51, the City acknowledges the Baldwin Park Police Management Employees Association as a recognized employee organization for the purpose of meeting and conferring regarding wages, hours and other terms and conditions of employment for those employees in certain specified classifications referred to in Section 5 of Resolution No. 96-51, The Police Management Employees Association is composed of the classified sworn employees in the positions of Police Captain and Police Lieutenant. The parties agree that the provisions contained herein shall be subject to all applicable laws and covers the period of July 1, 2017 through June 30, 2020, unless otherwise provided. This Memorandum of Understanding abrogates and supersedes the Memorandum of Understanding effective for the prior from July 1, 2014 to June 30, 2017 dated July 15, 2015, and this MOU is applicable for the period from July 1, 2017 through June 30, 2020. This Memorandum shall in all respects be subject and subordinate to the provisions of the Baldwin Park. Municipal Code, and statutory provisions of the Federal Government and the Slate of California in effect at the time of the execution of this Memorandum. Scope The scope of representation shall include all matters relating to wages, hours and other terms and conditions of employment, except however, that the scope of representation shall not include consideration of the merits, necessity, or organization of any service or activity provided by law or executive order; which shall include but not be limited to the right of the City to: direct, supervise, hire, promote, suspend and retain employees; relieve employees from duties because of lack of work or funds, or under conditions where the employer determines continued work would be inefficient or non-productive; determine services to be rendered, operations to be performed, utilization of technology, and overall budgetary matters; determine the methods, processes, means, job classifications, and personnel by which government operations are to be performed and conducted; determine the overall mission of the unit of government; maintain and improve the efficiency and effectiveness of Resolution No. 2018-250 Page 5 government of the City in situations of emergency; and take whatever other actions may be necessary to carry out the wishes of the public not otherwise specified above or by collective agreement. The provisions of the Memorandum shall be applied equally to all employees without unlawful discrimination as to age, sex, marital status, race, color, ancestry, religious creed, national origin, political affiliation or (when the nature of work permits) physical handicap. Any violation of this by the recognized employee organization shall also be subject to immediate correction and possible loss of recognition. All references to employees in this Memorandum designate both sexes, and whenever one gender is used it shall be construed to include both, where appropriate. Consistent with Section 3502 of the California Government Code, the parties adhere to the State law, which provides that: Except as otherwise provided by Legislature, public employees shall have the right to form, join and participate in activities of employees organizations of their own choosing for the purpose of representation on all matters of employer-employee relations. Public employees also shall have the right to refuse to join or participate in the activities of employee organizations and shall have the right to represent they°nselves individually in their employment relations with the public agency. The City and the Association agree not to interfere with the aforesaid right. « r waWROMMMEM It is intended that this Agreement sets forth the full and entire understanding of the parties regarding the matters set forth herein, and any other prior or existing understanding or agreement by the parties, whether formal or informal, regarding any such matters are hereby superseded orterminated in their entirety. Except as specifically provided herein, it is agreed and understood that both parties voluntarily and unqualifiedly waive their right, and agree that the other party shall not be required to negotiate with respect to any subject or matter covered herein during the term of this agreement. Nothing contained herein shall preclude the parties from mutually agreeing to meet and confer. Any agreement, alteration, understanding, variation, waiver, or modification of any of the terms or provisions contained herein shall not be binding upon the parties hereto unless made and executed in writing by all parties hereto, and if required, approved and implemented by the City Council. The waiver of any breach, term or condition of this Agreement by either party shall not constitute a precedent in the future enforcement of all its terms and provisions. Resolution No. 2018-250 Page 6 r 'i The Association agrees that neither the employees it represents, or any person acting in concert with them, will cause, sanction, or take part in any strike, walkout, sit- down, slowdown, stoppage of work, picketing, retarding of work, abnormal absenteeism, withholding of services, or any other action against the City that would impede the proper functioning of the City government at any time. Violation of any provision of this Section by the Association shall be cause for the City terminating this Agreement upon the giving of written notice to this effect to the President of the Association, in addition to whatever other remedies may be available to the City at law or in equity. Violation of any of the provisions of this Section by any employee shall be just cause for the imposition of disciplinary action up to and including termination, in addition to whatever other remedies may be available to the City at law or in equity. No employee shall receive any portion of his regular salary or benefits while engaging in activity in violation of this Section. The City agrees that it will not lock out any employee at any time. This Memorandum of Understanding is subject to all applicable Federal, State and City laws, ordinances, resolutions, and any lawful rules and regulations enacted by the City Council. If any part or provision(s) of this Memorandum of Understanding is in conflict or inconsistent with such applicable provisions of Federal, State or City Laws, ordinances, resolution or is otherwise held to be invalid or unenforceable by any tribunal of competent jurisdiction, such part or provision(s) shall be suspended and superseded by such applicable law or regulations, and the remainder of this Memorandum of Understanding shall not be affected thereby. The parties shall enter the Meet and Confer process immediately for the purpose of arriving at a mutually satisfactory replacement of such part or provision(s). Section 2 - Direct Wage Payments Eligibility to receive any retroactive salary payment(s) or other retroactive compensation provided for in this Section 2 or in any section of this Memorandum of Understanding shall be conditioned upon the affected unit member being employed by the City on the date that the retroactive payment is distributed. Said requirement is consistent with the agreement and understanding of the parties that any and all retroactive payments provided for herein are not intended as compensation for past services rendered. Adoption of a Se en Ste m- Cora ensation Plan Effective July 1, 2004 a Seven Step compensation Plan (5% between steps) shall be adopted by the City Council and made apart hereof, and will be on file Resolution No. 2018-250 Page 7 with the Human Resources Manager or designated representative(s). Employees who receive a minimum overall performance rating of Competent up to a maximum overall performance rating of Superior shall be eligible to receive one (1) step advancement within their classification. Sala The unadjusted (the salary rate set forth in the City salary matrices - the rates without adjustment for bonuses or any other benefits, including but not limited to City paid employee CalPERS contributions) base salary rates for classifications designated as police management employees shall be increased as follows: 2% effective the first payroll period commencing on or after July 1, 2017 2% effective the first payroll period commencing on or after July 1, 2018 2% effective the first payroll period commencing on or after July 1, 2019 Commencing June 30, 2017, City shall pay each sworn employee a monthly longevity payment based upon the employee's years of full time law enforcement service to the City in the amount that corresponds to the employee's years of full time service, as set forth below: a. 10-14 years of full time service shall entitle employee to $158 per month; or b. 15- 19 years of full time service shall entitle employee to $315 per month; or c. 20-24 years of full time service shall entitle employee to $470 per month; or d. 25 or more years of full time service shall entitle employee to $675 per month. A sworn employee may earn longevity payment in the amount commensurate with the employee's completed years of full time service as set forth above provided that the employee shall not be entitled to collect more than one longevity payment at any one time. An employee's longevity payment shall not increase the employee's unadjusted base salary Instead the longevity payment will be added to the employee's unadjusted base salary after any percentage increase to the employees unadjusted base salary including the one effective on July 1, 2016. Section 3 - Insurances/Supplemental Wage Payments Resolution No. 2018-250 Page 8 Health Benefits/Cafeteria Plan The health plan coverage term, annual premium rates and PEMHCA employer contribution amounts, as determined by CalPERS, run from January 1St through December 31st of each calendar year. The City shall pay the monthly cost of the employer's minimum contribution as required by Government Code §22892. Effective the first full pay period after ratification by both parties, the City will contribute an additional amount in excess of the employer contribution amount toward the following expenses. The sum of the minimum contribution and the additional amount shall not exceed $1,400.00 per month. Employees may opt -out of enrollment in the City's CaIPERS medical plan only upon proof of enrollment in another group health insurance plan. Employees may use cafeteria funds for any of the following options: 1. Premium cost for enrollment in City provided health insurance plan for self, two (2) party, orfamily coverage 2. Premium cost for enrollment in a City provided dental plan for self, two (2) party, orfamily coverage. 3. Premium cost for vision care in excess of what the City provides. 4. Election to receive funds in cash, which will be treated as taxable income. 5. Such "cash out" shall not exceed $1,200 per month. 6. Any combination of the foregoing options. Any premium in excess of the City's monthly maximum contribution shall be paid by the Employee via payroll deductions. Retiree Health Benefit Planfor Emto ees Hired Before Jul 1 2015 The City Council shall adopt and file an appropriate resolution with the Board of Administration of the Public Employees Retirement System (CaIPERS) whereby the City will elect to obtain a post-retirement health benefit plan for employees who are members of this bargaining group before July 1, 2015 as the sole and exclusive health benefit plan for such employees who retire with the intent to provide coverage to said employees after the resolution is approved by CaIPERS and a contract for a health benefit plan between the City and CaIPERS is approved bythe parties. For all employees hired prior to July 1, 2015, if upon retirement the employee enrolls in the City's CaIPERS medical care plan, the City will pay the minimum employer contribution to CaIPERS that is required by Government Code Section 22892. In addition the City will also pay into the retiree's individual health reimbursement account, or similar reimbursement plan an amount equal to the difference of the City's minimum employer contribution required by Government Code section 22892 and the premium cost for retiree -only coverage in the retiree's chosen medical plan. Resolution No. 2018-250 Page 9 I�etiM°ee I-lealt6 I enefit Plan for Em to eek I -lir d' n or AfteLLul 1. 2015 The City Council shall adopt and file an appropriate resolution with the Board of Administration of the Public Employees Retirement System (CaIPERS) whereby the City will elect to obtain a postretirernent health benefit plan for all employees who become members of this bargaining unit on or after July 1, 2015 as the sole and exclusive health benefit plan for such employees who retire, with the intent to provide coverage to said employees after the resolution is approved by CaIPERS and a contract for a health benefit plan between the City and CaIPERS. For all employees hired on or after July 1, 2015, if upon retirement the employee enrolls in the City's CaIPERS medical care plan, the City will pay the minimum employer contribution to CaIPERS that is required by Government Code Section 22892. In addition the City will make a contribution to the retiree's individual health reimbursement account, or similar reimbursement plan, based upon the employee's years of service to the City as follows: Credited Years ofService Percentage of Amount 5 years or less of service 0% of the premium cost for retiree -only coverage in the retiree's chosen medical plan, less the City's minimum employer contribution to CaIPERS 6 to 10 full years of service 20% of the premium cost for retiree -only coverage in the retiree's chosen medical plan, less the City's minimum employer contribution to CaIPERS 11 to 15 full years of service 0% of the premium cost for retiree -only coverage in the retiree's chosen medical plan, less the City's minimum employer contribution to CaIPERS 16 to 20 full years of service 60% of the premium cost for retiree-only,coverage in the retiree's chosen medical plan, less the City's minimum employer contribution to CaIPERS 21 to 25 full years of service 80% of the premium cost for retiree -only coverage in the retiree's chosen medical plan, less the City's minimum employer contribution to CaIPERS 26+ full years of service 100% of the premium cost for retiree -only coverage in the retiree's chosen medical plan, less the City's minimum employer contribution to CaIPERS. For employees that retire on Industrial Disability before age 57, the employee will be treated as having served for the number of years of his or her actual service to the City plus the number of additional years he or she would have served at age 57. The city will provide a vision plan to all affected employees, and will contribute up to a Resolution No. 2018-250 Page 10 maximum premium cost of $32.12 per month. If the premium exceeds this amount, then the employee shall be responsible to paythe difference in excess of $32.12 Life Insurance Effective January 1, 2009, the City will fund term life insurance in the face amount of $50,000. Effective June 1, 1993, the City will provide for the dental plan enhancement of orthodontics to the "Reimbursable Plan Choice" of the City's dual choice dental plan. The additional cost for this enhancement will be paid for by the City. Those affected individuals currently enrolled in the "Pre -paid Plan Choice" presently receive this benefit. Lon TerM Disabfl The City will provide each employee with long-term disability insurance coverage as set forth in the plan on file in the Personnel Office. Effective June 1, 1993, affected employees will be eligible to receive benefits commencing on the 31st day of non -work related injury or illness, and employees will be eligible to receive a maximum benefit of 66 2/3% of their current base salary up to a maximum of $5,000 per month. Retirement The City will pay 100% of the employer's contribution to the CalPERS retirement program and provide retirement benefits at the 3% at 50 formula as currently specified under the City's contract with the California Public Employees' Retirement. All such employee contributions shall be deposited in the member's retirement accounts. The employee will pay 100% of the employee contribution. Effective as soon as reasonably practical and consistent with CalPERS documentary requirements, the City shall amend its contract with CalPERS to provide for Level V of the 1959 Survivors' Benefit, conditioned upon said amendment resulting in no increased CalPERS City contribution rate or other CalPERS cost and no decrease in the City CalPERS accountvalue. I The City shall pay an additional one hundred fifty dollars ($150.00) per month to a person who is capable of speaking, reading, writing and/or interpreting the languages of Spanish, Chinese, Japanese, Vietnamese, Tagalog, Signing, Armenian and Farsi. Determination of capability shall be made by qualifying tests established by the City. Tuition Reimbursement Effective July 1, 2004, the City agrees to reimburse Police Management members for educational expenses up to a maximum of $3,000 per fiscal year. In order to qualify Resolution No. 2018-250 Page 11 for the reimbursement said employee must attend a nationally accredited college or university and shall receive a "C" or better as a completion grade' for the specific course. Employee will continue to process the tuition reimbursement as stated within the City's current policy. An employee shall be responsible to pay back the City if said employee separates from employment within two (2) years of receiving the reimbursement. Each member who possesses any of the following degrees: Associate of Arts/Science, Bachelor of Arts/Science, Master of Arts/Science or Doctorate from a nationally accredited college or university shall be eligible to receive the following compensation: Associate of Arts/Science 2% increase to base salary Bachelor of Arts/Science 8% increase to base salary Masters of Arts/Science 10% increase to base salary Doctorate 12% increase to base salary Effective the first full pay period after ratification by both parties the City shall pay each sworn employee in PMA bargaining group a monthly POST Certificate payment based upon the employee's receipt of the following POST Certificates as set forth below: A. $750.00 monthly for a Management POST Certificate B. $560.00 monthly for Advanced POST Certificate C. $500.00 monthly for a Supervisory POST Certificate In addition to the Management POST certificate eligible employees can also receive an Advanced Certificate POST incentive, but not the Supervisory POST incentive pay. Employees who hold a Supervisory and Advanced POST Certificate are eligible to receive both incentives. Section 4 - Attendance and Leaves Sick Leave Sick leave shall accrue at the rate of 3.6923 hours on a biweekly basis and shall be debited on an hourly basis. Effective September 7, 1994, each eligible affected employee shall elect their maximum sick leave hours accrual. Dependent upon the total number of currently accrued sick leave hours, the maximum sick leave hour's accrual may be set at 300 hours, 600 hours or 900 hours. If an eligible affected employee wishes to elect a Resolution No. 2018-250 Page 12 maximum sick leave accrual level that is at a higher level than their currently accrued sick leave hours, they may do so. The maximum accrual elected by the affected employee will be irrevocable. Once the election is made by the employee, such excess hours will be removed from the employee's sick leave hours accrual, calculated at their then straight time hourly rate and placed into a sick leave hours bank to be paid at a maximum of 50% of the total value with the timing and method of payment to be determined bythe City. When an employee's service with the City is terminated for any reason, no compensation shall be paid for unused sick leave. Annual Sick Leave Incentive Sick leave shall accrue on a biweekly hourly basis and shall be debited on an hourly usage basis. Each January 1, eligible employees will commence to accrue sick leave hours above their prior elected sick leave hours bank (300, 600 or 900). At the close of the calendar year, each eligible employee will receive 50% of the unused portion of sick leave hours as compensation, calculated at their then straight time hourly rate. Payment will be made atthe next closest pay period. Bereavement Leave Each classification represented by the Association shall receive the equivalent of three(3) working days per incident, as needed, for a death in their immediate family. Immediate family shall mean and include only the employee's spouse, children, step- children, parents, brothers, grandparents, State Registered Domestic Partner, spouse's parents, and spouse's grandparents. Said time will not be cumulative from one twelve month period to another nor will pay in lieu of unused leave for bereavement is provided. Vacation Leave The general policy and accrual levels of vacation will be set forth in Section 11.3 of the Personnel Rules. Employees will be entitled to utilize accrued vacation leave after completion of six (6) months continuous employment with the City. Employees may be eligible to utilize accrued vacation leave at an earlier time, upon written request to and approval of their department head. The times during which an employee may take his/her vacation leave shall be determined by the department head with due regard for the wishes of the employee and for the needs of the service. Employees shall, each calendar year, be required to take a minimum of forty (40) consecutive hours vacation leave. In addition, an employee may, with approval of the department head use vacation leave in lesser increments during the Resolution No. 2018-250 Page 13 calendar year. Employees may accumulate up to a maximum of two (2) vacation periods in any one calendar year for the purpose of a vacation leave with approval of the department head. A vacation period is defined as the maximum amount of vacation leave accrued by an employee in any calendar year. Effective July 3, 2005, the maximum accrual of vacation leave that may be accumulated shall be as follows: 1. Employees having less than five (5) years of employment (vacation accrual = 96 hours per year), the maximum amount of vacation that may be accumulated shall be 192 hours. 2. Employees having more than five (5) years but less than ten (10) years of employment (vacation accrual = 120 hours per year), the maximum amount of vacation that may be accumulated shall be 240 hours. 3. Employees having more than ten (10) years but less than fifteen (15) years of employment (vacation accrual = 144 hours per year), the maximum amount of vacation that may be accumulated shall be 288 hours. 4. Employees having more than fifteen (15) years but less than twenty (20) years of employment (vacation accrual =168 hours per year), the maximum 5. Amount of vacation that maybe accumulated shall be 336 hours. 6. Employees having more than twenty (20) years of employment (vacation accrual = 192 hours per year), the maximum amount of vacation that may be accumulated shall be 384 hours. If an employee, because of business necessity, is not able to utilize excess accrued vacation hours, upon written request to, and approval of the department head, an employee will be given an extension in order to take his/her vacation. In cases where the employee forfeits vacation leave time at the request of the City, upon approval of the Chief Executive Officer or designated representative(s), said employee shall be compensated for forfeited vacation leave time at the employee's current rate of pay. It is the employee's responsibility to schedule vacation time well in advance to avoid forfeiting his or her vacation or to avoid anyconflicts. Employees will be notified on a quarterly basis of their current and potential maximum vacation hours accrual for the calendar year to assist them in the reduction of excess accrued vacation hours. In the event a legal holiday falls during a vacation leave, such holiday shall not be charged as vacation leave, and the vacation leave shall be extended or credited accordingly. Resolution No. 2018-250 Page 14 Employees who separate from the service of the City shall be eligible to receive compensation for all unused, accrued vacation leave. Administrative Leave Effective the first full pay period after ratification, each employee in the position of Police Captain shall receive a maximum of sixty (60) hours of administrative leave with pay each fiscal year. The use of such leave shall be at the reasonable discretion of the employee's department head. Unused time at the end of each fiscal year, June 30, will be paid during the following month of July with said time being calculated at their then straight time hourly rate. Holid For employees working a 4/10 plan or a 3/12 plan, the following days shall be observed as holidays: January 1st; the third Monday in February; the last Monday in May; July 4th; the first Monday in September; November 11th; the fourth Thursday in November; December 24th; December 25th and such other days as may be designed as holidays by motion of the City Council. If any of the foregoing holidays fall on a Friday or a Saturday, the holiday will not be observed on the preceding Wednesday or Thursday. If any of the holidays fall on a Sunday, the Monday following is the holiday in lieu thereof. 4 1. Employees working a 3/12 plan will receive one (1) twelve (12) hour day of floating leave, for a total of 12 hours. 2. Employees working a 4/10 plan will receive two (2) ten (10) hour days of floating leave, for a total of 20 hours. Shift Emto es Employees assigned to shifts other than normal business hours, shall have the option of receiving the holiday hours worked as cash payment at their straight time rate for each holiday as it occurs, other than floating holiday time, or may elect to bank the holiday hours as the holiday occurs, other than floating holiday time. The times during which an employee may take his/her holiday bank hours shall be approved bythe department head with due regard for the wishes of the employee and for the needs of the service. This holiday bank leave shall Resolution No. 2018-250 Page 15 be used in the increment of the employees assigned work schedule, e.g., 8, 9, 10 or 12 hours. Employees may accumulate up to a maximum of one hundred (100) hours of holiday bank time. However, upon implementation by the City of accounting procedures and rFnethods whereby use of holiday If an employee, because of business leave in increments of one (1) hour or more can be reasonably documented, affected employees shall be provided the option of using holiday leave in such amounts of time. Although the City shall endeavor in good faith to institute such an accounting process, it shall remain the sole discretion of the City to determine when such a modified accounting process can be reasonably implemented. Necessity is not able to utilize excess accrued holiday bank hours, upon written request to, and approval of the department liead, an employee will be paid for any excess hours over their maximum holiday bank hours accrual. Each January 1, such excess hours will be removed from the ,employee's holiday bank hours accrual, calculated at their then straight time hourly rate and placed in a holiday hours bank to be paid not later than June 30 of the same year. Employees who separate from the service of the City shall be eligible to receive compensation for all unused, accrued holiday bank hours at his/her straight time rate. Non -shift Emplo ee At the beginning of each calendar year, the City will determine how many of the set holidays fall on a Friday and/or Saturday. An employee will be credited with an equivalent number of hours of holiday time ("holiday bank"), Each affected employee will also be credited with the above floating holidays. The actual date for the use of such leave shall be subject to the approval of the employee's appointing authority. This holiday bank leave shall be used in the increment of the employees assigned work schedule, e.g., 8, 9, 10 or 12 hours. Employees may accumulate up to a maximum of one hundred (100) hours of holiday bank time. If an employee, because of business necessity, is not able to utilize excess accrued holiday bank hours, upon written request to, and approval of the department head, an employee will be paid for any excess hours over their maximum holiday bank hours accrual. Each January 1, such excess hours will be removed from the employee's holiday bank hours accrual, calculated at their then straight time hourly rate and placed in a holiday hours bank to be paid not later than June 30 of the same year. If an employee separates employment from the City, and has used holiday bank time prior to the occurrence of the actual holiday, he/she will have his/her vacation' bank, administrative leave and/or final paycheck reduced to .reflect the excess holiday bank time used. If an employee separates employment from the City, and has not used any eligible accrued holiday bank time, he/she will be paid for such eligible holiday Resolution No. 2018-250 Page 16 bank time at his/her straight time rate. Military Leave An employee granted military leave pursuant to Section 11.6 of the Personnel Rules shall not be granted additional compensation when such leave extends beyond the employees regularly scheduled four (4) workdays per week to his/her "Friday" day off. Jury Duty An employee granted jury duty leave pursuant to Section 11.7 of the Personnel Rules shall not be granted additional compensation when such leave extends beyond the employees regularly scheduled four (4) days per week to his/her "Friday" day off. When an employee is scheduled to attend a conference or training program Monday through Friday, his/her work hours will be 8:00 a.m. to 5:00 p.m., Monday through Friday, so there is no issue that he/she is eligible for additional compensation while attending the conference or training. Iniury on Dut While any employee is on injury on duty status, his/her work hours will be 8:00 a.m. to 5:00 p.m., Monday through Friday, so there is no issue that he/she is eligible for additional compensation while receiving treatment or keeping doctor's appointments. Section 5 -Work Schedules The City agreed to implement an experimental 4/10 plan for all affected employees in the Police Department effective August 2, 1993. The Association recognizes that the City may, at its sole discretion, end the 4/10 plan at any time. The termination of such 4/10 plan is not subject to the grievance process or any other administrative review. The Association recognizes that the 4/10 plan is not a vested right in any manner, and that the termination of such 4/10 plan is not subject to the meet and confer process or meet and consult process. 3/12 Work. Schedule The 3/12 work schedule for Patrol Lieutenants was approved for implementation to take place January 7, 1996. Detailed scheduling and department procedures relating to this work schedule will be resolved by the operations division commander after implementation. Resolution No. 2018-250 Page 17 Probation.g r P eri d Probationary period is (12) twelve months. Workday Police Captains assigned to City Hall, shall have a standard workday consisting of ten and one-half (10 1/2) hours, nine hours and fifty minutes (9:50) of work time and forty (40) minutes as a non -paid unrestricted meal period. Meal periods shall be in accordance with department administrative guidelines. Patrol Lieutenants shall have a standard workday consistent with other patrol officers working on the 3/12 program, which will include a paid restricted meal period of one-half (1/2) hour. Meal periods shall be in accordance with department administrative guidelines. Employees will be provided two (2) ten (10) minute rest breaks during the day, one each approximately at the midpoint of each one-half workday. Rest time is not cumulative beyond the half scheduled workday within which the break period occurs nor may it be used to extend lunch or shorten the workday. Hours of Work Police Captains assigned to City Hall, shall work Monday through Thursday, 7:30 a.m.