HomeMy Public PortalAbout18-1824 - Approving the Development Agreement No. 18-2018 with California Processing Co. Commercial CannabisORDINANCE NO. 18-1824
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARSON,
CALIFORNIA, APPROVING DEVELOPMENT AGREEMENT NO. 18-2018
BY AND BETWEEN THE CITY OF CARSON AND CALIFORNIA
PROCESSING COMPANY, LLC, FOR A PROPOSED COMMERCIAL
CANNABIS OPERATION CENTER LOCATED AT 2403 E. 223RD STREET
(APN: 7315012900, 7315012804)
WHEREAS, in 1996 California voters approved Proposition 215, the Compassionate Use Act
("CUA"), codified as Section 11362.5 of the Health and Safety Code, to exempt certain patients and their
primary caregivers from criminal liability under state law for the possession and cultivation of cannabis
for medical purposes; and
WHEREAS, in 2003 the California legislature enacted Senate Bill 420, the Medical Marijuana
Program Act ("MMPA"), codified as Sections 11362.7, et seq., of the Health & Safety Code, and as later
amended, to clarify the scope of the Compassionate Use Act of 1996 relating to the possession and
cultivation of cannabis for medical purpose, and to authorize local governing bodies to adopt and
enforce laws consistent with its provisions; and
WHEREAS, in October 2015, the State of California adopted AB 266, AB 243, and SB 643,
collectively referred to as the Medical Marijuana Regulation and Safety Act ("MCRSA"), which
established a comprehensive regulatory and licensing scheme for commercial medical cannabis
operations; and
WHEREAS, at the November 8, 2016 general election, the Control, Regulate and Tax Adult Use
of Marijuana Act ("AUMA") was approved by California voters, and by the voters of the City of Carson by
a margin of 56% to 44%, as Proposition 64, which established a comprehensive regulatory and licensing
scheme for commercial recreational (adult use) cannabis operations, and which also legalized limited
personal adult -use cannabis use, possession, and cultivation; and
WHEREAS, on lune 27, 2017 Governor Brown signed Senate Bill 94, the Medicinal and Adult Use
Cannabis Regulation and Safety Act ("MAUCRSA"), which merged the regulatory regimes of MCRSA and
AUMA; and
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WHEREAS, on November 21, 2017 the Carson City Council adopted Ordinance No. 17-1637 to
add Chapter 15 (Commercial Cannabis Operations Regulatory Program) to Article VI of the Carson
Municipal Code, which authorizes no more than four (4) commercial cannabis centers, which may
include indoor cultivation, mixed -light cultivation, manufacturing, testing and/or (wholesale)
distribution; and
WHEREAS, under MAUCRSA the State of California began issuing licenses in 2018 for both
medical and adult -use cannabis businesses in multiple categories which include cannabis cultivation,
manufacturer, testing, retailer, distributor, and microbusiness; and
WHEREAS, On September 4, 2018, the Carson City Council in compliance with Chapter 15 of
Article VI of the Carson Municipal Code ("CMC') approved the issuance of one (1) commercial cannabis
operation permit (cannabis center) to California Processing Company, LLC, a California limited liability
company; and
WHEREAS, CMC section 615100 provides that before a commercial cannabis center ("cannabis
center") may operate in the City of Carson, in addition to being issued a commercial cannabis operation
permit (cannabis center), the cannabis center shall apply for and enter into a development agreement
with the City setting forth the terms and conditions under which the cannabis center will operate that
are in addition to the requirements of Chapter 15 of Article VI of the Carson Municipal Code; and
WHEREAS, as permitted by Government Code section 65864, et seq., Carson Municipal Code
("CMC') section 615100 provides for the consideration of commercial cannabis development
agreements by the City Council of the City of Carson ("City Council"); and
WHEREAS, the City of Carson ("City") and California Processing Company, LLC, a California
limited liability company ("Developer"), desire to enter into a statutory development agreement to vest
certain land use entitlements and to encourage Developer to undertake the development of
approximately 3.7 net acres of real property described as the northwest corner of Alameda and 223rd
Street in the City of Carson, California, with an address of 2403 E. 223rd Street, Assessor Parcel Nos.
7315-012-900 and 7315-012-804, ("Site"); and
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WHEREAS, Developer proposes to develop the Site with an approximately 220,000 sq. ft., four-
story tilt -up concrete building to be utilized specifically for operations related to: 1) manufacturing
r facility sites that produce, prepare, propagate, or compound manufactured cannabis products, either
directly or indirectly or by extraction methods, or independently by means of chemical synthesis or by a
combination of extraction and chemical synthesis, package or repackage cannabis products, label or
relabel its container, or transform cannabis into a concentrate, an edible product, a beverage or a
topical product; 2) small scale cultivation for nursery or research and development purposes; 3)
warehousing, transportation and distribution and delivery (to the extent permitted by State law and the
Carson Municipal Code); 4) laboratory testing and compliance operation; and 5) any other use permitted
by City law whether cannabis related or not ("Project"); and
WHEREAS, California Government Code section 65865 authorizes the City to enter into
development agreements with any person having a legal or equitable interest in real property; and
WHEREAS, Developer has proposed to enter into a development agreement concerning the
Project to provide assurances that the Project can proceed without disruption caused by a change in the
City's planning policies and requirements, except as provided in a development agreement, which
assurance will thereby reduce the actual or perceived risk of planning for and proceeding with
development of the Project; and
WHEREAS, the City desires the timely, efficient, orderly and proper development of the Project
in furtherance of the goals of the General Plan; and
WHEREAS, the City Council determines that by entering into the Development Agreement that:
(i) the City will promote orderly growth and quality development of the Site in accordance with the goals
and policies set forth in the General Plan; and (ii) significant benefits will be created for City residents
and the public generally; and
WHEREAS, City staff has prepared, and the Developer has reviewed and has concurred with the
terms and conditions of, the development agreement as set forth in Exhibit "A," and incorporated
herein by this reference with the same force and effect as set forth in full (the "Development
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Agreement"); and
WHEREAS, the provisions of the proposed Development Agreement are consistent with the
General Plan and Specific Plan and contain all necessary elements required by Government Code section
65864 et seq. and Section 615100 of the City of Carson Municipal Code; and
WHEREAS, the City and Developer have reached mutual agreement and desire to voluntarily
enter into the Development Agreement to facilitate development of the Project on the Site, subject to
conditions and requirements set forth therein; and
WHEREAS, Carson Municipal Code section 615100(B)(3) provides that the Planning Commission
shall review proposed cannabis center development agreements and provide a recommendation to the
City Council to approve, approve with modifications or deny the proposed cannabis center development
agreement; and
WHEREAS, the Project has been the subject of an Initial Study and a Mitigated Negative
Declaration ("IS/MND") pursuant to the California Environmental Quality Act ("CEQA"), which
adequately describes the Project and its potential impacts, as well as the impacts potentially resulting
from the approval of the Project for the purposes of CEQA, and an associated Mitigation Monitoring and
Reporting Program ("MMRP") was prepared for the Project; and
WHEREAS, on October 30, 2018 the City of Carson Planning Commission held a duly noticed
public hearing in accordance with the provisions of Government Code Section 65090, et seq.,
Government Code Section 65867, and the City of Carson Municipal Code, to receive and consider all
public comment on the proposed Development Agreement, the IS/MND and the MMRP, and
recommended to the City Council on a 5-4 vote: approval of the Development Agreement with the
following two amendments: 1) the applicant to submit a Safety -Policing Plan approved by the L.A.
County Sheriff and City of Carson prior to issuance of building permits, and 2) City shall devote 25% of
the revenues generated by this project to drug rehabilitation and homeless programs; and, approval and
s
certification of the IS/MND and MMRP; and
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WHEREAS, the City Council on November 20, 2018 in Resolution No. 18-158 adopted and
certified the IS/MND and the MMRP, and determined that for purposes of CEQA the proposed Project
will not have a significant effect on the environment because the proposed mitigation measures in the
IS/MND and the adoption of the MMRP reduce all potentially significant impact to less than significant,
and all of the proposed mitigation measures in the IS/MND and the MMRP have been incorporated into
the Development Agreement; and
WHEREAS, California state law under Proposition 64 provides that cities may regulate or enforce
local commercial cannabis regulations through local code, and otherwise commercial cannabis uses are
allowed pursuant to a state commercial cannabis license; and
WHEREAS, Carson Ordinance No. 17-1637 provides for the issuance of local commercial
cannabis permits for businesses located in the commercial and industrial zones of the City; and
WHEREAS, According to the City's General Plan, Land Use Plan, the Site is designated as
Regional Commercial, which includes uses intended to offer a wide range of services to both the
community and the region; and
WHEREAS, the Developer has made a request for Zone Text Amendment No. 30-2018 ("ZTA") to
expressly allow cannabis uses within commercial zones consistent with the provisions of City of Carson
Ordinance No. 17-1637 (which allows four cannabis centers in the City as long as they are at least 750'
from sensitive uses identified in the Ordinance) upon approval of a development agreement to allow the
specific proposed cannabis uses; and
WHEREAS, with approval of the ZTA, the Project will be expressly consistent with the Carson
Zoning Ordinance and effectuate the establishment of a commercial cannabis use at the proposed site
with approval of the Development Agreement; and
F .. WHEREAS, on November 20, 2018 the City Council held a duly noticed public hearing, as
required by law and in accordance with the provisions of Government Code Section 65090, et seq.,
Government Code Section 65867, and the City of Carson Municipal Code, to receive and consider all
public comment on the proposed Development Agreement, at which time it received input from staff,
01007.0005/520603.4 ORDINANCE NO. 18-1824
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the city attorney, and the applicant; heard public testimony; discussed the proposed Development
Agreement, and closed the public hearing; and
WHEREAS, the terms and conditions of the Development Agreement have undergone review by
the City Council at a publicly noticed hearing and have been found to be fair, just, and reasonable, and
consistent with the City's policies, the General Plan and Chapter 15 of Article VI of the Carson Municipal
Code;and
WHEREAS, the City Council has determined that the provisions of the Development Agreement
are: (i) consistent with the goals, objectives, and policies of the general plan and any applicable specific
plan, (ii) compatible with the uses authorized in and the regulations prescribed for the zoned district in
which the real property is located, (iii) will not be detrimental to the health, safety, environmental
quality, and general welfare of the community, (iv) will not adversely affect the orderly development of
property or the preservation of property values, and (v) provides for a reasonable penalty for any
violation of the development agreement; and
WHEREAS, all legal prerequisites to the adoption of this Ordinance have occurred;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARSON, CALIFORNIA DOES HEREBY
RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals. The recitals set forth above are all true and correct and are
incorporated herein by this reference.
Section 2. Application. An application was duly filed by the applicant with respect to real
property located at 2403 E 223rd Street in the City of Carson (APN 7315012900, 7315012804),
requesting approval of Development Agreement No. 18-2018 by and between the City of Carson and
California Processing Company, LLC.
Section 3. Public Hearing. A City Council meeting was duly held on November 20, 2018
meeting date, at 6:00 P.M. at City Hall, Council Chambers, 701 East Carson Street, Carson, California, for
consideration of the aforementioned application at a duly noticed public hearing in accordance with the
provisions of the Government Code and Carson Municipal Code, to receive and consider all public
01007.0005/520603.4 ORDINANCE NO. 18-1824
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comment on the Project and the proposed development agreement, and a notice of time, place and
purpose of the aforesaid meeting was duly given.
Section 4. Authority. Based on substantial evidence presented to the City Council during
the public hearing conducted with regard to the Development Agreement, including written staff
reports, verbal testimony, site plans, and the exhibits stated herein, the City Council hereby determines
that the Development Agreement is authorized by and satisfies the requirements of Government
Section Code 65864 through 65869.5 and Section 615100 of the City of Carson Municipal Code.
Section S. Findings. With respect to the Development Agreement No. 18-2018, the City
Council finds that:
aj The Development Agreement is consistent with the goals, objectives and policies of the
City's General Plan.
bj The Development agreement supports General Plan goal ED -4, "Maintain and increase
net fiscal gains to the City."
L Evidence: annual revenues to the City for its general fund of no less than $1,000,000
in the first year of the cannabis center's operation, $1,250,000 in the second year of
the cannabis center's operation, $1,750,000 in the third year of the cannabis
center's operation, and thereafter $1,750,000 + CPI annually.
ii. Evidence: payment of development impact fees of approximately $440,000 to the
City to mitigate Project impacts on the City's infrastructure, including but not limited
to, any or all of the following: Traffic and circulation (roads, sidewalks, and signals);
Public Safety (Fire and Sheriff's stations); Parks and open space (park
land/improvements and trails and bikeways); Library; Noise (sound walls); Flood
control and stormwater.
iii. Evidence: agreement to annex Site into one or more community facilities districts
("CFDs") to fund public safety services and infrastructure necessary to serve the
Project, the Site and the public. The CFDs will levy a special tax on the Site property.
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cj The Development Agreement supports General Plan goal W-6.6, "Attract land uses that
generate revenue to the City of Carson, while maintaining a balance of other community
needs such as housing, open space, and public facilities."
L Evidence: the proposed project would include annual revenue to the City's general
fund as specified in the Development Agreement while maintaining a balance of
other community needs by developing an underutilized site without negatively
impacting housing, open space and public facilities.
d) The Development Agreement supports General Plan goal ED -3.4, "Encourage
development opportunities that increase economic gains to the City."
i. Evidence: the proposed project includes the construction of an approximately
220,000 sq. ft. building for commercial cannabis operations that will be a source of
revenue as specified in the Development Agreement.
e) The Development Agreement is compatible with the uses authorized in and the
regulations prescribed for the zoned district in which the real property is located.
L Evidence: Proposition 64 established a presumption that state licensed commercial
cannabis operations are allowed unless otherwise expressly prohibited. The subject
property is currently zoned CA (Commercial, Automotive) which is silent on
commercial cannabis uses. Carson Ordinance No. 17-1637 (Chapter 15 of Article VI
of the Carson Municipal Code) allows for the issuance of commercial cannabis
operation permits in commercial zones.
ii. Evidence: A ZTA is proposed to expressly allow cannabis uses within commercial and
industrial zones consistent with the provisions of the Cannabis Operations
t Ordinance No. 17-1637 which allows four cannabis centers in the City as long as
they are at least 750' from sensitive uses identified in the Ordinance. The ZTA will
require approval of a DA to allow the cannabis uses for this site. With approval of
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the ZTA, the project would be expressly consistent with the Carson Zoning
Ordinance.
f) The Development Agreement will not be detrimental to the health, safety,
environmental quality, and general welfare of the community.
L Evidence: cannabis uses will be subject to the provisions of the Cannabis Operations
Ordinance No. 17-1637.
ii. Evidence: compliance with all mitigation measures from a California Environmental
Quality Act initial study and mitigated negative declaration prepared for the Project.
iii. Evidence: compliance with strict standards contained in both Chapter 15 of Article
VI of the Carson Municipal Code as well as State law, including odor control, security
guards, security cameras, alarm systems, heightened site management
requirements concerning nuisances and waste disposal, no Site access to the
general public, and procedures for the non -diversion of cannabis and cannabis
products.
iv. Evidence: agreement to annex Site into one or more community facilities districts
("CFDs") to fund public safety services and infrastructure necessary to serve the
Project, the Site and the public. The CFDs will levy a special tax on the Site property.
V. Evidence: payment of development impact fees of approximately $440,000 to the
City to mitigate Project impacts on the City's infrastructure, including but not limited
to, any or all of the following: Traffic and circulation (roads, sidewalks, and signals);
Public Safety (Fire and Sheriff's stations); Parks and open space (park
land/improvements and trails and bikeways); Library; Noise (sound walls); Flood
control and stormwater.
vi. Evidence: in 1996 California voters approved Proposition 215, the Compassionate
Use Act ("CUA"), codified as Section 11362.5 of the Health and Safety Code, to
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exempt certain patients and their primary caregivers from criminal liability under
state law for the possession and cultivation of cannabis for medical purposes.
vii. Evidence: in 2016 California voters (and City of Carson voters by a margin of 56% to
44%) approved Proposition 64, the Control, Regulate and Tax Adult Use of
Marijuana Act ("AUMA"), which established a comprehensive regulatory and
licensing scheme for commercial recreational (adult use) cannabis operations, and
which also legalized limited personal recreational cannabis use, possession, and
cultivation.
g) The Development Agreement will not adversely affect the orderly development of
property or the preservation of property values.