-to 6:00 p.m. Patrol Lieutenants shall work their assigned shifts as scheduled. The Police Lieutenant assigned to Investigations shall work four (4) days per week, 7:00 a.m. to 5:30 p.m. Section 6 - Overtime Overtime Police Captains shall not be eligible for overtime compensation in any form. on - Overtime Authorization Section are as to Police UeUtenants) All overtime requests must have the prior written authorization of a supervisor prior to the commencement of such overtime work. Where prior written authorization is not feasible, explicit verbal authorization must be obtained. Where verbal authorization is obtained, written authorization must be obtained as soon thereafter as practicable. Dispatched calls beyond the end of duty time are considered as authorized. Resolution No. 2018-250 Page 18 An employee's failure to obtain prior written approval, or explicit verbal authorization followed by written authorization, will result in the denial of the overtime request. Employees are cautioned not to spend excessive amounts of time at their workstation before or after their normal work period or during their meal breaks. Meal breaks should be taken away from the employee's workstation. This incidental time will not be compensated in any manner whatsoever unless prior authorization of supervisor is ottained. Except as provided below, employees are not authorized to wear their uniforms or any part thereof that is distinguishable as such unless on -duty. Each employee is provided with a locker for their own personal convenience. An employee may or may not utilize the locker for storage and changing purposes at their own discretion. Nothing herein prevents a sworn employee from wearing their uniform to and/or from their residence to and/or from work as long as the badge and insignia are covered by a non- police issue garment such as a windbreaker. Employees choosing to wear their uniforms covered to and/or from work should not wear their "Sam -Browne" belt. Time spent in changing clothes before or after a shift is not considered hours worked and is not compensable in any mannerwhatsoever. ShiftTrades The practice of shift trading shall be voluntary on behalf of each employee involved in the trade. The trade must be due to the employee's desire or need to attend to a personal matter and not due to the department's operations. The employee providing the trade shall not have their compensable hours increased as a result of the trade; nor shall the employee receiving the trade have their compensable hours decreased as a result of the trade. Any hours worked beyond the normal workday will be credited to the individual actually doing the work. "Payback" of shift trades are the obligation of the two employees involved in the trade. Payback are to be completed within twelve (12) months of the date of the initial shift trade. Any dispute as to payback is to be resolved by the involved employees, and under no circumstances will the department be obligated for any further compensation whatsoever to any of the involved employees. The department is not responsible in any manner for hours owed to employees by other employees that leave the employment of the City or are assigned otherduties. A record of all initial shift trades and payback shall be maintained by the involved employees on forms provided bythe department ("Shift Trade Log"). If one individual fails to appear for the other (regardless of the reason), the person who agreed to the shift trade is the newly scheduled officer and will be held responsible for that shift period. That person will be listed as absent without leave Resolution No. 2018-250 Page 19 and may be subject to disciplinary action. Early Relief Polipy The practice of early shift relief, shall be voluntary on behalf of each employee involved in the relief. The employee providing the early relief shall not have their compensable hours increased as a result of the early relief. "Payback" of early relief hours are the sole obligation of the two employees involved in the early relief. Any dispute is to be resolved by the involved employees, and under no circumstances will the department be obligated for any further compensation whatsoever to any of the involved employees. The department is not responsible in any manner for hours owed to employees by other employees that leave the employment of the City or are assigned other duties. All members of the department training while on duty. Employees who than the required qualification dates Such time is not counted as working whatsoever. are required to qualify and receive remedial choose to shoot at the range at times other will be considered to be on personal time. time and is not compensable In any manner Employees who are provided with a City vehicle to travel to and from work shall not be compensated in any manner whatsoever for such travel time in the City vehicle. This provision also applies in those situations where the radio must be left on and monitored. The City provides a gym facility for the voluntary use of employees during their off duty hours. Time spent by employees in working out at the gym facility is not considered hours worked and will not be compensated in any manner, Call back duty occurs when an employee is ordered to return to duty on a non- regularly scheduled work shift. Call back does not occur when an employee is held over from their prior shift or is working prior to their regularly scheduled shift. An employee called back to duty shall be credited with a minimum of two (2) hours work commencing when they report to duty. Any hours worked in excess of two (2) hours shall be credited on an hour for hour basis for actual time worked. Travel time shall not be considered hours worked and shall not be compensated in any Resolution No. 2018-250 Page 20 manner whatsoever. Call back duty hours will be compensated at time and one-half rate irrespective of the total paid leave exclusions for the work period. This provision is to be distinguished from "Court Pay" which is to be used when an employee is called back to court. Court Pay When an employee is physically called to court for appearances, he/she shall be credited with' a minimum of four (4) hours work commencing when he/she reports to court. Any hours worked in excess of four (4) hours shall be credited on an hour for hour basis for actual time spent in court. Travel time shall not be considered hours worked and shall not be compensated in any manner whatsoever. Court pay will be compensated at time and one-half rate, irrespective of the total paid leave exclusion for the work period. Court Standby? Court Standby time is not considered hours worked under the Fair Labor Standards Act. However, in recognition of the City's past practice, the employee will continue to receive credit for two (2) hours in the a.m. and two (2) hours in the p.m., provided that the employee is not actually required to be present in the court buildings. Court standby will be paid only for an employee's assigned regular days off, that fall Monday - Friday. Attendance at training schools/facilities (including the academy), which improves the performance of regular tasks and/or prepares for job advancement are not compensable for hours in excess of the employee's normal work shift. Any time spent in excess of the normal work shift will not be counted as working time and is not compensable in any manner whatsoever. Time spent in studying and other personal pursuits is not compensable hours of work, even though the employee may be confined to campus or to barracks 24 hours a day. Travel time to and from the training facility outside of an employee's normal work shift is not compensable hours of work. Mandatory training as required by the Department and/or P.O.S.T. is compensable for actual time spent in training. Resolution No. 2018-250 Page 21 Work Period The work period for the covered classification of 'Police Lieutenant within the bargaining group shall be seven (7) days in length. Overtime Compensation For purposes of calculating overtime, all Police Lieutenants required to work in excess of the standard work period of forty (40) hours in a seven (7) day cycle shall receive compensation at the rate of time and one-half their regular rate of pay. Effective November 1, 2004, in addition to regular overtime a Police Lieutenant will be entitled to MOU Overtime as follows: A Police Lieutenant that is taking a vacation, Holiday Bank and/or compensatory leave during their regular scheduled work week and is called into work on an overtime assignment or is required to work past their regular shift will be compensated at one and one-half (1.5) times the employee's regular rate of pay. A Police Lieutenant that is required to work on any City recognized Holiday will be compensated at the regular rate of pay and will also receive either twelve (12) hours of Holiday Bank time or twelve (12) hours of paid straight time at the employee's regular rate of pay. The employee may elect to choose whether he/she receives the twelve (12) hours of Holiday Bank time or twelve (12) hours of straight time at the regular rate of pay. An employee who is called into work outside of the employee's regular shift and that day happens to fall on a City recognized Holiday said employee will be compensated at one and one (1.5) times the employee's regular rate of pay. Paid Leave Exclusions In determining a Police Lieutenant's eligibility for overtime compensation in a work period, paid leaves of absences and unpaid leaves of absences shall be excluded from the total hours worked. To the extent authorized by law, paid leave of absences which shall be excluded include: 1. Sick Leave 2. 4850 Time Leave 3. Jury Duty 4. Administrative Leave 5. Bereavement Leave Resolution No. 2018-250 Page 22 6. Military Leave 7. Workers Compensation Leave (IOD) q9 Imp- ensatory_iIIM_e. In lieu of receiving cash payment for hours worked in excess of forty (40) hours during the seven (7) day work period, a Police Lieutenant may elect the option of earning compensatory time, and shall have a cap of one hundred fifty (150) hours placed on the accrual of compensatory time off. The, time during which an employee may take their compensatory time shall be approved by the department head with due regard for the wishes of the employee and for the needs of the service. Should this provision be found invalid by an arbitrator, court of competent jurisdiction or the Department of Labor, the accrual of the compensatory time shall cease and all accrued compensatory time shall be paid at the employee's current straight time rate. On or before December 31 of each year, an employee shall reduce their accrued compensatory time bank to forty (40) hours or less. Any time in excess of forty (40) hours shall be paid at the employee's current straight time rate unless advance, written approval of the employee's department head and the Executive Team is obtained to carry over all or part of the excess of forty (40) hours. Upon separation from City service, accrued compensatory time of eighty (80) base rate. s an employee shall be compensated for all hours or less at their straight time hourly The City agrees that in the event the Department of Labor issues new or revised interpretative regulations defining what is and what is not compensable hours of work, the City shall amend any affected provisions of this language to comply with such regulations. The Association recognizes that there will be no retroactive application of such regulations under this Memorandum of Understanding unless so provided bythe regulations or courts. Section 7 - Policies and Procedures I I LOB The pay periods and times of delivery of payroll checks for all employees shall be set bythe Executive Team. The City may deduct regular dues of employee members of the recognized employee organization. Dues deduction shall be made only on the written authorization of the employee. Dues deduction authorization may be canceled and the Resolution No. 2018-250 Page 23 dues deduction discontinued at any time by the employee upon voluntary written notice to the Personnel Services Division. Uniforms - Lieutenants,stain Effective July 1, 2015 the City will provide $900.00 per year for eligible employees by adding this amount to each employee's paycheck but will not increase the employee's base salary. The City shall continue to provide new employees with two (2) complete uniforms (excluding shoes) upon commencing employment with the City. Employees shall be responsible for the replacement of uniforms due to normal wear and tear. If an employee's uniform is damaged during the execution of their duties said employee will document in a police report or inter -office memorandum the circumstances surrounding the damage. The City shall provide the employee with a replacement uniform equivalent to the one that was damaged. Effective July 4, 1993, sworn personnel will have the option of selecting a light duty jacket or heavy-duty jacket as part of their uniform. Disci linar A eal Procedures Classifications represented by the Association will be subject to the disciplinary procedures as setforth in Section 14ofthe Personnel Rules. American's With Disabil'itiesAct Because the ADA requires accommodations for individuals protected under the Act, and because these accommodations must be determined on an individual, case- by-case basis, the parties agreed that the provisions of this agreement may be set aside in order for the City to avoid discrimination relating to hiring, promotion, granting permanency, transfer, layoff, reassignment, termination, rehire, rates of pay, job and duty classification, seniority, leaves, fringe benefits, training opportunities, hours of work or other terms and privileges of employment. The Association recognizes that the City has the legal obligation to meet with the individual employee to be accommodated before any adjustment is made in working conditions. The Association will be notified of these proposed accommodations prior to implementation bythe City. Any accommodation provided to an individual protected by the ADA shall not establish a past practice, nor shall it be cited or used as evidence of a past practice in the grievance procedure. Prior to setting aside any provision of this agreement in order to undertake required accommodations for an individual protected by the Act, the City will provide the Association with written notice of its intent to set aside the provision, and will allow the Association the opportunity to discuss options to setting aside of any provisions. Resolution No. 2018-250 Page 24 It is the purpose of this policy to eliminate substance abuse and its effects in the workplace and to ensure that employees are in a condition to perform their duties safely and efficiently, in the interests of their fellow workers and the public as well as themselves. Policy It is the City's policy that employees shall not be under the influence of or in unlawful possession of alcohol or illegal drugs while on city property, at work locations, or while on duty; shall not utilize such substances when they are assigned to be on call for duty; shall not possess, provide or sell illegal drugs to any other employee or to any person while on duty; nor have their ability to work impaired as a result of the use of alcohol or illegal drugs. While use of medically prescribed medications and drugs is not per se a violation of this policy, the employee must notify his/her supervisor, before beginning work, when taking medication or drugs (including the possible effects of taking such medication or drugs) which the employee believes may interfere with the safe and effective performance of duties or operation of equipment. In the event there is a question regarding an employee's ability to safely and effectively perform assigned duties -while using such medications or drugs, clearance from their physician may be required. The City is committed to providing reasonable opportunity for rehabilitation for those employees whose drug or alcohol problem classifies them handicapped under federal and/or state law. Persons whose use of drugs or alcohol prohibits them from performing the duties of their position, or whose use constitutes a direct threat to property or the safety of others, are not considered handicapped under federal or state law. Application This policy applies to all employees of the City of Baldwin Park. This policy applies to alcohol and to all substances, drugs, or medications, legal or illegal, which could impair an employee's ability to effectively and safely perform the functions of the job. Ems I�silillts An empLoyee n est; Resolution No. 2018-250 Page 25 a. Refrain from the use of, or unlawful possession of, illegal drugs or narcotics while on duty; b. Not reportto work while his/her abilityto perform duties is impaired due to alcohol or drug use; c. Not possess or use alcohol or impairing drugs (illegal drugs and prescription drugs without a prescription) during working hours or at anytime while on city property, unless authorized bythe Police Department; d. Not directly orthrough a third party sell or provide illegal drugs to any person, including any employee, while either employee or both employees are on duty; e. Notify his/her supervisor, before beginning work, when having consumed alcohol or when taking any medications or drugs, prescription or non- prescription, which the employee believes may interfere with the safe and effective performance of duties or operation of equipment; f. Report to their supervisor of any criminal drug statute conviction no later than five (5) days after such conviction; g. Reportto the supervisor when they have knowledge of objective evidence those other employees may be underthe influence of drugs or alcohol or engaging in illegal drug related activities. Employees who believe they may have an alcohol or drug usage problem are urged to voluntarily seek confidential assistance through their medical plans orthrough other resources available in their community. While the City will be supportive of those who seek help voluntarily, the City will be equally firm in identifying and disciplining those who continue to be substance abusers and do not seek help. Notwithstanding the above language, Section 3.01(B) of the Baldwin Park Police Manual will be taken into consideration for all sworn employees of the Police Department. Mana eent Res onsibilities 1, Managers and supervisors are responsible for reasonable enforcement of this policy. 2. Notifythe affected contract/granting agencywithin ten (10) days after receiving notice of any conviction. 3. Prepare and distribute to all employees, a summary of available benefits through the various health plans. Information to be distributed through the Personnel Services office. 4. To treat any cases where rehabilitation is recommended or already underway Resolution No. 2018-250 Page 26 as a medical situation, subjectto current medical leave policies. 5, To maintain strict confidentiality on all matters arising under the provision of this policy. Medical information, if necessitated, will be maintained by Personnel Services in separate, secured files. 6. Information will only be shared where there is a bona fide "need to know" by management in instances where referrals, rehabilitation, medical leaves, work accommodation, discipline orotheremployment related decisions areaffected. 7. As with all policies and procedures, any incident or situation requiring management attention is expected to be given thorough and deliberate consideration before any final action is taken, especially in disciplinary cases. Decisions made on such cases under this policy will be subject to review by an individual's department head, and Personnel/Risk Manager. Section 18, of the Personnel Rules, relating to smoking in the City workplace will be amended to read as follows: 18.1 Purpose The purpose of this policy is to set forth City Council direction in regard to smoking by City employees in City facilities and to encourage non-smoking by City employees in the workplace. This policy is necessary because such smoking is recognized as a hazard to the health of smokers and non-smokers alike. All employees must be aware of the provisions of City Council Ordinance No. 1232, which prohibits smoking by anyone in and around City -owned premises and public parks and other recreational facilities. City owned premises is defined as a building or site owned and occupied, or leased and occupied, by the City of Baldwin Park for any municipal function, and includes the entire site of the City -owned premises and all structures thereon. City owned premises shall not include any public sidewalk adjacent to the site or City - owned premises, nor any building owned in part by the Baldwin Park Redevelopment Agency which is also partly owned by a private individuals or Owner Participation Agreement. City -owned premises include, but are not limited to, City Hall, the City Yard, and the site occupied by the City Housing Authority. Public Park means any park, roadside rest, or other site designated by the City of Baldwin Park for any recreational purpose which is owned, managed or controlled by the City, and includes the entire site of the public park, all structures thereon, and any public sidewalk adjacent to that site. Public Park includes, but is not limited to, the Julia McNeill Senior Center, the Esther Snyder Community Center, Morgan Park, Barnes Park, Hilda Solis Park, Walnut Creek Nature Park, and the Baldwin Park Teen Resolution No. 2018-250 Page 27 Center and Skate Park. This policy governs all areas of city -owned buildings not considered to be public access areas and not therefore, governed by Ordinance No. 1232. These areas would include employee offices, rooms or hallways not normally open to the public, employee lounges, kitchens, lunchrooms and employee break rooms, workstations, locker rooms, city vehicles and other common employee areas. Smoke or Smoking is defined as the burning of any form of tobacco, in a pipe, cigar or cigarette or any other device used for the burning of tobacco or other similar combustible material, so that the person in possession thereof can inhale and exhale the smoke there from. 18.2 Policy This policy will supersede the policy effective September 7, 1989) Effective January 1, 1995, smoking in all areas of city -owned buildings and city -owned vehicles is prohibited. Should any dispute arise from this policy, it shall be directed to the Executive Team. 18.3 Procedure The Maintenance Division shall be responsible for posting and maintaining all signs in accordance with the standards approved by the Executive Team. Signs in private offices shall be the responsibility of the office occupant. "No Smoking" signs shall be available from the Maintenance Division. Those managers and supervisors closest to employee worksites are hereby charged with the implementation of and compliance with this policy. The Executive Team is ultimately responsible for such implementation and compliance. The Human Resources Manager shall be responsible for updating this policy as necessary and communicati ng this policy to all employees. No person shall discharge, discipline or in any manner retaliate against any employee because such employee exercises any rights afford bythis policy. Limited Reo ever The parties agree to allow a reopener during the term of the MOU which shall be limited to proposed modifications to Cost of Living Adjustments. Either party shall provide written notice to the other of its intent to invoke this section, and a written description of the precise changes that are proposed. Proposed changes shall not be implemented without completion of the meet and confer process and as appropriate, completion of any impasse- resolution procedures. Resolution No. 2018-250 Page 28 IN WITNESS WHEREOF, the parties hereto have caused their duly authorized representatives to execute this Memorandum of Understanding the day, month and year noted. BALDWIN PARK POLICE MANAGEMENT EMPLOYE CITY OF BALDWIN PARK Christopher f" resident Manuel Lozano, Mayor INDEX Section 1- Rights and Recognition Resolution No. 2018-250 Page 29 Page Recognition 4 Duration of Memorandum- 4 Scope 4 Non-discrimination 5 Full Understanding, Modification 5 and Waiver No Strike; No Lock Out 6 Savings Clause 6 Section 2 - Direct Wage Payments Salary 7 Section 3 - Insurances/Supplemental Wage Payments Benefits Plan 8 Vision Plan 11 Life Insurance 11 Dental Plan Enhancement 11 Long Term Disability 11 Retirement 11 Bilingual Pay 12 Tuition Reimbursement 12 Educational Incentive 12 Section 4 - Attendance and Leaves Sick Leave 13 Annual Sick Leave Incentive 13 Bereavement Leave 13 Vacation 14 Administrative Leave 15 Holidays 15 Floating Holidays 16 Holiday Bank 16 Military Leave 17 Jury Duty 17 Training/Conference Leave 17 Injury on Duty '18 INDEX Section 1- Rights and Recognition Resolution No. 2018-250 Page 29 Page Recognition 4 Duration of Memorandum* 4 Scope 4 Non-discrimination 5 Full Understanding, Modification 5 and Waiver No Strike; No Lock Out 6 Savings Clause 6 Section 2 - Direct Wage Payments Salary 7 Section 3 - Insurances/Supplemental Wage Payments Benefits Plan 8 Vision Plan 11 Life Insurance 11 Dental Plan Enhancement 11 Long Term Disability 11 Retirement 11 Bilingual Pay 12 Tuition Reimbursement 12 Educational Incentive 12 Section 4 - Attendance and Leaves Sick Leave 13 Annual Sick Leave Incentive 13 Bereavement Leave 13 Vacation 14 Administrative Leave 15 Holidays 15 Floating Holidays 16 Holiday Bank 16 Military Leave 17 Jury Duty 17 Training/Conference Leave 17 Injury on Duty '18 RESOLUTION NO. 2018-251 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK ADOPTING A SALARY RESOLUTION TO ESTABLISH A COMPREHENSIVE PAY SCHEDULE FOR ALL FULL TIME EMPLOYEES, PART TIME EMPLOYEES AND ELECTED OFFICIALS IN ACCORDANCE WITH CALPERS GUIDELINES. WHEREAS, the City of Baldwin Park, through negotiations with various employee bargaining groups has established corresponding Memoranda of Understanding which are in full force and affect; and established individual contracts with each executive management employee; and WHEREAS, California Employees Retirement System (CaIPERS) does require all government agencies to provide and make available to the public the salary of all full- time employees, part-time employees and Elected Officials in a single salary format specified by CalPERS; and WHEREAS, the City of Baldwin Park has compiled the necessary salary data to create a single salary schedule required in compliance with the requirements of CaIPERS and has attached said report to this resolution as Exhibit with the date, January 1, 2018. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY RESOLVE AND ORDER AS FOLLOWS: SECTION 1. That this City Council does hereby approve and authorize the creation of a comprehensive City of Baldwin Park Pay Schedule that includes pay rate information for all full-time and part-time employees as well as Elected Officials, attached hereto as Exhibit to be effective on January 1, 2018. SECTION 2. Resolutions or portions thereof in conflict with this resolution are hereby repealed. SECTION 3. That the City Clerk shall certify to the adoption of this Resolution and shall forward a certified copy hereof to each Department Head and the Human Resources Manager. 1 PASSED, APPROVED, AND ADOPTED this 18th day of April, 2018. MANUEL LOZANO MAYOR ATTEST: 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 Resolution No. 2018-251 was duly adopted by the City Council of the City of Baldwin Park at a regular meeting thereof held on April 18, 2018 and that the same was adopted by the following vote to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN; COUNCIL MEMBERS: ALEJANDA AVILA CITY CLERK 0 00 o CN z Q) 0 5— § co 1 0 M LL 0 0 (D uj w U) N U) 06 (O o o C)O u am (o C 0 CL p!y O O a0 N h (dD O U (OC7 O M h V O C ',. p CO N w O cli LL — '� ER b9 Efl N O O O CL O W O O O O O O � SILO O ,,.N F- N'00 H U M...'.... N. CJ N N ',(R EA EFl (fl w ) „w..... M F- F ... V' ...... M O co N 7 O? 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E E ro C � 7 L m E m 0 �, E C +' O O O O O ro O m ® O N N 7 C 0 Q O I- (/� 4 U11S 2a.Ud- a ... Z:w 2 2LL2Q .. D - ........ d I E`rfD n O O N N L C, N N k- I- H Cc' F- N F- z a ............. ... Ia ""'i,n ° _C, a..t a..... ai a .... O O N CL Tj O b T� u �OD 00 LO :3 o =3 � V - 7 r ca Q' E a d O U V U w Z q q� q q q�q cd, �Gil q 1 lw� M.9� N Ld, C� Iii I� H., M. IN I 00 00 4Lq 6 d i N d ® c Z m RESOLUTION NO. 2018-252 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK ADOPTING A SALARY RESOLUTION TO ESTABLISH A COMPREHENSIVE PAY SCHEDULE FOR ALL FULL TIME EMPLOYEES, PART TIME EMPLOYEES AND ELECTED OFFICIALS IN ACCORDANCE WITH CALPERS GUIDELINES. WHEREAS, the City of Baldwin Park, through negotiations with various employee bargaining groups has established corresponding Memoranda of Understanding which are in full force and affect; and established individual contracts with each executive management employee; and WHEREAS, California Employees Retirement System (CaIPERS) does require all government agencies to provide and make available to the public the salary of all full- time employees, part-time employees and Elected Officials in a single salary format specified by CalPERS; and WHEREAS, the City of Baldwin Park has compiled the necessary salary data,to create a single salary schedule required in compliance with the requirements of CaIPERS and has attached said report to this resolution as with the date, January 14, 2018. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY RESOLVE AND ORDER AS FOLLOWS: SECTION 1. That this City Council does hereby approve and authorize the creation of a comprehensive City of Baldwin Park Pay Schedule that includes pay rate information for all full-time and part-time employees as well as Elected Officials, attached hereto as Exhibit to be effective on January 14, 2018. SECTION 2. Resolutions or portions thereof in conflict with this resolution are hereby repealed. SECTION 3. That the City Clerk shall certify to the adoption of this Resolution and shall forward a certified copy hereof to each Department Head and the Human Resources Manager. 1 PASSED, APPROVED, AND ADOPTED this 18th day of April, 2018. MANUELLOZANO MAYOR ATTEST: 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 Resolution No. 2018-252 was duly adopted by the City Council of the City of Baldwin Park at a regular meeting thereof held on April 18, 2018 and that the same was adopted by the following vote to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: ALEJANDA AVILA CITY CLERK I 00 / z a) :3 T- -a or a) 0 -.= cu 0 U) :3 >, LL 0 m\ uj a) uj I (n Ooo puN LJ gy U 0 CO C r O C � N O Cl) r c ', 69 r 69 69 w r ..V 7 . (c C 8 r, M O (O � d U- - U o 0 aD In r O h N 00 `o M N N r 0 ( f7 r N 6F3 (9 W (p 69 (si ............D 3.0 Cl) M N ,00 O N N CSS,. O O M� O2 000 r ti p U N N I-, n O rb9 E9 69 69 R!Y p O O '.... (o V- Il - Cl r N2 r lq zlt N r N �69 r 69 yq,69 69 c CR CD C4 00 Lq N r C2 04 L0 T tM d�d.. 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O - 17 17 -� , �, h• I� N 0..�. O O O m,.� M (O (D (O (O M 'i 17 U-) ca co (a � co CO CO 00 w H) Za 6<3 to w ;;V-> d) ff! 0 w69 M fig d) Efl Ni M V) EA V3 ff3 ,•••• • ... F �.. Ln U,) Ln LO M Ln Ln Ln (O (O (O Kj y id'i, Efl Efl 69 Efl ffl Efl ffl ER kfi.� M Efl �3 ' 9 EA 69 " 69 i V3 YER '', ffl fH di Efl � Ln O M 0 7 00 7 r 0 r O� c} 0 0 I� N 0 N 0 N�N 0 0 � M I- (D O � M O (D � O '0 Ln Ln Ln Ln (O CD (O CO (D a» (D e» M I` v> N va a0 in wwvain w <nw wvai»(fl a» inbsvaes Q ('M N M N M N M N M N LL! O w O 00 O 00 O a0 O O O O M co O Cl? '....... (O Ln LO LO L(7 L(i LO 0 Lo w w (D h I- h M Efl � f! -T V3 � EA fA ElT Ui Eii VT Efi Vi Vi Hi � 69 � 69. EA i 69 i E�9 Efi t t . ..t t �� c .m� .,.. ..... `>73 > > > a a a 7,o a > > o > > > > > a :3 z :3 L L ". 5 C f 0 n > m c� N f0 N N C N O N N - j O U W N y N C " 'a ,� E U f[0 O N N N .� n. N O (d L U O ''� N O C DM' O C C C O as N fn n.. a. 7 N w a. a .� C N. N N =3 m a �,(�(n �H olL, U) x ��C�� ° c U j C J C W moi. N C D m C C. V N J E E 12 = t m E m>> E y r _ o o o o m a� m _ v� o E o Lu a� o c o a' o oa - �(DdUll2 2aUd � � 2 2LL2Q m '"...,.�. 65.,...,, N'....,,,. N N N�.....N Z a _w . s_ a.,. a ... "....... d ...... a ... a a ....N.,...... a a a d �_a. ,,,...., •co E 0 RESOLUTION NO. 2018-253 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK ADOPTING A SALARY RESOLUTION TO ESTABLISH A COMPREHENSIVE PAY SCHEDULE FOR ALL FULL TIME EMPLOYEES, PART TIME EMPLOYEES AND ELECTED OFFICIALS IN ACCORDANCE WITH CALPERS GUIDELINES. WHEREAS, the City of Baldwin Park, through negotiations with various employee bargaining groups has established corresponding Memoranda of Understanding which are in full force and affect; and established individual contracts with each executive management employee; and WHEREAS, California Employees Retirement System (CaIPERS) does require all government agencies to provide and make available to the public the salary of all full- time employees, part-time employees and Elected Officials in a single salary format specified by CaIPERS; and WHEREAS, the City of Baldwin Park has compiled the necessary salary data to create a single salary schedule required in compliance with the requirements of CaIPERS and has attached said report to this resolution as Exhibit , with the date, March 25, 2018. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY RESOLVE AND ORDER AS FOLLOWS: SECTION 1.. That this City Council does hereby approve and authorize the creation of a comprehensive City of Baldwin Park Pay Schedule that includes pay rate information for all full-time and part-time employees as well as Elected Officials, attached hereto as Exhibit to be effective on March 25, 2018. SECTION 2. Resolutions or portions thereof in conflict with this resolution are hereby repealed. SECTION 3. That the City Clerk shall certify to the adoption of this Resolution and shall forward a certified copy hereof to each Department Head and the Human Resources Manager. 1 PASSED, APPROVED, AND ADOPTED this 18th day of April, 2018. MANUEL LOZANO MAYOR ATTEST: STATE OF CALIFORNIA COUNTY OF LOS ANGELES SS: CITY OF BALDWIN PARK fi I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park do hereby certify that the foregoing Resolution No. 2018-253 was duly adopted by the City Council of the City of Baldwin Park at a regular meeting thereof held on April 18, 2018 and that the same was adopted by the following vote to wit: AYES: COUNCIL MEMBERS: NOES,. COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS ABSTAIN: COUNCIL MEMBERS: ALEJANDA AVILA CITY CLERK Pi 00 I co < LO C) CL C14 z < m 0) U- 0 LLJ 00 I N n V OI O O' O 7 7 Z N N N N 7 Z OD N T I pu M O O O O O "" L] O^ M CO jjN OL O y N 3 E 0 ill O (ry v rl- M CO N a) j O o W a U- M �',..M d bN9 ami � Efl ',, w 609 o o W o `o' 0 0g 0 (O LO F= v o 0 o 13 F= U LO o LO LO r - r N c2 M N NL (14 Efl 69 b9 EH ..W t` �...... O •.N., O. M O I� V M m co O) N ol O O ((') N O ',k L6 -4 � h .' ff} EA ffl. M CO co - jy I- r rl- 69 N h 3a Efl 69 '.69 V3 69 (fl Y 0) ..._.._, N .. 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E ',,. d' (() CO h W O N' N N N N N Z CL t__j_j 97 IL "I'll't IL IL Cd I • I RESOLUTION NO. 2018-254 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK ADOPTING A SALARY RESOLUTION TO ESTABLISH A COMPREHENSIVE PAY SCHEDULE FOR ALL FULL TIME EMPLOYEES, PART TIME EMPLOYEES AND ELECTED OFFICIALS IN ACCORDANCE WITH CALPERS GUIDELINES. WHEREAS, the City of Baldwin Park, through negotiations with various employee bargaining groups has established corresponding Memoranda of Understanding which are in full force and affect; and established individual contracts with each executive management employee; and WHEREAS, California Employees Retirement System (CaIPERS) does require all government agencies to provide and make available to the public the salary of all full- time employees, part-time employees and Elected Officials in a single salary format specified by CalPERS; and WHEREAS, the City of Baldwin Park has compiled the necessary salary data to create a single salary schedule required in compliance with the requirements of CaIPERS and has attached said report to this resolution as Exhibit , with the date, October 4, 2017. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY RESOLVE AND ORDER AS FOLLOWS: SECTION 1. That this City Council does hereby approve and authorize the creation of a comprehensive City of Baldwin Park Pay Schedule that includes pay rate information for all full-time and part-time employees as well as Elected Officials, attached hereto as Exhibit to be effective on October 4, 2017. SECTION 2. Resolutions or portions thereof in conflict with this resolution are hereby repealed. SECTION 3. That the City Clerk shall certify to the adoption of this Resolution and shall forward a certified copy hereof to each Department Head and the Human Resources Manager. 1 PASSED, APPROVED, AND ADOPTED this 18th day of April, 2018. MANUEL LOZANO MAYOR ATTEST: 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 Resolution No. 2018-254 was duly adopted by the City Council of the City of Baldwin Park at a regular meeting thereof held on April 18, 2018 and that the same was adopted by the following vote to wit: AYES: COUNCIL MEMBERS NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: � . ABSTAIN:: COUNCIL MEMBERS: . ALEJANDA AVILA CITY CLERK z 9 �rc N I � p � ƒ f o C14 z ± a) k q �\ 0 « m ' ■ > LL 0CD $ \ F- < C) \ w \ \( |6-0 6-9 \ ] G ;� § 0 0 ƒ ,§ /\ \ * \ k ( \ R 7 m m # 6 \. § & k 2 m� ) n Im ■ k w ¥ .w ,w 3 m G �Q G ® S y 2 / R 7 LO ` °\ 1- \ § 2 J \ / 2 G a )06 § \. 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En Efl Efl 04 � �C ro U I o ,o .m.-i+s N a' � m O W �.,,.A. � ® � U d Vi En � 6% i9 U) m O N >� H aa ,..... o U a o 0 0 0 0 0 0 s c e c cI c t UW N U) N a ro o N a' ® m N N U) N a RESOLUTION NO. 2018-255 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK ADOPTING A SALARY RESOLUTION TO ESTABLISH A COMPREHENSIVE PAY SCHEDULE FOR ALL FULL TIME EMPLOYEES, PART TIME EMPLOYEES AND ELECTED OFFICIALS IN ACCORDANCE WITH CALPERS GUIDELINES. WHEREAS, the City of Baldwin Park, through negotiations with various employee bargaining groups has established corresponding Memoranda of Understanding which are in full force and affect; and established individual contracts with each executive management employee; and WHEREAS, California Employees Retirement System (CaIPERS) does require all government agencies to provide and make available to the public the salary of all full- time employees, part-time employees and Elected Officials in a single salary format specified by CaIPERS; and WHEREAS, the City of Baldwin Park has compiled the necessary salary data to create a single salary schedule required in compliance with the requirements of CaIPERS and has attached said report to this resolution as Exhibit , with the date, December 1, 2017. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY RESOLVE AND ORDER AS FOLLOWS: SECTION 1. That this City Council does hereby approve and authorize the creation of a comprehensive City of Baldwin Park Pay Schedule that includes pay rate information for all full-time and part-time employees as well as Elected Officials, attached hereto as Exhibit to be effective on December 1, 2017. SECTION 2. Resolutions or portions thereof in conflict with this resolution are hereby repealed. SECTION 3. That the City Clerk shall certify to the adoption of this Resolution and shall forward a certified copy hereof to each Department Head and the Human Resources Manager. 1 PASSED, APPROVED, AND ADOPTED this 18th day of April, 2018. MANUEL LOZANO MAYOR ATTEST: STATE OF CALIFORNIA p COUNTY OF LOS ANGELES u`M- SS CITY OF BALDWIN PARK I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park do hereby certify that the foregoing Resolution No. 2018-255 was duly adopted by the City Council of the City of Baldwin Park at a regular meeting thereof held on April 18, 2018 and that the same was adopted by the following vote to wit: AYES: COUNCIL MEMBERS NOES; COUNCIL MEMBERS. ABSENT: COUNCIL MEMBERS ' ABSTAIN: COUNCIL MEMBERS- ' . ALEJANDA AVILA CITY CLERK N I C) U') CN (D A U) LL 0 Cc 0 > '0 uj I lli�o O OO a 1 0 O7 N N N Z N'.. _.. __.;.N 00 Lo 41, ' M � CyOO w Lr) 000 o w cD 0 7. C 7 U 61� O �0p ~ > CJ N �, C r M 04 M r 0 0 o d r 69 69 69 0 0' LD LO r N 00 M N N N r r M EH 69 / (03-69 � r-... .... ON M O N d" m. ,. Cl) O W N M O O D LO N O O O r 000 N ti 69 M � 69 N r C0® O 0h �,,, r ~ N r- N r N 69 69 69 60 W 69 ...... „.e., N OD 2 ....C4 U) '4.... U7 r N O 00 r. 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N � N � 00 N N N N N N N M M M M M M ,� m t} r � l�-) 06,9) I I � ��I �69 I� � p � lco� M W M OBD f: ''.W � � Nd N �3i %fA ffA 69( �fH m ® 4m'i � co M OR oO r r ao 02 rn rn -6 a) a N U y` O L IL �CC Q Or 0 N cai O C0O0 In OJ M •- C 9 fD r dl h W 00 V1$, . V3 Efl Efl ER EH v W c,4 C14 cli C14 m O> '$ (D r ao w O � � ai sa a a~ d a N m a a � g S -6 a) a y` O IL C 0 N cai dl CI c,4 C14 cli C14 m O> '$ (D r ao w O � � ai sa a a~ d a N m a RESOLUTION NO. 2018-256 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK ADOPTING A SALARY RESOLUTION TO ESTABLISH A COMPREHENSIVE PAY SCHEDULE FOR ALL FULL TIME EMPLOYEES, PART TIME EMPLOYEES AND ELECTED OFFICIALS IN ACCORDANCE WITH CALPERS GUIDELINES. WHEREAS, the City of Baldwin Park, through negotiations with various employee bargaining groups has established corresponding Memoranda of Understanding which are in full force and affect; and established individual contracts with each executive management employee; and WHEREAS, California Employees Retirement System (CaIPERS) does require all government agencies to provide and make available to the public the salary of all full- time employees, part-time employees and Elected Officials in a single salary format specified by CaIPERS; and WHEREAS, the City of Baldwin Park has compiled the necessary salary data to create a single salary schedule required in compliance with the requirements of CaIPERS and has attached said report to this resolution as Exhibit , with the date, September 1, 2017. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY RESOLVE AND ORDER AS FOLLOWS: SECTION 1. That this City Council does hereby approve and authorize the creation of a comprehensive City of Baldwin Park Pay Schedule that includes pay rate information for all full-time and part-time employees as well as Elected Officials, attached hereto as Exhibit to be effective on September 1, 2017. SECTION 2. Resolutions or portions thereof in conflict with this resolution are hereby repealed. SECTION 3. That the City Clerk shall certify to the adoption of this Resolution and shall forward a certified copy hereof to each Department Head and the Human Resources Manager. 1 PASSED, APPROVED, AND ADOPTED this 18th day of April, 2018. MANUEL LOZANO MAYOR ATTEST: STATE OF CALIFORNIA COUNTY OF LOS ANGELES �` SS: CITY OF BALDWIN PARK i I, ALEJANDRA AVILA, City Clerk of the City of Baldwin Park do hereby certify that the foregoing Resolution No. 2018-256 was duly adopted by the City Council of the City of Baldwin Park at a regular meeting thereof held on April 18, 2018 and that the same was adopted by the following vote to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: AL,EJANDA AVILA CITY CLERK 2 I I IN I 6 U �� �� ) ! $ ME \ k 00 In \ /§ § I --C14= f 7�� % 2 & \ & $ ug�® @ 2.,...... 2§ ƒ k\ I,-. / \ CL 00 �) e _ �/ D :..y >�, ■ @ r r- 0 jCi / 6 < ■ LU ƒ CN _ Q _ Q Q ) ! $ ME \ k 00 In ti (D 00 0 r 00 N (D _. h LL7 LO h LO LO A N O CL r� W v (CY o N ao co l� cq v m h I Da o W LO O I® v 00 M h LO Cl) co � i- h (I yr Di �y LO .w '4'✓i LO W 69 M N O N V: U). M O 0 6,3 v> 0 v, 69 (' . h O_ N I- . 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CR Ci L�'' I�9 �c2 �269I A6 wK 6q Q O 'N d'• 00 00 M OR I- N y 0) . ',. w ffl 69� Efl 69 69 � U Q N CL Q 00 .,,, ... O �. . N co M r a) O C f® O~), � O I`d N f� a0 00 W U 7 Q Vi 6p, b9 6% 69 69 '69 E C r O a) va U W ypd y Gly pl-� m Q1d M iL� OO,.ONa z o a a a a a 00 N M. RESOLUTION NO. 2018-257 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK ADOPTING A SALARY RESOLUTION TO ESTABLISH A COMPREHENSIVE PAY SCHEDULE FOR ALL FULL TIME EMPLOYEES, PART TIME EMPLOYEES AND ELECTED OFFICIALS IN ACCORDANCE WITH CALPERS GUIDELINES. WHEREAS, the City of Baldwin Park, through negotiations with various employee bargaining groups has established corresponding Memoranda of Understanding which are in full force and affect; and established individual contracts with each executive management employee; and WHEREAS, California Employees Retirement System (CaIPERS) does require all government agencies to provide and make available to the public the salaryof all full- time employees, part-time employees and Elected Officials in a single salary format specified by CalPERS; and WHEREAS, the City of Baldwin Park has compiled the necessary salary data to create a single salary schedule required in compliance with the requirements of CaIPERS and has attached said report to this resolution as Exhibit , with the date, July 1, 2017. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY RESOLVE AND ORDER AS FOLLOWS: SECTION 1. That this City Council does hereby approve and authorize the creation of a comprehensive City of Baldwin Park Pay Schedule that includes pay rate information for all full-time and part-time employees as well as Elected Officials, attached hereto as Exhibit to be effective on July 1, 2017. SECTION 2. Resolutions or portions thereof in conflict with this resolution are hereby repealed. SECTION 3. That the City Clerk shall certify to the adoption of this Resolution and shall forward a certified copy hereof to each Department Head and the Human Resources Manager. 1 PASSED, APPROVED, AND ADOPTED this 18th day of April, 2018. MANUEL LOZANO MAYOR ATTEST: 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 Resolution No. 2018-257 was duly adopted by the City Council of the City of Baldwin Park at a regular meeting thereof held on April 18, 2018 and that the same was adopted by the following vote to wit: AYES: COUNCIL MEMBERS NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ' ABSTAIN: COUNCIL MEMBERS:' ALEJANDA AVILA CITY CLERK N I I 4 � 2 ƒ % ® cl 0 z o § 2 § ■ N ° o f m m f k ■ _ £ 2\ b �\ m k F) Q b G F-< Q. w U e CD \..... 'CO4: �C� � \ .f f \ $ / / \ \ \ & $ &a m 2 �E0 \ /� ) 4 z m R 0 C) - § # k � \} OD q, cl f D® § N ° o f m m f k ■ _ £ w m Q G Q. 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J c w a �.0 0 m C 11 N' E o)'� m v\ r m c E m �' .2 �. E d _ •� o 04 o U)a'Uaz . .... za0a �.., . _ .. a`z�� .,..., ... z iaz¢ n.....,. _6' ...... I �� E a° LLi O r O a) ON N NN N N N z 0- a a a a a R, I M M�El�m iZdI I- � C4 00 IR <fl �I v3 w �esi tl� 61) nlv3 is�� �ifl �i�� w T N fH fiT be Efi U9T EH EH L CL 0 UN A CL N Q� m, Z a O CD `7 Cq Cl V = —' U9 tfi EfT fA «a to tri c — o « U CD t, 'C o U 0 0 0 0 0 0 w T N CL 0 A CL m, Z CD w T N RESOLUTION NO. 2018-258 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK AMENDING THE EXECUTIVE EMPLOYEES BENEFITS MATRIX AND UNCLASSIFIED MANAGERS MATRIX WHEREAS, on April 18, 2018, the City Council adopted Resolution 2018-258 Approving the Executive Employee Benefits Matrix and the Unclassified Managers Benefits Matrix; and WHEREAS, the City is desirous of amending specified benefits in both the Executive Employee Benefits Matrix and the Unclassified Managers Benefits Matrix. NOW, THEREFORE, the City Council of the City of Baldwin Park does hereby RESOLVE, DETERMINE AND ORDER as follows: SECTION 1. That this City Council does hereby approve the Executive Employee Benefits Matrix attached hereto as Exhibit A. SECTION 2 That this City Council does hereby approve the Unclassified Employee Benefits Matrix attached hereto as Exhibit B. SECTION 3. That all Resolutions or portions thereof, or any previous contract or agreement, in conflict are hereby repealed and superseded by the attached Exhibits A and B. SECTION 4. That the City Clerk shall forward a copy of this resolution to the Human Resources Manager and certify to the adoption of this Resolution. APPROVED AND ADOPTED THIS 18th day of April, 2018. Manuel Lozano Mayor ATTEST: STATE OF CALIFORNIA COUNTY OF LOS ANGELES ss. CITY OF BALDWIN PARK I, LAURA M NIETO, Deputy City Clerk of the City of Baldwin Park, do hereby certify that the foregoing Resolution was duly and regularly approved and adopted by the City Council of the City of Baldwin Park at its regular meeting of the 18th day of April 2018, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: ABSENT: COUNCILMEMBERS: LAURA M. NIETO DEPUTY CITY CLERK Executive & Unclassified Managers Benefit Matrix Effective April 2018 EXECUTIVE EMPLOYEES BENEFIT MATRIX ATTACHMENT A "OST OIC LIVING AD.JU ' ]%ff,4NT The following unadjusted base salary increases shall be provided to all Executive Employees: +2% retroactive to the first full pay period of Fiscal Year 2017-18 +2% effective the first full pay period of Fiscal Year 2018-19 +2% effective the first full pay period of Fiscal Year 2019-20 INS U WIINC E/S tj P130 LEM'E TAL WAGE PAYMENTS Benefits Plan Effective the first full pay period commencing on or after July 1, 2017, the City will contribute a sum not to exceed $1,875 per month for each Executive employee towards benefits as detailed below: The employee is required to maintain a minimum coverage for himself/herself in a plan of his or her choice, unless the employee can show proof of adequate health insurance coverage through another source. In instances where the employee's medical insurance premium is less than the City's monthly contribution, such employee will have an option to have the excess monies placed toward an existing benefit program. These options include: 1. Placement in a City provided health insurance plan for self, two (2) party or family coverage. 2. Placement in a City provided dental insurance plan for self, two (2) party or family coverage. 3. Placement spread over a combination of the options listed above. 4. Elect to receive any excess monies in cash, which will be considered as taxable income, or 5. Elect to place the excess cash monies in a City provided deferred compensation program. Vision Plan Effective the first full pay period commencing on or after July 1, 2017, the City will provide a vision plan, and will contribute up to ci maximum premium cost of $37.55 per month. Dental Plan Enhancement Effective June 1, 1993, the City will provide for the dental plan enhancement of orthodontics to the "Reimbursable Plan Choice" of the City's dual choice dental plan. Additional cost for this enhancement will be paid for by the City. Those affected individuals currently enrolled in the "Pre -paid Plan Choice" presently receive this benefit. Page 1 of 12 Executive & Unclassified Managers Benefit Matrix Effective April 2018 Life Insurance The City will provide term life insurance in the face amount of $100,000. Long -Term Disahiliy and Short -Term Disability The City will provide long-term and short-term disability insurance coverage as set forth in the plan on file in the Personnel Services Office. RETIREMENT ,Retirement Miscellaneous [�Ininlovees In accordance with City Resolution 2015-094, effective October 25, 2015, employees will pay 100% of the employee's membership contribution to the California Public Employees Retirement System (Ca1PERS). All such employee contributions shall be deposited in the member's retirement. Retirement Sworn l:;amlr�y �s In accordance with City Resolution 2015-094, effective October 25, 2015, employees will pay 100% of the employee's membership contribution to the California Public Employees Retirement System (Ca1PERS). All such employee contributions shall be deposited in the member's retirement account. Retiree Health Care For all Unclassified Employees, if upon retirement the employee enrolls in the City's CalPERS medical care plan, the City will pay the minimum employer contribution to Ca1PERS that is required by Government Code section 22892. In addition, the City will also pay into the retiree's individual health reimbursement account, or similar reimbursement plan, an amount equal to the difference of the City's minimum employer contribution required by Government Code section 22892 and the premium cost for retiree -only coverage in the retiree's chosen medical plan. VE I11CL E A1j., IWA CI+ Effective the first full pay period commencing on or after July 1, 2017, the City will provide an Executive employee an amount of $500.00 per month vehicle allowance except for the Police Chief who may choose a take-home, City -owned vehicle. EL:EC"FR1 N:1C DEVICE M0N,rHLVALLOWANCE Effective the first full pay period commencing on or after July 1, 2017, the City will provide an Executive employee an amount of $150.00 per month to obtain and maintain access to personal electronic communication devices (smart phones, tablets, laptops, etc.) also used for City business. ATTENDANCE AND LEAVES Page 2 of 12 Executive & Unclassified Managers Benefit Matrix Effective April 2018 Sick Leave The general policy for sick leave will be as set forth, for all full-time employees, in Section 11.4 of the Personnel Rules. Sick leave will accrue at the rate of 3.6923 hours on a biweekly basis and shall be debited on an hourly basis. Effective September 7, 1994, each eligible employee shall elect their maximum sick leave hours accrual. Dependent upon the total number of currently accrued sick leave hours, the maximum sick leave hours accrual may be set at 300 hours, 600 hours or 900 hours. If an eligible employee wishes to elect a maximum sick leave accrual level that is at a higher level than their closest currently accrued sick leave hours, they may do so. The maximum accrual elected by the eligible employee will be irrevocable. When an employee's service with the City is terminated for any reason, no compensation shall be paid for the unused sick leave hours accrual bank. Animal Sick Leave Inoctitiv Sick leave shall accrue on hourly basis of eight (8) hours per month and shall be debited on an hourly usage basis. Each January 1, eligible employees will commence to accrue sick leave hours above their prior elected sick leave hours bank (300, 600 or 900). At the close of the calendar year, each eligible employee will receive 75% of the unused portion of sick leave hours as compensation, calculated at their then straight time hourly rate. Payment will be made at the next closest pay period. Vacation All Executive employees shall accrue vacation leave in accordance with the following: a. Employees having less than five (5) years of service with the City: 3.6923 hours on a biweekly basis for time actually worked. b. Employees having more than five (5) years of service but less than ten (10) years of service with the City: 4.6154 hours on a biweekly basis for time actually worked. c. Employees having more than ten (10) years but less than fifteen (15) years of service with the City: 5.5385 hours on a biweekly basis for time actually worked. d. Employees having more than fifteen (15) years but less than twenty (20) years of service with the City: 6.4615 hours on a biweekly basis for time actually worked. e. Employees having over twenty (20) years of service with the City: 7.3846 hours on a biweekly basis for time actually worked. Employees will be entitled to utilize accrued vacation leave after completion of six (6) months continuous employment with the City. Page 3 of 12 Executive & Unclassified Managers Benefit Matrix Effective April 2018 Bereavement Leave Each Executive employee shall receive the equivalent of their workweek per incident, as needed, for a death in his or her immediate family. Immediate family shall mean and include only the employee's spouse, children, step -children, parents, spouse's parents, grandparents, spouse's grandparents, brothers and sisters. Said time will not be cumulative from one twelve month period to another nor will pay in lieu of unused leave for bereavement be provided. Administrative Leave Effective July 1, 2004, each Executive employee shall receive a maximum of seventy- two (72) hours of administrative leave with pay each fiscal year. Unused time at the end of each fiscal year, June 30, will be paid during the following month of July with said time being calculated at their then straight time hourly rate. All Executive employees are currently working on an alternate work schedule of four (4) days, ten (10) hours. While assigned to such work schedule, the following days shall be observed as holidays: January 1st, the third Monday in February; the last Monday in May; July 4th; the first Monday in September; November 11th; the fourth Thursday in November; December 24th; December 25th; and such other days as may be designated as holidays by motion of the City Council. If any of the foregoing holidays falls on a Friday and/or Saturday, the holiday will not be observed on the preceding Wednesday or Thursday. If any of the holidays fall on a Sunday, the Monday following is the holiday in lieu thereof. Floath l_le l_d... For each Executive employee working the 4/10 plan such employee will receive two (2) ten (10) hour days of floating leave, for a total of 20 hours. At the beginning of each calendar year, the City will determine how many of the set holidays fall on a Friday and/or Saturday. An employee will be credited with an equivalent number of hours of holiday time ("Holiday Bank"). Each affected employee will also be credited with the above floating holidays. For Executive Employees working the four (4) day, ten (10) hour alternate work schedule, the holiday bank will be calculated at ten (10) hours per holiday. Employees may accumulate up to a maximum of one hundred (100) hours of holiday bank time. Each January 1, such excess hours will be removed from the employee's holiday bank hours accrual, calculated at their then straight time hourly rate and placed in a holiday hours bank to be paid no later than June 30 of the same year. If an employee separates employment from the City, and has used holiday bank time prior to the occurrence of the actual holiday, he/she will have his/her vacation bank, administrative leave and/or final paycheck reduced to reflect the excess holiday bank time used. Page 4 of 12 Executive & Unclassified Managers Benefit Matrix Effective April 2018 If an employee separates employment from the City, and has not used any eligible accrued holiday bank time, he/she will be paid for such eligible holiday bank time at his/her straight time rate. C"r: r s l ion for ccrued Leave "1"t, Notwithstanding the maximum accruals established for vacation, administrative leave and holiday bank, Executive employees may accrue up to a maximum of three (3) months of additional paid leave time composed of a combination of vacation, administrative leave and/or holiday bank time. C,ig Lt ll Qgt l inie Closure One-time City Hall closure: December 26 - 29, 2017; City to provide 20 hours of holiday time for December 27 and 28, 2017. DEFERRED COMPENSATION Effective the first full pay period commencing on or after July 1, 2017, the City will contribute $500.00 per month to each employee into a City sponsored 457 Plan on a pre-tax basis. Page 5 of 12 Executive & Unclassified Managers Benefit Matrix Effective April 2018 UNCLASSIFIED MANAGERS BENEFITS MATRIX ATTACHMENT B COST OF LIVIN1 ADJUSTMENTS The following unadjusted base salary increases shall be provided to all Unclassified Managers: +2% retroactive to the first full pay period of Fiscal Year 2017-18 +2% effective the first full pay period of Fiscal Year 2018-19 +2% effective the first full pay period of Fiscal Year 2019-20 INSURANCES/SUPPLEMENTAL WANE PAYMENTS Benefits Plan Effective the first full pay period commencing on or after July 1, 2017, the maximum amount of monies that are eligible for cash out shall be capped at $1,200 per month. Effective the first full pay period commencing on or after July 1, 2017, the City's contribution to medical and dental premiums shall be increased to $1,400 per month. The employee is required to maintain a minimum coverage for himself/herself in a plan of their choice unless the employee can show proof they have adequate health insurance coverage through another source. In instances where the employee's medical insurance premium is less than the City's monthly contribution, such employee will have an option to have the excess monies placed toward an existing benefit program. These options include: 1. Placement in a City provided health insurance plan for self, two (2) party or family coverage; 2. Placement in a City provided dental insurance plan for self, two (2) party or family coverage; 3. Placement spread over a combination of the options listed above; 4. Elect to receive any excess monies in cash, which will be considered as taxable income; or 5. Elect to place the excess cash monies in a City provided deferred compensation program. Vision Plan Effective the first full pay period commencing on or after July 1, 2017, the City will provide a vision plan to all affected employees, and will contribute up to a maximum premium cost of $37.55 per month. If the premium exceeds the amount, then the employee shall be responsible to pay the difference in excess of $37.55. Page 6 of 12 Executive & Unclassified Managers Benefit Matrix Effective April 2018 Det tail Pl.ati Enhaiiceinent Effective June 1, 1993, the City will provide for the dental plan enhancement of orthodontics to the "Reimbursable Plan Choice" of the City's dual choice dental plan. Additional cost for this enhancement will be paid for by the City. Those affected individuals currently enrolled in the "Pre -paid Plan Choice" presently receive this benefit. Life Insurance ......... The City will provide term life insurance in the face amount of $60,000 effective April 6, 2016. The City will provide a supplemental life insurance program to enable employees to purchase additional life insurance at the employee's cost and no contribution from the City. L,c���1;jertn SIT? *abirit -ind. hoit'I'e is 17i,sEibili1 W The City will provide each employee with long-term disability insurance coverage as set forth in the plan on file in the Human Resources Office. Effective June 1, 1993, affected employees will be eligible to receive benefits commencing on the 31 st day of non -work related injury or illness, and employees will be eligible to receive a maximum benefit of 66 2/3% of their current base salary up to a maximum of $5,000 per month. RETIREMENT 1;rIII�Ic c r c Before Rpnuary.j X01 The City contracts with the State of California Public Employees Retirement System (Ca1PERS) for the classifications contained in this agreement. The plan shall include the following options: 1. 2.7% @ 55 retirement formula (Government Code §21354.4); 2. Single highest year final compensation (Government Code §20042); 3. Military service credit as public service option (Government Code §21024); 4. 1959 Survivors Benefit Level I for which each employee contributes ninety-three cents ($.93) per pay period (Government Code §21571); 5. Pre -Retirement Death Benefits to continue after remarriage of survivor (Government Code §21551); 6. 2% Annual Cost of Living Allowance (Government Code §21329); 7. The City agrees to contract with Ca1PERS to include 1959 Survivors Benefit Level IV; and 8. $500 Retired Death Benefits. In accordance with City Resolution 2015-094, effective October 25, 2015, employees will pay 100% of the employee's membership contribution to the California Public Employees Retirement System (Ca1PERS). All such employee contributions shall be deposited in the member's retirement account. Fuge 7 of 12 Executive & Unclassified Managers Benefit Matrix Effective April 2018 New C'arl' 'RS ienibers "1lir cl On or After 1�lM, a ary 1� 201 The City contracts with the State of California Public Employees Retirement System (Ca1PERS) for the classifications contained in this agreement. The plan shall include the following options: 1. 2% at 62 formula (Government Code §7522.20); 2. Three (3) year average final compensation period (Government Code §20037); 3. Pre -Retirement Death Benefits to continue after remarriage of survivor (Government Code §21551); 4. Military Service Credit as Public Service (Government Code §21024); 5. 1959 Survivors Benefit Level I for which each employee contributes ninety-three cent ($.93) per pay period (Government Code §21571); 6. 2% Annual Cost of Living Allowance (Government Code §21329); 7. Employees will pay 50% of the normal cost, currently 5.5% member contribution to Ca1PERS; or as adjusted by Ca1PERS 8. The City agrees to contract with Ca1PERS to include 1959 Survivors Benefit Level IV; and 9. $500 Retired Death Benefits Retiree Health Care For all Unclassified Employees, if upon retirement the employee enrolls in the City's Ca1PERS medical care plan, the City will pay the minimum employer contribution to Ca1PERS that is required by Government Code section 22892. In addition, the City will also pay into the retiree's individual health reimbursement account, or similar reimbursement plan, an amount equal to the difference of the City's minimum employer contribution required by Government Code section 22892 and the premium cost for retiree -only coverage in the retiree's chosen medical plan. BILINGUAL PAY Effective the first full pay period commencing on or after July 1, 2017, the City agrees to increase the bilingual pay amount from one hundred dollars ($100.00) to one hundred fifty dollars ($150.00) per month to a persona who is capable of speaking, reading, writing and/or interpreting the language of Spanish, Chinese, Japanese, Vietnamese, Tagalog, and Signing. Qualifying test established by the City shall make determination of capability. Re -testing of individuals will be required to determine bilingual capability in the above stated languages. Only those individuals who score at the level of "Good" or better will be eligible for bilingual pay. El. EC'I'RGNIC DEVICE KION 1wI1LY ALLOWANCE Effective the first full pay period commencing on or after July 1, 2017, the City will provide an Executive employee an amount of $100.00 per month to obtain and maintain access to personal electronic communication devices (smart phones, tablets, laptops, etc.) also used for City business. Page 8 of 12 Executive & Unclassified Managers Benefit Matrix Effective April 2018 A"I I"ENDANC , ANI.) LEAVES Sick Leave The general policy for sick leave will be as set forth, for all full-time employees, in Section 11.4 of the Personnel Rules. Sick leave will accrue at the rate of 3.6923 hours on a biweekly basis and shall be debited on an hourly basis. Each eligible employee shall elect his/her maximum sick leave hours accrual. Dependent upon the total number of currently accrued sick leave hours, the maximum sick leave hours accrual may be set at 300 hours, 600 hours or 900 hours. If an eligible employee wishes to elect a maximum sick leave accrual level that is at a higher level than their closest currently accrued sick leave hours, they may do so. The maximum accrual elected by the eligible employee will be irrevocable. Once the election is made by the employee, such excess hours will be removed from the employee's sick leave hours accrual, calculated at their then straight time hourly rate and placed into a sick leave hours bank to be paid at 75% of the total value, with the timing and method of payment to be determined by the City. When an employee's service with the City is terminated for any reason, no compensation shall be paid for the unused sick leave. iinual Sick :...Leave Incentive. Sick leave shall accrue on hourly basis of eight (8) hours per month and shall be debited on an hourly usage basis. Each January 1, eligible employees will commence to accrue sick leave hours above their prior elected sick leave hours bank (300, 600 or 900). At the close of the calendar year, each eligible employee will receive 75% of the unused portion of sick leave hours as compensation, calculated at their then straight time hourly rate. Payment will be made at the next closest pay period. Bereavement Leave Each classification represented by the Association shall receive the equivalent of their workweek per incident, as needed, for a death in their immediate family. Immediate family shall mean and include only the employee's spouse, children, stepchildren, foster children, grandchildren, parents, grandparents, brothers, sisters, State Registered Domestic Partner and spouse's Parents and spouse's grandparents. Said time will not be cumulative from one twelve month period to another nor will pay in lieu of unused leave for bereavement is provided. Vacation Employees will be entitled to utilize accrued vacation leave after completion of six (6) months continuous employment with the City. Employees may be eligible to utilize accrued vacation leave at an earlier time, upon written request to and approval of their department head. The times during which an employee may take his/her vacation leave shall be determined by the department head with due regard for the wishes of the employee and for the needs of the service. Page 9 of 12 Executive & Unclassified Managers Benefit Matrix Effective April 2018 Employees shall, each calendar year, be required to take a minimum of forty (40) consecutive hours vacation leave. In addition, an employee may, with approval of the appointing authority, use vacation leave in lesser increments during the calendar year. Employees may accumulate up to a maximum of two (2) vacation periods in any one calendar year for the purpose of a vacation leave. A vacation period is defined as the maximum amount of vacation leave accrued by an employee in any calendar year, in accordance with Subsections (a), (b), (c), (d) and (e), as stated below. a. Employees having less than five (5) years of employment (vacation accrual = 96 hours per year) the maximum amount of vacation that may be accumulated shall be 192 hours. b. Employees having more than five (5) years of service but less than ten (10) years of employment (vacation accrual = 120 hours per year), the maximum amount of vacation that may be accumulated shall be 240 hours. c. Employees having more than ten (10) years but less than fifteen (15) years of employment (vacation accrual = 144 hours per year), the maximum amount of vacation that may be accumulated shall be 288 hours. d. Employees having more than fifteen (15) years but less than twenty (20) years of employment (vacation accrual = 168 hours per year), the maximum amount of vacation that may be accumulated shall be 336 hours. Employees having over twenty (20) years of employment (vacation accrual —192 hours per year). The maximum amount of vacation that may be accumulated shall be 384 hours. If the employee, because of business necessity, is not able to utilize excess accrued vacation hours, upon written request to and approval of the Department Head, an employee will be given an extension in order to take his/her vacation. In cases where the employee forfeits vacation leave time at the request of the City, upon approval of the Chief Executive Officer or designated representative(s), said employee shall be compensated for forfeited vacation leave time at the employee's current rate of pay. It is the employee's responsibility to schedule vacation time well in advance to avoid forfeiting his/her vacation or to avoid any conflicts. Employees will be notified on a quarterly basis of their current and potential maximum vacation hours accrual for the calendar year to assist them in the reduction of excess accrued vacation hours. In the event a legal holiday falls during a vacation leave, such holiday shall not be charged as vacation leave, and the vacation leave shall be extended or accredited accordingly. Employees who separate from the service of the City shall be eligible to receive compensation for all unused, accrued vacation leave. Page 10 of 12 Executive & Unclassified Managers Benefit Matrix Effective April 2018 „diiiiiiistrati've Leave Effective...... the first pay period including July 1, 2017, each employee shall receive a maximum of sixty (60) hours of administrative leave with pay each fiscal year. The use of such leave shall be at the reasonable discretion of the employee. Unused time at the end of each fiscal year, June 30, will be paid during the following month of July with said time being calculated at their then straight time hourly rate. flotida For employees working a 4/10 plan, the following days shall be observed as holidays: January 1st, the third Monday in February; the last Monday in May; July 4th; the first Monday in September; November 11th; the fourth Thursday in November; December 24th; December 25th; and such other days as may be designated as holidays by motion of the City Council. If any of the foregoing holidays falls on a Friday and/or Saturday, the holiday will not be observed on the preceding Wednesday or Thursday. If any of the holidays fall on a Sunday, the Monday following is the holiday in lieu thereof. 7 l amyl ng [( li — Employees working a 4/10 plan will receive two (2) ten (10) hour days of floating leave, for a total of twenty (20) hours. Holiday Bank At the beginning of each calendar year, the City will determine how many of the set holidays fall on a Friday and/or Saturday. An employee will be credited with an equivalent number of hours of holiday time ("holiday bank"). Each affected employee will also be credited with the above floating holidays. The actual date for the use of such leave shall be subject to the approval of the Chief Executive Officer. This holiday bank leave can be used in hourly increments and combined with other leave. Employees may accumulate up to a maximum of one hundred (100) hours of holiday bank time. If an employee, because of business necessity, is not able to utilize accrued holiday bank hours, upon written request to, and approval of the Chief Executive Officer, the employee will be paid for any excess hours over his/her maximum holiday bank hours accrual. Each January 1, such excess hours will be removed from the employee's holiday bank hours accrual, calculated at their then straight time hourly rate and placed in a holiday hours bank to be paid not later than June 30 of the same year. If an employee separates employment from the City, and has used holiday bank time prior to the occurrence of the actual holiday, he/she will have his/her vacation bank, administrative leave and/or final paycheck reduced to reflect the excess holiday bank time used. Page 11 of 12 Executive & Unclassified Managers Benefit Matrix Effective April 2018 If an employee separates employment from the City, and has not used any eligible accrued holiday bank time, he/she will be paid for such eligible holiday bank time at his/her straight time rate. kjty Hall ()n Tipic Closure One-time City Hall closure: December 26 - 29, 2017; City to provide 20 hours of holiday time for December 27 and 28, 2017. DEFERRED ED + ."OMPENSAT O l Effective the first full pay period commencing on or after July 1, 2017, the City will contribute $150.00 per month to each employee into a City sponsored 457 plan on a pre-tax basis. Mage 12 of 12 a ;bkTO: Honorable Mayor and Members of the City Council m�{ FROM: Sam Gutierrez, Interim Director of Public Works , ,P �i, . SAN, rA6IE L /'4 � DATE: April 4, 2018 E �� 11 �, SUBJECT: SECOND READING AND APPROVAL OF ORDINANCE NO. 1406, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, AMENDING CHAPTER 50 OF THE BALDWIN PARK MUNICIPAL CODE AND ENACTING A NEW SECTION IN CHAPTER 50 RELATED TO MANDATORY COMMERCIAL AND MULTI -FAMILY RECYCLING" SUMMARY This report requests City Council approval of Ordinance 1406, to amend chapter 50 of the Baldwin Park Municipal Code and add new chapter sections related to State mandated organics recycling for Commercial and Multi -Family dwellings. FISCAL IMPACT This program will have no impact on the City's General Fund. The Change in the BPMC has the potential to increase building permit activity for small construction and demolition projects funded out of pocket for affected businesses and qualifying multi -family dwellings. RECOMMENDATION Staff recommends that the City Council adopt Ordinance No. 1406 on second reading, read by title only, and waive further reading thereof. ORDINANCE NO. 1406, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, AMENDING CHAPTER 50 OF THE BALDWIN PARK MUNICIPAL CODE AND ENACTING A NEW SECTION IN CHAPTER 50 RELATED TO MANDATORY COMMERCIAL AND MULTI -FAMILY RECYCLING" BACKGROUND This Ordinance was introduced at the City Council meeting on April 4, 2018 for first reading, and at that meeting Ordinance No. 1406 was approved by the City Council. LEGAL REVIEW This report has been reviewed and approved by the City Attorney as to legal form and content. ALTERNATIVES 1. The City Council may choose not to approve the Organics Ordinance; however, this action is not recommended because it may impede the City's ability to meet strict diversion requirements in a timely manner which can make the City subject to fines. 