L Evidence: the DA will effectuate the establishment of a regulated commercial
cannabis use at the proposed site, which is presently undeveloped, and will not
negatively affect property values.
h) The Development Agreement provides for a reasonable penalty for any violation of the
Development Agreement -
i. Evidence: the Development Agreement provides for notice, cure and termination
procedures for failure to perform any material duty or obligation.
ii. Evidence: the Development Agreement provides that in the event the Developer
fails to perform any monetary obligation under the Agreement, City may sue for the
payment of such sums to the extent due and payable. The Developer shall pay
interest thereon at the higher of: (i) ten percent (10%) per annum, or (ii) the
maximum rate permitted by law, from and after the due date of the monetary
obligation until payment is actually received by the City.
i) The Development Agreement Provides for public benefits.
i. Evidence: the Development Agreement provides for social justice programs such as
equitable business ownership and employment opportunities.
01007.0005/520603.4 ORDINANCE NO. 18-1824
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ii. Evidence: the Development Agreement provides local hiring program with respect
to the construction, operation and maintenance of the Project and Site.
Section 6. Approval. Based on the entire record before the City Council and all written and
oral evidence presented to the City Council, the City Council hereby approves the Development
Agreement as set forth in Exhibit "A."
Section 7. Environmental Review. The City Council, exercising their independent
judgment, finds that the development permitted by the proposed project will not have a significant
effect on the environment, as indicated in the Initial Study and Mitigated Negative Declaration, and
associated Mitigation Monitoring Reporting Program, prepared pursuant to the provisions of the
California Environmental Quality Act (CEClA), and adopted and certified by the City Council on November
20, 2018 by Resolution No. 18-158, and that the Development Agreement adopts all of the
recommended mitigation measures.
Section 8. Severability. If any section, subsection, sentence, clause, phrase, or portion of
this ordinance is, for any reason, held to be invalid or unconstitutional by the decision of any court of
competent jurisdiction, such decision shall not affect the validity of the remaining portions of this
ordinance. The City Council hereby declares that it would have adopted this ordinance and each
section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses, phrases, or portions thereof may be declared invalid or
unconstitutional.
Section 9. Effective Date. This ordinance shall be in full force and effect thirty (30) days
after its passage.
Section 10. Certification. The City Clerk shall certify to the adoption of this ordinance, and
shall cause the same to be posted and codified in the manner required by law.
PASSED, APPROVED, and ADOPTED this 41h day of December, 2018.
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APPROVED AS TO FORM:
STATE OF CALIFORNIA j
COUNTY OF LOS ANGELES ) ss.
CITY OF CARSON j
CITY OF CARSON:
ATTEST:
Donesia Gause-Aldana, MMC, City Clerk
I, Donesia Gause-Aldana, City Clerk of the City of Carson, California, hereby attest to and certify that the
foregoing ordinance, being Ordinance 18-1824 passed first reading on the 20`h day of November, 2018,
adopted by the Carson City Council at its meeting held on the 4`h day of December, 2018, by the
following roll call vote:
AYES: COUNCIL MEMBERS: Robles, Hilton, Santarina, Davis—Holmes
NOES: COUNCIL MEMBERS: Hicks
ABSTAIN: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
Donesia Gause-Aldana, MMC, City Clerk
01007.0005/520603.4
ORDINANCE NO. 18-1824
Page 12 of 76
RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
CITY CLERK
City of Carson
701 E. Carson Street
Carson, CA 90745
No Recording Fee Required — Government Code § 27383
DEVELOPMENT AGREEMENT
between
THE CITY OF CARSON
("City")
and
CALIFORNIA PROCESSING COMPANY, LLC
("Developer")
ORDINANCE NO. 18-1824 (Exhibit "A")
01007.0oa5/515778.6 CFN Page 13 of 76
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (together with all exhibits hereto, the
"Agreement"), is made by and between the CITY OF CARSON ("City"), a municipal
corporation, and CALIFORNIA PROCESSING COMPANY, LLC, a California Limited
Liability Company ("Developer"). The City is entering this Agreement for the limited purposes
as described below. City and Developer are hereinafter collectively referred to as the "parties"
and individually as a "party".
RECITALS:
A. Recitals and -Capitalized Terms. The recitals in this Agreement constitute part of
this Agreement and each party shall be entitled to rely on the truth and accuracy of each recital as
an inducement to enter into this Agreement. The capitalized terms used in these recitals and
throughout this Agreement shall have the meaning assigned to them in Article 1. Any
capitalized terms not defined in Article 1 shall have the meaning otherwise assigned to them in
this Agreement, the Carson Municipal Code, or as apparent from the context in which they are
used.
B. Legislation „ -Authorizing Development Agreements. To strengthen the public
planning process, encourage private participation in comprehensive planning and reduce the
economic risk of development, the legislature of the State of California adopted the Development
Agreement Statute, Sections 65864, et seq., of the Government Code, authorizing City to enter
into an agreement with any person having a legal or equitable interest in real property providing
for the development of such property and establishing certain development rights therein. As set
forth in Government Code Section 65868, a development agreement is a binding contract such
that it "may be amended, or canceled in whole or in part, by mutual consent of the parties to the
agreement or their successors in interest. Notice of intention to amend or cancel any portion of
the agreement shall be given in the manner provided by Section 65867. An amendment to an
agreement shall be subject to the provisions of Section 65867.5."
C. The Site. Developer has a legal or equitable interest in real property, or can
perfect such right, described as the northwest corner of Alameda and 223d Street in the City of
Carson, California, with an address of 2403 E. 223`d Street, Assessor Parcel Nos. 7315-012-900
and 7315-012-804, legally described in Exhibit "A" and shown on the Site Map attached hereto
as Exhibit "B".
D. Commercial Cannabis Operation_ Permit (Cannabis Center). On November 21,
2017 the Carson City Council adopted Ordinance No. 17-1637 which added Chapter 15
(Commercial Cannabis Operations Regulatory Program) to Article VI of the Carson Municipal
Code ("Chapter 15"). Chapter 15 authorizes no more than four (4) commercial cannabis centers,
which may include indoor cultivation, mixed -light cultivation, manufacturing, testing and/or
(wholesale) distribution. Developer submitted to City an application for issuance of a
commercial cannabis operation permit (cannabis center) pursuant to Chapter 15 of Article VI of
the Carson Municipal Code. On September 4, 2018, the Carson City Council in compliance with
Chapter 15 of Article VI of the Carson Municipal Code approved the issuance of one (1)
commercial cannabis operation permit (cannabis center) to Developer.
1
ORDINANCE NO. 18-1824 (Exhibit "A")
01007 0005/515778.6 CFN Page 14 of 76
E. The Project. Developer intends to construct a building of up to 220,000
square feet with four stories, which will be used for commercial cannabis operations including
manufacturing, distribution, delivery (to the extent permitted by State law and the Carson
Municipal Code, with retail sales of cannabis and cannabis products directly to consumers within
the City of Carson being prohibited by the City's current cannabis regulations), testing, smalI-
scale cultivation and supporting non -cannabis services (the "Project"). Developer has submitted
a conceptual Site Plan showing the proposed Project and the Scope of Development attached
hereto as Exhibit "C". This Agreement does not guarantee that the City will issue any further
Project entitlements and does not in any way limit the City's discretion in granting or denying
land use approvals for the Project or any portion thereof.
F. Requirement for Development Agreement. Chapter 15 establishes a
comprehensive set of regulations and a regulatory permit process for specific types of
commercial cannabis operations to preserve the public health, safety, and welfare of the residents
and visitors of the City of Carson. Chapter 15 further specifies that it shall be unlawful to own,
establish, operate, use, participate in, or permit the establishment or activity of a commercial
cannabis operation in any manner or capacity, other than as provided. Section 615100 of the
Carson Municipal Code requires that each commercial cannabis operation shall apply for and
enter into a development agreement with the City setting forth the terms and conditions under
which the commercial cannabis operation will operate that are in addition to the requirements of
Chapter 15, including, but not limited to, public outreach and education, community service,
payment of fees and other charges as mutually agreed, and such other terms and conditions that
will protect and promote the public health, safety, and welfare.
G. Public Hearings: Findings. In accordance with the requirements of the California
Environmental Quality Act, appropriate studies, analyses, reports and documents were prepared
and considered by the Planning Commission and the City Council. On October 30, 2018 the
Planning Commission held a duly noticed public hearing and recommended certification of a
Mitigated Negative Declaration for the Project, and recommended that the City Council approve
the Project. On , 2018, the City Council held a duly noticed public hearing
on the Developer's application for this Agreement, and after making appropriate findings; (i)
certified, by Resolution No. , the Mitigated Negative Declaration for the
Project; (ii) found on the basis of substantial evidence based on the entire administrative record,
that this Agreement is consistent with all applicable plans, rules, regulations and official policies
of the City, including the General Plan and Zoning; and (iii) introduced the Authorizing
Ordinance. On , 2018, the City Council adopted the Authorizing Ordinance.
H. Cannabis Taxes and Alternative Minimum Payment. In November 2016, the
City's voters adopted Ordinance No. 16-1599 which imposed a tax on cannabis related business
activities ("Tax Ordinance"). The Tax Ordinance provided that the City Council may impose the
tax at a lower rate and establish exemptions, incentives or other reductions. In addition, the Tax
Ordinance provided that the City Council reserved the authority to amend the Tax Ordinance to
further the purposes and intent of the Tax Ordinance in any manner that does not increase a tax
rate. On September 4, 2018, the City Council adopted Resolution No. 18-130 setting a tax rate
on cannabis related business activities and establishing alternate minimum payments for
commercial cannabis businesses governed by a development agreement ("Tax Resolution"). In
accordance with the Tax Resolution and Article 5 (Public Benefits and Fees) of this Agreement,
1)
ORDINANCE NO. 18-1824 (Exhibit "A")
01007.0005!515778.6 CFN Page 15 of 76
Developer is required to: (i) guarantee a minimum amount of annual revenue annually; and
(ii) guarantee that revenue regardless of occupancy rate.
1. Mutual Agreement. Based on the foregoing and subject to the terms and
conditions set forth herein, Developer and City desire to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained, and having determined that the foregoing recitals are true and correct and should be,
and hereby are, incorporated into this Agreement, the parties agree as follows:
1. DEFINITIONS
The following words and phrases are used as defined terms throughout this Agreement.
Each defined term shall have the meaning set forth below.
1.1 Anniversary "Anniversary Date" means the date of the anniversary
of each year following the Effective Date of this Agreement.
1.2 Annual Review. "Annual Review" means the annual review of the
Developer's performance of the Agreement in accordance with Article 9 of this
Agreement and Government Code § 65865.1.
1.3 Ap2licable Law. "Applicable Law" means all statutes, rules, regulations,
guidelines, actions, determinations, permits, orders, or requirements of the federal, State,
County, City and local and regional government authorities and agencies having
applicable jurisdiction, that apply to or govern the Site, the Project or the performance of
the parties' respective obligations hereunder, including any of the foregoing which
concern health, safety, fire, environmental protection, labor relations, mitigation
monitoring plans, building codes, zoning, non-discrimination, prevailing wages if
applicable, and Department of Toxic Substances Control ("DTSC") regulations. All
references herein to Applicable Law include subsequent amendments or modifications
thereof, unless otherwise specifically limited in this Agreement.
1.4 Applications. "Application(s)" means a complete application for the
applicable land use or building approvals (such as a subdivision map, conditional use
permit, building permit, etc.) meeting all of the terms of this Agreement, or where the
terms of this Agreement do not address a particular permit, then meeting the terms of the
current ordinances of the City; provided, however, that any additional or alternate
requirements in those ordinances enacted after the date this Agreement is approved by the
City Council which affect the Project application shall apply only to the extent permitted
by this Agreement.
1.5 Assignment. All forms of use of the verb "assign" and the nouns
"assignment" and "assignee" shall include all contexts of hypothecations, sales,
conveyances, transfers, leases, and assignments.
3
ORDINANCE NO. 18-1824 (Exhibit "A")
01007.00451515779.6 CFN Page 16 of 76
1.6 Authorizing Ordinance. "Authorizing Ordinance" means Ordinance No.
approving this Agreement, introduced on and adopted on
1.7 Building_ Permit. `Building Permit," with respect to any building or
structure to be constructed on the Site, means a building permit for not less than the shell
and core of such building or structure issued by the City's Division of Building and
Safety.
1.8 Cannabis. "Cannabis" means all parts of the plant Cannabis sativa
Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds
thereof; the resin, whether crude or purified, extracted from any part of the plant; and
every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its
seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified,
obtained from cannabis. "Cannabis" does not include the mature stalks of the plant, fiber
produced from the stalks, oil or cake made from the seeds of the plant, any other
compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks
(except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant
which is incapable of germination.
1.9 Cannabis concentrate. "Cannabis concentrate" means cannabis that has
undergone a process to concentrate one or more active cannabinoids, thereby increasing
the product's potency. Resin from granular trichomes from a cannabis plant is a
concentrate for purposes of this division. A cannabis concentrate is not considered food,
as defined by Section 109935 of the Health and Safety Code (and as amended), or a drug,
as defined by Section 109925 of the Health and Safety Code (and as amended).
1.10 Cannabis products. "Cannabis products" means cannabis that has
undergone a process whereby the plant material has been transformed into a concentrate,
including but not limited to, concentrated cannabis, or an edible or topical product
containing cannabis or concentrated cannabis and other ingredients.
1.11 Carson Municipal Code. "Carson Municipal Code" means the City's
Municipal Code as it existed on the date the City Council approves this Agreement and as
it may be amended from time to time consistent with the terms of this Agreement.
1.12 CEOA. "CEQA" means the California Environmental Quality Act,
Section 21000 er seq. of the California Public Resources Code and its implementing
regulations and guidelines, including future amendments to or recodification thereof.
1.13 CEOA Completion Date. "CEQA Completion Date" means the later date
of either: (i) 30 days after the Notice of Determination; or (ii) the date of the final
settlement or resolution of any appeal, lawsuit or other action by a third party challenging
the Development Approvals or the CEQA process.
1.14 Certificate of Compliance. "Certificate of Compliance" shall have the
meaning set forth in Section 10.2 below.
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1.15 Certificate of Occupancy. "Certificate of Occupancy," with respect to a
particular building or other work of improvement, means the final certificate of
occupancy issued by the City with respect to such building or other work of
improvement. No Certificate of Occupancy shall be issued until all required covenants
are recorded.
1.16 City. "City" means the City of Carson, California.
1.17 City Council. The "City Council" means the governing body of the City.
1.18 City's Design Guidelines. "City's Design Guidelines" means applicable
design guidelines stated in the Carson Municipal Code, including but not limited to those
guidelines articulated in the General Plan, or by City's Planning Commission or Planning
Division; Project -specific Design Guidelines shall govern for purposes of this Agreement
over general City Design Guidelines.
1.19 Cid Manager. "City Manager" means the City Manager of City.
1.20 Claims or Litigation. "Claims or Litigation" means any challenge by
adjacent owners or any other third parties (i) to the legality, validity or adequacy of the
General Plan, Land Use Regulations, this Agreement, Development Approvals or other
actions of the City pertaining to the Project, or (ii) seeking damages against the City as a
consequence of the foregoing actions, for the taking or diminution in value of their
property or for any other reason. "Claims or Litigation" shall also include any referendum
involving the approval of this Agreement, any of the Entitlements or then Existing
Development Approvals.
1.21 Commercial Cannabis Operation. "Commercial cannabis operation" or
"commercial cannabis activity" includes the cultivation, possession, manufacture,
distribution, processing, storing, laboratory testing, packaging, labeling, transportation,
delivery, or wholesale (not retail sale) of cannabis and cannabis products; except, as
applicable, as preempted by State law.
1.22 Commercial Cannabis Operation Permit. "Commercial cannabis operation
permit" shall mean a City of Carson permit issued pursuant to the procedures provided
for in Chapter 15 of Article VI of the Carson Municipal Code, and which shall allow the
permit holder to operate a specific type of commercial cannabis operation in the City of
Carson subject to the requirements of Chapter 15 of Article VI of the Carson Municipal
Code, State law, and the specific permit.
1.23 Conditions of Approval. "Conditions of Approval" means those
conditions to the Development of the Project imposed via this Agreement and attached
hereto as Exhibit "D".