2. Direct Staff with alternative direction. ATTACHMENT 1. Ordinance No. 1406 ORDINANCE NO. 1406 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, REPEALING AND ADDING A NEW SUBCHAPTER 50.17 (HEALTH AND SAFETY) OF THE BALDWIN PARK RELATED TO MANDATORY COMMERCIAL AND MULTI -FAMILY RESIDENTIAL RECYCLING AND AMENDING VARIOUS RELATED DEFINITIONS WHEREAS, the purpose of this new subchapter 50.17 is to establish requirements for the collection and recycling of recyclable materials and collection and organics processing of organic materials generated from commercial facilities, multifamily dwellings, and large events and venues; WHEREAS, these requirements will assist the City of Baldwin Park ("City") in complying with the Integrated Waste Management Act of 1989 (AB 939 - 1989), Large Event and Venuses Recycling Law (AB 2176 — 2004), the Alternative Compliance Act of 2008 (AB 1016 — 2008), the Mandatory Commercial Recycling Act (AB 341 — 2011) and the Mandatory Commercial Organics Recycling Act (AB 1826 — 2014); WHEREAS, these requirements will also help reduce greenhouse gas emissions associated with the mining and manufacturing of goods from virgin materials and associated with the disposal of solid waste in landfills and further protect the natural environment and human health as well as enhance the economy through increased recycling and organics processing activities; WHEREAS, in addition, adoption of this Ordinance will provide exclusions and exemptions for select waste customer, commercial generators, and large events and large venues that are not included or able to comply with this chapter or for whom this chapter poses an undue burden; WHEREAS, adoption of this Ordinance will also provide for enforcement through the use of fines for violating the requirements of the new Chapter; WHEREAS, the City Council if the City of Baldwin Park has determine that adoption of this Ordinance will serve the health, safety and public welfare of the community. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES ORDAIN AS FOLLOWS: Ordinance No. 1406 Page 2 SECTION 1. The definitions of "Commercial" and "Residential" contained in Section 50.01 (Definitions) of Chapter 50 (Solid Waste Management) shall be amended to read as follows: "Commercial means comprised of a business including any retail outlet, financial establishment, commercial warehouse, manufacturing facility, professional office, hotel or motel and automobile courts, hospital or other health care facility, any nonprofit organization (such as any church or club), and any multi -family dwellings comprised of five units or more" "Residential references single family dwellings, and multi -family dwelling less than five units. " SECTION 2. The definition of "Multi -family" contained in Section 50.01 (Definitions) of Chapter 50 (Solid Waste Management) shall be amended as follows: "Multi -family references any structure having multiple residences which many be classified as residential or commercial." SECTION 3. Chapter 50 (Solid Waste Management) of the Baldwin Park Municipal Code (BPMC) is hereby amended to include the following new Subchapter 50.17 (Mandatory Commercial and Residential Recycling): SUBCHAPTER 50.17 MANDATORY COMMERCIAL AND RESIDENTIAL RECYCLING A Definitions. "The following words or phrases, whenever used in this Chapter, shall be constructed as defined in this section: 'Customer' means a generator that contracts for solid waste removal services and enters into a service agreement with a franchised authorized hauler for solid waste collection services. 'Generator' means an owner or responsible party of a commercial property which generates solid waste as a result of its business, commercial activity or other property activity. Generators may include tenants, property managers, and employees and contractors of generators. 'Large event' means an event that charges an admission price, or is operated by a local agency, and serves an average of more than 2,000 individuals per day of operation Ordinance No. 1406 Page 3 of the event, including, but not limited to, a public, nonprofit, or privately owned park, parking lot, golf course, street system, or other open space when being used for an event, including, but not limited to, a sporting event or a flea market. 'Large venue' means a permanent venue facility that annually seats or serves an average of more than 2,000 individuals within the grounds of the facility per day of operation of the venue facility. For purposes of this chapter, a venue facility includes, but is not limited to, a public, nonprofit, or privately owned or operated stadium, amphitheater, arena, hall, amusement park, conference or civic center, zoo, aquarium, airport, racetrack, horse track, performing arts center, fairground, museum, theater, or other public attraction facility. For purposes of this chapter, a site under common ownership or control that includes more than one large venue that is contiguous with other large venues in the site, is a single large venue. "Organic waste" means food waste, green waste, landscape and pruning waste, nonhazardous wood waste, and food -solid paper waste that is mixed in with food waste. The definitions set forth in Section 50.01 and 50.17 shall also apply to this chapter. B. Commercial generators. Each commercial generator shall be responsible for ensuring and demonstrating its compliance with the requirements of this chapter. Each commercial generator shall: 1. Ensure the segregation of recyclable materials and organic material from garbage by placing each type of material in a separate designated receptacle or container, and ensure that employees, contractors, volunteer, customers, visitors, and other persons on site segregate recyclable materials an organic materials. 2. Provide an adequate number and type of labeled receptacles needed for segregating and storing recyclable materials and organic materials, and provide adequate access to these receptacles. 3. Post and maintain signs containing information and instructions on the proper segregating and storage of recyclable materials and organic materials in areas where receptacles are located. 4. Ensure that all receptacles used for collecting and storing recyclable materials, organic materials, and garbage are affixed with signs or labels that display the appropriate information to enable users to clearly differentiate which receptacles are used for Ordinance No. 1406 Page 4 recyclable materials, organic material, and garbage minimize the contamination of material placed in receptacles. 5. Provide adequate instructions to employees, contractors, and volunteers of the requirements of this chapter, including (1) the requirement and procedures to ensure the segregation of recyclable materials and organic materials from garbage; (2) the employee's, contractor's, and volunteer's responsibilities regarding compliance with this chapter; and (3) the types and location of receptacles and containers for recyclable material, organic materials, and garbage. 6. Ensure that instructions or training materials provided to employees, contractors and volunteers are promptly made available to the City upon request. 7. Ensure that the contents of receptacles are deposited in the proper container and ensure that the contents of the receptacles for recyclable materials and organic materials are not delivered to garbage containers. Commercial generators shall be assessed a premium fee based on the size of the container for recyclable material and organic material containers that are collected for garbage disposal by the franchisee if the contents of their recyclable material and organic material containers contain unacceptable levels of contamination. C. Large Events and Large Venues Large Events and Large Venues shall be responsible for ensuring and demonstrating compliance with the requirements of this chapter. In addition to other requirements in this chapter and Municipal Code, each Large Event and Large Venue shall: 1. Segregate recyclable materials and ensure that employees, contractors, volunteers, customers, visitors, and other persons on site segregate recyclable materials. 2. Ensure the Large Event and Large Venue has access to an adequate number and type of containers needed for collecting and storing recyclable materials. 3. Provide or ensure the provision of adequate receptacles throughout the Large Event and Large Venue location to make the segregation of recyclable materials and organic materials convenient for employees, volunteers, contractors, vendors, exhibitors, presenters, visitors, attendees, customers, and other person on site. 4. Ensure that all receptacles used for segregating and storing recyclable materials, organic materials, and garbage are affixed with signs or labels that display the appropriate information to enable users to accurately segregate solid waste and to clearly Ordinance No. 1406 Page 5 differentiate which receptacles are used for recyclable materials, organic materials, and garbage, to minimize the contamination of material placed in receptacles. 5. Ensure that the contents of the receptacles for recyclable materials and organic materials are not delivered to garbage containers unless they include unacceptable levels of contamination. D. Provisions for self -haulers. 1. Nothing in this chapter shall preclude any person, solid waste customer, commercial generator, multi -family generator, or Large Event and Large Venue form self - hauling recyclable materials or organic materials generated by that entity to a recycling or organics processing facility. 2. Self -haulers shall: a. Comply with the requirements in this chapter by delivering for recycling those items that can be recycled by local recycling facilities and establishments and shall comply by delivering for organics processing those items that are accepted by local organics processing facilities. b. Provide proof of compliance with this chapter, upon request by the City; proof includes but is not limited to a receipt from a recycling or organics processing facility that clearly identifies the type and quantity of material delivered and an application for Exemption from the Necessity for Refuse Collection. E. Authorized Haulers. 1. Authorized Haulers shall obtain and maintain a business license with the City, 2. Authorized Haulers shall keep separate garbage, recyclable materials, and organic materials that have been segregated into separate containers by commercial generators, multi -family generators, or Large Event and Large Venues. 3. Authorized Haulers shall ensure that segregated recyclable materials are delivered to a recycling facility and that segregated organic materials are delivered to an organics processing facility, except that a container that contains unacceptable levels of contamination may be delivered for garbage disposal if the solid waste collector notifies the City of the occurrence; the date of the occurrence; and the account name, primary contact, phone number, billing address, and service address for the solid waste customer at which the container is located. Ordinance No. 1406 Page 6 F. Exclusions. Solid waste customers that subscribe to less than four cubic yards of garbage collection service per week shall be excluded from the requirements of this chapter. G. Exemptions. Solid waste customers, commercial generators, and Large Event and Large Venues that can document using the methods described in subsection C of this section that the circumstances described in subsections A and B of this section pertain to their operations shall be exempt from the requirements of this chapter. 1. No Generation of Recyclable Materials. Solid waste customers, commercial generators, and Large Event and Large Venues may be exempt from the requirements of this chapter if the solid waste customer, commercial generator, or Large Event and Large Venue demonstrates to the City that no recyclable material or organic materials are generated on site. 2. Space Constraints and Zoning Considerations.. a. Solid waste customers may be exempt from the requirements of this chapter if the City determines that either: 1. There is inadequate space for a solid waste customer to store containers for recyclable materials or organic materials on site and that it is infeasible for the solid waste customer to share recyclable materials or organic material containers with adjacent commercial facilities or multi -family dwellings; or 2. Compliance with this chapter will result in violating City zoning or other regulations. 3. Commercial generators, multi -family generators, and Large Event and Large Venues may be exempt for the requirements of this chapter if the City determines that either: 1. There is inadequate space for the commercial generator or Large Event and Large Venue to store receptacles for recyclable materials or organic materials on site and that it is infeasible for the commercial generator or Large Event and Large Venue to deposit recyclable or organic material directly into containers without an intermediate receptacle; or Ordinance No. 1406 Page 7 2. Compliance with this chapter will result in violating City zoning or other regulations. 4. Verification if Exemption. The solid waste customer shall petition the City with a written request for an exemption documenting the circumstances of a claimed exemption. The City may visit the solid waste customer's site; examine the receptacles for garbage, recyclable materials, or organic materials; or take other actions to verify the circumstances identified in the petition. The solid waste customer, commercial generator, or Large Event and Large Venue requesting an exemption shall not be granted an exemption from the requirements of this chapter if the City determines that (1) recyclable material or organic material are generated on site (2) it is feasible for containers and receptacles for recyclable materials, and necessary, for organic materials to be place on site, and (3) it is feasible to share recycling container with an adjacent commercial facility or multi -family dwelling. The City may require the solid waste customer or commercial generator that is granted exemption for the requirements of this chapter to submit a renewal of is petition for an exemption every two years from the date the exemption was granted by the City. H. City authority. The City or its designee is authorized to administer and enforce the provisions of this chapter. To the extent permitted by law, the City or its designee may inspect any collection container at a commercial facility, multi -family dwelling, or Large Event and Large Venue and any solid waste collector's load for garbage, recyclable materials, or organic material. To the extent permitted by law, the City or its designee may also inspect the premises of any commercial facility, multi -family dwelling, or Large Event and Large Venue to determine compliance with provisions of this chapter. I. Administrative appeal. Unless otherwise expressly provided by the Baldwin Park Municipal Code, any person adversely and directly affected by any determination made or action taken by the City pursuant to the provisions of this chapter may file an administrative appeal with the City Clerk. If no appeal is filed within ten days the determination of the City shall be final. J. Enforcement goals. The City shall enforce this chapter with the goal of maximizing participation in the program and ensuring that recyclable materials and organic material that haven been property segregated by the solid waste customer, commercial generator, multifamily generator, or Large Event and Large Venue are correctly collected and delivered to Ordinance No. 1406 Page 8 recycling and organics processing facilities. The City or its designee shall conduct the following activities to enforce this chapter. 1. Develop and disseminate public education and promotional materials relating to the importance of recycling and organics processing and the availability of recycling and organics processing opportunities available to solid waste customers, commercial generators, multifamily generators, and Large Event and Large Venues; 2. Provide technical assistance and training to solid waste customers, commercial generators, multifamily generators, and Large Event and Large Venues to increase recycling; 3. Enforce provisions of the franchise agreement for collection of recyclable materials, organic materials, and garbage with franchisee to stimulate demand for recyclable material and organic material collection service. K. Enforcement for contamination. Enforcement of this chapter regarding contamination in containers for garbage, recyclable material, and organic material shall be carried out by the waste hauler. The waste hauler will notify City of customers with excessive or ongoing contamination. Solid waste collectors shall not be held liable for the failure of solid waste customers to comply with this chapter, unless specified in the franchise, contract, registration certificate, or permit issued by the City. L. Penalties. The City may issue administrate fines for violating this chapter or any rule or regulation adopted pursuant to this chapter, except as otherwise provided in this chapter. The City's procedures on imposition of administrative fines are hereby incorporated in their entirety and shall govern the imposition, enforcement, collection, and review of administrative citation issued to enforce this chapter and any rule or regulations adopted pursuant to this chapter. M. Implementation schedule. The schedule for enforcement of this chapter shall be implemented in accordance with the timeline specified in Table 1. Ordinance No. 1406 Page 9 N. Other provisions. 1. No Other Power Affected. This chapter does not do any of the following; a. Otherwise affect the authority of the City or its designee to take any other action authorized by any other provision of law. b. Restrict the power of a City Attorney, District Attorney, or the Attorney General to bring in the name of the people of California any criminal proceeding otherwise authorized by law. c. Prevent the City or designee from cooperating with, or participating in, a proceeding. d. Affect in any way existing contractual arrangements including franchises, permits, or licenses previously granted or entered into between the solid waste collectors and City. 2. Cumulative Remedies. Any remedy provided under this chapter is cumulative to any other remedy provided in equity or at law. Nothing in this chapter shall be deemed to limit the right of the City or its solid waste operators to bring a civil action; nor shall a conviction for such violation exempt any person from a civil action brought by the City or its solid waste operators. The fees and penalties imposed under this chapter shall constitute a civil debt and liability owning to the City from the person, firms, or corporations ................ -- --_- ................ ......... _.._..I Material Date Entities Affected Covered Effective __ _ Recyclable Materials: All commercial and multi- Recyclable immediately family solid waste customers that subscribe to four Materials upon adoption cubic yards or more of garbage collection service per week. April 1, 2016 Organic Materials: All commercial and multi -family Organic solid waste customers that generate 8 cubic yard of Materials organic waste per week shall arrange for organic waste recycling services......... January 1, 2017 Organic Materials: All commercial and multi -family Organic solid waste customers that generate 4 cubic yards of Materials organic waste per week shall arrange for organic waste rec cline services. Januar 1, 2019 January Organic Materials Businesses tha... 4 g t generate 4 Organic cubic yards or more of commercial solid waste per Materials week shall arrange for organic waste recycling services. N. Other provisions. 1. No Other Power Affected. This chapter does not do any of the following; a. Otherwise affect the authority of the City or its designee to take any other action authorized by any other provision of law. b. Restrict the power of a City Attorney, District Attorney, or the Attorney General to bring in the name of the people of California any criminal proceeding otherwise authorized by law. c. Prevent the City or designee from cooperating with, or participating in, a proceeding. d. Affect in any way existing contractual arrangements including franchises, permits, or licenses previously granted or entered into between the solid waste collectors and City. 2. Cumulative Remedies. Any remedy provided under this chapter is cumulative to any other remedy provided in equity or at law. Nothing in this chapter shall be deemed to limit the right of the City or its solid waste operators to bring a civil action; nor shall a conviction for such violation exempt any person from a civil action brought by the City or its solid waste operators. The fees and penalties imposed under this chapter shall constitute a civil debt and liability owning to the City from the person, firms, or corporations Ordinance No. 1406 Page 10 using or chargeable for such services and shall be collectible in the manner provided by law. 3. Liability. Nothing in this chapter shall be deemed to impose any liability upon the City or upon any of its officers or employees including without limitation under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA). O. Disclaimer of liability. The degree of protection required by this chapter is considered to be reasonable for regulatory purposes. The standards set forth in this chapter are minimal standard and do not imply that compliance will ensure safe handling of recyclable materials, organic materials, or garbage. This chapter shall not create liability on the part of the City, or any of its officers or employees, for any damages that result from reliance on this chapter or any administrative decision lawfully made in accordance with this chapter. All persons handling solid waste within the boundaries if the City should be and are advised to conduct their own inquiry as to the handling of such materials. In undertaking the implementation of this chapter, the City is assuming an undertaking only to promote the general welfare, It is not assuming, nor is it imposing on its officer and employees, an obligation for breach of which it is liable in money damages to any person who claims that such breach proximately caused injury. P. Duties discretionary. Subject to the limitations of due process and applicable requirement of State or Federal laws, and notwithstanding any other provisions of this chapter, whenever the words "shall" or "must' are used in establishing a responsivity or duty of the City, its elected or appointed officers, employees, or agents, it is the legislative intent that such words establish a discretionary responsibility or duty requiring the exercise of judgment and discretion. SECTION 2. Severability. If any section, subsection, phrase or clause of this ordinance is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance. SECTION 3. City Clerk. The City Clerk shall certify to the adoption of this ordinance and shall cause this ordinance to be published by title and summary in the manner prescribed by law. SECTION 4. Effective Date. 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 XXXXX DAY MANUEL LOZANO MAYOR ATTEST:. STATE OF CALIFORNIA COUNTY OF LOS ANGELES SS, CITY OF BALDWIN PARK Ordinance No. 1406 Page 11 I, ALEJANDRA AVILA, City Clerk, of the City of Baldwin Park, do hereby certify that the foregoing Ordinance No. 2018-1406 was duly and regularly approved and adopted by the City Council of the City of Baldwin Park at a regular meeting thereof, held on the XXXX day of XXXX by the following vote: AYES: COUNCIL MEMBERS:. NOES: COUNCIL MEMBERS.- ABSENT: EMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: ALEJANDRA AVILA CITY CLERK ITEM NO. ai ooi/i/l ;1 i`IJJ STAFF REPORT TO: Honorable Mayor and City Councilmembers I J # Y I L =@ ti SAN pRfEL L E' ,, FROM: Gus Ronno, Coinniunity 0evelopulent Director my L. Harbin, A1+1����'I', City Plamn �.. ,. lA°.I"'E: April 18, 2015 Vy SUBJECT: AN ORDINANCE OF CITY COUNCIL OF THE CITY OF BALDWIN PARK ADOPTING THE FINDNINGS OF FACT AND APPROVING ZONING DESIGNATIONS ON PROPERTIES WITHIN SPECIFIC PLAN AREAS WHICH ARE CONSISTENCY EDITS THAT HAVE BEEN PREVIOUSLY APPROVED BY THE CITY COUNCIL (LOCATIONS: PLAN 13-01 (ROEM PROJECT—RAMONA BLVD./BOGART ST.), SPECIFIC PLAN 14-01 (INDIGO PROJECT—BALDWIN PARK BLVD/. MERCED AVE.), SP 15-01 (DOWNTOWN TRANSIT ORIENTED SPECIFIC PLAN) AND SPECIFIC PLAN 16-01 (PACIFIC VILLAS—PACIFIC AVE.); APPLICANT: CITY OF BALDWIN PARK; CASE NUMBER Z-556) SUMMARY This report requests City Council approval of Ordinance No. 1409 adopting the findings of fact and approving zoning designations on properties within specific plan areas which are consistency edits that have been previously approved by the City council. FISCAL IMPACT There is no fiscal impact associated with this item. RECOMMENDATION Staff recommends that the City Council adopt Ordinance No. 1409 on second reading, read by title only, and waive any further reading thereof. BACKGROUND This Ordinance was introduced at the City Council meeting on April 4, 2018 for first reading, and at that meeting Ordinance No. 1409 was approved by the City Council. ATTACHMENTS #1, Ordinance No. 1409 ORDINANCE NO. 1409 AN ORDINANCE OF CITY COUNCIL OF THE CITY OF BALDWIN PARK ADOPTING THE FINDNINGS OF FACT AND APPROVING ZONING DESIGNATIONS ON PROPERTIES WITHIN SPECIFIC PLAN AREAS WHICH ARE CONSISTENCY EDITS THAT HAVE BEEN PREVIOUSLY APPROVED BY THE CITY COUNCIL (LOCATIONS: PLAN 13-01 (ROEM PROJECT—RAMONA BLVD./BOGART ST.), SPECIFIC PLAN 14-01 (INDIGO PROJECT— BALDWIN PARK BLVD/. MERCED AVE.), SP 15-01 (DOWNTOWN TRANSIT ORIENTED SPECIFIC PLAN) AND SPECIFIC PLAN 16-01 (PACIFIC VILLAS—PACIFIC AVE.); APPLICANT CITY OF BALDWIN PARK; CASE NUMBER Z-556) WHEREAS, specific plans can provide a reliable means of flexibility for all types of development; and WHERAS, adopted specific plans and their associated environmental documentation can provide potential developers with a sense of security when pursuing a development project in accordance with an adopted specific plan; and WHEREAS, since adoption of the comprehensive Zoning Code update in May 2012, there have been four specific plans (SP 13-01, 14-01, 15-01 and 16-01) approved by resolution; and WHEREAS, in order to have consistency between the Zoning designations and General Plan Land Use designations, as required by State Law, on the various properties within previously approved specific plans this clean–up map edits are necessary. NOW, THEREFORE, the City Council of the City of Baldwin Park does hereby ordain as follows: SECTION 1. The foregoing recitations are hereby adopted by the City Council as findings. Based on those findings, the City Council determines the public health, safety and general welfare of the City of Baldwin Park, its residents, property owners, businesses and visitors can be enhanced by amending the zoning map to reflect the subject changes as shown in Attachment "A" is in the best interest of the community to amend the Official Zoning Map of the City; and SECTION 2. Based on the foregoing findings and determinations, City Council adopts the findings of fact as follows relating to zone map amendments: 1) The zoning map amendments are consistent with the goals, policies, and objectives of the General Plan. The zone change would be consistent with the goals, policies, and objectives of the General Plan in that it would finalize the adoption of the Specific Plans for the Downtown TOD Specific Plan, Specific Plan 13-01 (Ramona/Bogart), Specific Ordinance 1409 - Page 2 Plan 14-01 (Baldwin Park/Merced), and Specific Plan 16-01 (Pacific Project). The adoption by ordinance of the specific plans and the zone changes for the identified properties implements two General Plan goals: Goal 1.0 of the Land Use Element states that that the City should maintain a balanced mix and distributions of land uses throughout Baldwin Park. Goal 2.0 of the Land Use Element directs the City to accommodate new development that is compatible with and complements existing conforming land uses. The amendments furthermore provide consistency between the zoning map and the General Plan land use map. 2) The amendment would not adversely affect surrounding properties. The zone change would not adversely affect surrounding properties as the affected properties are included in specific plans that have previously established comprehensive plans for development of residential uses (Specific Plan 14-01 (Baldwin Park/Merced), and Specific Plan 16-01 (Pacific Project)) and commercial and mixed uses (Downtown TOD Specific Plan and Specific Plan 13- 01 (Ramona/Bogart)). Development of the identified properties would complement and enhance adjacent residential, commercial, and mixed use areas. 3) The amendment promotes public health, safety, and general welfare. The zone change would promote the public health, safety, and general welfare of affected properties by finalizing zoning that was previously reviewed and adopted and providing additional enforceability regarding zoning regulations. 4) The amendment serves the goals and purposes of the zoning code. The zone change serves the goals and purpose of the zoning code in that it provides for the orderly and compatible development of new uses that will enhance the character of the community while creating additional housing, commercial, and mixed use development options. Adoption by ordinance of the zone designation changes also provides the City with additional enforceability with regard to specific zoning regulations. SECTION 3. Based on the foregoing findings and determinations, The proposed actions are exempt from CEQA pursuant to CEQA Guidelines Section 15061.b.3 in that the proposed activities are clean-up changes to properties with projects that have already been subject to CEQA review and are either under construction or already constructed. These clean-up zone changes and General Plan land use designation changes can be seen with certainty to have no possibility of having a significant effect on the environment since they are implementing actions already taken. Therefore, the project is not subject to CEQA. Ordinance 1409 - Page 3 SECTION 4. This ordinance shall go into affect 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. 1409 was duly approved and adopted at a regular meeting of the City Council on 2018 by the following vote: AYES: COUNCILMEMBER: NOES: COUNCILMEMBER: ABSENT: COUNCILMEMBER: ABSTAIN: COUNCILMEMBER: ALEJANDRA AVILA, CITY CLERK STAFFREPORT SAN GABRIEL ' VA LtEY JAN TO: UU1]t,%I� DATE: Honorable Mayor and City Councilmembers Shannon Yauchzee, CEO April 18, 2018 SUBJECT: Approval of an Agreement for a Contract for Public Information Officer with Lee Andrews Group SUMMARY The City Council has had previous discussions about expanding the public awareness of the positive things happening in the City and have used consultants in the past for this purpose. The firm of Lee Andrews has submitted the attached proposal and asked to provide a presentation. FISCAL IMPACT The annual cost to provide services will be billed hourly at a total not to exceed cost of $49,999 annually„ RECOMMENDATION It is recommended that the City Council 1) Approve the Agreement with Lee Andrews Group for one year with the option to renew for one additional year; 2) Direct the CEO and City Attorney to prepare a standard consultant agreement to be executed by the Mayor, and; 3) Authorize the Finance Director to appropriate the funding from the BIT account subject to the proper Public Hearing Process. Lee Andrewshas been to leader in coin rnuni cation for over 23 years and has a comprehensive knowledge of the . e proposal . ( ) . gi ' .c , an Skin C��rl�rrel Valley and Baldwin Park, l'1air° �i•ca �rasal attar_.1�rccl is aina�.�l to l�rtiilcl a strategic coni aarrrarcrrtrc organizational frarnewor�k, expand the City's reach to the public and the media, and develop proactive methods of rr.orairaaarraicatiora. The lirn'i has recently performed such work in the Cities of Lynwood, Montebello and Huntington Park as well as a long list of additional clients listed in the proposal. LEGAL REVIEW The City Attorney has reviewed the report and attachments. ALTERNATIVES The City Council may 1) Direct Staff top negotiate changes to the proposal; 2) Direct staff to solicit RFP's for the service, 3) Not choose to engage in this service at this time. ATTACnmEN,r Proposal by Lee Andrews Group 1/51110/l/ a/ 1 Prepared for Shannon Yauchzee Chief Executive Officer City of Baldwin Park 14403 East Pacific Avenue Baldwin Park, CA 91706 Issued: Monday, April 9, 2018 l/ Lee1rIews'&',"""'/""'./ 'U',/, ��'11�"j 11"11-1 2 Public Information Services Proposal - Lee Andrews Group 3 Public Information Services Proposal - Lee Andrews Group Contents FirmProfile., .......................... ............................................ ............ .............. 4 Personnel................. ..................... .......................... ........ ....................... ,......... 5 Project Organizational Chart.................................................................... 5 Approach.................................,.......,..................................,............................ 6 Scopeof Work ..... .............. ................ ,............ .................... ,......................... 9 1. Graphics Design and Branding—, .... ...... -- ....... ................... 9 2. Digital & Social Media................................................................................9 3. City Newsletter ........... ............. .,....................... ......... ....................... --.....12 4. Media Relations Support ....... ............... ......................... ....................12 5. Door -to -Door Canvassing & Literature Distribution .............................13 6. Multi-ethnic/Multi-lingual Interpretation & Translation Services ........ 13 Budget..... ........ ....... ..................................................... ... ...........................15 4 Public Information Services Proposal - Lee Andrews Group Firm Profile The Lee Andrews Group is a full-service public affairs and government relations firm that provides outreach and communication support services for municipalities, 'public agencies and private sector organizations. Through the development and implementation of strategic, research -based, and culturally -competent public outreach programs, the Lee Andrews Group is able to help our clients effectively inform and mobilize stakeholders, elected officials, public agencies, and the community at large in support. of their objectives. LA Group is committed to providing outstanding professional services for the City of Baldwin Park that help further the City's mission and promote its services. Our team would achieve this by delivering culturally- and linguistically -relevant communications services for the City of Baldwin Park that would promote access to the City's services for those who need them. Collectively, our communications team offers cutting-edge, field-tested, and award- winning media strategies that achieve positive social impacts. More importantly, we understand the area since our team members have extensive experience with many neighboring municipalities including Azusa, Covina, EI Monte, Duarte, along with the rest of the San Gabriel Valley. We work with a variety of different stakeholder groups consisting of homeowners associations, business groups, elected officials, schools and faith -based organizations. The goals is to combine our regional expertise with the latest consumer - focused marketing and communication strategies to achieve measurable results. Our team will address each task for this contract with a deep understanding of the audiences that must be reached, along with a knowledge of evidence -based strategies to effect change at the individual, industry, and community. We will implement the right mix of cost-effective strategies to achieve the results desired by City of Baldwin Park. 5 Public Information Services Proposal - Lee Andrews Group Personnel Lee Andrews Group's proposed team routinely work together to deliver media and communications services. The management team is set up with Paulina Velasco and Hannah Flanagan -Flores as Public Information Officers and primary point of contact for the City. They will be guided by David Vela as strategic advisor and principal in charge. Lee Andrews Group takes great pride in the superior service we provide to our clients, including the time and attentiveness provided by the CEO and other senior personnel. Consistent with this policy, Stephanie Graves will remain attached and committed to the project throughout its duration and will remain'available to the City of Baldwin Park to address other needs upon request. Project Organizational Chart b Public Information Services Proposal - Lee Andrews Group Approach Our team members under the direction of City Staff will implement a robust municipal communications plan that positions the City of Baldwin Park as the leader in the San Gabriel Valley. Lee Andrews Group team believes that serving as a Public Information Team has'three guiding strategies: • Centralize communications coordination and suggest relevant media protocols • Provide ongoing communications training for City staff and councilmembers • Disseminate information in English, Spanish, Chinese, Tagalog and Vietnamese when appropriate • Coordinate City logo and use for unified portrayal of City government • Reviews current public relations plans and evaluates its efficiencies Serve as spokesperson • Arranges news conferences, media and other public appearances for public officials, prepares or edits the material to be presented • Bolster traditional channels of communication • Use new media technologies • Continue and grow social media presence • Support and plan for targeted communication projects • Enhance direct communication and partnership with the community and media outlets • Update and maintain project media kit 7 Public Information Services Proposal - Lee Andrews Group Scope of Work Lee Andrews Group will provide communications services and act as the Public Information team for the City of Baldwin Park with the intent to increase public awareness, encourage meaningful community engagement and build trust in City government. The Public Information team's objective is to deliver timely, accurate, coordinated and relevant public information in the way residents receive and access information, and in a manner that elevates City Council/staff expertise, promotes City values, and produces high quality communications. Aiming to strategically position the City's profile as a leader amongst the cities in the San Gabriel Valley. 1. Graphics Design and Branding As a team, we strongly believe that the design of quality imagery, typography, infographics, websites, and interactive media can be used to develop and maintain a trustworthy brand for the City of Baldwin Park by making it feel more accessible and recognizable. All the material provided by our team will be written in plain language and use appropriate graphics so that decision -makers and the public can rapidly understand the documents. With over 30 years of collective experience providing rich media content in several formats to deliver effective messages, our process expands beyond delivering basic content. We rely on an application of social marketing concepts, cross-cultural color and design theories, behavioral change theories, and working closely with City staff. 1.1. Rebranding Creating a successful city brand is much like creating a product or personal brand. Our design team will work closely with city staff to determine several factors that will define the City's new brand. Through a series of strategy meetings, our team will develop three (3) prototype logos that will match the city's current color scheme. After a logo is selected, our team will develop templates such as; • Official Letter Head • Email Signature • Business Cards • And other materials as necessary. 2. Digital & Social Media LA Group team has a creative and savvy social media team that can expeditiously develop digital strategies and implement plans to disseminate information to rapidly reached concentrated audiences. Baldwin Park will benefit from our firms best -'in -class technology for community engagement initiatives. Our team members use platforms such as Percolate, Spredfast, Sprinklr, and others to manage the social communities of large municipalities and public agencies across California. 3 Public Information Services Proposal - Lee Andrews Group We measure performance across paid, earned, and owned social channels. This holistic approach enables us to properly track and optimize marketing efforts, connecting campaign performance with overarching brand initiatives. It also allows us to optimize programs and campaigns in real-time, based on how audiences are engaging with us online. The'team will also monitor the latest trending topics related to the City and its interests in each major platform. Our team will constantly monitor developments for platforms such as Facebook, Twitter, Tumblr, Instagram, Pinterest, YouTube, and Linkedln, as well as new platforms like Snapchat and Musically. 2.1. Auditing Presence- Our team will inventory all profiles representing Baldwin Park. LA Group will search and note all official and unofficial pages representing Baldwin Park including fan pages, rogue employee accounts and poser accounts. 2.2. Social Accounts and Profiles - Based on the preliminary research, the team has identified inactive social media accounts. Lee Andrews Group Staff will work with City staff to identify the need of current inactive accounts. 2.2.1. Facebook- Our team recommends consolidating all inactive Facebook pages into one page, creating an Official City of Baldwin Park Facebook page following the same graphic design and color scheme of the City's web page. Lee Andrews Group Staff will link with the city's offical Twitter account to the Facebook page. 2.2.2. Twitter- The City of Baldwin Park's official Twittter acount was last utlized in 2015. Our team plans to revive the account and recommends posting 3-4 times a week. 2.2.3. Nextdoor-Our team will work with Nextdoor to create an Official City account to communicate with users. 2.2.4. Newsletter - A quarterly newsletter sent via email can highlight community events and occurences such as the recent opening of LA Fitness. 2.3. Workflow Protocol - Lee Andrews Group Staff will create and curate content for posting, scheduling posts, monitoring and engaging, and creating promotional campaigns. Lee Andrews Group Staff aims to ensure quality, timeliness, and efficiency of our social media activities. Example Workflow for Scheduling Posts • Prepare Drafts • Approve drafts/give feedback Edit/Finalize drafts i Schedule final 1 approved posts 9 Public Information Services Proposal - Lee Andrews Group 2.4. Activities Lee Andrews Group Staff understands that the City of Baldwin Park 's social marketing needs are fluid and these activities will also need to be adjusted periodically. There may be times when a high level of monitoring and engagement are needed, for example around the annual State of the City event in which there may be more activity in creating and scheduling posts. 2.5. Creating & Curating Postings - Lee Andrews Group Staff will create and curate content for posting to the City's social media profiles, making sure that the City stays in front of the residents and other followers. Our team will determine the types (categories) of posts such as acomplishments, public safety alerts, key events, econimic development updates, and fun facts about the City. For example: • Highlighting city residents doing good college winning championships. • Promoting Businesses and Business Associations • Highlight Key City events, such as Concerts and the State of the City • Promote Acomplishments from Parks and Rec and other departments • Highlight new Green Streets, Completed Streets projects, New Buses to CNG fuel We will schedule and determine the frequency of posts for each social network. Posts are easily created and can be posted immediately or scheduled for a future day/time, across multiple social profiles. 2.5.1. Build visual and text content specifically for different digital platforms 2.5.1.1. Video • Highly -produced, production house quality • Quick, easy, smart phone, fast -edit videos Edited with captions - they must tell our story, communicate our message with and without audio • Streaming live events - planned and spur of the moment 2.5.1.2. Photos • 360 for Facebook • Eye-catching, captioned to help tell story for shareability, on all platforms • Images needed for all social media, blog and website posts 2.5.1.3. Text • Know your stuff - gather information from the subject matter experts whether they are in the community/audience being targeted or Office of Extraordinary Innovation • Friendly, easy -to -understand, with personality and a consistent voice 2.6. Tools - We will constantly evaluate and select tools to help manage social media efficiently and effectively. To draft, approve and manage social media metrics Public Information Services Proposal - Lee Andrews Group the Lee Andrews Group Staff will utilize Buffer as the control center for the social media management strategy. 2.6.1. Monitoring & Engagement- Social monitoring of all profiles is a critical activity because followers require fast response to questions, comments, and complaints. We will monitor all social profiles for engagement and respond appropriately. If approvals are required for responses, it is recommended that City of Baldwin Park identifies a point of contact to answer all questions and comments posed by followers. Engagement activities could include Reply, Comment, Retweet, Follow, Like and other social actions. 2.6.2. Analytics & Reporting - It is important to measure the results of the campaign, our team will regularly review and monitor metrics such .-as fan base growth, demographics, post reach, and engagement (retweets, likes, comments etc.). 2.6.3. Support & Training - Our team aims to maintain constant communication with the city staff. Our team will train key members of the City of Baldwin Park on the porotcols for digital media for elected officials, comissioners, and city staff. 2.6.4. Account Passwords and Access - Lee Andrews Group will create the social media password roster for all social media profiles. We will keep an ongoing list of all individuals who have access to the social media account. 2.6.5. Branding - The social media pages will be branded on handouts and signage for all City departments. At the discretion of the City of Baldwin Park officials the social media page can be branded on the offical city website. Lee Andrews Group proposes all future promotional handouts and giveaways are branded with the social media page name. 3. City Newsletter Lee Andrews Group will work with the City of Baldwin Park to develop a city newsletter than can be emailed, mailed or both on a regular basis. Through over 30 years of collective experience we have found there are three (3) things that make a municipal newsletter successful: good organization and planning, involving the community and producing quality graphics. Lee Andrews Group will develop an editorial calendar for the newsletter to know how long it will take from collecting the articles to receiving the printed newsletters. It's easy to underestimate the work involved at the different stages, however an editorial calendar will ensure that deadlines are met in a timely manner. 4. Media Relations Support Lee Andrews has deep understanding of the evolving media landscape and its impacts on journalism, storytelling, and on our clients. Our team understands how to cut through the clutter and navigate the new realities by being the conduit between reporter and client - providing journalists with the news angles they want to tell and properly packaging the storylines clients need to share. 11 Public Information Services Proposal - Lee Andrews Group Our team of media relations experts are armed primarily with great stories and strong relationships, but also with next -generation media targeting tools including: Cision, Muckrack, Gorkana, NewsWhip, Demographics Pro, and Traackr. Those tools can provide the background, insight, and understanding that can make or break a story. Additionally, we maintain a database of key opinion leaders that enables us to engage with relevant influences across markets and platforms. We pride ourselves on our excellence in writing, offering in-house editorial services for development of materials - including press releases, annual reports, bylined articles, executive speeches, and press kits, fact sheets. For media outreach, our media network utilizes a collaborative approach to harnessing our team's collective expertise for the City of Baldwin Park. Our media specialists work diligently to cultivate and maintain ongoing relationships with major outlets, which allows us to be on the front lines with journalists, creating earned media opportunities for the city. Deliverables: + Preparing and attending meeting with the Editorial Boards of the San Gabriel Valley Tribune, Examiner and other news outlets. • Responding and meeting with journalists. • Positioning the City of Huntington Park in a positive light. 5. Door -to -Door Canvassing & Literature Distribution Lee Andrews Group specializes in the development and implementation of targeted outreach strategies that effectively advance our clients' priorities by creating popular consensus. Our team utilizes proven methods of personalized outreach that reach specific communities, groups, and/or businesses. We excel in reaching often - underrepresented segments of the public by leveraging our extensive relationships with numerous community-based partners that serve Blacks/African Americans, Latinos, Asian/Pacific Islanders, Native Americans, Millen nials/Youth, Women, Immigrants and the LGBTQ communities. 6. Multi-ethnic/Multi-lingual Interpretation & Translation Services The Lee Andrews Group Team combines the latest technology with expert human touch at every stage to enable successful communication in Baldwin Park's most representative languages. We do not just translate words- we make sure your message gets across, and your copywriting hits the intended target. Readers in any language will feel as though the message was written in their language. We thoroughly understand the culture and nuances of language and of each population to be targeted. The Lee Andrews oGroup Team understands the variations of languages and how migration patterns dictate which one to use. Our translators are Los Angeles residents, familiar with local language and cultural preferences, in order to facilitate public participation and community engagement as well as to develop trust. 12 Public Information Services Proposal - Lee Andrews Group We only use Native speakers - it isn't just Spanish to us. Or Chinese, for that matter. We understand the way that Spanish is spoken in Baldwin Park, which is entirely different from the Spanish spoken in Miami or New York. We also understand that the number of Cantonese or Mandarin speakers at a given meeting will vary depending on where it is held. We can help determine which languages or dialects are most appropriate for a specific area - we have a deep roster of local linguists and maintain close relationships with many of them. For each translation the Lee Andrews Group Team performs for Baldwin Park, in any language, we use industry -specific software to compile terminology databases and build translation memories. This allows us to apply them to future projects, ensuring that the city's terminology remains consistent throughout. These tools also offer cost savings: previously translated materials only need to be reviewed rather than translated from scratch. 13 Public Information Services Proposal - Lee Andrews Group Budget For the above stated tasks, Lee Andrews Group proposes a contract total not to exceed $49,999 for a term of 12 months beginning upon approval by the City Manager with the option to renew for an additional 12 month period, subject to approval by the City Manager. The assigned project staff available at the following rates and time commitments: David Vela Strategic Advisor $ 275.00/ Hour 2 Hours/Month Paulina Velasco Public Information Officer $ 150.00/Hour 10 Hours/ Month Hannah Flanagan -Flores Public Information Officer $ 150.00/Hour 10 Hours/Month Alisha James Public Information Officer $ 125.00/ Hour 4 Hours/ Month Assistant General Provisions • Automobile mileage will be charged at the current IRS rate, $0.54 per mile as of August 2016. Consultant support services, such as printing, reproduction, polling, and other direct expenses and other usual and customary out-of-pocket expenses, will be billed at cost. Expenses over $250.00 are subject to review by the City for approval. 14 Public Information Services Proposal - Lee Andrews Group m ITEM NO. STAFF REPORT L " lJi�OF TO: Honorable Mayor and Members of the City Council THE FROM: Manuel Carrillo Jr., Director of Recreation & Community Scrvi U 5AN GABRI L �' DATE: April 18, 2018 SUBJECT: RESOLUTION OF THE CITY COUNCIL OF THE CITY BALDWIN ,. PARK SUPPORTING "CALIFORNIA PROPOSITION 68, PARKS, ENVIRONMENT, AND WATER BOND" SUMMARY The purpose of this staff report is for City Council to consider adopting Resolution No. 2018-248 in support of the "California Proposition 68, Parks, Environment, and Water Bond." FISCAL IMPACT There is no fiscal impact at this time by this action. RECOMMENDATION Staff recommends the City Council: 1) Adopt Resolution No. 2018-248 entitled "RESOLUTION OF THE CITY COUNCIL OF THE CITY BALDWIN PARK IN SUPPORT OF THE CALIFORNIA PROPOSITION 68, PARKS, ENVIRONMENT, AND WATER BOND;" and 2) Authorize the Mayor to execute resolution, letters of support as needed and appropriate to demonstrate the City Council's support of the California Proposition 68, Parks, Environment, and Water Bond on behalf of the City Council. BACKGROUND Proposition 68 would authorize $4 billion in general obligation bonds for state and local parks, environmental protection and restoration projects, water infrastructure projects, and flood protection projects. Assuming a 3.5 percent interest rate over a 30 -year period, the bond issue would generate $2.53 billion in interest, meaning the state would spend $6.53 billion to pay off the bond issue. The measure would require between 15 and 20 percent of the bond's funds, depending on the type of project, be dedicated to projects in communities with median household incomes less than 60 percent of the statewide average; that 60 percent threshold amounted to about $39,980 in 2016. The largest amount of bond revenue— $725 million—would go specifically toward neighborhood parks in park poor neighborhoods in accordance with the Statewide Park Development and Community Revitalization Act of 2008's competitive grant program. The measure would also reallocate $100 million in unissued bonds that voter approved via Proposition 1 (2014), Proposition 84 (2006), and Proposition 40 (2002). Proposition 68 will invest over $1 billion dollars in our local and state parks to ensure very child in California has safe and accessible places to play and to protect California's special places for the next generation. It allocates funds to construct and rehabilitate parks in communities across California, improve and repair state parks, and expand access to parks, waterways, and natural areas. Resolution No. 2018-248 April 18, 2018 Page 2 • $725 million for parks in neighborhoods with the greatest need. • $285 million to cities, counties and local park districts to make parks safer and improve facilities • $218 million to repair and improve state parks • $95 million to promote recreation and tourism On the June 2018 ballot, this proposition will go before the people of California for vote. LEGAL REVIEW The City Attorney has reviewed the resolution and has approved it as to form. ALTERNATIVES The City Council may choose not to endorse the resolution. 1) Resolution No. 2018-248 Resolution No. 2018-248 RESOLUTION OF THE CITY OF BALDWIN PARK SUPPORTING THE CALIFORNIA PROPOSITION 68 PARKS, ENVIRONMENT AND WATER BOND WHEREAS, California faces frequent and intense droughts, devastating wildfires, and growing challenges from climate change that threaten our water, parks, coastline, access to the outdoors, and natural resources; and WHEREAS, Our water, parks, and outdoors are what makes California special, and we must safeguard our open spaces, access to our coast, natural areas, forests, and beautiful places where families hike, camp, swim and play; and WHEREAS, Families in some underserved communities in California have water that is so contaminated that they cannot turn on the tap and get clean water to drink; and WHEREAS, Many communities lack access to safe neighborhood parks for children to play and exercise; and WHEREAS, A clean, reliable water supply is essential to the health of our families and strength of our economy, and supports an $87 billion outdoor recreation and tourism industry that provides over 700,000 jobs; and WHEREAS, It has been 15 years since California passed a bond to provide funding for natural resources; and WHEREAS, Proposition 68 is a general obligation bond that invests $4.1 billion in the coming years for some of California's most pressing water, parks, and natural resource needs; and WHEREAS, Proposition 68 provides $1.7 billion to ensure clean drinking water, prepare for the next drought, clean up groundwater, capture and recycle more water, and keep toxic pollutants out of California's rivers, lakes and streams that supply clean water; and WHEREAS, Proposition 68 dedicates $1.3 billion to create safe parks for every child, improve parks in neighborhoods with the greatest need, repair local and state park facilities, and restore and expand access to outdoor recreation throughout California; and WHEREAS, Proposition 68 invests $1.1 billion to protect California's natural resources to prevent wildfires, restore rivers, lakes, streams and natural areas, prevent Resolution NO. 2018-248 Page 2 toxic air pollution, address climate change, and protect our coastline to increase access to our coast and beaches; and WHEREAS, All regions of the state will benefit from these investments with strict accountability to ensure funds will be spent efficiently and for intended purposes; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY RESOLVES AS FOLLOWS: SECTION 1. The City Council hereby declares its support for the California Proposition 68 "Parks, Environment and Water Bond" measure on the June 5, 2018 state-wide ballot. SECTION 2. The City Council hereby encourages all voters to educate themselves as to whether or not to support the California Proposition 68 "Parks, Environment and Water Bond" measure and to get out and vote in the November election. SECTION 3. The City Council hereby encourages all of the City's local non-profit and volunteer organizations who use and benefit from the City's park facilities to educate themselves and their members about this legislation in a manner which is allowable and appropriate within the rules and judgment of each organization. SECTION 4. The City Council hereby authorizes the Mayor to sign letters of support as needed and appropriate to demonstrate the City Council's support of the California Proposition 68 "Parks, Environment and Water Bond" measure on behalf of the City Council. SECTION 5. The City Clerk shall certify to the adoption of this Resolution which shall be effective upon adoption. Passed, approved and adopted the 18t" day of April 2018 I, the undersigned, hereby certify that the foregoing Resolution Number 2018-248 was duly adopted by the City Council following a roll call vote: MANUEL LOZANO MAYOR ATTEST: 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 resolution was duly and regularly approved and adopted by the City Council Resolution NO. 2018-248 Page 3 of the City of Baldwin Park at a regular meeting of the City Council on April 18, 2018, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS; ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS ALEJANDRA AVILA CITY CLERK STAFF REPORT SANI,8RfI Lv', UEY"° , TO: FROM: DATE: ITEM N6 Honorable Mayor and City Councilmembers Rose Tam, Director of Finance'm April 18, 2018 ..... SUBJECT: SUCCESSOR AGENCY TO THE DISSOLVED COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF BALDWIN PARK WARRANTS AND DEMANDS SUMMARY Attached is the Warrant and Demand Register for the Successor Agency to the Dissolved Community Development Commission of the City of Baldwin to be ratified by the City Council. FISCAL IMPACT The attached Warrant Register for Successor Agency of the City of Baldwin Park in the total amount of $625.50 LEGAL REVIEW None required. RECOMMENDATION Staff recommends that the City Council ratify the attached Warrants and Demands Register. BACKGROUND The attached Claim and Demand report format meets the required information as set out in the California Government Code. Staff has reviewed the requests for expenditures for the appropriate budgetary approval and for the authorization from the department head or its designee. Pursuant to Section 37208 of the California Government Code, the Chief Executive Officer or his/her designee does hereby certify to the accuracy of the demands hereinafter referred. Payments released since the previous City Council meeting and the following is a summary of the payment released: 1. The March 13 to April 9,2018 Successor Agency Warrant with check numbers 13535 to 13536 in the total amount of $625.50 were made on behalf of Successor Agency of the City of Baldwin Park constituting of claim and demand against the Successor Agency of the City of Baldwin Park, are herewith presented to the City Council as required by law, and hereby ratified. City of Baldwin Park, CA Vendor Number Vendor Name Bank Code: SA -SUCCESSOR AGENCY 01189 COUNTY OF LOS ANGELES 05191 HARRELL & CO ADVISORS, LLC Payment Date Payment Type 03/15/2018 Regular 03/15/2018 Regular Check Report By Check Number Date Range: 03/13/2018 - 04/09/2018 Discount Amount Payment Amount Number Discount Bank Code SA Summary 0.00 625.50 Payable Payment Payment Type Count Count Regular Checks 2 2 Manual Checks 0 0 Voided Checks 0 0 Bank Drafts 0 0 EFT's 0 0 2 2 Check Report By Check Number Date Range: 03/13/2018 - 04/09/2018 Discount Amount Payment Amount Number Discount Payment 0.00 625.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 625.50 0.00 50.50 13535 0.00 575.00 13536 Ola°1'i4/2018 :L 1 1,57 A Page 1. of it STAFF REPORT TO: FROM: ITEM NO. r ;r�rtur�yrr/firs r rti�� r -x j Grirr%r�/�%�jr�� Honorable Mayor and City Councilmembers City Attorney's Office PREPARED BY: Amy L. Harbin, AICP, City Planner Abraham Tellez, Associate Planner w DATE: April 18, 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 FNL"L1"LI1 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 DA18-15 April 18, 2018 Page 2of6 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 ORDINAN+ "E 1412 ENT1"�I"1.�E1) 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 INANCE 141:3 + NTI'°I"I 1A) 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 ()RDINANCE 1414 EN"1"I'fl., ]) 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 OI11iANCI+ 141.E E'Njflr1°LE'1T 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 ENTI'l I,EDAN 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 F:\Granicus Agenda Template\2018 Agendas\04182018\Agenda Item No. - Cannabis 15 Applications, doc DA 18-01 Through DA18-15 April 18, 2018 Paee 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 14:I EN"I r LED 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 ENT11 LED 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 F:tGranicus Agenda Templatel201 B Agendas1041820181Agenda Item No, - Cannabis 15 Applications. doe DA 18-01 Through DA18-15 April 18, 2018 Pape 4 of 6 AT 13450 BROOKS DRIVE, UNITS A AND C (APN: 8535-023-010) WITHIN THE CITY OF BALDWIN PARK ORIII.NA I E 1423 E NTI"FLED 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 UALIT)"AC 00 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 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 153.120.330.13 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. FAGranicus Agenda Template\2018 Agendas\04182018\Agenda Item No. _-Cannabis 15 Applications doc DA 18-01 Through DA18-15 April 18, 2018 Page 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. 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. I'LANNING C."OrtlMl&ION 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 This report has Thn 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 Re -search #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 .�.e��,�... .... ...,.. �. _..— ..W.._ DA 18-03; RUKLI, Inc. �..........�..... � �.. #3, #4, �....�_.�..��� A 18-04; 428 Cloverleaf, LLC Informational Table; CAN 17-06 Informational Table; CAN 17-07 Vicinity Map � � -.1--vicinity Map _ ... m ,.., -----------w. A _ ... ....s. - ..... _ . .. - Benda Templale\2018 Agendas\0418201BWgenda Ilam No -Cannabis 15 Applications F.AGranicus A—Template—\2_01-8" —_m., doc DA 18-01 Through DA 18-15 April 18, 2018 Pan 6 of 6 Findings of Fact Findings of Fact Development Agreement Development Agreement Draft OrdinanceDraft 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 . . . .............. 07; Organic Management Solutions, LLC 48, 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 412, 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 OrdinanceDraft Ordinance DA 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 415, DA 18-15; Green Health Industries, LLC Informational Table; CAN 17-31 Vicinity Map Findings of Fact Development Agreement Draft Ordinance FaGranicus Agenda Templatet2018Agendas\04182018fAgenda Item No _-Cannabis 15 Applications, doe Ar-,FT,A,C-,I�-11-IMI��-�..N"-,r #'l -DA IS -01 It"VE N (),M E R E S E.NRCI.-I INFORMA r - , FIONAL TABLE G"C S (--)F FA"Il FINDIN' DEVELOPMEN ry AGREEMENT RRAFT ORDINANCE DA 18-01 DEVELOPMENT OPMENT A REEMENT INFORMATION Location. _ _ 41...45 Pu.., ro. ,... ente Ave. APN- 8437-015-014 -------- .... Zoning of Subject Location . ........ ......... I -C, Industrial Commercial Principal Name(s) Edward Avayan 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 _......... e...... reassessment by the City every five (5) years Floor Area of Buildings 4,360 s.f. per City Records A minimum of 20% of the Project's workforce shall Employee Requirements consist of residents of the City. _� Zoo, R G sA K010A RI 9 qAUII,d0 s 9 VICINITY MAP CASE NUMIBER: DA 18-01 LOCATION: 4145 Puente Avenue DATE: April 12, 2018 , THE SAN GADWEL VA L LEY 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) T he 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 1801 cannabis related signage outside and leave the industrial fapade 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. 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 welfa.re of persons residing in the imrnediate 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 ......... p 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"). Vl i1is 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 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, N 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 3- 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. M 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. 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 w ting, 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 N 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 off icer 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. .T 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 In 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 91 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. -10- 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 resat 20 percent of the Pr gct's workforce shall�c n ist of r ide�nt _oj-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. 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. tTbie City's failure to conduct a p �"�Eiodi 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: M (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 M 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. M 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. M 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 C.ity, 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, M "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 Flan 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 -18- 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. 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 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 -20- 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, there 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 STATU'T'ORY AGREEMENI' 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 S-I-ATUTORY AGREEMENT and naming the officers that are aUthor'ized to execute this STATUTORY AGREEMENT on its behalf. Each individual executing this STATUTORY AGREEMENT ori 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 No 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. 99 IN WITNESS WHEREOF, the parties hereto have caused this STATUTORY AGREEMENT to be executed as of the dates written above. CITY OF BALDWIN PARK JENOME RESEARCH By: Manual Lozano, Mayor ATTEST: M Edward Avakyan CEO APPROVED AS TO FORM: By: City Clerk By: Legal Counsel for Jenome Research APPROVED AS TO FORM: By• Robert N. Tafoya, City Attorney IIS EXHIBIT_ A LEGAL DESCRIPTION OF PROPERTY w EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] EXHIBIT B -1- ITEM: B, (Baldwin, Park Ta Coripi.) ATTACHNIENT BALD"WIN''PARK TALE CORP. INFORMATION.M., J'ABLE VICINITY MAV FIN Dl -.'N- GS O.F FACT DIEVIt'l- OP-MEN"I", AGIkEt- - DRAFT ORDINANCE DA 18-02 DEVELOPMENT ENT AGREEMENT INFORMATION 1 1_ _ ......... _ .__ ...... Location _._ . .._............. .. . 14551 Joanbridge St. APN: 8414-006-062 _.111 . .. Zoning of.Sub,4��_ �.._ ct Location I, Industrial ..__ _ . .. Principal Names Lih Piing Henry Liou Company Name Baldwin Park TALE Cort ......... . . Term of Development Fifteen (15) years from 12/29/2017 Agreement e _ 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) ..years. Floor Area of Buildings 11 400 s.f per City Records. _....... ®... At least 20% of the Project's workforce shall consist Employee Requirements of residents of the City, 6#101 w G, CIS < F- 0 BALDWIN Acv m NU SIA St VICINITY MAP CASE NUMBER: DA 18-02 LOCATION: 14551 Joanbridge Street DATE: April 12, 2018 3R ;Q A. tHE u �dAN GABRIr L LLEY rr R I St JOANBRIDGE 0 60001 I ��; ­,------,.-- JOANBRIDGE St N CALIFORNIB, v UA > < uj m U-1 ce LU A w G, CIS < F- 0 BALDWIN Acv m NU SIA St VICINITY MAP CASE NUMBER: DA 18-02 LOCATION: 14551 Joanbridge Street DATE: April 12, 2018 3R ;Q A. tHE u �dAN GABRIr L LLEY 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 e„ d 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 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. 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 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 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. -4- 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. N 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 0 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, 7. 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. WE (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 orjointly 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. 0 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. M 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 tc 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 prcent of the Prgjecl's woris of the Cijy. Job announcements shall be posted at City Halkf alonshvvlith roof that th....._. consist o residents g p e 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 M 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 M 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 ���re to condUct a.,periodic review of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY 7.8 Cost of Review. The costs incurred by City in connection with the periodic reviews shall beborne bythe City. The Owner iSnot liable for any costs associated with any City periodic review of this STATUTORY AGREEMENT. The {}vYOer is not liable for costs incurred for reviews. ARTICLE 8. DEFAULTS AND REMEDIES. 8.1 Remedies iOGeneral. |tiSacknowledged bYthe parties that the City would not have entered into this STATUTORY AGREEMENT ifitwere to be liable in dornaQea under this STATUTORY AGREEK8ENT, or with respect to this STATUTORY AGREEMENT or the application the[eof, except as hereinafter expressly provided. SUb'�Ctt� ex tensions of time by [nWtWa} consent in writing, failure or delay by either party to perform any be[Dl or provision of this STATUTORY AGREEMENT shall constitute a defa\[t. IN the event Of alleged defaU1t or breach of any te[Ol8 Dy conditions of this STATUTORY AGREEMENT, the party alleging SUchdefault Urbreach shall give tile other party thirty (30\d8V8'notice inuVriLiOgspecifying the nature Ofthe alleged default and the rNanne[i' ` which said defaUUmay besatisfactorily cured during any such thirty (3O)day period, the party charged shall not be considered in default for purposes of termination or institution of legal proceedings. |ngene [@|. each Ofthe parties hereto may pursue any remedy 8tlaw O[equity available for the breach of@nyruViaioO of this STATUTORY AGREEMENT through any at8hy court, except that the ' City shall not be liable in monetary dennages, unless expressly provided for in this STATUTORY AGREEMENT, to Owner, to any rwortgage8 or lender, O[tOany successors iOinterest OfOwner ifsmccc�ssQrsin interest are, pernnittedunder this STATUTORY AGREEMENT or [Do[tg8Q88 QF lender, or to any other pe�Fson, and Owner covenants on behalf of itself and all successors in intereat, if successors in interest are permitted under this STATUTORY AGREEMENT, to the Property or any portion thereof, not tOsue for damages O[claim any damages: ' (i) For any breach Ofthis STATUTORY AGREEMENT 0rfor any cause of action which arises Out of this STATUTORY AGREEMENT; Or (ii\ Fo[the irnp@irnlaOtO[restriction Ofany right orinterest conveyed o[ ` ' provided under, with, orpursuant to this STATUTORY AGREEMENT, including, without |iDlit8tiDO. any impairment O[restriction which Owner characterizes 83 G regulatory taking or inverse COOdenlnGtiOO� or iii) Arising out OfOrconnected with any dispute, CODtrOVe[Sy or issue regarding � di �h (iii) application abgO O[ request for 8 permit for CU|tiVGtiOO. manufacturing 8Dd/0[ distribution Orinterpretation 0[effect 0fthe provisions Ofthis 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. 