1.24 Consumer Price Index. "Consumer Price Index" shall mean the same
percentage increase as the Consumer Price Index for Los Angeles -Long Beach -Anaheim,
California area for the preceding twelve month period. Excepting, however, that for
purposes of calculating the Consumer Price Index, the rate shall have a floor no lower
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than 2% and shall be capped at 3%, For example, if the actual Consumer Price Index is
1.9%, a rate of 2% shall apply; if the actual Consumer Price Index is 3.1%, a rate of 3.0%
shall apply.
1.25 Default. "Default" refers to any material default, breach, or violation of a
provision of this Development Agreement as defined in Article I I (Default, Remedies
and Termination) below. "City Default" refers to a Default by the City, while "Developer
Default" refers to a Default by the Developer.
1.26 Development. "Development" means the preparation of designs for, and
improvement of, the Site for purposes of affecting the structures, improvements and
facilities composing the Project including, without limitation: design, grading, the
construction of infrastructure related to the Project, whether located within or outside the
Site; the construction of structures and buildings; the installation of landscaping; and the
operation, use and occupancy of, and the right to maintain, repair, or reconstruct, any
private building, structure, improvement or facility after the construction and completion
thereof, provided that such repair, or reconstruction takes place during the Term of this
Agreement.
1.27 Development Agreement Statute. "Development Agreement Statute"
means Sections 65864 through 65869.5 of the Government Code as it exists on the date
the City Council approves this Agreement.
1.28 Development Approvals. "Development Approvals" means all Site-
specific (meaning specifically applicable to the Site only and not generally applicable to
some or all other properties within the City) plans, maps, permits, and entitlements to use
of every kind and nature. Development Approvals include, but are not limited to, site
plans, tentative and final subdivision maps, vesting tentative maps, variances, zoning
designations, planned unit developments, conditional use permits, design overlay review
permits, grading, building and other similar permits, the Site-specific provisions of
general plans, environmental assessments, including environmental impact reports, and
any amendments or modifications to those plans, maps, permits, assessments and
entitlements. The term Development Approvals does not include rules, regulations,
policies, and other enactments of general application within the City.
1.29 Development Impact Fees. "Development Impact Fees" means a
monetary exaction other than a tax or special assessment that is charged by a local
governmental agency to an applicant in connection with approval of a development
project for the purpose of defraying all or a portion of the cost of public facilities related
to the development project, pursuant to Gov. Code § 66000(b).
1.30 Development PIan. "Development Plan" means the Existing Development
Approvals, Future Development Approvals and Existing Land Use Regulations.
1.31 Director. "Director" means the City's Director of Community
Development or equivalent official.
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1.32 Distribution. "Distribution" means the procurement, sale, and transport of
cannabis and cannabis products between entities licensed for and/or engaged in
commercial cannabis activities.
1.33 Distributor. "Distributor" means a person engaged in distribution.
1.34 Edible. "Edible" means cannabis product that is intended to be used, in
whole or in part, for human consumption, including, but not limited to, chewing gum, but
excluding products set forth in Division 15 (commencing with Section 32501) of the
Food and Agricultural Code. An edible cannabis product is not considered food, as
defined by Section 109935 of the Health and Safety Code, or a drug, as defined by
Section 109925 of the Health and Safety Code.
1.35 Effective Date. "Effective Date" means the latest of the following dates:
(i) this Agreement becomes effective pursuant to the Development Agreement Statute; or
(ii) all necessary hearings have been held and the Existing Development Approvals, have
been granted, including the CEQA Completion Date; or (iii) this Agreement has been
executed by both parties; or (iv) the periods in which to bring any Claim or Litigation
have expired without any Claim or Litigation having been commenced or, if any Claim or
Litigation has been commenced, the date on which the validity of this Agreement, the
Entitlements and the Existing Development Approvals have been finally upheld and are
free from any further judicial review; and (vi) Developer has closed on its ownership of
fee title to, or an equitable interest in, the Site.
1.36 Eligible Uses / Prohibited Uses. The Site shall be restricted in use to those
uses permitted under the Scope of Development. Eligible Uses are permitted on the Site
as part of the Project and include such uses as commercial cannabis manufacturing,
distribution, testing and cultivation pursuant to Chapter 15 of Article VI of the Carson
Municipal Code. Prohibited Uses are not permitted on the Site or as part of the Project
and include such uses as transitional housing and retail cannabis sales. No use permit
may be issued for a Prohibited Use.
1.37 Entitlements. As used herein, "Entitlements" shall mean receipt by
Developer of all final Project entitlements, including without Iimitation all necessary
governmental approvals, consents and permits to develop its Project (other than building
permits) .
1.38 Existing Development Approvals. "Existing Development Approvals"
means the Development Approvals which have been previously granted or are granted
concurrent herewith, or will be granted pursuant hereto. The term "Existing
Development Approvals" shall include Future Development Approvals after such Future
Development Approvals are granted.
1.39 Existing Land Use Regulations. "Existing Land Use Regulations" or
"Existing Regulations" means those Land Use Regulations applicable to the Site in effect
on the date the City Council approves this Agreement.
41007.0005/515778.4 CFN
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1.40 Extraction. "Extraction" means the process of obtaining cannabis
concentrates from cannabis plants, including but not limited to through the use of
solvents like butane, alcohol or carbon dioxide.
1.41 Force Majeure. "Force Majeure" shall have the meaning set forth in
Section 17.2 below.
1.42 Future Development Approvals. "Future Development Approvals" means
those Development Approvals applicable to the Site approved by the City after the
Effective Date such as, but not limited to, site plans, tentative and final subdivision maps,
vesting tentative maps, variances, zoning designations, planned unit developments,
conditional use permits, design overlay review permits, grading, building and other
similar permits or more detailed planning or engineering Development Approvals. A list
of specifically -anticipated and agreed-upon Future Development Approvals is attached
hereto at Exhibit "F'.
1.43 Future Land Use Regulations. "Future Land Use Regulations" means
Land Use Regulations enacted after the Effective Date of this Agreement.
1.44 General PIan. "General PIan" means the City's General Plan as it exists
on the date the City Council approves this Agreement.
1.45 Grading Permit. "Grading Permit" means a permit issued by the City's
Division of Building and Safety which allows the excavation or filling, or any
combination thereof, of earth.
1.46 Land Use Regulations. "Land Use Regulations" means those ordinances,
laws, statutes, rules, regulations, initiatives, policies, requirements, guidelines,
constraints, codes or other actions of the City which affect, govern, or apply to the Site or
the implementation of the Development Plan. Land Use Regulations include the
ordinances and regulations adopted by the City which govern permitted uses of land,
density and intensity of use and the design of buildings, applicable to the Site, including,
but not limited to, the MND and MND Mitigation Measures, Zoning Ordinances,
development moratoria, implementing growth management and phased development
programs, ordinances establishing development exactions, subdivision and park codes,
any other similar or related codes and building and improvements standards, mitigation
measures required in order to Iessen or compensate for the adverse impacts of a project
on the environment and other public interests and concerns or similar matters. The term
Land Use Regulations does not include, however, regulations relating to the conduct of
business, professions, and occupations generally; taxes and assessments; regulations for
the control and abatement of nuisances; building codes; encroachment and other permits
and the conveyances of rights and interests which provide for the use of or entry upon
public property; any exercise of the power of eminent domain; or similar matters.
1.47 Manufacture. "Manufacture" or "manufacturing" means to compound,
blend, extract, infuse, or otherwise make or prepare a cannabis product; includes the
activities of a manufacturer.
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1.48 Manufacturer. "Manufacturer" means a person that conducts the
production, preparation, propagation, or compounding of cannabis or cannabis products
either directly or indirectly or by extraction methods, or independently by means of
chemical synthesis, or by a combination of extraction and chemical synthesis at a fixed
location that packages or repackages cannabis or cannabis products or labels or relabels
its container; includes the activity of manufacturing.
1.49 MND. "MND" means the Final Mitigated Negative Declaration for the
Project which was certified by the City Council, after making appropriate findings, by
Resolution No. adopted on, 2018 as being in compliance with CEQA.
1.50 MND Mitigation Measures. "MND Mitigation Measures" means the
mitigation measures imposed upon the Project pursuant to the MND and the Conditions
of Approval thereof. The MND Mitigation Measures are attached hereto as Exhibit "E".
1.51 Mortgage. "Mortgage" means a mortgage, deed of trust, sale and
leaseback arrangement or other transaction in which all, or any portion of, or any interest
in, the Site is pledged as security.
1.52 Mortgagee. "Mortgagee" refers to the holder of a beneficial interest under
a Mortgage.
1.53 Mortgagee Successor. "Mortgagee Successor" means a Mortgagee or any
third party who acquires fee title or any rights or interest in, or with respect to, the Site, or
any portion thereof, through foreclosure, trustee's sale, deed in lieu of foreclosure, lease
termination, or otherwise from, or through, a Mortgagee. If a Mortgagee acquires fee title
or any right or interest in, or with respect to, the Site, or any portion thereof, through
foreclosure, trustee's sale or by deed in lieu of foreclosure and such Mortgagee
subsequently conveys fee title to such portion of the Site to a third party, then such third
party shall be deemed a Mortgagee Successor.
1.54 Non -Defaulting Party. "Non -Defaulting Party" shall have the meaning set
forth in Article 11 below.
I.55 Person. "Person" means any individual, firm, co -partnership, joint
venture, association, corporation, limited liability company, estate, trust, business trust,
receiver, syndicate, or any other group or combination acting as a unit.
1.56 Planning Commission. "Planning Commission" means the City's
Planning Commission.
1.57 Proceeds. "Proceeds" means total revenue and/or money received through
the sale of goods and/or services before any deductions or allowances (e.g., rent, costs of
goods sold, taxes).
1.58 Processing "Processing Fees" means (i) the City's normal fees for
processing tentative tracts, map review, plan checking, site review, site approval,
administrative review, building permit (plumbing, mechanical, electrical, building),
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inspection and similar fees imposed to recover the City's costs associated with
processing, review and inspection of applications, plans, specifications, etc., and (ii) any
fees required pursuant to any Uniform Code. Developer is required to pay the City's
normal and customary Processing Fees, which Fees are not subject to limitation
hereunder except pursuant to the City's general police power authority.
I.59 Project. "Project" means the Development of the Site, pursuant to this
Agreement, the MND and MND Mitigation Measures, and the Existing Land Use
Regulations, as described more specifically in the Scope of Development, attached hereto
as Exhibit "C" and incorporated herein by this reference.
1.60 Reservations of Authority. "Reservation of Authority" shall have the
meaning set forth in Article 9 below.
1.61 Schedule of Performance. "Schedule of Performance" means the schedule
attached hereto as Exhibit "G".
1.62 Scope of Development. "Scope of Development" means the description
of the Project and the manner in which it will be developed as set forth in Exhibit "C".
1.63 Site. "Site" means the approximately 3.7 net acres in the City of Carson,
legally described in the Legal Description attached hereto as Exhibit "A" and shown in
the Site Map attached hereto as Exhibit "B".
1.64 State. "State" means the State of California.
1.65 Taxes. "Taxes" means general or special taxes, including but not limited
to ad valorem property taxes, sales taxes, transient occupancy taxes, utility taxes or
business taxes of general applicability citywide which do not burden the Site
disproportionately to similar types of development in the City and which are not imposed
as a condition of approval of a development project. Taxes do not include Development
Impact Fees or Processing Fees.
1.66 Testing. "Testing" or "testing laboratory" refers to a laboratory, facility,
or entity that offers or performs tests on cannabis or cannabis products; includes the
activity of laboratory testing.
1.67 Term. "Term" means that period of time during which this Agreement
shall be in effect and bind the parties, as defined in Section 3.1 below.
1.68 Transfer. "Transfer" shall have the meaning set forth in Article I2 below
1.69 Zoning Code. "Zoning Code" means Article IX of the Carson Municipal
Code as it existed on the date the City Council approves this Agreement except (i) as
amended by any zone change relating to the Site approved concurrently with the approval
of this Agreement, and (ii) as the same may be further amended from time to time
consistent with this Agreement.
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2.
3.
4.
1.70 Other Definitions. Unless otherwise specified in this Agreement, other
definitions relating to cannabis businesses, sales and proceeds shall bear the same
meaning and definition as utilized in Chapter 15 of Article VI of the Carson Municipal
Code. This includes, without limitation, the definitions for "retailer" (or "retail"), "adult
use," "delivery," and "medical."
EXHIBITS.
The following are the Exhibits to this Agreement:
2.1 Exhibit A
2.2 Exhibit B
2.3 Exhibit C
2.4 Exhibit D
2.5 Exhibit E
2.6 Exhibit F
2.7 Exhibit G
TERM.
Legal Description
Site Map
Scope of Development
Reserved
MND Mitigation Measures
List of Future Development Approvals
Schedule of Performance
3.1 Term. The term of this Development Agreement (the "Term") shaIl
commence on the Effective Date and shall continue until twenty (20) years from the
Effective Date hereof.
3.2 Termination for Default. This Agreement may be terminated due to the
occurrence of any Default in accordance with the procedures in Article 11.
3.3 Effective Date. See Section 1.35 above. If such a Claim or Litigation has
been filed, then the Effective Date shall be the date that the Claim or Litigation has been
successfully resolved in the City's favor, and the time for any further judicial review has
run. The City shall give Developer notice as to the date established as the Effective Date.
Until the Effective Date, neither City nor Developer shall have any rights or obligations
under this Agreement. The Effective Date is not otherwise tolled for any other Force
Majeure as described in Section 17.2.
DEVELOPMENT OF THE SITE; OPERATOR PERMITS.
4.1 Rip -ht to Develop. During the Term, the Developer shall have a vested
right to develop the Site (subject to Article 9 below) to the full extent permitted by the
MND and MND Mitigation Measures, this Agreement and the Development Plan, which
shall exclusively control the Development of the Site (including the uses of the Site, the
density or intensity of use, architectural review, the maximum height and size of
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proposed buildings, the provisions for reservation or dedication of land for public
purposes and the design, improvement and construction standards and specifications
applicable to the Project).
4.2 Developer Responsibility for DIF Amount. Developer shall be
responsible for payment of one-time impact fees of $2/square foot of gross building area.
The Project contemplates a new building of up to 220,000 square feet with four stories,
which will be used for commercial cannabis operations including manufacturing,
distribution, testing, and small-scale cultivation on 3.7 acres of Iand. Based on the square
foot of the Project, Developer will be responsible for one-time development impact fees
in the total amount of $440,000 (the "DIF Amount"), provided that if the Project
increases or decreases in size, the DIF Amount will be adjusted accordingly at the same
rate. Developer shall submit payment of the DIF Amount prior to the issuance of building
permits. No building permits shall be issued prior to the full payment of the DIF Amount.
Any amounts deposited by Developer shall be used by the City to pay for increased
accumulative Project impacts on the City's infrastructure, including but not limited to,
any or all of the following: Traffic and circulation (roads, sidewalks, and signals); Public
Safety (Fire and Sheriff's stations); Parks and open space (park land/improvements and
trails and bikeways); Library; Noise (sound walls); Flood control and stormwater. Interest
accruing upon any such deposit shall inure to and be created for the benefit of the City.
4.3 This Agreement to Govern Zoning. The City has determined that this
Agreement is consistent with the General Plan and the Zoning Code. As such, this
Agreement and its Exhibits shall be the primary documents governing the use and
Development of the Site and, in the event of a conflict, shall prevail over any other
Existing Land Use Regulations. Any zoning issues or requirements applicable to the Site
that are not otherwise governed by this Agreement, the MND or the Development Plan
shall be governed by the Existing Land Use Regulations.
4.4 Right To Future Approvals. Subject to the City's exercise of its police
power authority as specified in Article 9 below, the Developer shall have a vested right:
(i) to receive from the City all Future Development Approvals for the Site that are
consistent with, and implement, the Development Plan and this Agreement; (ii) not to
have such approvals be conditioned or delayed for reasons inconsistent with the
Development Plan and this Agreement; and (iii) to Develop the Site in a manner
consistent with such approvals in accordance with this Agreement. All Future
Development Approvals for the Site, shall upon approval by the City, be vested in the
same manner as provided in this Agreement for the Existing Land Use Regulations, for
the Term of this Agreement.