8.2 Specific Performance. The parties acknowledge that money damages and remedies at law are inadequate, and specific performance and other non -monetary relief -14- 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 ofthis STATUTORY AGREEMENT has begun, After such irnpleaientation, 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 snxty (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 terrninaties -15- 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 anv failure of the Citv 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 I 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 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 rllodify 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 accenting 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 co„,uc+ of the City'-s munirinal operations.r.Uo M 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 -18- 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 M 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 S I A TUT OR Y AGREEMENT . Upoi 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 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 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. 9W 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• CityCl__... erk APPROVED AS TO FORM: By. Robert N. Tafoya, City Attorney m Baldwin Park TALE Corp By. President APPROVED AS TO FORM: BY _... Legal Counsel for Baldwin Park TALE Corp EXHIBIT A LEGAL DESCRIPTION OF PROPERTY EXHIBIT A EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] EXHIBIT B 0 ITEM: C (Rukh Inc ATTI AC'H.M-EN'],-'#3-DA 'I R LJK Uj 1 9 1 N C-11 0 INFORMA r F'IONAL TABLE VICINITY MAP, FINDINGS OF -FACII, DEV r]r Et )OPMENTAGREEM.''EN 4 DA 18-03 DEVELOPMENT ENT A EEMEN'T INFORMATION --. ...... - - 14824 d. APN 8437-014-014 & 4150 Ramona Blvd. Ave. APN 8437-022-008 Puente Av . � ... .......... 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 the property complies with obligations under this Agreement ... ... agreement, ..c reem.. ... ._._._.. 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 Q.ons_umer Price Index.. .. ,._ Floor Area of Buildings g 32 .. 0 s f and 17b200 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. CASE : DA 18-03 LOCATION: 14824 Ramona Boulevard DATE: April 12, 2018 HUB OF -_HE 1A111 GABRIEL Ra J I, LEY R` t4a'14 Fdaunuwrim Efl,,d -d 050 P-11� A,. KF'11jf,)A4S R I R3 s V, 4-511, W R I Os Os I/ VICINITY MAP CASE NUMBER: DA 18-03 LOCATION: 4150 Puente Avenue DATE: April 12, 2018 L D H U H 0 F ME SAN GABRIF I VAt I .:V 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 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 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 one m — , 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 orthrough 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 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 develop n'teat, the City deems the 4'riplen'ientation 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. 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. M 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. M 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. N 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, 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 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 N (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. M 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 I!! 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 3tl _percent of the Proiect's workforce shall consist of residents of the Cit 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 M 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 conductwwa periodic review NT shall ot constitute a breach of this STATUTORY AGRE of this STATUTORY AGREEME w n EME 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. 12 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 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 M 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. M 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, stage or local law, ordinance or regulation relating to industrial hygiene or to environrriental 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 atternpt 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 darnages or damages which are remedial by the payment of monetary coMpensatlon. 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 Governn°rent, 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. 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 Pian 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 M 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 gander shall incluide thefeminine 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. M 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: (i) is for the benefit of and is a burden upon every portion of the Property; (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. 19- 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 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 M 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. M Manual Lozano, Mayor ATTEST: By: By: President City Clerk APPROVED AS TO FORM: APPROVED AS TO FORM: By:. M Robert N. Tafoya, City Attorney Legal Counsel for RUKLI, INC. EXHIBIT A LEGAL DESCRIPTION OF PROPERTY rt, EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] -1- 'ITE,M: D (428 Cloiverleaf,, LLC) ATTACHMENT #4—IDA 18-04 428 ERlj-f"d,AF, VICINITYMAP VINDINGS OF FACT D F-4' V It" L j 0 P FV t E N T 'A G R LIE J I—V—,I'- U - DRAFT ORDINANCE DA 18-04 DEVELOPMENT AGREEMENT INFORMATION -. ....... -1 . ......... 13111 Spring St. APN 8535-023-051 & 428 Location Cloverleaf Dr. APN 8564-021-009 and 8564-021- 010 I, Industrial and I -C, Industrial Commercial, Zoning of Subject Locations respectively Principal Names Mine Yon Huang (David Sie rist Esq,) .�...- Company Names ® 428 Cloverleaf LLC .... Term of Development Fifteen (15) years from 12/29/2017 reement for Year #1 June 30 and December 31 for Payment Schedule Quarterly for Years #2 through #15—Four equal lyments. 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) years, 28,016 s.f. and 16,752 s.f. per City Records, Floor Area of Buildings respectively �.....� _ At least 20% of the Project's workforce shall consist Employee Requirements of residents of the Cily CASE NUMBER: DA 18-04 LOCATION: 13111 Spring Street DATE: April 12, 2018 4. HUS OF T u SAN CrAF3RIE <ry VALLEY" JdY1+Ik1w"YW > p�V R'Is CASE NUMBER: DA 18-04 LOCATION: 13111 Spring Street DATE: April 12, 2018 4. HUS OF T u SAN CrAF3RIE <ry VALLEY" JdY1+Ik1w"YW > CASE NUMBER: DA 18-04 LOCATION: 428 Cloverleaf Drive !ATE: April 12,2018 RI 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 1\Ai inlr:lnal Code are met. DICnPnCariPS remain nrnhihitPrl throunhnl It th.e 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. PASSED AND APPROVED ON THE _ day of ATTEST: ALEJANDRA AVILA, CITY CLERK STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss: CITY OF BALDWIN PARK ) Ordinance 1413 Page 4 12018 MANUEL LOZANO, MAYOR 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 readingng of the ty Council on 2018. hereafter, sa d O di Ordinance No 1413 wlas duly approved and adopted ...t ' regular at .. T p a regular meeting of the City Council on — _1111 w, 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 GOV/D rn ment (( nrin anal is intanded to he a Staf Utory Development Anraamant iindar anti J `1' 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. M 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 issuan.ce by the City in connection with Development of the Property. i Approvals" �-,- L.,J,. L 4.L. +L.,. C..7..+7.-, f1... L. r,w,.,.,+ l�r,r,rn�il+I0 11U +h4 "Development App ovals also include UOLl l II le Exis ing Development l lcl 11 r,pp ovals anA Ll I 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 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, Cl 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 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 M (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 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 conflictwith the Development Plan. The term "do not conflict" means new rules, regulations, and policies which: (a) do not modify the f Development Plan, including, without limitation, the permitted land uses, the density or intensit;/ 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 Pian; 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 Pian. (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 orjointly 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 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 115, 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 tate 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 tenTlinate 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 ercent of.the ect' 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. -11- 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 breachofthis 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. 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. M 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 1 4. . 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 -15- 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 -16- 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 M 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. -� s- 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 -19- 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 execration 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 STA FUTORY 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 STATUE OPRY AGREEMENT including, without limitatlon, any claim that the terms in this STATUT(D Y AGREEMENT constitute an abuse of the police power, violate substantive due process, deny eCaUal protraction of the laws, effect a taking of property without payment of just compensation, and/or impose an unlawful tax. M 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 in Manuel Lozano, Mayor By: ATTEST: By: City Clerk APPROVED AS TO FORM: W Ming Yong Huang CEO APPROVED AS TO FORM: By: Legal Counsel for 428 CLOVERLEAF, LLC m Robert N. Tafoya, City Attorney EXHIBIT A LEGAL DESCRIPTION OF PROPERTY -1- EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] -1- ITEM: `#i, Grou��I Verde ATT'AC-l-IMENT'#5-.DA 1-8-05 CASA VERDE IN'FO,RMAT',t.ONAI.-,j TABLE VICINITY M, I AP ( Ir...-, FINJI)INGS OF FA � I DEVELOPMEN""ll AG"4ZEEMENT DA 18-05 DEVELOPMENT AGREEMENT INFORMATION .m Location 5117 Calmview Ave. APN 8413-007-062 Zoning of Subject Location ........ I, Industrial .... Principal Names .......... ......... Victor Chevez and Helen Chau Company Names Ca ... 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) years 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. IRWINDALE ARROW H%V"Y N T Q HkLi, I k WA [N� "il CASE NUMBER: DA 18-05 LOCATION: 5117 Calmview Avenue DATE: April 12, 2018 HUB OF 1 T h-1 F U . a S1AN C_"ef4BRIFI.. s VAt,Lf,Y " fIAL TWIN 6",f RK i K" i _. 9iN1CV' JOANBRIDGE St r I RNIA Av C • pJlXuliPh h: "'IP LU i0p ..,.. IAr VANA1I SIr DAL MM AV NJUMA St 101NWA St os yy-y f l 1 r C I nrv�+as��aa. x R 1, N T Q HkLi, I k WA [N� "il CASE NUMBER: DA 18-05 LOCATION: 5117 Calmview Avenue DATE: April 12, 2018 HUB OF 1 T h-1 F U . a S1AN C_"ef4BRIFI.. s VAt,Lf,Y DA 1805 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, 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. 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 imr"nediate 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 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 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, N 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 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. M 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. -5- 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. V 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. IIS 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. 31d. 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 of 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 ori 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„ nes,, otiate developaraent agreen�rents, 7_. 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. M (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 orjointly 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 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 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 Citv 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. tGea t Qj: ccG x1t g Lha k!rc ect'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. 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 M 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 constitute a bre of this STATUTORY AGREEMENT shall notch of this STATUTORY a 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. s 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 -14- 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 AGREEMEN'I' 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 afle� r Owner is di�aterrvGned by th(-,� City to be in default of the terms and conditions of this STA'I­UTORY AGREEMENT until such default thereafter is cured by Owner or is waived by the City. If flee Coy terr`r6nates 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 ...,15- 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, -16 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. .. @ 7- 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 M 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 M 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 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, 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 in Manuel Lozano, Mayor ATTEST: By City Clerk APPROVED AS TO FORM: By: Helen Chau Manager Victor Chevez Manager APPROVED AS TO FORM: By: By: - Legal Counsel for Robert N. Tafoya, CASA VERDE GROUP City Attorney Im EXHIBIT A LEGAL DESCRIPTION OF PROPERTY EXHIBIT A -1- EXHIB_IT_B MAP DEPICTING PROPERTY [TO BE ATTACHED] ■ " EMvi F (RD Baldwin Park ." T o A 1,,,r I'ACH'Al ENT #6-DA't-8-06 IN-FORMA"I'l-ONA-Ij TABIX VICI,N-t-FY'M-..,.AP FINI)INGS OF FACT D EVE ENT AGREEMENT DRAFT ORDINAN'CE DA 18-06 _ DEVELOPMENT AGREEMENT EEMENT INFORCV ATION Loc..,.._ ation ..... . 13467 Dalewood St. APN 8559-003 018 -- - – Zoning of Subject Location I -C, Industrial Commercial _ �. Principal Name(s) Darrin and Ryan (m ganesian ® _ _ Company,Name RD Baldwin Park Term of Development Fifteen (15) years from 12/29/17 Acreement �.. 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) ._._..... y �� a rs . .._....... .. „,. ., __ n_................. Floor Area of Buildings 20,355 s.f. per City Records .� _ m A,,... At least 20% of the Project's workforce shall consist Employee Requirements of residents of the City. R 1 11 R I I C ()s A V, 1 0 r �V P, 2 1.1 "rW VWA lmmr-�. VA -161 CASE NUMBER: DA 18-06 I LOCATION: 13467 Dalewood Street DATE: April 12, 2018 J, Vr: y � vf,- L ; 14" HUB or, THE u -71 SAN GABHIF.1• VA L LEY Ilk J A stir J, Vr: y � vf,- L ; 14" HUB or, THE u -71 SAN GABHIF.1• VA L LEY Ilk J A 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 F A � 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 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 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. 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,._-,...- 1 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 ...............e ...... -------- _ _................... m , 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 / Trot-aicana Enterprises LLC, a California limited liability col,lipany ("Owner"). This STATUTORY AGREEMENT shall become effective on the Effective Date defined in Section 3.1.0' 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 Developnnient 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, sulj,eot to Owner's ac.,cluisition 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 Error! No text of specified style in document. -1- 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 or facilities 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 Error! No text of specified style in document. -2- 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. Error! No text of specified style in document. -3- 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. Error! No text of specified style in document. -4- 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. Error! No text of specified style in document. -5- 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; Error! No text of specified style in document. -6- (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 Error! No text of specified style in document. -7- 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 Error! No text of specified style in document. -8- 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 Error! No text of specified style in document. -9- 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 orjointly 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, Error! No text of specified style in document. -10- 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. Error! No text of specified style in document. '11- 5.8 Jobs and Wage Creation. 5.8.1 Local Hiring. Owner agrees to use its reasonable efforts to hire qualified City residents forjobs 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 prcent ofITthe Pro`er f" Workforce shall consistm ofrresidentswof' 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 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. Error! No text of specified style in document. -12- 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 _Citv'sITfailure to conduct a periodic review of this STATUTORY AGREEMENT hall not constitute breach of this „STATUTORY m.._......_ 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 Error! No text of specified style in document. -13- 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 Error! No text of specified style in document. -14- 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. Error! No text of specified style in document. -15- 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. Error! No text of specified style in document. -16- 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 provislons of this Section 9.4 do riot apply to environmental conditions that predate Owner's ownershil:a 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 Error! No text of specified style in document. -17- 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 Error! No text of specified style in document. -18- 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 corldifions 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 detern°rined to be invalid, void or unenforceable, at Owner's option this entire S TA I'UTORY 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. Error! No text of specified style in document. -19- 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 Error! No text of specified style in document. -20- 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: Error! No text of specified style in document. -21- (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. Error! No text of specified style in document. -22- 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: Manual Lozano, Mayor ATTEST: By: City Clerk APPROVED AS TO FORM: By Robert N. Tafoya, City Attorney RD BALDWIN PARK / TROPICANA ENTERPRISES LLC M President APPROVED AS TO FORM: By: .........................._... Legal Counsel for RD Baldwin Park Enterprises Error! No text of specified style in document. -23- / Tropicana EXHIBIT A LEGAL DESCRIPTION OF PROPERTY EXHIBIT A EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] ITEM: G (Organic Ma agemeyt Solutions' o lut(o \d \ A arm .."'. CH,._FArr #7 --'DA 18-07 ORGANIC MANAGEMENT INFORMATtONA.I., TABLE VICINITYMAP FINDIM S t") F FA I-).R,AIF'I'OIZDINAN(',".ig"-lj DA 1807 DEVELOPMENT ENT AGREEMENT INFORMATION ......... _ __._....... . 14837 Ramona Blvd. APN: 8437-018-002 & 14841 Location Ramona Blvd. APN: 8437-018-001 ..... Zoning of Subject Locations _ I -C, Industrial Commercial (both) ,,, .. .... _.._ (s � Principal Name........) ®..... _e.� Phil Reyes and Alexis Reyes Company Name _ Organic Management Solutions, LLC _ .... 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) years. ......... ...... _ Floor Area of Buildings 480 s.f. and 980 s.f. per City Records, respectively ........ At least 20% of the project's workforce shall consist Employee Requirements of residents of the City. ,.. VICINITY MAP CASE NUMBER: DA 18-07 LOCATION: 14837 Ramona Bouleva[d DATE: April ] 2, 2018 � &LD & Hu&or © IH: 0 .. } MNGAWFt f V A d. t � ¢ . } C\ ,.. VICINITY MAP CASE NUMBER: DA 18-07 LOCATION: 14837 Ramona Bouleva[d DATE: April ] 2, 2018 � &LD & Hu&or © IH: 0 .. } MNGAWFt f V A d. t � ¢ . . p!. VICINITY M CASE \IUM BER: DA 18-07 LOCATION: ]484] Ramona Boulevard DATE: April] 2, 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 1807 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 §§ 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 n 2018. Thereafter, said Ordinance No. 1416 was dulyapproved and adopted at a regular meeting of the City Council on I--, -----_, 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 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 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 M 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. 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 -3- . 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 t lar is consistent with the invent and objeCLiVes of the STATUTORY AGREEMENT. 0 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 S-71- TI IU ITI /%'-%/ VI /'A 1V' EE M EAT shall control. 0 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. M 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 Citv'g costs to research cannabis and cannabis laws and reaulations, draft cannabis ordinance, conduct public meetings, negotiate development agreements, -7- 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. In (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 orjointly 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 of 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 lour and year live, Owner will Nay a Fee of f 5.00 per sq. foot for a total of $330,000 per year. 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. 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 µµleast 20 percent of the Projects workforce shall consist ofresidents ofthe 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 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 M 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 (iir-_..a:c:., a,��\ a,. r1,......� +..+:. +h..+ FF. -.r +h., + on 4 Orin n -r —ni I rnwio and I�CIIIIIIdIC ) lU VVVIICI sta ng that after the most recen� pciivdiC vi �N�.viai 1— w, a .. 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 M 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. TLe i "s_ failure to conduct eriodic 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. 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 J:_., 1__II L I:.Y :a__I a_ those a c_..a L. aL. :.. C�_.:a:.. .., o L... ... o n .J remedies shall be lir ited o U ose set o t II I� U11 ID LIoII 8. I, Section I O.2, al d Section 8.3. 6[I 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 M 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 maybe, 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 Co:'ncel M 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 Feulnrnl nr Ctata (-nrwprnment 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 M 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 containe(J 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 STA110-ORY 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 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 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 ordeterminingi the validity of any provision of this STATUTO Y AGREEMENT shall be filed and proseoUted 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 they 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 o u w 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, WE 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 -21- 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 M 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: m Robert N. Tafoya, City Attorney IIIA ORGANIC MANAGEMENT SOLUTIONS, LLC. Philip R. Reyes CEO APPROVED AS TO FORM: By: Legal Counsel for ORGANIC MANAGEMENT SOLUTIONS, LLC. EXHIBIT A LEGAL DESCRIPTION OF PROPERTY EXHIBIT A EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] -1- T E M: H (M ei dil cal Grade Farms B,P) ATJ"AClI-Nl VNT #8 -DA 18-08 MI 'R IMCAL (-,v`. .,Al'.F','F.A.RM'S B.p INFO RMATI'ONAL TABLE VIGINITY MAP FUNDING'S OFFACT I)EVELOI-"-M,'ENI-'A("'R.EEM.EN'I DRA,V-1` ORD1NANCE DA 18-08 DEVELOPMENT AGREEMENT NNFORMATNGN Location l..... ....... 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 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) years ..... 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. DATE: April 12,2018 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. Furthermorc, 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. 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 g Y i .........._...:......__., 2018 by the following vote: meeting of the it Council on w mm 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. 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 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 I -and Use Regulations applicable to development of the Property for the Project, as modified and supplemented by Subsecluent 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 N 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 -4- 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 .�5- 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 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 M (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 anothefl, person or entity, whether a party or an officer or rep resentcitive of a party or to a different address, or both. Notices given before actual receipt of notice of change shall not be invalk.,lated 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 conferredupon Owner. Fee shall include City's cost to research cannabis and cannabis laws and regulations, draft cannabis ordinance, conduct public meetings, negotiate developn—lent 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 -7- 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. (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 circurv,stance s as Owner would otherwise be entitled by the Development Plan; or (c) do not prevent Ownerfrom con,'u"nencing, prosecuting, and finishing grading of the land, constructing public and private imp rove mR nts, and occupying the Property, or any portion thereof, all at such daate,s and schedules as Owner would otherwise be entitled to do so by the Developrr"ient 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 S FATUTORY 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 reap shall be in effect for a period of fifteen (15) years, and may be extended pursuant tothe provisions of the California Subdivision Map Act (Government Code §§ 66416 of Seq,) All Development Approvals shall not expire if Owner corn nierices substantial construction of the Project within one (1) year from the M 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 -10- 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 Lf Lrty )erqent of the P (.jLet_t' 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 -11- 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 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 this STATUTORY AGREEMENT shall onduct a periodic review — - -. .NT l not constitute a breachof this ST „ ATUTORY mm 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. 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. 14. 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 STA 1`UTORY AGREEMENT and will be investing even more significant time and resources in inipler'nenting 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 defat.,flt by they 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 call 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 oil the Property after Owner is deteri-pined 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 ;pity 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 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. -16- 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, -17- 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 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 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 rer wires otherwise, the singular of any word, shall irl(;lude the plural and vice versa, and pronouns inferring the ri'mSCuline gender shall include the feminine,, gender and neuter, and vire 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 constrtut:e a waiver of such party's right to insist and demand strict compliance by the other party with the terms of this STA'I"UTORY 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 rather 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 M 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 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 AGREEMENI" 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 STAN l_JTORY AGREEMENT and naming the officers that are authorized to execute this STATUTORY AGREEMENT on its behalf. Each individual executing this STATUTORY AGREEMEN t 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 STATUJ'ORY 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 -21- 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: in lR MEDICAL GRADE FARMS, BP By: Sergio Torres CEO APPROVED AS TO FORM: By: Jade Effect, LLC Cristeta Summers, Consultant for Medical Grade Farms, BP Robert N. Tafoya, City Attorney EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Real Property depicted on Tract 8706 Lot 405002, Los Angeles County Assessor's Bleecker St., Baldwin Park, CA 91706. 11, Map Coordinates 39-F2, Census Tract Parcel No. 8414-004-005, located at 5148 EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] 'TEM: I (Kultiv8 Group, A T r I"A("Ii,IM ENT #9—IDA -18-09 K LJ I AIIA/8 GIZO-IJPL."I.4c tNl;(.)IZMA'-I-"IONAL TA BILE VICINITY MAP HN-DIN"G'S OFFACrj"i T 11 1 )RAFT ORDINANC,"'E DA 18-09 DEVELOPMENT AGREEMENT INFORMATION .......e. Location _............................. 15023 Ramona Blvd. APN 8437-021-006 Zoning of Subject Location I -C, Industrial Commercial .. ... Principal Names O melt, Joshua Pierce, and Kevin Huebner Shaun Sza i _ Company Names Kultiv8 Group LLC 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) years. 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. 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 rnet. 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 • 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 person..el. 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 flex,glnhnment AgreBment Prnjrartc (tiff 1 R-nl thrni igh nA 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 1 1s 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 —_—, 2018 by the following voter 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: M 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 n 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 0 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 M (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 orjointly 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 0 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. -10- 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 Ie,tt's workis of thg.. Job announcements shall be posted at City Hall,f �alonghwlith consist proof that fu the e job announcements were advertised in at least two newspapers published, printed or distributed in the City and on various social rnedia 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 reviow and processing of the Project, inclru( ing 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 M 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 peni odic 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. M 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, -13- 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 -14- 8A 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 M 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. 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 puu'poses of this Smi ATUTORY 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 deterrriine the terms or conditions of this STAWI UTORY 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. M 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 thlc CTA TI ITORY AGREEMENT and the City would not have entered into this UI 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. M 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. M 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. -20- 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. 1 i .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 KULTIV8 GROUP, LLC. By: Manuel Lozano, Mayor ATTEST: B: City Clerk APPROVED AS TO FORM: By: Robert N. Tafoya, City Attorney m By: President APPROVED AS TO FORM: By: Legal Counsel for KULTIV8 GROUP, LLC.. EXHIBIT A LEGAL DESCRIPTION OF PROPERTY EXHIBIT A EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] EXHIBIT B -1- (GSC �ITEM: (-,Ir'SC CAPITAL G"RO-L,J P AL TABI,L -INFORMATION V,tCI-N'tTY'MI'AP FtN,D'INGS OFFAC"'I", j -.J,. F N I ETO P M E.Nl".A.(,.,Ilr R E F M- ..) 1. D -RA -V I'ORII) DA 18-10 DEVELOPMENT AGREEMENT INFORMATION'S _..................... .......................... Location _............ ... 4621 Littlejohn St. APN: 8535-023-033 Locatei„on Zoning of Location ����� I, Industrial PnncipaI Name(s) i 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) _ years......... 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. DATE:•12,2018 , ,pLDIIr41 , 11Or OF u r����,` SAN GARRIF1 {i VAI,tEY 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 Miinir.inai Code are met DiGnAnSArIeS remain nrohibited thrnijnhniit 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 DA 18-10 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 r'NDevelopment Agreement Projects (DA 18-v 1 t�irough 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 ) 1„ 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 W _____........ ..... 