! 4.4.1 Proiect Description. Developer intends to develop the Site for
permitted commercial cannabis business activities per the Carson Municipal
Code, including the following business activities: 1) manufacturing facility sites
that produce, prepare, propagate, or compound manufactured cannabis products,
either directly or indirectly or by extraction methods, or independently by means
of chemical synthesis or by a combination of extraction and chemical synthesis,
package or repackage cannabis products, label or relabel its container, or
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transform cannabis into a concentrate, an edible product, a beverage or a topical
product; 2) small scale cultivation for nursery or research and development
purposes; 3) warehousing, transportation, distribution and delivery (to the extent
permitted by State law and the Carson Municipal Code) of the latter; 4) laboratory
testing and compliance operation; and 5) any other use permitted by City law
whether cannabis related or not.
4.4.2 Developer has represented that an initial anchor tenant for the
Project will be an existing, well-established and properly -licensed commercial
cannabis business that has submitted a letter of intent to Developer stating the
terms of a proposed lease. In reliance on Developer's representation, City's
approval of this Agreement is conditioned on an existing, well-established,
reputable and properly -licensed anchor tenant occupying a substantial square
footage of the Project for at least the first five years of operations. After such
five-year period, the City Manager shall exercise reasonable discretion to
determine if an anchor tenant is materially similar to the initial proposal for
purposes of this subsection and shall have the authority (but not the obligation) to
present any proposed alternative anchor tenant to the Council for approval prior to
occupancy by such tenant.
4.5 Obtaining and Maintaining Required Licenses. Developer shall require,
warrant and ensure that all subtenants, lessees, and owners of any portion of the Site, as
the case may be, at all times comply fully with all existing and future Iocal rules
(pursuant to the Carson Municipal Code) and all existing and future State rules applicable
to commercial cannabis activities on the Site and shall ensure such compliance by all of
Developer's employees, contractors, vendors, and members of the public invited or
allowed access to the Site.
4.5.1 Developer shall require that all subtenants, lessees, and owners of
any portion of the Site, as the case may be, promptly apply for and obtain all State
and City licenses required for activities on the Site.
4.5.2 All commercial cannabis operation permit applicants seeking to
establish a commercial cannabis operation at the Site shall be prescreened by
Developer to ensure compliance with State laws and the Carson Municipal Code,
including Chapter 15 of Article VI of the Carson Municipal Code. No commercial
cannabis operation permit shall be issued by the City and become effective unless
and until: (a) Developer has prescreened the applicant and submitted its approval
in writing to the City, and (b) City has determined that the applicant and
application meets all requirements of the Carson Municipal Code. City's
determination and issuance of the operation permit and business license shall be
done administratively and the application may be approved administratively by
the Director without further action or review of the City Council or the Cannabis
Permit Committee (as understood by Chapter 15 of Article VI of the Carson
Municipal Code) within a reasonable amount of time after the application is
submitted to the City. If the Director is unable to make the findings and
determinations prerequisite to the granting of approval pursuant to this Section,
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the application shall be denied in writing with the reasons for any denial specified.
The application fee shall be a reasonable fee to cover the City's actual cost of
reviewing the application.
4.6 Renewal of Permits. The process described in Section 4.5 shall also
govern the annual renewal of commercial cannabis operation permits.
4.7 Revocation and/or Suspension of _ Commercial Cannabis Operation
Permits. Any commercial cannabis operation permit for any commercial cannabis
activity at the Site may be revoked or suspended by the City Council, pursuant to written
findings (made by adopted resolution after a public hearing held at a public meeting of
the City Council) of any material violation of applicable State law or State rules, or of
any material violation of Chapter 15 of Article VI of the Carson Municipal Code, or of
any material violation of this Agreement (a material violation of this Agreement
expressly includes, but is not limited to, failure to fully comply with any and all financial
obligations owed to City pursuant to this Agreement), provided that at least thirty (30)
days' written notice has been provided to the permit holder to cure the alleged violation.
Such notice to cure does not preclude assessment by City of applicable financial penalties
or interest. The permit holder shall have the right at the public hearing to present
evidence to demonstrate that it is not in violation and to rebut any evidence. Conditions
(if any) of suspension or revocation are at the reasonable discretion of the City Council
and may include, but are not limited to, a prohibition on all owners, operators, managers
and employees of the suspended or revoked commercial cannabis operation from
operating within the City for a period of time set forth in writing and/or a requirement
(when operations may resume, if at all, pursuant to the City Council's determination) for
the holder of the suspended or revoked permit to resubmit an application for a
commercial cannabis operation permit pursuant to the requirements of Chapter 15 of
Article VI of the Carson Municipal Code.
5. PUBLIC BENEFITS AND FEES.
5.1 Minimum Annual Payments. As consideration for City's approval and
performance of its obligations set forth in this Agreement, Developer shall guarantee and
pay to City a Minimum Annual Payment as set forth below. The Minimum Annual
Payment shall be made according to the schedule below, and shall not be adjusted or
delayed by reason of the level of occupancy of the Project.
5.1.1 First Year: $1,000,000 paid prior to issuance of the first Certificate
of Occupancy for the Project to be applied against actual taxes due for the next
full four calendar quarters (the "Initial Period"). The last day of the Initial Period
will become the year end ("Year End Date") for the payment of Minimum Annual
Payments.
5.1.2 Second Year: $1,250,000 payable quarterly, with the full
$I,250,000 amount to be due on the first anniversary of the Year End Date.
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5.1.3 Third Year: $1,750,000 payable quarterly, with the full $1,750,000
amount to be due on second anniversary of the Year End Date.
5.I.4 Fourth Year and all following years: $1,750,000 increased by the
change in the Consumer Price Index for the prior year (compounded annualIy),
payable quarterly, with the full annual amount to be due at the Year End Date for
that year.
5.2 Taxes. The cannabis tax due to the City from commercial cannabis
operations located at the Site, pursuant to Chapter 13 of Article VI of the Carson
Municipal Code, shall be determined from the total annual proceeds (based on the one
year periods established by Section 5.1.1 through 5.1.4 of this Agreement) established in
proceeds from those operations (combined) for each year using the rates established
below ("Baseline Tax"). The Baseline Tax is the cannabis tax rate applicable to
commercial cannabis operations at the Site pursuant to Chapter 13 of Article VI of the
Carson Municipal Code, consistent with the authority provided by Carson Municipal
Code section 61320 which reads in part: "The City Council may impose the tax
authorized by this Chapter at a lower rate and may establish exemptions, incentives, or
other reductions, and penalties and interest charges or determinations of tax due for
failure to pay the tax in a timely manner, as otherwise allowed by Code or California
law." The cannabis tax shall be payable quarterly to the City based on the sales reported
to the State of California on the quarterly cannabis tax return, subject to the authority of
the City to conduct audits upon any sales reports (such audits to be paid for by
Developer). if the Baseline Tax revenue for each year is lower than the Minimum Annual
Payment for that year, Developer shall pay the deficiency amount to meet the Minimum
Annual Payment within one month after the close of the applicable year. If the Baseline
Tax for a given year exceeds the Minimum Annual Payment for that year, City shall keep
all tax revenues that exceed the Minimum Annual Payment. Cannabis proceeds above
that amount shall be subject to the following tax rates, and paid by Developer within one
month after the close of the applicable quarter, to City in addition to the Minimum
Annual Payment if applicable for that year:
5.2.1 Manufacturing: 0.5%
5.2.2 Distribution: 1.0%
5.2.3 Cultivation: 1.0% / $0.00 per square foot
5.2.4 Testing: 1.0%
5.2.5 Medical Deliveries Retailer (to the extent permitted by State law
and the Carson Municipal Code): 2.5%
5.2.6 Adult -Use Retailer Deliveries (to the extent permitted by State law
and the Carson Municipal Code): 5.0%
15
ORDINANCE NO. 18-1824 (Exhibit "A")
01 007.tW5r51577H 0 CFN Page 28 of 76
5.3 Obligation of Developer and Tenants. Payment of the Baseline Taxes
shall be the joint and several obligation of Developer and its tenants. Developer may
establish an escrow account to collect payments from its Tenants on a periodic basis.
Developer shall be responsible for full payment to the City and any shortfall in the
Minimum Annual Payment and additional taxes. However, nothing herein shall prevent
City from pursuing any available remedies against any Carson commercial cannabis
permit holder or Site tenants under the Carson Municipal Code or Tax Resolution.
5.3.1 Notwithstanding any of the foregoing commitments in this Section
5, beginning in the Fourth Year identified in Section 5.1.4, should Developer, by
virtue of economic circumstances outside Developer's reasonable control, suffer
significant economic hardship, then Developer may defer payment of up -to 50%
of the Minimum Annual Payment for no more than two years. After two years of
such deferrals (consecutive or otherwise), if Developer is again unable to feasibly
make full payment of a Minimum Annual Payment, then Developer may again
defer payment of up -to 50% of the Minimum Annual Payment on a year-to-year
basis, as outlined below, and any such subsequent deferral can only occur if all
the following conditions are met:
',,Q Developer has provided City at least 30 days' written
notice of its inability to feasibly make a payment upon the Minimum
Annual Payment;
t_l11 Developer provides the City with an opportunity to audit, at
no cost to City (i.e., Developer's cost), all reasonably -requested financial
records and data to demonstrate by a preponderance of the evidence that
payment upon the Minimal Annual Payment will cause Developer
significant economic hardship, such that Developer cannot economically
and feasibly continue Project operations. Such evidence may include,
without limitation, impending bankruptcy, foreclosure on the Project or a
majority of Developer's assets, or unreasonable ratio of debt to assets;
(�) The Baseline Tax for the given year is below the Minimum
Annual Payment;
(J) The Developer has paid at least fifty percent (50%) of the
Minimum Annual Payment for the given year; and
tef The Developer has fully paid all previous Baseline Taxes
and met the Annual Minimum Payments in the first three years identified
in Sections 5. 1.1 through 5.1.3.
!� 5.3.2 City shall provide Developer written notice of any determination
I 1 made by the City that Developer does not qualify for a deferral.
5.3.3 If Developer qualifies for a deferral of payment, the amount of the
deferral for any particular year will be equal to the difference between the
Minimum Annual Payment and the actual payments, up to a maximum of fifty
16
ORDINANCE NO. 18-1824 (Exhibit "A")
01007 0005/515778 6 UN Page 29 of 76
percent (50%) of the Minimum Annual Payment. If Developer qualifies for a
deferral of payment, such deferral shall not be subject to interest or penalty costs
and shall be carried forward up to the Term of this Agreement. However, if
Developer does not qualify for a deferral (e.g., is unable to demonstrate by a
preponderance of the evidence that payment upon the Minimal Annual Payment
will cause Developer significant economic hardship), then the full amount of the
Minimum Annual Payment plus all penalties and assessments applicable under
the Carson Municipal Code or Tax Resolution shall apply and be payable to the
City within 90 days of the City's determination that Developer does not qualify
for a deferral.
5.3.4 If City determines that Developer does qualify for one or more
deferral(s) of payment upon the Minimum Annual Payment, the City may, in its
sole discretion, send written notice of such determination to Developer and elect
to negotiate with Developer either (i) a new Minimum Annual Payment that
accommodates Developer's economic needs, or (ii) a new schedule for
Developer's payment of Minimum Annual Payments or deferrals thereof.
5.4 Audits; Reopener Provision. City shall have the right to conduct periodic
audits of all commercial cannabis operations located at the Site pursuant to the Carson
Municipal Code, at City's discretion and Developer's expense. At the City's sole
discretion, between the end of the third year from the issuance of the first Certificate of
Occupancy to the end of the sixth year from the issuance of the first Certificate of
Occupancy, and thereafter every three years, City shall have the right to discuss and
negotiate with Developer increases in the Annual Minimum Payments and the Baseline
Tax. Factors to be included in such negotiations include but are not limited to: (i) changes
in federal or State cannabis laws; (ii) changes in State and local cannabis tax rates,
applicable sales tax rates, and/or methodology; and (iii) changes in the uses and
occupancy of the Site. Developer shall both participate in as well as conclude such
negotiations in good faith.
5.5 Local Hiring. A goal of City with respect to this Project and Site and
other major projects and sites within City is to foster employment opportunities for
Carson residents ("Local Hiring Program"). To that end, Developer covenants that with
respect to the construction, operation and maintenance of the Project and Site, Developer
shall make reasonable efforts to cause all solicitations, for full-time, part-time, new or
replacement employment relating to the construction, operation and maintenance of the
Project and Site, to be advertised in such a manner as to target local City residents, and
Developer shall make other reasonable efforts at local employment outreach as City shall
approve. Developer shall also notify City of jobs available at the Project and Site such
that City may inform City residents of job availability at the Project and Site. Developer
shall include in each lease or sale of any portion of the Site, as the case may be, this
Local Hiring Program as a guideline for any subtenant, lessee, owner of any portion of
the Site, or by any applicant licensed on any portion of the Site. Nothing in this Section
shall require Developer to offer employment to individuals who are not otherwise
qualified for such employment. Without limiting the generality of the foregoing, the
17
ORDINANCE NO. 18-1824 (Exhibit "A")
01007 0005/515778.6 CFN Page 30 of 76
provisions of this Section are not intended, and shall not be construed, to benefit or be
enforceable by any person whatsoever other than City.
5.6 Social Justice Hiring. Developer and commercial cannabis operations at
the Site shall promote equitable business ownership and employment opportunities at the
Site in order to decrease disparities in life outcomes for marginalized communities and
address the disproportionate impact of the war on drugs on those communities. To these
ends, Developer and commercial cannabis operations at the Site shall engage in proactive
efforts to hire partners and employees from marginalized communities and/or
rehabilitated persons; seek to establish commercial cannabis operations that are diverse
and inclusive; and, seek the hiring of otherwise qualified employees who have been
arrested for or convicted of minor cannabis -related crimes that would not be considered
crimes following the passage of the Adult Use of Marijuana Act (Proposition 64).
5.7 Local Tenancy Application Program. Developer shall implement a policy
favoring or granting preferential application points, consistent with the Local Hiring
provisions described above, to facilitate the leasing of space on the Site to residents of the
City of Carson, including local tenants, lessees, and subtenants of any portion of the Site,
as the case may be, to target residents of the City of Carson, by ensuring that local
residents of the City are aware of Project and Site opportunities and have a fair
opportunity to apply and compete for such operation space within the Project and Site.
5.8 Financing of Public Safety Services and Improvements. Developer
acknowledges that City is considering the formation of one or more community facilities
districts ("CFDs") to fund public safety services and infrastructure necessary to serve the
Project. Developer shall cooperate in the formation of such CFDs and shall agree to
annex into such CFDs when requested by City. The CFDs will levy a special tax on the
Site property. The amount of the special tax shall be the same rate and no higher than the
rates paid for similar uses, as such similar uses are determined in the reasonable
discretion of the City Manager. The CFD shall be formed in accordance with the City's
Goals and Policies for Community Facilities District Financing, as may be amended from
time to time. The CFD shall be formed henceforth by the City.
6. PROJECT CONSTRUCTION AND SCHEDULING.
6.1 Timing of Development. The parties acknowledge that the substantial
public benefits to be provided by the Developer to the City pursuant to this Agreement
are in consideration for, and in reliance upon, assurances that the City will permit
Development of the Site in accordance with the terms of this Agreement. Accordingly,
the City shall not attempt to restrict or limit the Development of the Site in any manner
that would conflict with the provisions of this Agreement or the Existing Development
Approvals. The City acknowledges that the Developer cannot at this time predict the
exact timing or rate at which the Site will be Developed. The timing and rate of
Development depend on numerous factors such as market demand, commercial tenant
availability, absorption, completion schedules and other factors, which are not within the
control of the Developer or the City. It is the intent of the parties to provide in this
Agreement that the Developer shall have the vested right to Develop the Site in such
18
ORDINANCE NO. 18-1824 (Exhibit "A")
01007 000/5157786 CFN Page 31 of 76
order and at such rate and at such time as the Developer deems appropriate. Except as set
forth in the following sentence, it is the intent of the parties that no City moratorium or
other similar limitation relating to the rate or timing of the Development of the Site or
any portion thereof, whether adopted by initiative, referendum or otherwise, shall apply
to the Site to the extent that such moratorium, referendum or other similar limitation is in
conflict with this Agreement. Notwithstanding the foregoing, the Developer
acknowledges that nothing herein is intended or shall be construed as (i) overriding any
provision of the Existing Land Use Regulations; or (ii) restricting the City from
exercising the powers described in Article 9 of this Agreement to regulate development
of the Site; and, (iii) nothing in this Article 6 is intended to excuse or release the
Developer from any obligation set forth in this Agreement which is required to be
performed on or before a specified calendar date or event.
6.2 Standard of Work. When the Developer is required by this Agreement
and/or the Development Plan to construct any improvements which will be dedicated to
the City or any other public agency, upon completion, and if required by applicable laws
to do so, the Developer shall perform such work in the same manner and subject to the
same construction standards as would be applicable to the City or such other public
agency should it have undertaken such construction work. Developer is aware of the
requirements of California Labor Code Sections 1720, et seq., and 1770, et seq., as well
as California Code of Regulations, Title 8, Section 1600, et seq., ("Prevailing Wage
Laws"). In any case where the Developer performs the public improvements work, the
Developer shall pay prevailing wages as required by the Prevailing Wage Laws, the City
shall not be liable for any failure in Developer's payment of prevailing wages or legally -
imposed penalties therefore, and Developer shall defend, indemnify and hold the City, its
elected officials, officers, employees and agents free and harmless from any claim or
Iiability (including reasonable attorneys' fees and court costs) arising out of any failure or
alleged failure to comply with the Prevailing Wage Laws.
6.3 Prevailing Wages. Developer is aware of the requirements of California
Labor Code Sections I720, et seq., and I770, et seq., as well as California Code of
Regulations, Title 8, Section 1600, et seq., ("Prevailing Wage Laws"), Developer shall
pay prevailing wages as required by the Prevailing Wage Laws. To the extent that it is
determined that Developer has not paid, or does not pay, prevailing wages required by
Prevailing Wage Laws for any portion of the Project, Developer shall defend, indemnify
and hold the City, its elected officials, officers, employees and agents free and harmless
from any claim or liability (including reasonable attorneys' fees and court costs) arising
out of any failure or alleged failure to comply with the Prevailing Wage Laws.
6.3.1 Developer acknowledges and agrees that should any third party,
r including but not limited to the Director of the Department of Industrial Relations
("DIR"), require Developer or any of its contractors or subcontractors to pay the
general prevailing wage rates of per diem wages and overtime and holiday wages
determined by the Director of the DIR under the Prevailing Wage Laws, then
Developer shall defend, indemnify and hold the City, its elected officials, officers,
employees and agents free and harmless from and against any such
determinations, or actions (whether legal, equitable, or administrative in nature)
19
ORDINANCE NO. 18-1824 (Exhibit "A")
01007.0005/515778 6 CFN Page 32 of 76
or other proceedings, and shall assume all obligations and liabilities for the
payment of such wages and for compliance with the provisions of the Prevailing
Wage Law. The City makes no representation that any construction or Site uses to
be undertaken by Developer are or are not subject to Prevailing Wage Law.
7. PROCESSING OF REQUESTS AND APPLICATIONS FOR FUTURE
DEVELOPMENT APPROVALS: OTHER GOVERNMENT PERMITS.
7.1 Project Uses. The Project is hereby approved for Eligible Uses.
7.2 Future Development Approvals. The parties contemplate that Developer
will be required to obtain certain Future Development Approvals that will be subject to
the City's discretionary review. The provisions of this Agreement shall fully govern the
process and authority for securing Future Development Approvals and supersede the
otherwise applicable provisions of the Zoning Code.
7.2.1 Approval of Future Development Approvals shall be the
responsibility of the Director, based upon an application submitted to the
Director, and may be approved administratively without further action or review
of the Planning Commission or City Council, while otherwise subject to Zoning
Code requirements in existence as of the effective date of this Agreement.
7.2.2 Before action is taken on any Future Development Approval,
including without limitation an application for any Project improvement or for the
issuance of a permit for any sign, building, structure, or alteration of the exterior
of a structure in the Project, plans and drawings of such Project improvement,
sign, building or alteration proposed as part of the Future Development Approval
shall be submitted, in such form and detail as the Director may prescribe, to the
Director for approval.
7.2.3 In order to grant approval, the findings and determinations of the
Director shall include that the Project improvement, as set forth in the proposed
Future Development Approval, is based on the requirements included in this
Agreement, the approved Scope of Development, Conditions of Approval, and
MND.
7.2.4 If the Director is unable to make the findings and determinations
prerequisite to the granting of approval pursuant to this Section, the application
shall be denied.
7.2.5 Approval of a Future Development Approval, and the finding that
such Future Development Approval conforms to the provisions of this
Agreement, is hereby declared to be an administrative function. The Director has
the authority and responsibility to perform this administrative function. The action
thereon by the Director shall be final and conclusive.
7.3 Other Governmental Permits. The Developer shall apply in a timely
manner for such other permits and approvals as may be required from other governmental
20
ORDINANCE NO. 18-1824 (Exhibit "A")
01007 00051515778 6 CFN Page 33 Of 76
or quasi -governmental agencies having jurisdiction over the Project as may be required
for the development of, or provision of services to, the Project. The City shall cooperate
with the Developer in its efforts to obtain such permits and approvals. The City and
Developer shall cooperate and use reasonable efforts in coordinating the implementation
of the Development Plan with other public agencies, if any, having jurisdiction over the
Site or the Project. Provided, however, that City makes no representations or warranties
with respect to approvals required by any other governmental entity.
V 8. AMENDMENT OF DEVELOPMENT AGREEMENT; OPERATING
MEMORANDA.
8.1 Initiation of Amendment. Either party may propose an amendment to this
Agreement.
8.2 Procedure. Except as set forth in Section 8.4 below, the procedure for
proposing and adopting an amendment to this Agreement shall be the same as the
procedure required for entering into this Agreement in the first instance, and meet the
requirements of the Development Agreement Statute.
8.3 Consent. Except as expressly provided in this Agreement, no amendment
to all or any provision of this Agreement shall be effective unless set forth in writing and
signed by duly authorized representatives of each of the parties hereto and recorded in the
Official Records of Los Angeles County.
8.4 Oneratin2 Memoranda.
8.4.1 Flexibility Necessary. The provisions of this Agreement require a
close degree of cooperation between City and Developer. Refinements and further
development and implementation of the Project may demonstrate that
clarifications and minor modifications to refine this Agreement are appropriate.
In addition, the parties desire to retain a certain degree of flexibility with respect
to those items covered in general terms under this Agreement. Therefore, from
time to time, during the Term, the City Manager and Developer may agree to
procedural or other minor modifications or clarifications to this Agreement,
including without limitation, to implement changes to the Schedule of
Performance. Such changes may be implemented through Operating Memoranda
approved by the City Manager and Developer pursuant to Section 8.4.2, which
after execution shall be attached to and form part of this Agreement and need not
be recorded. Except as provided in this Section 8.4, all other modifications shall
require an amendment to this Agreement.
8.4.2 Operating Memoranda. When and if Developer finds it necessary
or appropriate to make changes to this Agreement pursuant to Section 8.4.1, the
parties shall effectuate such modifications through operating memoranda
("Operating Memoranda") approved by the parties in writing that reference this
Section 8.4. Operating Memoranda are not amendments to this Agreement but
mere ministerial clarifications, therefore public notices and hearings shall not be
21
ORDINANCE NO. 18-1824 (Exhibit "A")
01007 00051515778.6 CFN Page 34 of 76
required. The City Attorney shall be authorized, upon consultation with
Developer, to determine whether a requested clarification may be effectuated
pursuant to this Section 8.4 or whether the requested clarification is of such
character as to constitute an amendment to the Agreement which requires
compliance with the provisions of Sections 8.2 and 8.5. The authority to enter into
any Operating Memoranda is hereby delegated to City Manager, and City
Manager is hereby authorized to execute any Operating Memoranda hereunder
without further City Council action.
8.5 Hearing Rights Protected. Notwithstanding the foregoing, City will
process any change to this Agreement consistent with State law and will hold public
hearings thereon if so required by State law and the parties expressly agree nothing herein
is intended to deprive any party or person of due process of law.
8.6 Effect of Amendment to Development Agreement. Except as expressly set
forth in any such amendment, an amendment to this Agreement will not alter, affect,
impair, modify, waive, or otherwise impact any other rights, duties, or obligations of
either party under this Agreement.
9. RESERVATIONS OF AUTHORITY.
9.1 Limitations, Reservations and Exceptions. Notwithstanding anything to
the contrary set forth hereinabove, in addition to the MND and MND Mitigation
Measures, this Agreement and the Development Plan, only the following Land Use
Regulations adopted by City hereafter shall apply to and govern the Development of the
Site ("Reservation of Authority"):
9. 1.1 Future Regulations. Future Land Use Regulations which (i) are not
in conflict with the Existing Land Use Regulations; (ii) would be applicable under
the Development Agreement Statute; or (iii) have been consented to in writing by
Developer (even if in conflict with the Existing Land Use Regulations).
9.1.2 State and Federal Laws and Regulations. Where State or federal
laws or regulations, enacted after the date this Agreement is approved by the City
Council, prevent or preclude compliance with one or more provisions of this
Agreement, those provisions shall be modified, through revision or suspension, to
the minimum extent necessary to comply with such State or federal laws or
regulations.
9.1.3 Public Health and Safety/Uniform Codes.
t
(a) Adoption Automatic Regarding Uniform Codes. This
i Agreement shall not prevent the City from adopting future Land Use
Regulations or amending Existing Land Use Regulations that are uniform
codes and are based on recommendations of a multi -state professional
organization and become applicable throughout the City, such as, but not
limited to, the Uniform Building, Electrical, Plumbing, Mechanical, or
Fire Codes ("Uniform Codes").
22
ORDINANCE NO. 18-1824 (Exhibit "A")
01007.000515 1 5 77 8.6 CFN Page 35 of 76
(b) Adoption Regarding Public Health and 5afetylUnifornt
Codes. This Agreement shall not prevent the City from adopting Future
Land Use Regulations respecting public health and safety to be applicable
throughout the City which directly result from findings by the City that
failure to adopt such future Land Use Regulations would result in a
condition injurious or detrimental to the public health and safety.
(c) Adoption Automatic Regarding Regional Progrants. This
Agreement shall not prevent the City from adopting Future Land Use
Regulations or amending Existing Land Use Regulations that are regional
codes and are based on recommendations of a county or regional
organization and become applicable throughout the region, such as the
Gateway Cities Council of Governments, with the exception of any Future
Land Use Regulations or amendments to Existing Land Use Regulations
that will otherwise prohibit the uses that are allowed by this Agreement.
9.1.4 Amendments to Codes for Local Conditions. Notwithstanding the
foregoing, no construction within the Project shall be subject to any provision in
any of the subsequent Uniform Construction Codes, adopted by the State of
California, but modified by the City to make it more restrictive than the
provisions of previous Uniform Construction Codes of the City, notwithstanding
the fact that the City has the authority to adopt such more restrictive provision
pursuant to the California Building Standards Law, including, but not limited to,
Health and Safety Code § 18941.5, unless such amendment applies City-wide.
The City shall give Developer prior written notice of the proposed adoption of
such amendment and Developer shall have the right to present its objections to the
amendment.
9.2 Regulation by 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 Site separately from, or jointly with, the City and this
Agreement does not limit the reasonable authority of such other public agencies.
9.3 Fees, Taxes and Assessments. Notwithstanding any other provision herein
to the contrary, the City retains the right: (i) to impose or modify Processing Fees as
provided in Section 1.58, (ii) to impose or modify business licensing or other fees
pertaining to the operation of businesses; (iii) to impose or modify taxes and assessments
which apply City-wide such as utility taxes, sales taxes and transient occupancy taxes;
(iv) to impose or modify fees and charges for City services such as electrical utility
charges, water rates, and sewer rates; (v) to impose or modify a community wide or area -
wide assessment district; and (vi) to impose or modify any fees, taxes or assessments
similar to the foregoing.
10. ANNUAL REVIEW
10.1 Annual Monitoring Review. Following commencement of construction (as
demarcated by the commencement of actual Site grading), the City and the Developer
01007.00051515778,6 CFN
23
ORDINANCE NO. 18-1824 (Exhibit "A")
Page 36 of 76
shall review the performance of this Agreement, and the Development of the Project, on
or about each anniversary of the Effective Date (the "Annual Review"). The cost of the
Annual Review shall be borne by Developer and Developer shall pay a reasonable
deposit in an amount requested by City to pay for such review. As part of each Annual
Review, within ten (10) days after each anniversary of this Agreement, the Developer
shall deliver to the City all information reasonably requested by City (i) regarding the
Developer's performance under this Agreement demonstrating that the Developer has
complied in good faith with the terms of this Agreement and (ii) as required by the
Existing Land Use Regulations.
10.1.1 The Director shall prepare and submit to Developer and thereafter
to City Council a written report on the performance of the Project, and identify
any deficiencies and explain why such deficiencies have occurred and the
Developer's plan to correct them. If any deficiencies are noted, a public hearing
shall be held before the City Council on the report to Council. The Developer's
written response shall be included in the Director's report. The report to Council
shall be made within 45 days of the anniversary date.
10.1.2 If the City determines that the Developer has substantially
complied with the terms and conditions of this Agreement, the Annual Review
shall be concluded. If the City finds and determines that the Developer has not
substantially complied with the terms and conditions of this Agreement for the
period under review, the City may declare a default by the Developer in
accordance with Article 11.
10.2 Certificate of Compliance. If, at the conclusion of an Annual Review, the
City finds that the Developer is in substantial compliance with this Agreement, the City
shall, upon request by the Developer, issue a Certificate of Compliance to the Developer
in a form approved by the City.
10.3 Failure to Conduct Annual Review. The failure of the City to conduct the
Annual Review shall not be a Developer Default unless Developer fails to cooperate in
providing necessary information.
11. DEFAULT, REMEDIES AND TERMINATION.
11.1 Rights of Non -Defaulting Party after Default. The parties acknowledge
that both parties shall have hereunder all legal and equitable remedies as provided by law
following the occurrence of a Default or to enforce any covenant or agreement herein
except as provided in Section 11.2 below. Before this Agreement may be terminated or
f action may be taken to obtain judicial relief the party seeking relief ("Non -Defaulting
Party") shall comply with the notice and cure provisions of this Article 11.
11.2 No Recovery for Monetary Damages. The nature of a development
agreement under the Development Agreement Statute is a very unusual contract for
promoting a large development project facing many complex issues including geologic,
environmental, finance, market, regulatory and other constantly evolving factors over a
24
ORDINANCE N0. 18-1824 (Exhibit "A")
01007AM/51 iMfii CFN Page 37 of 76
long time frame. The high level of uncertainty and risk involved justify the extraordinary
commitments made to the Developer. However, the original persons representing the
parties and approving the transaction are only likely to be involved with the Project for a
limited time in comparison to the over-all life of the Project. This can lead to confusion
over time as to the intent of the parties in dealing with changed circumstances.
11.2.1 Accordingly, in this Agreement, the rights of enforcement are
limited as follows (i) the remedy of monetary damages is not available to either
party, and (ii) there is no shortcut to a mediation or arbitration procedure where a
nonelected representative can arbitrarily determine land use development issues.
11.2.2 However, the parties shall have the equitable remedies of specific
performance, injunctive and declaratory relief, or a mandate or other action
determining that the City has exceeded its authority, and any other available
equitable remedies, other than recovery of monetary damages, to enforce their
rights under this Agreement. The parties shall have the right to recover their
attorney fees and costs pursuant to Section 17.8 in such action, and nothing herein
limits the provisions for restitution or liquidated damages set forth herein.
Moreover, the Developer shall have the right to a public hearing before the City
Council before any default can be established under this Agreement, as provided
in Section 11.7.3.
11.3 Recovery of Monies Other Than Damages.
11.3.1 Restitution of Improper Exactions. In the event any actions,
whether monetary or through the provision of land, good or services, are imposed
on the Development of the Site other than those authorized pursuant to this
Agreement, the Developer shall be entitled to recover from City restitution of all
such improperly assessed exactions, either in kind or the value in -lieu of the
exaction, together with interest thereon at the rate of the maximum rate provided
by law per year from the date such exactions were provided to City to the date of
restitution.
11.3.2 Monetary Default. In the event the Developer fails to perform any
monetary obligation under this Agreement, City may sue for the payment of such
sums to the extent due and payable. The Developer shall pay interest thereon at
the higher of. (i) ten percent (10%) per annum, or (ii) the maximum rate permitted
by law, from and after the due date of the monetary obligation until payment is
actually received by the City.