1.11", 2018. Thereafter, said Ordinance No. 1419 was duly approved and adopted at a regular meeting of the City Council on m rrrm 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 Agrer- merit, and is dated April _, 20'18 for references purposes only and is entered into between (i) the City of Baldwin Park ("City"), a California municipal corporation, and (Gi) GSC Capital GWUP l 1 C ("Owner"). This STATUTORY AGREEMENT shall become effec bvc: on the 1 ffec tive Date defiried 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 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. M 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. .3- 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 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 P1 -011 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. V 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 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 M (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 narned 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 ge 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 CAi"t, !a lions in effoeffort,as, of'L,_e 11 Effective Date. 3.9 Fee. Fee means the amount(s) set by the City, negotiated with Owner, to provide City commensurate benefit based ori 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 developmer)t agreennents, 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 LAse of the Property, the maximum height and size of proposed buildings, -7- 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 OVYner'S obllgatlons 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 AJy LI IC %-]Ly. (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 Appo,ovals, 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 sr.rch 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 (includirrg construction standards and specifications) or the rate of development of the Deveiopment, nor shall the City be prohibited from denying or conditionally approving any Subsequent Development applications oil 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 l roperty separately fron-u orjointly 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 snap 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 of seri) All Development Approvals shall not expire if Owner cornniences 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 eaipowered to examine Owner's books and records, inclarding tax returns. The City has the power and authority to wxan-rine sr.uch books and records at any reasonable time, including brut 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. 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 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. -10- 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 lea §t 20 percent of the Project's ject' workforce shill consist of resideN-its of th Qqy. 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 -11- 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 mmamm 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 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 hark including but not limited to, any application for any type of distribution, cultivation or manUfdcturing perrnil, any application for any distribution, cultivation or manufacturing rights, or any application for any A StributiC_, nultiVatinn or manufacturing license from the rjty 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, -13- 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 -14- 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 consistentwith 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 �1GREEK"IVIEhl11 , whether such operations be by O.vine1 �r by any Or :.�.��nor'c 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), wl-lich the City or its City Council rnenibers may Stiffer, 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 -15- 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 c n c� of h Cit. c rc incurred. rc o agrees t any pay the defence costs .,� the City a, the costs a... r,.. Owner agr.,..� o pay n, 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 -16- 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 rermnot fnr in r retation or MoHiticatinn. I he C'.it\/ will nni ijnreaS. nnahly withhold Its i .� .U- p 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 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 M 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 paw or in equity arising under this S"I".AT1.J.fORY AGREEMENT or brought by a party hereto for the purpose of enforcing, construing or determirring 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 paw 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 ttie 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 sperformance of all obligations under this STATUTORY AGREEMENT and the atisfaction of the conditions of this STAT`UTORY 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, -19- 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 I 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. M 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 on 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 EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] EXHIBIT B -1- lei ITEM,p K (Ellite Green Cultivators) ATTAC"Al'E'N"I"'1,84 1. ELITE GREEN (1,114,7FIVATORS MFO.R.-MATIONAL TABIJE VICINYINMAP VINDING"S OF FACI r -l",, , ACry"I A j IA-EEMEN.1 D,RAFr-[" ORDINANCE DA 18-1 DEVELOPMENT AGREEMENT INFORMATION Location . _,....... 5157 Azusa Canyon Rd. APN: 8413-001-030 Zoning of Subject Location ..............®... .....e � I -C, Industrial Commercial Principal Name(s) I'll........._. .. Mike Sandoval and Ed Barraza ........ Company Names �............. u.... .... ._. Elite Green Cultivators ...e..... Term of Development --------: �. ,.... ......... ...... Fifteen 15 ears 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) years. Floor Area of Buildings 5,000 s.f. per application .. Employee Requirements ................... At least 20% of the Projects workforce shall consist of residents of the City. DATE: April 12, 2018 "BALD11�4\ HUB OF ,rH E .SAN GABRIKA. a VA L LE'Y JAfVIt,�,�'� w� i, ,,rsr - c 0 DATE: April 12, 2018 "BALD11�4\ HUB OF ,rH E .SAN GABRIKA. a VA L LE'Y JAfVIt,�,�'� w� 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 detrimental to the neighborhood Cultivators application indicates welfare of the community and or surrounding community, Elite they want to be very involved not be Green in the DA 1811 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 n.=%ie1npmen4 Annmizment Prnjertc tnA 1 R-nl thrni lgh 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 AI C IAAInOA A\/II A r\L LJ/"\I N V I\!l PYV ILs\, 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 mm m , 2018. Thereafter, said Ordinance No. 1420 was duly approved and adopted at a regular meeting of the City Council on _ mm yy 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. N 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" 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 vse Regulations applicable ucveIUj�I i IeI ILAlmnt v it ic' 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. E[c3 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 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 it i� this ST AT UTORY 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 _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 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 M (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 .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. 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 91 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 orjointly 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 ss 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 M 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 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 -10- 5.8.1 LnC@| Hiring. Owner agrees to Use its reasonable efforts to hire qualified City residents for jobs @tthe Project. Owner shall also use reasonable efforts to retain the Sen/ioea of qualified contractors and suppliers who are located in thm{}ih/ or who employ @ significant OUDlbe[ Of City residents. At least 20 percent of the P[o cLs workforce shall carisist of residents of the Citv. Job announcementsshall he posted aitCitV Ho||. @|OOg with proof that the job announcements were advertised in at least two DevvSpope[8 pub|ished, printed or distributed in the City and on V@[iOuS SOCi@| media sites accessible to the g8Oe[o| public. In addition, Owner shall make @ good faith effort to advertise job announcements at local job fairs, On |Ooo| radio and through public agencies and organizations. 5.9 Development Agreement Administrative Fee Deposit. [)vvOa[ Sh@|| be responsible for all Of the City's aCtUG| Coats associated with processing Development /\pp[OV8l3 for the Project including, but not limited to, COStS GSSOCi8ted with the City's [eVi8VY and p[OCeSSiOg of the Project, including but not limited to [8Vi8VViOg the Project's eDt|Ue[DeOt3. including all 8OVi[oODl8Dt@l C|88[@nCe dOCUDl8DtS' D8[Dlit3. licenses and all dOCUDleOtS evidencing compliance with state and |OC@| |8VV. As such, UpOD iSSU8OC8 of its permit, DVvn8[ DlUSt deposit $15.000 with the City for the purpose Of [9inlbU[SiOg the C|b/ for any associated costa with processing the Project, as detailed above and reimbursing the City for its actual CO3tS incurred in drafting and p[OCeGSiOg this STATUTORY AGREEMENT. Owner will be liable for the City's aotU8| costs incurred in processing future Development Approval applications. City acknowledges and agrees that this payment is not merely a dapoSit, but is a cap on the amount of the City's actual Costa incurred in processing this STATUTORY AGREEMENT. ARTICLE 6. DISTRIBUTION AND TRANSPORTATION 8.1 Transportation of Cannabis. All pick ups and drop offs of cannabis and cannabis p[OdUCtS into and out of the City Of Baldwin Park 8h@|| be by the eXClUSiV8 distributor, F<uk|i. Inc., or such other CoF0p@Oy should RUkli' Inc. no |DOge[ hold that right. {)VVOe[ Sho|| not, UO its Ovvn or through any p8[3oO or entity, arrange for pick ups or drop Offs Of cannabis or C8On@biS products into or out of the City Of B@|dYYiO Park for any pU[pOS8. except bythe 8XC|USiV8 distributor. 6.2 Distribution Of Cannabis. OvvOe[ shall distribute its C8OO@bis and cannabis products only through the City's exclusive distributor. Owner shall cooperate fully with the City's exclusive distributor regarding the @000UOtiOg for product, revenue and tax collection. 6.3 {}vvOer and the City's exclusive distributor shall naooh their own @Q;eeDleDt 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 annua||y, on or before each anniversary of the Effective Date, in order to ascertain [)vvne/a good faith compliance with this STATUTORY AGREEMENT. During the periodic [8VieVV. [)vVDeF shall be required to d8nlOOSt[8te good faith CODlp|iGOC8 with all the terms of the STATUTORY AGREEMENT. -11- 7.2 Special Review. The City Council may order a special review of com.pliance 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 aep riodic review of this STATUTORY AGREEMENT shall notconstitutea 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 M 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. M 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 law. Government Tort Liability Act and all other applicable statutes and decisional la\ilr. 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 -14- 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 -15- 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 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 not be affected thereby to the extent such remaining provisions are not rendered impractical to perform taking into consideration the purposes of this STATUTORY -17- 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 dgvejonment 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. M 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 -19- 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, or impose an unlawful tax. 11.20 [RESERVED] Wit 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 Manuel Lozano, Mayor ATTEST: By: City Clerk APPROVED AS TO FORM: M ELITE GREEN CULTIVATORS In President APPROVED AS TO FORM: By: Legal Counsel for ELITE GREEN CULTIVATORS Robert N. Tafoya, City Attorney EXHIBIT A LEGAL DESCRIPTION OF PROPERTY EXHIBIT A -1- EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] -1- ITEM: (Pacific Cultivat"lon',ILCE i r - A 1"JACtIM''ENT #12—DA18-12 I I i C"Lit'll, 'I -VATIONI -1 I dt-XI, INFORNIA j", I-ONAL TABLL VIC"'INITY MAI` FIN -11 DINGS .A(-'�"T 1),E,-,N",r A(---',',REEMEN rl'i D.I-"Z.,A,Fl- 0,RDINANCIT DA 18-12 . .. . .. . ........ . . . . . . . . . . .... . . ... .......... DEVELOPMENT AGREEMENT INFORMATION � ........ Location_ _ mm - 517511 . 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 ye.. ars 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) years. Floor Area of Buildiri s 30,341 s f. p� r City Records At least 20% of the Project's workforce shall consist Employee Requirements of residents of the City, VICINITY MAP CASE NUMBER: DA 18-12 LOCATION: 5175 Commerce Drive DATE: April 12, 2018 HUB OF THE SAN GARRIF.1U va 1y"e, VAlN1Y I; VICINITY MAP CASE NUMBER: DA 18-12 LOCATION: 5175 Commerce Drive DATE: April 12, 2018 HUB OF THE SAN GARRIF.1U va 1y"e, VAlN1Y DA 1812 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 C ity. 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 1812 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 Developi—nei It Ag`r eement Projects (^vA 18-v i tlirougl i DA 1 L) i 5) Vviii ilvt 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: ALEJAI'JDRA 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 _ , 12018, Thereafter, said Ordinance No. 1421 was duly approved and adopted at a regular meeting of the City Council on -1111.... , 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 -1- 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 smatters; 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. 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, str.LNctUre„ improvement or facility after the construction and =e e within the Term tt�q �"�t�ATi», STATUTORY A�.�'I�k.��FeM�EnN p orepair, or reconstruction con,ipletion thereof; provided, take plac 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 3.. 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. M 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. 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.111 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 pr -;s nns rlosnribed in this CT9T1 ITnDV AGRRr=MP SIT I t• VMI IVIIJ \.14J411 V 111 LIIIJ v1 \1v1vl\1 /\JI- ILI`11. 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. M 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, _7.. 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 %elith anal to the extent "f the Development Plan and/or application. The Properly ghall 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. IE (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 Rand for public purposes and Development Exactions, except as expressly permitted elsewhere in this STATUTORY AGREEMENT, and standards for design, development and constrr.rction of the project; (b) do not prevent Owner frora'a obtaining arry Subsequent Development Approvals, including, without limitation, all necessary approvals„ permits, certificates, and the like, at such dates and under sr.rch circairrrstances as Owner would otherwise be entitled by the Development Plan; or (c) roto not prevent Owner frorTi cornu-aencing, prosecaatlaag, and finishing grading of the land, oorrstructing public and private irnprovem ants, and occupying the Property, or any portion thereof, all at such dates and schedr.rles 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 acid specifications) or the rate of development of the Development, nor shall the City be prohibiter;) 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 arrth0rity to regulate aspects; of tyre development of the Property separately from or° jorratly with the City,, and this STATUTORY AGREEMENT does not limit tl°roof authority of SLIch other 1: Ublic 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 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... 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 -11- 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 r1iss+rihii+nr, RUlrli Inn nr such othor `--m-an`yi should Rukli Inc, no longer hold that righ1. t 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 12.. 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 .this of this STATUTORY AGREEMENT shall not constitute a beech 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 tern -is or condutrons 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 ()wner„ to any raicartgagee or lender, or to any successors in interest of Owner if successors in interest are perry irtted 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. M 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 -14- 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 15 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 iiabii�ty for damage or claims for damage for personal injuy, 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, 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. 1T. 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 AGREF::MEKIT 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 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 development rights set forth in Article 4 of this STATUTORY AGREEMENT are essential M 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 Gc any dispute arising hereunder shall laws of the State of California. This whole according to its fair language purposes of the parties hereto, and are to be resolved against the dra STATUTORY AGREEMENT, sinc negotiation and preparation hereof. ✓erning Law. This STATUTORY AGREEMENT and be governed and interpreted in accordance with the STATUTORY AGREEMENT shall be construed as a and common meaning to achieve the objectives and the rule of construction to the effect that ambiguities ting party shall not be employed in interpreting this a all parties were represented by counsel in the 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 -19 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 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] 21- 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• Robert N. Tafoya City Attorney 22.... PACIFIC CULTIVATION, LLC M President APPROVED AS TO FORM: M Legal Counsel for PACIFIC CULTIVATION, LLC m EXHIBIT A LEGAL DESCRIPTION OF PROPERTY EXHIBIT A EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] EXHIBIT B -1- ITEM: M (Cloud Control Inc.1 A ri, i r TACHM ENT #.I 3—,DA, -18-13 CLOUD CONTRO-Ld, INC. INFORMATIONA1, JABLE VICIN"ITY F"I'N'RINGS OF FACT r -1-i "I" A,`,REU-`.MlE.NrF D E V'14 -"J -.L M E N f D" RAFT ORDINAN'CE A 1813 DEVELOPMENT ENT AG EEMENT INFORMATION - - ...... ......... _ -... -- 13450 Brooks Drive, Unit A & C APN: 8535-023- Location 010 Zoning of Subject Location I, Industrial ... ........ ........ ......... Jonathan Yuan Kai Lee, Jefferson Liou, and Jerrell Principal Name(s) .... Austin Sheep Company NameCloud Contrmol, Inc ........ 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) years. 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. mmn.� A. CASE UMBER: DA 18-13 LOCATION: 13450 Brooks Drive DATE: April 12, 2018 0 IHE rrY 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-v 1 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 mm _- ....... 2018 by the following vote.- AYES: ote: 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 (ii) Cloud (i) ICtBaldwin Control, Inc.,Inc.BaCaliforniaanark ( corporation California,al and UTORY 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 riot 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 24 vNHEREAS, the City is authorized purs! ant 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. 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 'rerrfl 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 Developri'ient 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. .3- 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 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 tenniriation of this STATUTORY AGREEMENT, this S"TATUTORY AGREEMENT shall be deemed terminated and of no further` force and effect, except: terms that are expressly stated in this STATUTORY AGREEMENT to survive ternµiination 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 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 (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 �g 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 .J + n '+�� f n ++h Drr.or+ll Oho maviml lm hoirrh+ nnrJ ci-7c of nrnnnssed b filrrlinnc al U-1 II Ilei silty of usG of LI lir I 10 pee Lel, U 0 1 � i nll n .w � � . ,�.lyl IL u Iu --- — N vNv y+, 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. WE (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 Developrnent 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, arid the like, at such dates and under such cif-cumstances as Owner would otherwise be entitled by the Development Plan; or (c) do not prevent. Owner from cornmencing, 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 srmuch 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 (Oovernrrrent Code §§ 66416 rpt sept) All Development Approvals stall not expire if Owner comr-Aaences substantial construction of the Project within one (1) year from the 0 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 Prnert Owner Shall be required to submit applications for anv and all subseauent 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 -10- 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 whsch will be applied in years 6 through 10. At the end of year '10, the City will set neva 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, 20,22, 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 frons the time the permit is 'issued. Subsequent annual payments will be due on the permit issuance anniversary date This payment is due within thirty (3�0) days of issuance of perp -0t and thereafter on the anniversary of the issuance of the permit. 5.8 Jobs and Waae 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 2 rent of tF p Pro t' workforce m 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 rnedia sites accessible to the general public. In addition, Owner shalt 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 o,Yiinirnum wage of $13/hOUr beginning January 1 2018 (California law requires $10.50/lIour), 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. -11- 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 issupnce of its permit, Owner must deposit $15,000 with the City for the purpose of reimbursing the rl;+.. F, +. J +S �. i+h rnnp c in'v fho Drnion+ as detailer! ahnxin nnri �.,ILy IVI ally associated liojL VVILII pl4llib0.7111y U I I.JJ .Lj u0 ... u 14 u _ 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 -12- 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„ GREEMENT,. 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 ars: 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: M (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 -14- 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 untill 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 -15- 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 �...,.:.,.:..a,...a'..,. .J:..'.1 .J7 CTATI I-rnOV A��CC CHIT any administrative or judicial proceeding that any Q I n I v 111.11\ 1 rIGREE EI I 1 or ally 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. -16- 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 erivironrnental conditions on, ender 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 of icers, 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 settlernent, 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 actior) (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 b;/ 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 power's, 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 broLught 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, M 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 M 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 nW 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 sl,-iall not be employed in interpret4rig 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 thefeminine 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 forrn 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 riot constitute a waiver of such party's right to insist and demand strict cornpiiance by the other party with the tem,is 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 parlay beneficiaries and this STXT-UTORY 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 M 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 M 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 authorizers to execute this STATUTORY AGREEMENT on its behalf. Each individual executing this S"TATU"FORY AGREEMEN'T 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 ATUTt.RY 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. 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 M CLOUD CONTROL, INC. M 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 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 EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] -1- ITE,M: N (VRD, Inc.) A I '"t TACII M EN"I" # I 4 -DA '1, 844 INFORMATIONAL TA"ll-IT Vl'-C.tN',I'I""Y MAP Ult . INDINC)"rS OFFACT DEVEI'I'JOPMENT AG.REEMFJ'N rj", C. DRAF RDI DA 1814 DEVELOPMENT AGREEMENT INFORMATION Location ...... i _ __................................................. . ._. 4802 Littlejohn St. APN 8535-023-011 .... _.... _ .... Zoning of Subject Location I, Industrial Principal Names -Marc 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) years. 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. CASE NUMBER: DA 18-14 LOCATION: 4802 Littlejohn Street DATE April ] 2, 2 0] 8 . R! 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 1814 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 �_ n n__:_ -a iron ao nA LI-...... L. nn �p AC\ will + h.,. ,.. Development agreement Protects kUM`8 to -V I enough urs 10-IJ) will not IIQVG 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 , "__.. _W .......................................,.,...1 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. 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 W 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, -4- 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 necee ssary, convenient or appropriate for the grading, construction, marketing, use and occupancy of the Project within the Properly at such tirnes 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 ,.5- 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 Mavnr of Baldwin Park. If the Mavor 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 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: 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. 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 prnvided 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. M (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 orjointly 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 M 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 Cnnditinnc of annrn\ial fnr 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. 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.al least 40 ffonk:y)__j ei n;�t of t.. j._* rce :Tall oras�ist of e idents f the City. Job announcements shall beposted 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 anyassociated costs with prnressinn tha 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 -12- 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 Citv's failure to conduct a ,periodic review of this STATUTORY. AGREEMENT shall notATUTORY constitute a breach of thaws ST . 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 LO 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: -13- (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 pursuant to the Government Tort Liability Act and all other applicable statutes and decisional law. Except as setforth 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 �15- 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. -16- 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, 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 M 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 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 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 w21- 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. la Manuel Lozano, Mayor By: ATTEST: By: City Clerk APPROVED AS TO FORM: By. ........�.._ .m..� Robert N. Tafoya, City Attorney Ren Yoneyama CEO APPROVED AS TO FORM: By: Buraq Investment Group, Cristeta Summers, Consultant for VRD, Inc. EXHIBIT A LEGAL DESCRIPTION OF PROPERTY -1- EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] -1- A. rj TA,CHMENT #.15-1.)A 18-15 EALTt)UST.R-t E S IN'FORMATIO'N"At--J'-'t"A,,B,f.j,E VICINI , MAI FINDINGS OF FACTI uEVELOt"'MIENT I DEVELOPMENT AGREEMENT INFORMATION Location .. ........................... ... .... .._ _. ........ 13460 Brooks Dr. APN- 8535-024-018 ........ ........ ...... ........ .._. ....... Zoning of Subject Location ........ I, Industrial Prin., Principal Names _. Sigrid Lopez and Artem Karapetyan Company Name _ .. ........ ..... Green Health Industries, LLC _ . --- ........ 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 paments. ........ ........ 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) years. Floor Area of Building's .. Approximately 18,520 s.f. Employee Requirements At least 20% of the Projects workforce shall consist of residents of the City.. r'II IM1 G ® 1 Sz_1 v vim. ..,� �v`®.. Ln --'/A% � ... � %r --,l LOCATION:I13460 Brooks Drive April 12, 2018 V l HE' SAN GAFSfrIEL VALLEY 4 r Os IRT M r'II IM1 G ® 1 Sz_1 v vim. ..,� �v`®.. Ln --'/A% � ... � %r --,l LOCATION:I13460 Brooks Drive April 12, 2018 V l HE' SAN GAFSfrIEL VALLEY 4 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 1815 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 Gover I III I (lent Diode §§ 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 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 I OCATFD 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 ATTEST.- ALEJANDRA TTEST: 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 _ .mmmm 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 corporation, 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 sen to enter into hinding stag tory deveionment 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. 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 Lanita 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 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- 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 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 3.1.12 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 I I !'\T ATI IT/11"1\/ A/l Mrr-11 Ar A IT authorized and shall, except as otherwise providea In this SIN 1 U I ORT MUMCCIVICIV 1 , 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 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 whiich 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 0 (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, 7_ 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. 4.6 Tentative Subdivision Map and Development Approvals Lifespan. The term of anv 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 0 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. -10- 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 t feast 20 percent of the P eck" workforceshallconsist 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 -11- 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 periodica review of this STATUTORY AGREEMENT shall not constitute a breach of this STATUTORY AGREEMEN... _ ....��.... � T. 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. M 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 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, -13- 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 M 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 -15- 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 -16- 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 m 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 reni ires, otherwise, the singular of anv 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 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, -19- 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 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. M 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: Sigrid, Lopez, President APPROVED AS TO FORM: ATTEST: By: By: .. City Clerk APPROVED AS TO FORM: By. Robert N. Tafoya, City Attorney Legal Counsel for Green Health Industries, LLC EXHIBIT A LEGAL DESCRIPTION OF PROPERTY EXHIBIT A EXHIBIT B MAP DEPICTING PROPERTY [TO BE ATTACHED] EXHIBIT B -1- STAFF REPORT HE SAN 6ABRIEL "VA LLEi ITEM NO. 2 TO: Honorable Mayor and Members of the City Council FROM: Shannon Yauchzee, Chief Executive Officer Rose'fgym, 1)ir ctor of Finance DATE: April 1 S, 201.I1 SUBJECT: UPDATE THE COST OF CITY SERVICE FEES BASED ON CONSUMER PRICE INDEX (CPI) ADJUSTMENT SUMMARY Article XIIIC of the State Constitution requires that fees be set at a rate that does not exceed their cost. Some fees need to be reduced and others can be raised to their cost. Staff recommends 2% increase to some of the City fees which is still less than the current average CPI increase while others might be reduced. FISCAL IMPACT Staff will bring back the fiscal impact to the Council meeting on May 2, 2018. RECOMMENDATION Staff recommends the Public Hearing be opened and continued to the next regular City Council meeting for review and approval. LEGAL REVIEW Not required. at this time,. BACKGROUND Information will be provided for the next Council meeting. ALTERNATIVE Staff recommends this item be held over to the next City Council meeting. ATTACHMENT None at this time. 3 ITEM NO. STAFF REPORT� TO: Honorable Mayor and City Councilmembers 0 7 FROM: Rose Tam, Director of Finance 1,4'ej' 1 ' SAN'64601 � '1 DATE: April 18, 2018 �i. � ,� � At`cEY,,' 'r `,� : 7I, i SUBJECT: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK CONFIRMING THE ADVISORY COMMITTEE'S REPORT AND LEVYING THE ASSESSMENT IN THE BALDWIN PARK CITYWIDE BUSINESS IMPROVEMENT DISTRICT FOR FISCAL YEAR 2018-19 SUMMARY '111C praa [)We of this staff repo wt is for City Council to approve the Business Improvement Tax (BIT) budget and set the zissessnaent rates fc.:r FY 2018-19. FISCAL IMPACT (,,Jpon t.:Nae l haal adoption of the reconarnended 1# 2018-19 1:11°1" 1xuclge:t and the approval o ° the resolution to levy the, assesstnetat, the City will beetaablecl to collect and ,spend these Rinds. These fatacls nn ay resralt in a savings to the G'etae it 1" rind of approxitnaately $271.,052 defending on tax collection and other revenue. RECOMMENDATION Staff recommends that Council: 1) Approve the FY 2018-19 BIT allocation budget; and 2) restore the full rate and approve Resolution No.2018-259, entitled "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CONFIRMING THE ADVISORY COMMITTEE'S REPORT AND LEVYING THE ASSESSMENT IN THE BALDWIN PARK CITYWIDE BUSINESS IMPROVEMENT DISTRICT FOR FISCAL YEAR 2018-2019"; and 3) provide staff direction on the appointment of a member of the public or business community to the Committee. BACKGROUND BIT Assessment In 1989, the City Council approved Ordinance 842 which established a City Business Improvement District (BID) that allows for an assessment (or surcharge) on each business license between 60 to 90 percent of the Business License Fees. The BIT was reduced to 50%. The full rate was restored in 2017. The ordinance requires the Advisory Committee to recommend a budget and State Law requires that a public hearing be held to adopt the resolution levying the assessment. The City ordinance indicates that the funds can be used only for the following purposes: 1) Decoration of any public place 2) Promotion of public events which are to take place in the City 3) Furnishing of music in any public place 4) The general promotion of business activities BIT Budget At the City Council Meeting on March 2, 2016, the City Council approved the designation of the Executive Team as the Business Improvement Advisory Committee. The Business Improvement Advisory Committee met on April 10, 2018 to discuss programs/projects for FY 2018-19 and the estimated cost and budget allocation. In attendance were the Chief Executive Officer, Police Chief, Interim Public Works Director, Fiscal Year 2018-2019 BIT Resolution and Budget April 18, 2018 Page 2 Director of Finance, Recreation and Community Services Director, Director of Community Development; and staff members from Recreation, Police, and Community Development. (a) Staff cost from Public Works estimated at $11,269 will be funded with Gas Tax Fund and $12,839 from Police will be funded from General Fund. (b) Staff cost from Public Works estimated at $6,328 will be funded with Gas Tax Fund. (c) Staff cost from Public Works estimated at $2,742 will be funded with Gas Tax Fund. LEGAL REVIEW T'te Citv Aftornev has reviewed and approved this report. ALTERNATIVES 1) As an alternative, the City Council may opt to fund the programs in a different manner than recommended as alternatives given above. ATTACHMENTS 1) Resolution No. 2018-251 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK CONFIRMING THE ADVISORY COMMITTEE'S REPORT AND LEVYING THE ASSESSMENT IN THE BALDWIN PARK