11.3.3 Liquidated Damages for Unreasonable Delays. The Project's
Schedule of Performance is attached hereto as Exhibit G. It is understood that the
Schedule of Performance is subject to all of the terms and conditions set forth in
the text of the Agreement. The summary of the items of performance in this
Schedule of Performance is not intended to supersede or modify the more
complete description in the text of this Agreement; in the event of any conflict or
25
ORDINANCE NO. 18-1824 (Exhibit "A")
01007 0005/515778.6 CFN Page 38 of 76
inconsistency between this Schedule of Performance and the text of the
Agreement, the text shall govern.
The time periods set forth in this Schedule of Performance may be altered or
amended only by written agreement signed by both Developer and City. A failure
by either party to enforce a breach of any particular time provision shall not be
construed as a waiver of any other time provision. The City Manager shall have
authority to approve extensions of time without City Council action not to exceed
a cumulative total of 180 days (subject to any force majeure).
Subject to any force majeure, if the Project is delayed such that Project
completion (as demonstrated by issuance of a certificate of occupancy for all
Project components) has not been accomplished by September 1, 2020, then
Developer shall pay the City $1,000,000.00 in liquidated damages for such delay
or non-performance of the Project. The parties recognize that if Developer fails to
timely perform the Project, or fails to cooperatively undertake the immediate cure
of any violation in a timely manner, the City and its residents will suffer damages,
including without limitation the minimum tax revenue guarantees set forth herein
and potential lost opportunities in the development of the Site, and that it is and
will be impractical and extremely difficult to ascertain and determine the exact
amount of damages that the City and its citizens will suffer. Therefore, the parties
agree that the liquidated damages established herein represent a reasonable
estimate of the amount of such damages for such specific violations, considering
all of the circumstances existing on the date of this Agreement, including the
relationship of the sums to the range of harm to City that reasonably could be
anticipated and the anticipation that proof of actual damages would be costly or
impractical. In placing their initials at the places provided, each party specifically
confirms the accuracy of the statements made above and the fact that each party
has had ample opportunity to consult with legal counsel and obtain an explanation
of these liquidated damage provisions prior to entering this Agreement.
Developer Initials City Initials
11.4 Compliance with the Claims Act. Compliance with this Article 11 shall
constitute full compliance with the requirements of the Claims Act, Government Code
§ 900 et seq., pursuant to Government Code § 930.2 in any action brought by the
Developer.
11.5 Notice and Opportunity to Cure. A Non -Defaulting Party in its discretion
may elect to declare a Default under this Agreement in accordance with the procedures
hereinafter set forth for any failure or breach of the other party ("Defaulting Party") to
perform any material duty or obligation of the Defaulting Party under the terms of this
Agreement. However, the Non -Defaulting Party must provide written notice to the
Defaulting Party setting forth the nature of the breach or failure and the actions, if any,
required by the Defaulting Party to cure such breach or failure. The Defaulting Party shall
be deemed in Default under this Agreement, if the breach or failure can be cured, but the
Defaulting Party has failed to take such actions and cure such default within thirty (30)
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days after the date of such notice or ten (10) days for monetary defaults (or such lesser
time as may be specifically provided in this Agreement). However, if such non -monetary
Default cannot be cured within such thirty (30) day period, and if the Defaulting Party
does each of the following:
(a) Notifies the Non -Defaulting Party in writing with a reasonable
explanation as to the reasons the asserted default is not curable within the thirty
(30) day period; and
(b) Notifies the Non -Defaulting Party of the Defaulting Party's
proposed cause of action to cure the default; and
(c) Promptly commences to cure the default within the thirty (30) day
period; and
(d) Makes periodic reports to the Non -Defaulting Party as to the
progress of the program of cure; and
(e) Diligently prosecutes such cure to completion,
then the Defaulting Party shall not be deemed in breach of this Agreement.
11.5.1 Notwithstanding the foregoing, the Defaulting Party shall
be deemed in default under this Agreement if the breach or failure
involves the payment of money but the Defaulting Party has failed to
completely cure the monetary default within ten (10) days (or such lesser
time as may be specifically provided in this Agreement) after the date of
such notice.
11.6 Dispute Resolution.
11.6.I Meet & Confer. Prior to any party issuing a Default Notice
hereunder, the Non -Defaulting Party shall inform the Defaulting Party either
orally or in writing of the Default and request a meeting to meet and confer over
the alleged default and how it might be corrected. The parties through their
designated representatives shall meet within ten (10) days of the request therefore.
The parties shall meet as often as may be necessary to correct the conditions of
default, but after the initial meeting either party may also terminate the meet and
confer process and proceed with the formal Default Notice.
11.6.2 Termination Notice. Upon receiving a Default Notice, should the
Defaulting Party fail to timely cure any default, or fail to diligently pursue such
cure as prescribed above, the Non -defaulting Party may, in its discretion, provide
the Defaulting Party with a written notice of intent to terminate this Agreement
("Termination Notice"). The Termination Notice shall state that the Non -
defaulting Party will elect to terminate this Agreement and state the reasons
therefor (including a copy of any specific charges of default) and a description of
the evidence upon which the decision to terminate is based. Once the Termination
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ORDINANCE NO. 18-1824 (Exhibit "A")
01007,00051515778 ,6 CFN Page 40 of 76
Notice has been issued, the Non -defaulting Party's election to terminate this
Agreement will only be waived if (i) the Defaulting Party fully and completely
cures all defaults prior to the date of termination, or (ii) pursuant to Section 11.6.3
below.
11.6.3 Hearing Opportunity Prior to _Termination. Prior to any
termination, a termination hearing shall be conducted as provided herein
("Termination Hearing"}. The Termination Hearing shall be scheduled as an open
public hearing item at a regularly -scheduled City Council meeting within thirty
(30) days of the Termination Notice, subject to any legal requirements including
but not limited to the Ralph M. Brown Act, Government Code Sections 54950-
54963. At said Termination Hearing, the Defaulting Party shall have the right to
present evidence to demonstrate that it is not in default and to rebut any evidence
presented in favor of termination. Based upon substantial evidence presented at
the Termination Hearing, the Council may, by adopted resolution, act as follows:
(a) Decide to terminate this Agreement.
(b) Determine that the alleged Defaulting Party is innocent of a
default and, accordingly, dismiss the Termination Notice and any charges
of default; or
(c) Impose conditions on a finding of default and a time for
cure, such that Defaulting Party's fulfillment of said conditions will waive
or cure any default.
11.6.4 Findings of a default or a condition of default must be based upon
substantial evidence supporting the following three findings: (i) that a default in
fact occurred and has continued to exist without timely cure, (ii) that the Non -
Defaulting Party's performance has not excused the default; and (iii) that such
default has, or will, cause a material breach of this Agreement and/or a substantial
negative impact upon public health, safety and welfare, or the financial terms
established in the Agreement, or such other interests arising from the Project.
Notwithstanding the foregoing, nothing herein shall vest authority in the City
Council to unilaterally change any material provision of the Agreement.
11.6.5 Following the decision of the City Council, any party dissatisfied
with the decision may seek judicial relief consistent with this Article.
11.7 Waiver of Breach. By not challenging any (Existing or Future)
Development Approval within 90 days of the action of City enacting the same, Developer
shall be deemed to have waived any claim that any condition of approval is improper or
that the action, as approved, constitutes a breach of the provisions of this Agreement. By
recordation of a final map on all or any portion of the Site, or obtaining a building permit,
the Developer shall be deemed to have waived any claim that any condition of approval
is improper or that the action, as approved, constitutes a breach of the provisions of this
Agreement for the subject portion of the Site.
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11.8 Venue. In the event of any judicial action, venue shall be in the Superior
Court of Los Angeles County.
12. ASSIGNMENT & BINDING SITE COVENANTS.
12.1 Right to Assisn.
12. 1.1 General. Neither party shall have the right to assign this
Agreement or any interest or right thereunder without the prior written consent of
the other party; however, notwithstanding the above, the Developer's assignment
of its rights and obligations under this Agreement to another entity which is
owned or controlled (directly or indirectly) by the Developer which assignee shall
own, develop or operate the Site pursuant to the provisions of this Agreement, is
permitted without the City's approval (a "Permitted Transfer"). The term
"assignment" as used in this Agreement shall not include successors -in -interest to
the City that may be created by operation of Iaw.
As used in this Section, the term "transfer" shall include the transfer to any person
or group of persons acting in concert of more than seventy percent (70%) of the
present equity ownership and/or more than fifty percent (50%) of the voting
control of the Developer (jointly and severally referred to herein as the "Trigger
Percentages") or any general partner of the Developer in the aggregate, taking all
transfers into account on a cumulative basis, except transfers of such ownership or
control interest between members of the same immediate family, or transfers to a
trust, testamentary or otherwise, in which the beneficiaries are limited to members
of the transferor's immediate family. A transfer of interests (on a cumulative
basis) in the equity ownership and/or voting control of the Developer in amounts
less than the Trigger Percentages shall not constitute a transfer subject to the
restrictions set forth herein. In the event the Developer or any general partner of
the Developer or its successor is a corporation or trust, such transfer shall refer to
the transfer of the issued and outstanding capital stock of the Developer, or of
beneficial interests of such trust; in the event that Developer or any general
partner of the Developer is a limited or general partnership, such transfer shall
refer to the transfer of more than the Trigger Percentages in the limited or general
partnership interest; in the event that the Developer or any general partner is a
joint venture, such transfer shall refer to the transfer of more than the Trigger
Percentages of such joint venture partner, taking all transfers into account on a
cumulative basis,
Except for a Permitted Transfer, the Developer shall not transfer this Agreement
or any of the Developer's rights hereunder, or any interest in the Site or in the
improvements thereon, directly or indirectly, voluntarily or by operation of law,
except as provided below, without the prior written approval of City, and if so
purported to be transferred, the same shall be null and void. In considering
whether it will grant approval to any transfer by Developer, which transfer
requires City approval, City shall consider factors such as (i) the financial strength
and capability of the proposed transferee to perform the obligations hereunder;
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and (ii) the proposed transferee's experience and expertise in the planning,
financing, development, ownership, and operation of similar projects. In no event
shall the City's approval of any transfer be unreasonably withheld or delayed.
In addition, no attempted assignment of any of the Developer's obligations
hereunder which requires the City's approval shall be effective unless and until
the successor party signs and delivers to the City an assumption agreement, in a
form reasonably approved by the City, assuming such obligations. No consent or
approval by City of any transfer requiring the City's approval shall constitute a
further waiver of the provision of this Section 12.1.1 and, furthermore, the City's
consent to a transfer shall not be deemed to release the Developer of liability for
performance under this Agreement unless such release is specific and in writing
executed by City. In no event shall the City's release of the Developer from
liability under this Agreement upon a transfer be unreasonably withheld or
delayed.
Notwithstanding any provision of this Agreement to the contrary, City approval of
a Transfer or Assignment of any portion of the Site under this Agreement shall
not be required in connection with any of the following (which shall also for
purposes hereof be deemed a Permitted Transfer) provided that such person or
entity transferee or assignee assumes in writing all of the Developer's obligations
under this Agreement and notifies the City in writing of the same.
(a) Any mortgage, deed of trust, sale/Iease-back, or other form
of conveyance for financing and any resulting foreclosure therefrom.
(b) The granting of easements or dedications to any appropriate
governmental agency or utility or permits to facilitate the development of
the Site.
(c) A sale or transfer resulting from, or in connection with, a
reorganization as contemplated by the provisions of the Internal Revenue
Code of 1986, as amended or otherwise, in which the ownership interests
of a corporation are assigned directly or by operation of law to a person or
persons, firm or corporation which acquires the control of the voting
capital stock of such corporation or all or substantially all of the assets of
such corporation.
(d) A sale or transfer of less than the Trigger Percentages
between members of the same immediate family, or transfers to a trust,
testamentary or otherwise, in which the beneficiaries consist solely of
immediate family members of the trustor or transfers to a corporation or
partnership in which the immediate family members or shareholders of the
transferor who owns at least ten percent (10%) of the present equity
ownership and/or at least fifty percent (500) of the voting control of
Developer.
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ORDINANCE NO. 18-1824 (Exhibit "A")
01007.000515 1 5 7 78.6 CFN Page 43 of 76
(e) A transfer of common areas to a duly -organized Site
Owners' Association.
(f) Any transfer to an entity or entities in which the Developer
retains a minimum of 51% of the ownership or beneficial interest and
retains management and control of the transferee entity or entities.
(g) Any transfer of interests in Owner for estate planning
purposes to the heirs of Owner, provided that the heirs retain a minimum
of 51% of the ownership or beneficial interest of the transferor entity and
retain management and control of the transferee entity.
12.1.2 Subiect to Terms of Agreement. Following any such Transfer or
Assignment of any of the rights and interests of the Developer under this
Agreement, in accordance with Section 12.1 above, the exercise, use and
enjoyment of such rights and interests shall continue to be subject to the terms of
this Agreement to the same extent as if the assignee or transferee were the
Developer.
12.1.3 Release of Developer. Upon the written consent of the City to the
complete assignment of this Agreement or the transfer of a portion of the Site and
the express written assumption of the assigned obligations of the Developer under
this Agreement by the assignee, the Developer shall be relieved of its legal duty
from the assigned obligations under this Agreement with respect to the portion of
the Site transferred, except to the extent the Developer is in Default under the
terms of this Agreement prior to the transfer.
13. RELEASES AND INDEMNITIES.
13.1 The City's Release As To Actions Prior To Effective Date. The City
forever discharges, releases and expressly waives as against the Developer and its
attorneys and employees any and all claims, liens, demands, causes of action, excuses for
nonperformance (including but not limited to claims and/or defenses of unenforceability,
lack of consideration, and/or violation of public policy), losses, damages, and liabilities,
known or unknown, suspected or unsuspected, liquidated or unliquidated, fixed or
contingent, based in contract, tort, or other theories of direct and/or of agency liability
(including but not limited to principles of respondent superior) that it has now or has had
in the past, arising out of or relating to the Site, this Agreement or the Development Plan.
13.2 The Developer's Release As To Actions Prior To Effective Date. The
Developer forever discharges, releases and expressly waives as against the City and its
respective councils, boards, commissions, officers, attorneys and employees any and all
claims, Iiens, demands, causes of action, excuses for nonperformance (including but not
limited to claims and/or defenses of unenforceability, lack of consideration, and/or
violation of public policy), losses, damages, and liabilities, known or unknown, suspected
or unsuspected, liquidated or unliquidated, fixed or contingent, based in contract, tort or
other theories of direct and/or of agency liability (including but not limited to principles
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ORDINANCE NO. 18-1824 (Exhibit "A")
01007.000515 1 577 9.6 CFN Page 44 of 76
of respondent superior) that they have now or have had in the past, arising out of or
relating to this Agreement and the Development Plan.
13.3 Litigation -Preventing Performance. The parties acknowledge that: (i) in
the future there may be challenges to legality, validity and adequacy of the General Plan,
the Existing Development Approvals, Development Plan and/or this Agreement; and (ii)
if successful, such challenges could delay or prevent the performance of this Agreement
and the Development of the Site.
In addition to the other provisions of this Agreement, including, without limitation, the
provisions of this Section I3.3, the City shall have no liability under this Agreement for
any failure of the City to perform under this Agreement or the inability of the Developer
to develop the Site as contemplated by the Development Plan or this Agreement as the
result of a judicial determination that on the date this Agreement is approved by the City
Council, or at any time thereafter, the Existing Land Use Regulations, the Development
Approvals, this Agreement, or portions thereof, are invalid or inadequate or not in
compliance with law.
13.4 Revision of Land Use Restrictions to Cure Litigation. If, for any reason,
the Development Plan, Existing Development Approvals, this Agreement or any part
thereof is hereafter judicially determined, as provided above, to not be in compliance
with the State or Federal Constitution, laws or regulations and, if such noncompliance
can be cured by an appropriate amendment thereof otherwise conforming to the
provisions of this Agreement, then this Agreement shall remain in full force and effect to
the extent permitted by law. The Development Plan, Existing Development Approvals
and this Agreement shall be amended, as necessary, in order to comply with such judicial
decision.
13.5 Participation in Litigation: Indemnity. The Developer shall defend,
indemnify and hold the City, its elected officials, officers, employees and agents free and
harmless from any and all actions, suits, claims, liabilities, losses, damages, penalties,
obligations and expenses (including but not limited to attorneys' fees and costs) against
the City for any such Claims or Litigation (as defined in Section 1.20) and shall be
responsible for any judgment arising therefrom. The City shall provide the Developer
with notice of the pendency of such action and shall request that the Developer defend
such action. The Developer shall utilize the City Attorney's office, or at written direction
of the City will use legal counsel of its choosing (in consultation with the City as
appropriate), and shall reimburse the City for any necessary legal cost incurred by City.
The Developer shall provide a deposit in the amount of 15O% of the City's estimate, in its
sole and absolute discretion, of the cost of litigation, including the cost of any award of
attorneys' fees, and shall make additional deposits as requested by City to keep the
deposit at such level. The City may ask for further security in the form of a deed of trust
to land of equivalent value. If the Developer fails to provide or maintain the deposit, the
City may abandon the action and the Developer shall pay all costs resulting therefrom
and City shall have no liability to the Developer. The DeveIoper's obligation to pay the
cost of the action, including judgment, shall extend until judgment. After judgment in a
trial court, the parties must mutually agree as to whether any appeal will be taken or
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defended. The Developer shall have the right, within the first 30 days of the service of the
complaint or petition on the Developer, in its sole and absolute discretion, to determine
that it does not want to defend any litigation attacking this Agreement or the
Development Approvals in which case the City shall allow the Developer to settle the
litigation on whatever terms the Developer determines, in its sole and absolute discretion,
but Developer shall confer with City before acting and cannot bind City. In that event, the
Developer shall be liable for any costs incurred by the City up to the date of settlement
but shall have no further obligation to the City beyond the payment of those costs. In the
event of an appeal, or a settlement offer, the parties shall confer in good faith as to how to
proceed. Notwithstanding the Developer's indemnity for claims and litigation, the City
retains the right to settle any litigation brought against it in its sole and absolute
discretion and the Developer shall remain liable except as follows: (i) the settlement
would reduce the scope of the Project by 10% or more, and (ii) the Developer opposes
the settlement. In such case the City may still settle the litigation but shall then be
responsible for its own litigation expense but shall bear no other liability to the
Developer. Neither City nor Developer shall have any rights or obligations under this
Section 13.5 prior to the Effective Date although Developer may, in its sole and
unfettered discretion, assume the obligations if it chooses to do so.
13.6 Hold Harmless:, Developer's Construction_ and Other Activities. The
Developer shall defend, indemnify and hold the City, its elected officials, officers,
employees and agents free and harmless from any and all claims, costs (including
attorneys' fees) and liability for any damages, personal injury or death, which may arise,
directly or indirectly, from the Developer's or the Developer's agents, contractors,
subcontractors, agents, or employees' operations under this Agreement, whether such
operations be by the Developer or by any of the Developer's agents, contractors or
subcontractors or by any one or more persons directly or indirectly employed by or acting
as agent for the Developer or any of the Developer's agents, contractors or
subcontractors. Nothing herein is intended to make the Developer liable for the acts of
the City's officers, employees, agents, contractors of subcontractors.
13.7 Survival of Indemnity Obligations. All indemnity provisions set forth in
this Agreement shall survive termination of this Agreement for any reason other than the
City's Default.
14. INSURANCE.
14.1 Types of Insurance. In addition to the insurance requirements of Chapter
15 of Article VI of the Carson Municipal Code, the following insurance requirements
apply:
14. 1.1 Commercial General Liability Insurance. Prior to commencement
and of construction by Developer on the Site, and for the Term of this Agreement,
Developer shall at its sole cost and expense keep or cause to be kept in force
commercial general liability ("CGL") insurance against liability for bodily injury
or death and for property damage (all as defined by the policy or policies) arising
from the use, occupancy, disuse or condition of the Site, providing limits of at
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ORDINANCE NO. 18-1824 (Exhibit "A")
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least Five Million Dollars ($5,000,000) bodily injury and property damage per
occurrence limit, Five Million Dollars ($5,000,000) general aggregate limit, and
Five Million Dollars ($5,000,000) products -completed operations aggregate limit.
14.1.2 Builder's Risk Insurance. Prior to commencement and until
completion of construction by Developer on the Site, Developer shall procure and
shall maintain in force, or caused to be maintained in force, builder's risk
insurance written on a "special causes of loss" form, on a replacement cost basis,
including vandalism and malicious mischief, covering improvements in place and
all material and equipment at the job site furnished under contract, but excluding
contractor's, subcontractor's, and construction manager's tools and equipment
and property owned by contractor's or subcontractor's employees.
14.1.3 Workers' Compensation. Developer shall also furnish or cause to
be furnished to City evidence reasonably satisfactory to it that any contractor with
whom Developer has contracted for the performance of any work for which
Developer is responsible hereunder carries workers' compensation insurance as
required by law.
14.1.4 Other Insurance. Developer may procure and maintain any
insurance not required by this Agreement.
14.1.5 Insurance Policy Form. Sufficiency. Content and Insurer. All
insurance required by express provisions hereof shall be carried only by insurance
companies licensed and admitted to do business in California, rated "A" or better
in the most recent edition of Best Rating Guide or in The Key Rating Guide and
only if they are of a financial category Class VIII or better, unless waived by City.
All such policies shall be nonassessable and shall contain language, to the extent
commercially reasonably obtainable, to the effect that (i) any loss shall be
payable notwithstanding any act of negligence of City or Developer that might
otherwise result in the forfeiture of the insurance, (ii) the insurer waives the right
of subrogation against City and against City's agents and representatives; (iii) the
policies are primary and noncontributing with any insurance that may be carried
by City; and (iv) the policies cannot be canceled or materially changed except
after thirty (30) days' written notice (ten (10) days in the event of cancellation for
non-payment of premium) by the insurer to City or City's designated
representative. Developer shall furnish City with copies of all such policies
promptly on receipt of them or with certificates evidencing the insurance. City
shall be named as an additional insured on the commercial general liability
insurance and on the builder's risk insurance (as its interest may appear) policies
required to be procured by the terms of this Agreement. In the event the City's
Risk Manager determines reasonably that the use, activities or condition of the
Site, improvements or adjoining areas or ways, affected by such use of the Site
under this Agreement creates a materially increased or decreased risk of loss to
the City, Developer agrees that the minimum limits of the CGL and builder's risk
insurance policies required by this Section 14.1 may be changed accordingly upon
receipt of written notice from the City's Risk Manager; provided that such
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increased limits are available at commercially reasonable premiums. Developer
shall have the right to appeal such determination of increased limits to the City
Council within thirty (30) days of receipt of notice from the City's Risk Manager.
14.2 Failure to Maintain Insurance and Proof of Compliance. Developer shall
deliver to City, in the manner required for notices, copies of certificates of all insurance
policies required hereunder together with evidence satisfactory to City of payment
required for procurement and maintenance of each policy within the following time
limits:
(a) For insurance required above, within thirty (30 days) after the
Effective Date.
(b) For any renewal or replacement of a policy already in existence, at
least ten (10) days before the expiration or termination of the existing policy.
If Developer fails or refuses to procure or maintain insurance as required hereby or fails
or refuses to furnish City with required proof that that insurance has been procured and is
in force and paid for, such failure or refusal shall be a default hereunder.
15. EFFECT OF AGREEMENT ON TITLE.
15.1 Covenant Run with the Land. Subject to the provisions of Articles 12 and
16 and pursuant to the Development Agreement Statute:
(a) All of the provisions, agreements, rights, powers, standards, terms,
covenants and obligations contained in this Agreement shall be binding upon the
parties and their respective heirs, successors (by merger, consolidation, or
otherwise) and assigns, devisees, administrators, representatives, lessees, and all
other persons acquiring any rights or interests in the Site, or any portion thereof,
whether by operation of laws or in any manner whatsoever and shall inure to the
benefit of the parties and their respective heirs, successors (by merger,
consolidation or otherwise) and assigns;
(b) All of the provisions of this Agreement shall be enforceable as
equitable servitudes and constitute covenants running with the land pursuant to
applicable law; and
(c) Each covenant to do or refrain from doing some act on the Site
hereunder (i) is for the benefit of and is a burden upon every portion of the Site,
(ii) runs with such lands, and (iii) is binding upon each party and each successive
owner during its ownership of such properties or any portion thereof, and each
person having any interest therein derived in any manner through any owner of
such lands, or any portion thereof, and each other person succeeding to an interest
in such Iands.
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ORDINANCE NO. 18-1824 (Exhibit "A")
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16. MORTGAGEE PROTECTION.
16.1 Definitions. As used in this Section, the term "mortgage" shall include any
mortgage, whether a leasehold mortgage or otherwise, deed of trust, or other security
interest, or sale and lease -back, or any other form of conveyance for financing. The term
"holder" shall include the holder of any such mortgage, deed of trust, or other security
interest, or the lessor under a lease -back, or the grantee under any other conveyance for
financing.
16.2 No Encumbrances Except Mortgages to Finance _ the Project.
Notwithstanding the restrictions on transfer in Article 12, mortgages required for any
reasonable method of financing of the construction of the improvements are permitted but
only for the following: (i) for the purpose of securing loans of funds used or to be used
for financing the acquisition of a separate lot(s) or parcel(s), (ii) for the construction of
improvements thereon, in payment of interest and other financing costs, and (iii) for any
other expenditures necessary and appropriate to develop, own or operate the Project
under this Agreement, or for restructuring or refinancing any for same. No map permitted
herein, even if for Financing purposes, shall permit financing for other than purposes of
developing, owning or operating the Project solely. The Developer (or any entity
permitted to acquire title under this Agreement) may notify the City in advance of any
future mortgage or any extensions or modifications thereof. Any lender which has so
notified the City shall not be bound by any amendment, implementation, or modification
to this Agreement without such lender giving its prior written consent thereto. In any
event, the Developer shall promptly notify the City of any mortgage, encumbrance, or
lien that has been created or attached thereto prior to completion of construction, whether
by voluntary act of the Developer or otherwise.
16.3 Developer's Breach Not Defeat Mortgage Lien. The Developer's breach
of any of the covenants or restrictions contained in this Agreement shall not defeat or
render void the lien of any mortgage made in good faith and for value but, unless
otherwise provided herein, the terms, conditions, covenants, restrictions, easements, and
reservations of this Agreement shall be binding and effective against the holder of any
such mortgage whose interest is acquired by foreclosure, trustee's sale or otherwise.
16.4 Holder Not Obligated to Construct or Complete Improvements. The holder
of any mortgage shall in no way be obligated by the provisions of this Agreement to
construct or complete the improvements or to guarantee such construction or completion.
Nothing in this Agreement shall be deemed or construed to permit or authorize any such
holder to devote the Project or any portion thereof to any uses, or to construct any
improvements thereon, other than those uses or improvements provided for or authorized
by this Agreement.
16.5 Notice of Default to Mort: aagee. Whenever the City shall deliver any
notice or demand to the Developer with respect to any breach or default by the Developer
hereunder, the City shall at the same time deliver a copy of such notice or demand to each
holder of record of any mortgage who has previously made a written request to the City
therefor, or to the representative of such lender as may be identified in such a written
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ORDINANCE NO. 18-1824 {Exhibit "A"I
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request by the lender. No notice of default shall be effective as to the holder unless such
notice is given.
16.6 Right to Cure. Each holder (insofar as the rights of City are concerned)
shall have the right, at its option, within ninety (90) days after the receipt of the notice,
and one hundred twenty (120) days after the Developer's cure rights have expired,
whichever is later, to:
(a) Obtain possession, if necessary, and to commence and diligently
pursue the cure until the same is completed, and
(b) Add the cost of said cure to the security interest debt and the lien
or obligation on its security interest;
provided that, in the case of a default which cannot with diligence be remedied or cured
within such cure periods referenced above in Section 11.5, such holder shall have
additional time as reasonably necessary to remedy or cure such default.
In the event there is more than one such holder, the right to cure or remedy a breach or
default of the Developer under this Section shall be exercised by the holder first in
priority or as the holders may otherwise agree among themselves, but there shall be only
one exercise of such right to cure and remedy a breach or default of the Developer under
this Section.
No holder shall undertake or continue the construction or completion of the
improvements on the Site (beyond the extent necessary to preserve or protect the
improvements or construction already made) without first having expressly assumed the
Developer's obligations to the City by written agreement satisfactory to City with respect
to the Project or any portion thereof in which the holder has an interest. The holder must
agree to complete, in the manner required by this Agreement, the improvements to which
the lien or title of such holder relates, and submit evidence satisfactory to the City that it
has the qualifications and financial responsibility necessary to perform such obligations.
16.7 City's Rights upon Failure of Halder to Complete Improvements. In any
case where one hundred eighty (180) days after default by the Developer in completion of
construction of improvements on the Site under this Agreement, the holder of any
mortgage creating a lien or encumbrance upon the Project or portion thereof has not
exercised the option to construct afforded in this Section or, if it has exercised such
option and has not proceeded diligently with construction, the City may, after ninety (90)
days' notice to such holder and if such holder has not exercised such option to construct
within said ninety (90) day period, purchase the mortgage, upon payment to the holder of
an amount equal to the sum of the following:
(a) The unpaid mortgage, debt plus any accrued and unpaid interest
(less all appropriate credits, including those resulting from collection and
application of rentals and other income received during foreclosure proceedings,
if any);
37
ORDINANCE NO. 18-1824 (Exhibit "A")
01007.00051515778.6 CM Page 50 of 76
IM
(b) All expenses, incurred by the holder with respect to foreclosure, if
any;
(c) The net expenses (exclusive of general overhead), incurred by the
holder as a direct result of the ownership or management of the applicable portion
of the Project, such as insurance premiums or real estate taxes, if any;
(d) The costs of any improvements made by such holder, if any; and
(e) An amount equivalent to the interest that would have accrued on
the aggregate of such amounts had all such amounts become part of the mortgage
debt and such debt had continued in existence to the date of payment by the City.
If the City has not purchased the mortgage within ninety (90) days of the expiration of the
ninety (90) days referred to above, then the right of the City to purchase shall expire.
In the event that the holder does not exercise its option to construct afforded in this
Section, and if the City elects not to purchase the mortgage of holder, upon written
request by the holder to the City, the City shall use reasonable efforts to assist the holder
in selling the holder's interest to a qualified and responsible party or parties (as
reasonably determined by City), who shall assume the obligations of making or
completing the improvements required to be constructed by the Developer, or such other
improvements in their stead as shall be satisfactory to the City. The proceeds of such a
sale shall be applied first to the holder of those items specified in subparagraphs (a)
through (e) hereinabove and any balance remaining thereafter shall be applied as follows:
(1) First, to reimburse the City for all costs and expenses actually and
reasonably incurred by the City, including, but not limited to, payroll expenses,
management expenses, legal expenses, and others;
(2) Second, to reimburse the City for all payments made by City to
discharge any other encumbrances or liens on the applicable portion of the Project
or to discharge or prevent from attaching or being made any subsequent
encumbrances or Iiens due to obligations, defaults, or acts of the Developer, its
successors or transferees;
(3) Third, to reimburse the City for all costs and expenses actually and
reasonably incurred by the City, in connection with its efforts assisting the holder
in selling the holder's interest in accordance with this Section; and
(4) Fourth, any balance remaining thereafter shall be paid to the
Developer.
j 16.8 Richt of City to Cure Mortgage Default. In the event of a default or breach
by the Developer (or entity permitted to acquire title under this Section) prior to
completion of the Project or the applicable portion thereof, and the holder of any such
mortgage has not exercised its option to complete the development, the City may cure the
default prior to completion of any foreclosure. In such event, the City shall be entitled to
38
ORDINANCE NO. 18-1824 (Exhibit "A")
01 OU7.000951577H 6 CFN Page 51 of 76
reimbursement from the Developer or other entity of all costs and expenses incurred by
the City in curing the default, to the extent permitted by law, as if such holder initiated
such claim for reimbursement, including legal costs and attorneys' fees reasonably
incurred, which right of reimbursement shall be secured by a lien upon the applicable
portion of the Project to the extent of such costs and disbursements. Any such lien shall
be subject to:
(a) Any Mortgage; and
(b) Any rights or interests provided in this Agreement for the
protection of the holders of such Mortgages;
provided that nothing herein shall be deemed to impose upon the City any affirmative
obligations (by the payment of money, construction or otherwise) with respect to the
Project in the event of its enforcement of its lien.