CITYWIDE BUSINESS IMPROVEMENT DISTRICT FOR FISCAL YEAR 2018-2019 WHEREAS, the City Council has previously ordered the formation of the Citywide Business Improvement Area (the "Area") pursuant to the terms and provisions of the Parking and Business Improvement Area Law of 1979, which has been superseded and replaced by the Parking and Business improvements Area Law of 1989, being Part 6 of Division 18 of the Streets and Highway Code of the State of California (Section 36500 et seq.) (The "Law"); and WHEREAS, the City Council has appointed an Advisory Committee for the purpose of making recommendations to the City Council on the expenditure of revenue derived from the levy of assessments, on the classification of businesses, and of the method of basis of levying the assessments pursuant to the Law; and WHEREAS, the Advisory Committee, comprised of the Baldwin Park Executive Team has made recommendations for Fiscal Year 2018-19 for which assessments are to be collected to pay the costs of improvements and activities described in Attachment "A" and WHEREAS, The City Council did give notice of the time and place for the public hearing on the question of the levy of the proposed assessment; and WHEREAS, at this time, the City Council has heard all testimony and evidence, and is desirous of proceeding with the levy of an annual assessment for said Area. NOW, THEREFORE, THE CITY OF BALDWIN PARK DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The above recitals are all true and correct. SECTION 2. The City Council hereby orders the programs and activities to be carried out as set forth in the Advisory Committee's recommendations in ATTACHMENT "A" and orders the annual levy to the Area as shown and set forth and described in said Report as Resolution of Intention. SECTION 3. The Assessment as set forth and contained in said Report is hereby confirmed and adopted. SECTION 4. The adoption of this Resolution constitutes the levy of the assessment for the Fiscal Year commencing July 1, 2018 and ending June 30, 2019. SECTION 5. The estimates of costs, the assessments, and all other matters as set forth in the Advisory Committee's Report pursuant to the Law, are hereby approved and adopted by the City Council and hereby confirmed. Resolution 2018-259 Page 2 SECTION 6. Written protests were not received from the owners of businesses in the area which will pay the assessments indicated in Ordinance No. 842. SECTION 7. A copy of the Advisory Committee's Report and the system of charges, including the classifications of businesses and the amount of the annual charges shall be filed in the Office of the City Clerk and open for public inspection. • MANUALLOZANO STATE OF CALIFORNIA COUNTY OF LOS ANGELES ss. CITY OF BALDWIN PARK I 1, Alejandra Avila, City Clerk of the City of Baldwin Park, do hereby certify that the foregoing Resolution No. 2018-259 was duly and regularly approved and adopted by the City Council of the City of Baldwin Park at a regular meeting held on 18th day of April, 2018 by the following vote of the Council: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: ALEJANDRA AVILA CITY CLERK City of Baldwin Park CITYWIDE BUSINESS IMPROVEMENT FEES FISCAL YEAR 2017-18 BUSINESS IMPROVEMENT ADVISORY COMMITTEE'S REPORT Method and Basis for Levv of Assessment Area assessments are based upon a percentage of the regular business license tax. The percentage differs by the Class of business and relates to the benefit each class derives from the improvements and activities in the area. The assessments are listed below: based on ordinance No. 842: Class A Business 60% Class B Business 75% Class C Business 90% A full description of the types of business in each class and certain except businesses are provided in Ordinance No. 842 (Attached). No annual charge levied in accordance with this assessment shall exceed $450. Business Imarovement Fees Activities for Fiscal Year 2018-19 BUSINESS IMPROVEMENT TAX BUDGET Projected Fund Balance as of June 30, 2018 $ 92,052 Projected Revenue from FY 2018-19 $179,000 Total Projected Available Fund Balance for FY 2018-19 $271,052 Pro ram Cost: BP NOW Publication -Bi -Monthly 53,432 Street Market & Fair (a) 102,268 Concerts in the Park (b) 62,344 4 1h of jU!y Spectacular (c) 48,508 Shop Local Program $4,500 Recommendations Sub -Total $271,052 Proiected Sur lus/(Deficit) $ 0 (a) Staff cost from Public Works estimated at $11,269 will be funded with Gas Tax Fund and $12,839 from Police will be funded from General Fund. (b) Staff cost from Public Works estimated at $6,328 will be funded with Gas Tax Fund. (c) Staff cost from Public Works estimated at $2,742 will be funded with Gas Tax Fund. ATTACHMENT "A" STAFF REPORT FfUO,0F �4 �: SAN ,G no �. �y'D a �a 14 30 TO: Honorable Mayor and Members of the City Council FROM: Rose Tam, Director of Finance DATE: April 18, 2018 SUBJECT: CREDIT CARD INTEGRATION SERVICES WITH TYLER ACCOUNTING AND PERMIT SOFTWARE SYSTEMS SUMMARY Due to the conversion of the accounting and permit software system with the Tyler accounting and permit software systems, staff have researched credit card companies that are compatible with the system. We recommend that the City use credit card merchant provider OpenEdge because of their compatibility and low fees. FISCAL IMPACT There is no fiscal impact to the General Fund for using the credit card merchant provider at this time. The fees are passed -on to the customers as allowed by the California State Government Code Section 6159(h). The merchant provider will also provide one credit card terminal per location at no additional cost. RECOMME"Nl1A.TION Staff recommends that the City Council authorize the staff to: 1. Accept credit card as an alternative payment method for receiving City taxes and service fees. 2. Use OpenEdge as the credit card merchant provider. 3. Pass -on the credit card fees to the customers as a convenience fee as allowed by the California State Government Code Section 6159(h). 4. Repeal and replace Resolution No. 2016-152 with Resolution No 2018-249 titled "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, REPEALING AND REPLACING RESOLUTION NO. 2016-152 AND ADOPTING SUBSTITUTE RESOLUTION ALLOWING FOR THE USE OF CREDIT CARD AS ALTERNATIVE METHOD FOR PAYMENT OF CITY TAXES AND FEES" LEGAL REVIEW The City Attorney has reviewed the above state law and this report. BACKGROUND The City collects from residents and customers local taxes and fees for services performed by City staff. They come to City Hall to remit their payment either in the form of cash or checks. Currently, only Recreation accepts credit card payments using Elavon as the credit card merchant provider. The City plans to use OpenEdge to provide credit card processing services as an alternative city-wide payment method. The credit card payments will be accepted over the counter and online through the City of Baldwin Park website. OpenEdge is one of the two credit card merchant providers offering credit card processing services that are compatible with Tyler Incode and Energov software system without going through a third party in addition to offering lower fees. The following table shows the price quotes of two credit card merchant providers: Credit Card Payment Merchant Provider Summary of Fee Proposals ** PCI (Payment Card Credit Card Merchant Industry Data Security Provider * Convenience Fee Standard Fee) OpenEdge 2.35% $0.00 Automated Merchant Systems, 2.95% with a $2.00 $0.00 Inc. minimum NOTE * The City plans to pass on the Convenience Fee to the residents and customers. ** The Payment Card Industry Data Security Standard (PCI DSS) is an information security standard for organizations that handle branded credit cards from the major card schemes. The PCI Standard is mandated by the card brands and administered by the PCI DSS Council. The standard was created to increase controls around cardholder data to reduce credit card fraud. Validation of compliance is performed annually, either by an external Qualified Security Assessor (QSA) or by a firm specific draft: Internal Security Assessor (ISA) that creates a Report on Compliance for organizations handling large volumes of transactions, or by Self -Assessment Questionnaire (SAQ) for companies handling smaller volumes. ALTERNATIVES 1. Defer acceptance of credit cards as alternative payment method with OpenEdge. 2. Absorb the credit card fees and appropriate an estimated $86,500 annual amount from the General Fund to cover the fees. 3. Provide staff alternative direction whether to proceed with the city-wide credit card payment system as an alternative payment method. ATTACHMENT 1. Resolution No. 2018-249 I 1 LEll • 1,I 11 .� ' 1 1 I I• # 1 .1 , . WHEREAS, pursuant to California State Government Code Section 6159(h), a court, city, county, city and county, or any other public agency may impose a fee for the use of a credit or debit card or electronic funds transfer; WHEREAS, as authorized by the above state law, it is the intent of the City Council of the City of Baldwin Park to offer to the residents and customers of the City the acceptance of credit card as an alternative method for the payment of City taxes and service fees; WHEREAS, the credit card fees charged by the card companies shall be passed -on to the residents and customers as convenience fee; and, WHEREAS, a properly noticed public hearing was held on April 18, 2018 to receive public comments on the proposed use of credit card as alternative method of payment of City taxes and fees. NOW THEREFORE BE IT HEREBY RESOLVED, by the City Council of the City of Baldwin Park as follows: 1. The use of credit card as alternative method of payment of City taxes and fees is hereby approved. 2. The credit card fees charged by the card companies shall be passed -on to the residents and customers as convenience fee. 3. The City Clerk shall certify as to the adoption of the Resolution and shall cause the same to be processed in the manner required by law. ATTEST: 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 Resolution No. 2018-249 was duly adopted by the City Council of the City of Baldwin Park at a regular meeting thereof held on April 18, 2018 and that the same was adopted by the following vote to wit: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN:. COUNCIL MEMBERS: ALEJANDA AVILA CITY CLERK AGENDA APRIL 18, 2018 7:00 P REGULAR MEETING COUNCIL CHAMBER 14403 E. PACIFIC AVENUE BALDWIN PARK, CA 91706 (626) 960-4011 Manuel Lozano Ricardo Pacheco Cruz Baca Monica Garcia Susan Rubio Chair - Vice Chair - Board Member - Board Member Board Member PLEASE TURN OFF CELL PHONES AND PAGERS WHILE MEETING IS IN PROCESS POR FAVOR DEAPAGAR SUS TELEFONOS CELULARES YDEEPERS DURANTE LA JUNTA PUBLIC COMMENTS The public is encouraged to address the Housing Authority on any matter posted on the agenda or on any other matter within its jurisdiction. If you wish to address the Board, 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 a la Agencia nombrada en esta agenda, para hablar sobre cualquier asunto publicado en la agenda o cualquier tema que est6 bajo su jurisdiccibn. Si usted desea la oportunidad de dirigirse a la Agencia, podr-A hacerlo durante el periodo de Comentarios del Pdblico (Public Communications) anunciado en la agenda. A cada persona se le permite hablar por tres (3) minutos. Hay un int6tprete para su conveniencia. Any written public record relating to an agenda item for an open session of a regular meeting of the Finance Authority that is distributed to the Housing Authority less than 72 hours prior to that meeting will be available for public inspection at City Hall in the City Clerk's office at 14403 E. Pacific Avenue, 3rd Floor during normal business hours (Monday - Thursday, 7:30 a.m. - 6:00 p.m.) CALL TO ORDER ROLL CALL FINANCE AUTHORITY REGULAR MEETING — 7:00 PM Board Members: Cruz Baca, Monica Garcia, Susan Rubio, Vice Chair Ricardo Pacheco and Chair Manuel Lozano PUBLIC COMMUNICATIONS Three (3) minute speaking time limit Tres (3) minutos ser6 el limite para hablar THIS IS THE TIME SET ASIDE TO ADDRESS THE COMMISSION No action may be taken on a matter unless it is listed on the agenda, or unless certain emergency or special circumstances exist. The a 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 COMISI& No se podra tomar acci6n en algun asunto a menos que sea incluido an la agenda, o a menos que exista alguna emergencia o circunstancia especial. EI cuerpo legislativo y su personal podran: 1) Responder brevemente a declaraci6nes o preguntas hechas por personas; o 2) Dirigir personal a investigar y/o fijar asuntos para tomar en consideraci6n an juntas proximas. [Codigo de Gobiemo §54954.2] CONSENT CALENDAR 1. Treasurer's Report — February 2018 Staff recommends that the Board receive and file the Treasurer's Report. ADJOURNMENT CERTIFICATION I, Alejandra Avila, Secretary of the Finance Authority hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the City Hall bulletin board not less than 72 hours prior to the meeting. Dated this 12th day of April, 2018. ✓ �... Alejandra Avila Secretary 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 paviia ezt�w rrarkrr1,Lzt. 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 ll) STAFF REPORT ITEM NO. 15d����f/G��rs�af� 2r,lfaaNd�i. Honorable Mayor and City Councilmembers Rose Tam, Director of Finance � April 18, 2018 TREASURER'S REPORT — FEBRUARY 2018 SUMMARY Attached is the Treasurer's Report for the month of February 2018. The Treasurer's Report lists all cash for the City which includes the Baldwin Park Financing Authority, the Housing Authority, and the Successor Agency to the Community Development Commission (CDC). All investments are in compliance with the City's Investment Policy and the California Government Code. FISCAL IMPA.C1' None LEGAL REVIEW None required. REC OM M:ENDATION Staff recommends that Council receive and file the Treasurer's Report for February 2018. BACXL-,RI: (JN 1) The City's Investment Policy requires the Treasurer's Report be submitted to the Mayor and City Council on a monthly basis. TO: u or FROM: m se yuM DATE: VA iSUBJECT: t�r4� JANO ., ITEM NO. 15d����f/G��rs�af� 2r,lfaaNd�i. Honorable Mayor and City Councilmembers Rose Tam, Director of Finance � April 18, 2018 TREASURER'S REPORT — FEBRUARY 2018 SUMMARY Attached is the Treasurer's Report for the month of February 2018. The Treasurer's Report lists all cash for the City which includes the Baldwin Park Financing Authority, the Housing Authority, and the Successor Agency to the Community Development Commission (CDC). All investments are in compliance with the City's Investment Policy and the California Government Code. FISCAL IMPA.C1' None LEGAL REVIEW None required. REC OM M:ENDATION Staff recommends that Council receive and file the Treasurer's Report for February 2018. BACXL-,RI: (JN 1) The City's Investment Policy requires the Treasurer's Report be submitted to the Mayor and City Council on a monthly basis. CITY OF BALDWIN PARK TREASURER'S REPORT 2/2812018 INVESTMENT INTEREST PURCHASE MATURITY PAR MARKET ... .....��...,,�»»�.rDESCRIPTION wmR . HAKE � DAIP DATEflfl .. VA9 UC PRINCIPAL 6aAL �_ VALUE ,� �• VALUE �—„.� State of California Local Agency Invostment Fund (LAIF) ........._ . pty.: ._....... _ Including Dsanaral (Fund 8. all other Special Rovonuo Funds 1.41% Varies Varies $ 27,291,047.43 $ 27,291,047.43 $ 27,291,047.43 $ 27,291,047.43 Housing Authority 1.41% Varies Varies 13,302.96 13,302.96 13,302.96 13,302.96 27,304,350.39 27,304,360.39 27,304,350.39 27,304,360.39 cortlticate of Deposit " Ono Bacebk USA N'F�`t•L �'� ,,;I'� Capital 1.16% 911412016 911412018 245,000.00 246,000.00 245,000.00 244,037.15 Wells Fargo Bank NA SIOUX Falls 1.16% 911412016 911412018 245,000.00 245,000.00 245,000.00 244,046.96 JP Morgan Chase Bank NA Columbus 1.15% 911612016 9/16/2016 245,000.00 246,000,00 246,000,00 244,034.70 Ally Bank Midvale CTF DEP ACT/366 1.15% 911712016 9/17/2018 245,000.00 246,000.00 246,000,00 244,017.65 American Express Centurion 1.60% 411212017 4112/2019 260,000.00 260,000.00 260,000.00 248,875.00 Everbank-Jacksonville 1.65% 4/1612017 411612019 260,000.00 260,000.00 250,000.00 248,765.00 Citibank National Association 1.80% 1/2612018 1125/2019 260,000.00 250,000.00 250,000.00 249,836.00 Goldman Sachs Bk USA NY 2.25% 1/2412018 112412020 260,000.00 250,000.00 250,000.00 249,670.00 Sallie Mae Bk SLT Lake City UT 2.25% 112412018 112412020 260,000,00 250,000.00 250,000.00 249,670.00 2,230,000.002,230,000.00 �Ymm 2,230,000.00 ._........2,222,741.35 Fiscal Agent Funds (IrmstlOoht. Service Fund) Varies Varies Varies 1,851,666.30 1,861,666.30 1,851,666.30 1,661,666.30 Fiscal Agent Funds - Succosraor Agency (Trust/Debt Service Fund) Varies Varies Varies 170,813.97 170,813.97 170,813.97 170,813.97 2,022. 460.27 oz2,aeo,z7 z,oz2,a6D.z7 $ .31 �666 L8�3.0.80 $ 3rt 56,630.66 1 �r60 3,1,,6�49,67�2.0,1 Total Investments $ 31,566,830.66 Cashwith Bank of the West _..._.._. ....._.._ _. ... City CPeeckVney 2,300,666.95 Money Market Plus 192,042.02 City Miscellaneous Cash 634,832.85 Successor Agency 44,833.96 Housing Authority 165,404.07 Financing Authority 1,719.08 Investment Brokerage 9,520.64 Total Cash with Bank of the West mmmm 3,248,919.47 Total Cash and Investments $3�9�06 /60 13 Schedule of Cash and Investments Includes city-wide assets as included in the Comprehensive Annual Financial Report. There was no investment maturity/purchase transaction made for the month of February 2018 and several deposits/withdrawals were made through the Local Agency Investment Fund. In compliance with the California Government Code Section 53646 et seq., I hereby certify that sufficient Investment liquidity and anticipated revenues are available to meet the City's expenditure requirements for the next six months that all investments are In compliance to the City's Statement of Investment Policy. Approved by: d Rose Tam Director of Finance dglX7_1 :A APRIL 18, 2018 7:00 P REGULAR MEETING COUNCIL CHAMBER 14403 E. PACIFIC AVENUE BALDWIN PARK, CA 91706 (626) 960-4011 Manuel Lozano Ricardo Pacheco Cruz Baca Monica Garcia Susan Rubio - Chair - Vice Chair - Board Member - Board Member - Board Member PLEASE TURN OFF CELL PHONES AND PAGERS WHILE MEETING /S IN PROCESS POR FAVOR DE APAGAR SUS TELEFONOS CELULARES Y BEEPERS DURANTE LA JUNTA PUBLIC COMMENTS The public is encouraged to address the Housing Authority on any matter posted on the agenda or on any other matter within its jurisdiction. If you wish to address the Board, 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 dingirse a la Agencia nombrada en esta agenda, para hablar sobre cualquier asunto publicado en la agenda o cualquier tema que est6 bajo su jurisdicci6n. Si usted desea la oportunidad de dirigirse a la Agencia, podr-A hacedo 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 inldrprte para su conveniencia. Any written public record relating to an agenda item for an open session of a regular meeting of the Finance Authority that is distributed to the Housing Authority less than 72 hours prior to that meeting will be available for public inspection at City Hall in the City Clerk's office at 14403 E. Pacific Avenue, 3rd Floor during normal business hours (Monday - Thursday, 7:30 a.m. - 6:00 p.m.) f Z#7WM HOUSING AUTHORITY REGULAR MEETING — 7:00 PM Board Members: Cruz Baca, Monica Garcia, Susan Rubio, Vice Chair Ricardo Pacheco and Chair Manuel Lozano PUBLIC COMMUNICATIONS Three (3) minute speaking time limit Tres (3) minutos ser6 el limite para hablar THIS IS THE TIME SET ASIDE TO ADDRESS THE COMMISSION 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 COMIS16N No se podra tomar acci6n en algun asunto a menos que sea incluido en la agenda, o a menos que exista alguna emergencia o circunstancia especial. EI cuerpo legislativo y su personal podran: 1) Responder breveinente a declaraci6nes o preguntas hechas por personas; o 2) Dirigir personal a investigar y/o fijar asuntos para tomar en consideraci6n en juntas proximas. [Codigo de Gobiemo §54954.2] CONSENT CALENDAR 1. Warrants and Demands Staff recommends that the Board ratify the Warrants and Demands. 2. Treasurer's Report — February 2018 Staff recommends that the Board receive and file the Treasurer's Report. ADJOURNMENT CERTIFICATION I, Alejandra Avila, Secretary of the Housing Authority hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the City Hall bulletin board not less than 72 hours prior to the meeting. Dated this 12th day of April, 2018.. °0,0. `Al�ejzrndra Avila Secretary 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 ar° vil baldwvhMgrk,,.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 ll) STAFF REPORT Ll TO: '7' FROM: seg ''VA6AY""' DATE: SUBJECT: ITEM NO. HA -1 The Honorable Chairman and Members of the Board Rose Tam, Director of Finance April 18, 2018 BALDWIN PARK HOUSING AUTHORITY'S WARRANTS AND DEMANDS SUMMARY Attached are the Warrants and Demands Registers for the City of Baldwin Park Housing Authority to be ratified by the Board. FISCAL IMPACT The total of the Warrants and Demands for Housing Authority is $357,284.00 LEGAL REVIEW None required. RECOMMENDATION Staff recommends that the Board ratify the attached Warrants and Demands Registers. BACKGROUND The attached Claims and Demands report format meets the required information as set out in the California Government Code. Staff has reviewed the requests for expenditures for the appropriate budgetary approval and for the authorization from the department head or its designee. Pursuant to Section 37208 of the California Government Code, the Chief Executive Officer or his/her designee does hereby certify to the accuracy of the demands hereinafter referred. Payments released since the previous meeting and the following is a summary of the payment released: 1. The March 13 to April 9, 2018 Automated Clearing House (ACH) in the amount of $357,284.00 were made on behalf of City of Baldwin Park Housing Authority constituting of claims and demands, are herewith presented to the Board as required by law, and hereby ratified. Check Register ACH April 9, 2018 Date Range: 03/13/2018...04/09/2018 Grouped by: VMS Date Range: All Sorted by. Check Number Program: All Check Number Payment Type: All Check Numbers: All Direct Deposit: Only Check Cleared: All Port Status: Include Port Ins Zero HAPs: Include Zero HAPs Voided Payments: Include Voided Payments Held Checks: Include Held Checks Check Number Check Date Payee Name ----____-- _.___-- ____ . Amount, ❑ 17164 03/13/2018 Moller Property Management ® 1714.00 ❑ 17165 03/13/2018 West Covina Senior Villas ll, LP ® 12.00 ❑ 17166 04/01/2018 Tanya Hang Chen ® 1109.00 ❑ 17167 04/01/2018 1015 West Garvey West Covina, LP ® 1433.00 ❑ 17168 04/01/2018 1024 Royal Oaks LP dba Whispering Fountains ® 13118.00 ❑ 17169 04/01/2018 1024 Royal Oaks LP dba Whispering Fountains ® 1245.00 ❑ 17170 04/01/2018 Aaron Abdus Shakoor ® 785.00 ❑ 17171 04/01/2018 Alan Wu ® 764.00 ❑ 17172 04/01/2018 Alejandra Gutierrez ® 675.00 ❑ 17173 04/01/2018 Alfonso Contreras ® 209.00 ❑ 17174 04/01/2018 Allan M. & Virginia J Chipp and Ralph Seline ® 2989.00 ❑ 17175 04/01/2018 Alta Vista Villas, LP ® 588.00 ❑ 17176 04/01/2018 Amparo M Limon ® 1089.00 ❑ 17177 04/01/2018 Amy Si On ® 782.00 ❑ 17178 04/01/2018 Ana Thai ® 956.00 ❑ 17179 04/01/2018 Andrew & Eva Fogg ® 1213.00 ❑ 17180 04/01/2018 Angel Romo ® 693.00 ❑ 17181 04/01/2018 Anna & Simon Choi ® 1231.00 ❑ 17182 04/01/2018 Annette C Scott ® 1510.00 ❑ 17183 04/01/2018 Antonio & Aida Rinos ® 1068.00 ❑ 17184 04/01/2018 Antonio R. Corral ® 312.00 ❑ 17185 04/01/2018 ASCENSION HOLDINGS LLC ® 932.00 ❑ 17186 04/01/2018 B.K. Mamdani ® 1231.00 ❑ 17187 04/01/2018 Badillo Street Senior Apartments, LLC ® 12411.00 ❑ 17188 04/01/2018 Baldwin Park Family Housing Limited ® 12643.00 ❑ 17189 04/01/2018 Beatrice Pyatt ® 889.00 ❑ 17190 04/01/2018 Becky Binh Nguyet Luu ® 1747.00 ❑ 17191 04/01/2018 Billy Theodorakopoulos ® 773.00 ❑ 17192 04/01/2018 Blessed Rock of EI Monte ® 2477.00 ❑ 17193 04/01/2018 Bobby Roach ® 1093.00 ❑ 17194 04/01/2018 Brookhollow Apartments ® 2773.00 0 HAPPY Software Page 1 04/09/2018 9:43:37 AM ❑ 17195 04/01/2018 Burnel & Mae Smith ® 1661.00 ❑ 17196 04/01/2018 Carol Hinds ® 681.00 ❑ 17197 04/01/2018 Central Apartments #2 ® 1672.00 ❑ 17198 04/01/2018 Chen Jackson ® 622.00 ❑ 17199 04/01/2018 Cho Wu ® 171.00 ❑ 17200 04/01/2018 Christina Villasenor ® 883.00 ❑ 17201 04/01/2018 Cienega Garden Apartments ® 2863.00 ❑ 17202 04/01/2018 Cipriano Salazar Jr. ® 889.00 ❑ 17203 04/01/2018 Clinett Glazis ® 592.00 ❑ 17204 04/01/2018 Covina 023 Woods 206 LP - Pama Management 206 ® 467.00 ❑ 17205 04/01/2018 Cynthia Pham ® 716.00 ❑ 17206 04/01/2018 Dajojo, LLC ® 467.00 ❑ 17207 04/01/2018 Denise Van Pham ® 1443.00 ❑ 17208 04/01/2018 Derek Sim ® 748.00 ❑ 17209 04/01/2018 Dieu Van Huynh ® 875.00 ❑ 17210 04/01/2018 Dieu-Thuy Nu Ton ® 1378.00 ❑ 17211 04/01/2018 Dimitris Papadopoulous ® 1245.00 ❑ 17212 04/01/2018 Dinghwa Eddy Liu ® 1426.00 ❑ 17213 04/01/2018 Doan & Lily Thi ® 1370.00 ❑ 17214 04/01/2018 Doanho Do Ha ® 1217.00 ❑ 17215 04/01/2018 Don Norwood ® 1231.00 ❑ 17216 04/01/2018 Donna J Falls ® 771.00 ❑ 17217 04/01/2018 Doreen Han ® 620.00 ❑ 17218 04/01/2018 Dung Tran ® 1146.00 ❑ 17219 04/01/2018 Dung Trung Pham and Tammy Tram Dang ® 816.00 ❑ 17220 04/01/2018 Emilio De Jesus Cruz ® 514.00 ❑ 17221 04/01/2018 Eric C. Otte ® 783.00 ❑ 17222 04/01/2018 Estate of Rosetta Mix ® 656.00 ❑ 17223 04/01/2018 Eunice Property, LLC ® 889.00 ❑ 17224 04/01/2018 EZ APT LLC ® 929.00 ❑ 17225 04/01/2018 Fanny Chan ® 641.00 ❑ 17226 04/01/2018 Fat Law ® 891.00 ❑ 17227 04/01/2018 Fernando Islas ® 1080.00 ❑ 17228 04/01/2018 Fred Lau ® 885.00 ❑ 17229 04/01/2018 Gilbert Dominguez ® 499.00 ❑ 17230 04/01/2018 Gleiberman Properties, Inc - FBO MG Properties Group ® 1123.00 ❑ 17231 04/01/2018 Grace Chiou ® 1248.00 ❑ 17232 04/01/2018 Greater San Gabriel Valley Property Management, Inc. ® 1485.00 ❑ 17233 04/01/2018 Group IX BP Properties, LP ® 350.00 ❑ 17234 04/01/2018 Guillermo Vasquez ® 1115.00 0 17235 04/01/2018 Ha X Van ® 2361.00 ❑ 17236 04/01/2018 Henry Ho ® 746.00 ❑ 17237 04/01/2018 Henry Wong ® 1698.00 ❑ 17238 04/01/2018 Heritage Park Villas LP ® 13890.00 ❑ 17239 04/01/2018 Hilbert Properties II ® 1648.00 ❑ 17240 04/01/2018 Hui Chuan Wang ® 3114.00 © HAPPY software Page 2 04/09/2018 9:43:37 AM ❑ 17241 04/01/2018 HUY VU 789.00 ❑ 17242 04/01/2018 Isabel R Sanchez 1038.00 ❑ 17243 04/01/2018 Jaime Barcena 786.00 ❑ 17244 04/01/2018 James or Barbara Fox 750.00 ❑ 17245 04/01/2018 JBMW Investment, LLC 669.00 ❑ 17246 04/01/2018 Jeff Ma 677.00 ❑ 17247 04/01/2018 Jesse S. Gonzalez 227.00 ❑ 17248 04/01/2018 Jianhong Zhen 421.00 ❑ 17249 04/01/2018 Jim & Nancy Bailey 603.00 ❑ 17250 04/01/2018 Jocelyn Jae Jhong 1770.00 0 17251 04/01/2018 Joe Clark 2333.00 ❑ 17252 04/01/2018 John Nguyen 515.00 ❑ 17253 04/01/2018 John W. Ruwitch and Anh Lam Truong 796.00 ❑ 17254 04/01/2018 John Young 496.00 ❑ 17255 04/01/2018 Jose Baudelio Delgado 741.00 ❑ 17256 04/01/2018 Joseph H. Garcia 3052.00 ❑ 17257 04/01/2018 Joseph M. Kwok 1271.00 ❑ 17258 04/01/2018 Joseph Pham 815.00 ❑ 17259 04/01/2018 Joseph T. Tung 964.00 ❑ 17260 04/01/2018 Juan Alvarado 435.00 ❑ 17261 04/01/2018 Kan Investments LTD, LLC 556.00 ❑ 17262 04/01/2018 Karen Lin 917.00 ❑ 17263 04/01/2018 Karen M Hollinhurst 885.00 ❑ 17264 04/01/2018 Kim Chau 753.00 ❑ 17265 04/01/2018 Kimberly Nguyen 776.00 ❑ 17266 04/01/2018 Kimberly U Dao 161.00 ❑ 17267 04/01/2018 Kin Wai Wong 895.00 ❑ 17268 04/01/2018 Ky Tran 1243.00 ❑ 17269 04/01/2018 LAI MING LEUNG 839.00 0 17270 04/01/2018 Lambert Lam 1218.00 ❑ 17271 04/01/2018 Lan Hua Mi Ku 1418.00 ❑ 17272 04/01/2018 Lark Ellen Village 5723.00 ❑ 17273 04/01/2018 Larry Chow 3419.00 0 17274 04/01/2018 Larry Mimms 1067.00 ❑ 17275 04/01/2018 Larry Pratt or Doreen E. Ewing 1396.00 ❑ 17276 04/01/2018 LAT Investments, LLC 2142.00 ❑ 17277 04/01/2018 Lawrence and/or Lorraine Scimeca 1412.00 0 17278 04/01/2018 LEFA Trust 954.00 ❑ 17279 04/01/2018 Leslie K Ng 851.00 ❑ 17280 04/01/2018 Lien Diep 1087.00 ❑ 17281 04/01/2018 Linda Man 790.00 ❑ 17282 04/01/2018 Lois J Gaston 1357.00 ❑ 17283 04/01/2018 Louis Tong 1074.00 ❑ 17284 04/01/2018 Lourdes Vela 2699.00 ❑ 17285 04/01/2018 Luan Trong Hoang 668.00 ❑ 17286 04/01/2018 Lucena A Ewing 2424.00 0 HAPPY software Page 3 04/09/2018 9:43:37 AM ❑ 17287 04/01/2018 Lucille Fulmer 805.00 Cl 17288 04/01/2018 Lupe Barajas 543.00 ❑ 17289 04/01/2018 Mack E Titus 25.00 Cl 17290 04/01/2018 Malcolm Oso 552.00 ❑ 17291 04/01/2018 Mallorca Apartments, LTD 886.00 ❑ 17292 04/01/2018 Man Sze Ma 944.00 ❑ 17293 04/01/2018 Maria Luisa Fernandez 74.00 ❑ 17294 04/01/2018 Maria Luz Rodriguez 359.00 ❑ 17295 04/01/2018 Marina Alvarez 615.00 ❑ 17296 04/01/2018 Mark T. Fernandez 643.00 ❑ 17297 04/01/2018 Mary L Haynes 996.00 ❑ 17298 04/01/2018 Mayra Ortega 995.00 ❑ 17299 04/01/2018 Melody (Muoi) Dao 1221.00 ❑ 17300 04/01/2018 Michael H Phuong 1328.00 ❑ 17301 04/01/2018 Michelle Toliao Fernandez 753.00 ❑ 17302 04/01/2018 Minh A Nguyen 797.00 ❑ 17303 04/01/2018 Mohamad Tavakkoli 2630.00 ❑ 17304 04/01/2018 Moller Property Management 857.00 ❑ 17305 04/01/2018 Monica Alber lel 919.00 0 17306 04/01/2018 Monrovia 612, LP 6856.00 ❑ 17307 04/01/2018 Monrovia Heritage Park LP 16492.00 ❑ 17308 04/01/2018 Monrovia Heritage Park LP 2364.00 ❑ 17309 04/01/2018 Mousa Boushaaya 885.00 ❑ 17310 04/01/2018 Nancy H Shen 786.00 ❑ 17311 04/01/2018 Nomer Lacson 1440.00 ❑ 17312 04/01/2018 Olie S Johnson 885.00 ❑ 17313 04/01/2018 Olive RE Holdings, LLC 2811.00 ❑ 17314 04/01/2018 Pacific Towers Senior Apartments - TDF LP 1872.00 ❑ 17315 04/01/2018 PAMA IV Properties, LP 1782.00 ❑ 17316 04/01/2018 Paramjit S Nijjar 1985.00 ❑ 17317 04/01/2018 Paul & Annie W Chau 966.00 ❑ 17318 04/01/2018 Paul P Simon 815.00 ❑ 17319 04/01/2018 Paul Yan 683.00 ❑ 17320 04/01/2018 Paul Yen 496.00 ❑ 17321 04/01/2018 Peter R Nasmyth 911.00 ❑ 17322 04/01/2018 Philip Tsui 633.00 ❑ 17323 04/01/2018 Primrose Villa 5347.00 ❑ 17324 04/01/2018 Quoc T. Vo 1386.00 ❑ 17325 04/01/2018 Quy Duc Tran 950.00 ❑ 17326 04/01/2018 Ralph V. Parra 1090.00 ❑ 17327 04/01/2018 Ramiro Viramontes 329.00 ❑ 17328 04/01/2018 RAMONA BLVD FAMILY APARTMENTS, L.P. 2879.00 ❑ 17329 04/01/2018 Raul Varela Ayala 895.00 ❑ 17330 04/01/2018 Richard A DaSylveira 1163.00 ❑ 17331 04/01/2018 Ro Van Le 759.00 ❑ 17332 04/01/2018 Robert Lawe 875.00 0 HAPPY Software Page 4 04/09/2018 9:43:37 AM ❑ 17333 04/01/2018 Robert and Judy Ip 2012 Trust 1226.00 ❑ 17334 04/01/2018 Roger Hin Nam Mak 8308.00 ❑ 17335 04/01/2018 Roland Wiekamp 1251.00 ❑ 17336 04/01/2018 Roman Basin 1104.00 ❑ 17337 04/01/2018 Ronald & Pamela Layne 531.00 ❑ 17338 04/01/2018 Rosa Beltran 1651.00 ❑ 17339 04/01/2018 Rosa Lamas-Serratos 1704.00 ❑ 17340 04/01/2018 Rosie Leon 786.00 ❑ 17341 04/01/2018 Roy Lam 598.00 ❑ 17342 04/01/2018 Ruel Torres 429.00 ❑ 17343 04/01/2018 SAE GROUP, LLC 1270.00 ❑ 17344 04/01/2018 Sam Gurfinkel 1227.00 ❑ 17345 04/01/2018 Sara Romo 954.00 ❑ 17346 04/01/2018 Sel Homes LLC 7304.00 ❑ 17347 04/01/2018 Sergio Molina 111.00 ❑ 17348 04/01/2018 Serrano West Covina #199W, LP 453.00 ❑ 17349 04/01/2018 Shiu-Ein Huang 285.00 ❑ 17350 04/01/2018 Siu Fung Mak 1575.00 ❑ 17351 04/01/2018 Sophia Wong 1710.00 ❑ 17352 04/01/2018 Steadfast Cameron Park LP 814.00 ❑ 17353 04/01/2018 Steadfast Mccord BHA, LP 891.00 ❑ 17354 04/01/2018 Sui Man Mak 1102.00 ❑ 17355 04/01/2018 T & T Asset Holding, LLC 2565.00 ❑ 17356 04/01/2018 Takis Bogris 617.00 ❑ 17357 04/01/2018 Tanya H Chen 798.00 ❑ 17358 04/01/2018 Thanh M Tang 730.00 ❑ 17359 04/01/2018 The Piedrahita Trust "B" 1551.00 ❑ 17360 04/01/2018 The Promenade Housing Partners, LP 2222.00 ❑ 17361 04/01/2018 Therisa L Tyck 895.00 ❑ 17362 04/01/2018 Thomas Pang 1127.00 ❑ 17363 04/01/2018 Tinh Van Le 477.00 ❑ 17364 04/01/2018 Tom Cinquegrani 1098.00 ❑ 17365 04/01/2018 Tom Lee 372.00 ❑ 17366 04/01/2018 Tuan Viet Ho 1681.00 ❑ 17367 04/01/2018 Up Hill Investment Inc. 1231.00 ❑ 17368 04/01/2018 Van T Tran 993.00 ❑ 17369 04/01/2018 Velma Alarcon Gandara 1282.00 ❑ 17370 04/01/2018 Vijay Gulati 2452.00 ❑ 17371 04/01/2018 Villa Olive Oak 539.00 ❑ 17372 04/01/2018 Vinh H. Lai 885.00 ❑ 17373 04/01/2018 Vinh Hong Lai 2853.00 ❑ 17374 04/01/2018 Vintage West Covina 10665.00 ❑ 17375 04/01/2018 Virginia Carlson 898.00 ❑ 17376 04/01/2018 Wai Keng Tam 970.00 ❑ 17377 04/01/2018 West Covina Senior Villas II, LP 584.00 ❑ 17378 04/01/2018 West Covina Seniors Villas 1 596.00 Q HAPPY Software Page 5 04/09/2018 9:43:37 AM ❑ 17379 04/01/2018 William J Rogers ® 801.00 ❑ 17380 04/01/2018 Wilson Apartment Associates L.P. ® 3310.00 ❑ 17381 04/01/2018 Woodside Village Apartments LP ® 6460.00 ❑ 17382 04/01/2018 Xitlalai Sanchez ® 1104.00 ❑ 17383 04/01/2018 Xuan Wang ® 1254.00 ❑ 17384 04/01/2018 Xue Fen Xu ® 1206.00 ❑ 17385 04/01/2018 Xuyen Thach Han ® 1926.00 ❑ 17386 04/01/2018 Y & H Investment, Inc. ® 1434.00 ❑ 17387 04/01/2018 Zelmira Medina ® 1610.00 ❑ 17388 04/01/2018 Zi Jian Li ® 1686.00 Total $357,284.00 Average $827.05 Unit Count 407 Average Weighted by Unit Count $839.01 Hard to House Count 2 0 HAPPY Software Page 6 04/09/2018 9:43:37 AM HA -2 ITEM NO. STAFF REPORT � " TO: Honorable Mayor and City Councilmembers �us,cr ry45FROM: Rose Tam, Director of Finance DATE: April 18, 2018 J1 ; ��' SUBJECT: TREASURERS REPORT — FEBRUARY 2018 rD j.. SUMMARY Attached is the Treasurer's Report for the month of February 2018. The Treasurer's Report lists all cash for the City which includes the Baldwin Park Financing Authority, the Housing Authority, and the Successor Agency to the Community Development Commission (CDC). All investments are in compliance with the City's Investment Policy and the California Government Code. FISCAL IMPACT None LEGAL REVIEW None required. II,ECOI 1MENDA.TION Staff recommends that Council receive and file the Treasurer's Report for February 2018. BACKGROUND The City's Investment Policy requires the Treasurer's Report be submitted to the Mayor and City Council on a monthly basis. CITY OF BALDWIN PARK TREASURER'S REPORT 212 812 01 8 NT INTEREST PURCHASE MATURITYTY PAR CURRENT KET DESCRIPE¢ON RATE „ AEDAT�VALUE PRMCIPAL 0[AUE VALUE V State of California Local Agency Investnwont Fund (LAIr) ............. City -Including Genera'] fund 5. all ot'lanr Special Rovanuo Funds 1.41% Varies Varies $ 27,291,047.43 $ 27,291,047.43 $ 27,291,047.43 $ 27,291,047.43 Housing Authority 1,41% Varies Varies 13,302.96 13,302.96 13,302.96 13,302.96 -.,. 27 904,350.39 - 27,304,360.39 ­­ 27,304,360.39 _ 27,304 350...-._ 39 ortlfiica4i ut II':,na.p a'stt Cap'tat i1 e Maur USA NATtl, ASSN 1.15% 9/14/2016 9114/2018 246,000.00 246,000.00 245,000.00 244,037.75 Wells Fargo Bank NA SIOUX Falls 1.15% 911412016 911412018 245,000.00 246,000.00 245,000.00 244,046.95 JP Morgan Chase Bank NA Columbus 1.15% 911612016 9/1612018 246,000.00 245,000.00 245,000.00 244,034.70 Ally Bank Midvale CTF DEP ACT/366 1.16% 911712016 9/1712018 245,000.00 245,000.00 246,000,00 244,017.65 American Express Centurion 1.60% 4112/2017 4112/2019 250,000.00 250,000.00 260,000.00 250,000.00 260,000.00 260,000.00 248,875.00 248,756.00 Everbank-Jacksonville Citibank National Association 1.55% 1.80% 411612017 1/2512018 4116/2019 1125/2019 260,000.00 260,000.00 250,000.00 249,835.00 Goldman Sachs Bk USA NY 2.25% 1/2412018 1/24/2020 260,000.00 250,000.00 250,000.00 249,670.00 Sallie Mae Bk SLT Lake City UT 2.25% 112412018 1/2412020 260,000.00 260,000.00 250,000.00 249,570.00 -- 2,230,000.00 2,230,000.00 2,230 000 00- 1.36 2 222,741 Fiscal Agent Funds (Trust)Detat Service Fund) Varies Varies Varies 1,861,666.30 1,861,666.30 1,851,666.30 1,861,666.30 Fiscal Agent Funds - Succossor Agency (Trust/Debt Service Fund) Varies Varies Varies 170,813.97 170,813.97 170,813.97 170,813.97 mm 2,022,480.27mm 2,022,480.27 2,022 480.27 mm2,022,,4848 2 20.2.7 7 $ ^,11,666 830,66^m $ 1,656,830.66 6 3 f&fy6�I438 6'8 $ 31 649 572 01 Total Investments $ 31,666,830.66 Cash with Bank of the West ,._..:..._....City Checking.-- 2,300,666.95 Money Market Plus 192,042.02 City Miscellaneous Cash 534,832.85 Successor Agency 44,833.96 Housing Authority 165,404.07 Financing Authority 1,719.08 Investment Brokerage 9,520,64 Total Cash with Bank of the West 3,248,919.47 Total Cash and Investments $ 34,805,750.13 Schedule of Cash and Investments Includes city-wide assets as Included In the Comprehensive Annual Financial Report. There was no investment maturity/purchase transaction made for the month of February 2018 and several deposits/withdrawals were made through the Local Agency Investment Fund. In compliance with the California Government Code Section 53646 et seq., I hereby certify that sufficient investment liquidity and anticipated revenues are available to meet the City's expenditure requirements for the next six months that all investments are in compliance to the City's Statement of Investment Policy. Approved by: Rose Tam,,„, Director of Finance