16.9 Right of the City to Satisfy Other Liens on the Site After Conveyance o
Title. After the conveyance of title and prior to completion of construction and
development, and after the Developer has had a reasonable time to challenge, cure, or
satisfy any liens or encumbrances on the Project, the City shall have the right to satisfy
any such liens or encumbrances; provided, however, that nothing in this Agreement shall
require the Developer to pay or make provision for the payment of any tax, assessment,
lien or charge so long as the Developer in good faith shall contest the validity or amount
thereof, and so long as such delay in payment shall not subject the Project or any portion
thereof to forfeiture or sale.
17. NUSCELLANEOUS.
17.1 Certificates of_Compliance. Either party (or a Mortgagee under Article 16)
may at any time deliver written notice to the other party requesting an Estoppel
Certificate stating:
(a) The Agreement is in full force and effect and is a binding
obligation of the parties;
(b) The Agreement has not been amended or modified either orally or
in writing or, if so amended, identifying the amendments; and
(c) There are no existing defaults under the Agreement to the actual
knowledge of the party signing the Estoppel Certificate.
A party receiving a request for an Estoppel Certificate shall provide a signed certificate to
the requesting party within thirty (30) days after receipt of the request. The Director may
sign Estoppel Certificates on behalf of the City. An Estoppel Certificate may be relied on
by assignees and Mortgagees.
17.2 Force Majeure. The time within which the Developer or the City shall be
required to perform any act under this Agreement shall be extended by a period of time
39
ORDINANCE NO. 18-1824 (Exhibit "A")
01007.00051515778 6 CFN Page 52 of 76
equal to the number of days during which performance of such act is delayed due to war,
insurrection, strikes, lock -outs, riots, floods, earthquakes, fires, casualties, natural
disasters, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight
embargoes, governmental restrictions on priority, initiative or referendum, moratoria,
processing with governmental agencies other than the City, unusually severe weather,
third party litigation as described in Section 13.3 above, or any other similar causes
beyond the control or without the fault of the party claiming an extension of time to
perform. An extension of time for any such cause shall be for the period of the enforced
delay and shall commence to run from the time of the commencement of the cause, if
written notice by the party claiming such extension is sent to the other party within thirty
(30) days of knowledge of the commencement of the cause. Any act or failure to act on
the part of a party shall not excuse performance by that party.
17.3 Interpretation.
17.3.1 Construction of Development Agreement. The language of this
Agreement shall be construed as a whole and given its fair meaning. The captions
of the sections and subsections are for convenience only and shall not influence
construction. This Agreement shall be governed by the laws of the State of
California. This Agreement shall not be deemed to constitute the surrender or
abrogation of the City's governmental powers over the Site.
17.3.2 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and this Agreement supersedes all previous negotiations, discussions,
and agreements between the parties, and no parole evidence of any prior or other
agreement shall be permitted to contradict or vary the terms of this Agreement.
17.3.3 Recitals. The recitals in this Agreement constitute part of this
Agreement and each party shall be entitled to rely on the truth and accuracy of
each recital as an inducement to enter into this Agreement.
17.3.4 Mutual Covenants. The covenants contained herein are mutual
covenants and also constitute conditions to the concurrent or subsequent
performance by the party benefitted thereby of the covenants to be performed
hereunder by such benefitted party.
17.3.5 Severability. If any provision of this Agreement is adjudged
invalid, void or unenforceable, that provision shall not affect, impair, or invalidate
any other provision, unless such judgment affects a material part of this
Agreement in which case the parties shall comply with the procedures set forth in
Section 13.4 above.
17.4 Joint and SeveralObligations. All obligations and liabilities of the
Developer hereunder shall be joint and several among the obligees.
40
ORDINANCE NO. 18-1824 (Exhibit "A")
01007.00051515778.6 CFN Page 53 of 76
17.5 No Third Party Beneficiaries. There are no other third party beneficiaries
and this Agreement is not intended, and shall not be construed, to benefit or be
enforceable by any other person, excepting the parties hereto.
17.6 Notice.
17.6.1 To Developer. Any notice required or permitted to be given by the
City to the Developer under this Development Agreement shall be in writing and
delivered personally to the Developer or mailed, with postage fully prepaid,
registered or certified mail, return receipt requested, addressed as follows:
California Processing Company, LLC
16501 Ventura Blvd., Suite 400
Encino, CA 91436
Attn: Todd Parkin
With copies to:
Zuber Lawler & Del Duca, LLP
350 South Grand Ave., 32n`1 Floor
Los Angeles, CA 90071
Attn: David Lambert
or such other address as the Developer may designate in writing to the City.
17.6.2 To the Cit}. Any notice required or permitted to be given by the
Developer to the City under this Development Agreement shall be in writing and
delivered personally to the City Clerk or mailed with postage fully prepaid,
registered or certified mail, return receipt requested, addressed as follows:
City of Carson
701 E. Carson Street
Carson, California 90745
Attention: Community Development Director
With a copy to:
Sunny Soltani, City Attorney
Aleshire & Wynder, LLP
18881 Von Karman Avenue, Suite 1700
Irvine, California 92612
or such other address as the City may designate in writing to the Developer.
Notices provided pursuant to this Section shall be deemed received at the date of
delivery as shown on the affidavit of personal service or the Postal Service
receipt.
01007.00051515778.6 CFN
41
ORDINANCE NO. 18-1824 (Exhibit "A")
Page 54 of 76
17.7 Relationship of Parties. It is specifically understood and acknowledged by
the parties that 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
Agreement. The only relationship between the City and the Developer is that of a
government entity regulating the development of private property and the owner of such
private property.
17.8 Attorney's Fees. If either party to this Agreement is required to initiate or
defend litigation against the other party, the prevailing party in such action or proceeding,
in addition to any other relief which may be granted, whether legal or equitable, shall be
entitled to reasonable attorney's fees. Attorney's fees shall include attorney's fees on any
appeal, and, in addition, a party entitled to attorney's fees shall be entitled to all other
reasonable costs for investigating such action, taking depositions and discovery and all
other necessary costs the court allows which are incurred in such litigation. All such fees
shall be deemed to have accrued on commencement of such action and shall be
enforceable whether or not such action is prosecuted to a final judgment.
17.9 Further Actions and Instruments. Each of the parties shall cooperate with
and provide reasonable assistance to the other to the extent necessary to implement this
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 to
implement this Agreement or to evidence or consummate the transactions contemplated
by this Agreement.
17.10 Time of Essence. Time is of the essence in: (i) the performance of the
provisions of this Agreement as to which time is an element; and (ii) the resolution of any
dispute which may arise concerning the obligations of the Developer and the City as set
forth in this Agreement.
17.11 Waiver. Failure by a party to insist upon the strict performance of any of
the provisions of this 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
Agreement thereafter.
I7.I2 Execution.
17.12.1 Counterparts. This 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.
., 17.12.2 Recording. The City Clerk shall cause a copy of this Agreement
to be executed by the City and recorded in the Official Records of Los Angeles
County no later than ten (10) days after the date that the City Council approves
this Agreement (Gov't. Code § 65868.5). The recordation of this Agreement is
ORDINANCE NO. 1t-1824 (Exhibit "A")
01007 00051515778.6 CFN Page 55 of 76
deemed a ministerial act and the failure of the City to record the Agreement as
required by this Section and the Development Agreement Statute does not make
this Agreement void or ineffective.
17.12.3 Authority to Execute. The persons executing this Agreement on
behalf of the parties hereto warrant that (i) such party is duly organized and
existing, (ii) they are duly authorized to sign and deliver this Agreement on behalf
of the party he or she represents, (iii) by so executing this Agreement, such party
is formally bound to the provisions of this Agreement, (iv) the entering into of
this Agreement does not violate any provision of any other Agreement to which
the party is bound and (v) there is no litigation or legal proceeding which would
prevent the parties from entering into this Agreement.
(SIGNATURES ON NEXT PAGE.)
ORDINANCE NO. 8-1824 (Exhibit "A")
01007 000.5/5t5778 b CFN Page 56 of 76
IN WITNESS WHEREOF, the City and the Developer have executed this Agreement on
ATTEST:
Donesia Gause-Aldana, City Clerk
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
Sunny K. Soltani, City Attorney
CITY OF CARSON
BY'
Albert Robles, Mayor
CALIFORNIA PROCESSING COMPANY, LLC
LE
Managing Member/Owner
By:
Managing Member/Owner
ORDINANCE NO. 18 1824 (Exhibit "A")
01007 0005/515778 6 CFN Page 57 of 76
STATE OF CALIFORNIA }
} ss
COUNTY OF LOS ANGELES )
On , before me , personally
appeared , who proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument and acknowledged
to me that he/she executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person or the entity upon behalf of which the person acted, executed the
instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal
Notary Signature
(SEAL)
STATE OF CALIFORNIA )
) Ss
COUNTY OF LOS ANGELES )
On , before me , personally
appeared , who proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument and acknowledged
to me that he/she executed the same in his/her authorized capacity, and that by his/her signature
on the instrument, the person or the entity upon behalf of which the person acted, executed the
instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal
Notary Signature
I
ORDINANCE NO. 18-1824 (Exhibit "A")
01007.0005/515778.6 CFN Page 58 of 76
EXHIBIT A
LEGAL DESCRIPTION
[ATTACHED]
ii
ORDINANCE NO. 18-1824 (Exhibit "A")
01007 CMS/51577B 6 CFN Page 59 of 76
LEGAL DESCRIPTION
2403223 d St.
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CARSON IN THE
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
THAT PORTION OF LOT 6 IN BLOCK "C" OF THE SUBDIVISION OF A PART OF THE RANCHO SAN
PEDRO, (ALSO KNOWN AS DOMINGUEZ COLONY), IN THE COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, AS SHOWN ON MAPS RECORDED IN BOOK 1, PAGES 601 AND 602, AND BOOK 32,
PAGES 97 AND 98 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY, BOUNDED AS FOLLOWS:
ON THE NORTH BY THE SOUTHERLY LINE OF THAT CERTAIN PARCEL OF LAND DESCRIBED IN
DEED TO THE STATE OF CALIFORNIA, AS RECORDED IN BOOK D74B, PAGE 676, OFFICIAL
RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, (NOW KNOWN AS
THE SAN DIEGO FREEWAY); ON THE SOUTH BOUNDED SOUTHERLY BY NORTHERLY LINE OF
100' STRIP OF LAND DESCRIBED PER (PARCEL 12-13:) IN DECREE OF CONDEMNATION,
RECORDED OCTOBER 5, 1973, INSTRUMENT NO. 4331, OFFICIAL RECORDS; ON THE WEST BY A
LINE WHICH IS AT RIGHT ANGLES TO SAID LAST MENTIONED CENTERLINE AND WHICH PASSES
THROUGH A POINT IN SAID CENTERLINE, DISTANT EASTERLY HEREON, 1607.85 FEET FROM
THE SOUTHERLY PROLONGATION OF THE WESTERLY LINE OF LOT 5 OF SAID BLOCK "C", AND
ON THE EAST BY THE WESTERLY LINE OF THAT CERTAIN 250 FOOT STRIP OF LAND
DESCRIBED
FIRST IN DEED TO THE PACIFIC ELECTRIC LAND COMPANY RECORDED AS INSTRUMENT NO.
1314 ON JANUARY 24, 1924, IN BOOK 2683, PAGE 358, OFFICIAL RECORDS.
A P N: 7315-012-900, 7315-012-804
ORDINANCE NO. 18-1824 (Exhibit "A")
Page 60 of 76
EXHIBIT B
SITE MAP
[ATTACHED]
iii
ORDINANCE NO. 18-1824 {Exhibit "A")
01 W7 00051515778.6 CFN Page 61 of 76
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EXHIBIT C
SCOPE OF DEVELOPMENT
Developer shall develop the Site for permitted commercial cannabis use, pursuant to Chapter 15
of Article VI of the Carson Municipal Code, including the following business activities: 1)
manufacturing facility sites that produce, prepare, propagate, or compound manufactured
cannabis products, either directly or indirectly or by extraction methods, or independently by
means of chemical synthesis or by a combination of extraction and chemical synthesis, package
or repackage cannabis products, label or relabel its container, or transform cannabis into a
concentrate, an edible product, beverages or a topical product; 2) small scale cultivation for
nursery or research and development purposes; 3) warehousing, transportation, delivery (to areas
outside the City of Carson limits) and distribution of the latter; 4) laboratory testing and
compliance operation; and 5) any other use permitted by City Iaw whether cannabis related or
not.
Each permitted commercial cannabis operation at the Site shall prepare, for City inspection, an
operations plan which shall be in conformance with the requirements of Carson Municipal Code
and, at a minimum, provide the following:
a) A list of the names, addresses, telephone numbers, and responsibilities of each owner and
manager of the facility.
b) The hours and days of operation for the facility.
c) A site plan and floor plan of the facility denoting the layout of all areas of the commercial
cannabis facility, including, as applicable, storage, cultivation, reception/waiting,
manufacturing, and all ancillary support spaces.
d) The commercial cannabis cultivation and manufacturing procedures to be utilized at the
facility, including, as applicable, a description of how chemicals and fertilizers will be
stored, handled, and used; extraction and infusion methods; the transportation process;
inventory procedures; track and trace program and procedures; quality control
procedures; and testing procedures.
e) Procedures for identifying, managing, and disposing of contaminated, adulterated,
deteriorated or excess commercial cannabis product.
f) Procedures for inventory control to prevent diversion of commercial cannabis to
noncommercial use, employee screening, storage of commercial cannabis, personnel
policies, and recordkeeping procedures.
g) An odor management plan detailing the steps that will be taken by Project and Site to
ensure off -Site odors shall not result from activities on the Site. This requirement at a
minimum means that all commercial cannabis operations at the Site shall be designed to
provide sufficient odor -absorbing ventilation and exhaust systems so that any odor
iv
ORDINANCE No. 18-1824 (Exhibit "A")
01007,00051515778.6 CFN Page 63 of 76
generated inside the location of a commercial cannabis operation is not detected outside
the building, on adjacent properties or public rights-of-way, or within any other unit
located within the same building as a commercial cannabis operation, if the use only
occupies a portion of a building.
h) Policies and procedures for adopting, monitoring, implementing, and enforcing all
requirements of the Carson Municipal Code.
i) Policies and procedures to control mold, mildew, dust, glare, heat, noise, noxious gasses,
odor, smoke, traffic, vibration, or other impacts of cultivation, manufacture, delivery, or
transporting of cannabis materials.
j) Policies and procedures to control any hazards due to the use or storage of materials,
processes, products, chemicals, fertilizers, or wastes.
k) Policies and procedures to control and not disturb surrounding residential or commercial
areas.
v
ORDINANCE N0. 18-1824 (Exhibit "A")
0 1007.000515 1 57 7 8.6 CFN Page 64 of 76
EXHIBIT D
RESERVED
VL
ORDINANCE NO. 18-1824 (Exhibit "A")
01007 0009/51577&6 CFN Page 65 of 76
EXHIBIT E
MND MITIGATION MEASURES
[ATTACHED]
vii
ORDINANCE NO. 18-1824 (Exhibit "A")
01007 0005/515776.6 CFN Page 66 of 76
Carcom Center Project
Mitigation Monitoring and Reporting Program
A. Introduction
This Mitigation Monitoring and Reporting Program (MMRP) has been prepared in accordance with Public
Resources Code Section 21081.6 and CEQA Guidelines Section 1509l(d), which require a public agency to
adopt a program for monitoring or reporting on the changes it has required in the project or conditions of
approval to substantially lessen significant environmental effects. Specifically, Public Resources Code
Section 21081.6 states: "... the [lead] agency shall adopt a reporting or monitoring program for the changes
made to the project or conditions of project approval, adopted in order to mitigate or avoid significant
effects on the environment ... The ... program... shall be designed to ensure compliance during project
implementation." The City of Carson, specifically the Planning Division of the Community Development
Department, is the Lead Agency for the proposed project.
The MMRP describes the procedures for the implementation of all of the mitigation measures identified in
the MND for the proposed project. Mitigation measures set forth in the MMRP are specific and enforceable
and are capable of being fully implemented by the City of Carson, the various applicants, and/or other
identified public agencies of responsibility.
Carcom Center Protect
MMAP
Page t
ORDINANCE NO. 18-1824 (Exhibit "A")
Page 67 of 76
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Page 72 of 76
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ORDINANCE NO 18-1824 (Exbit' )
Page 7 0 76
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96
EXHIBIT F
LIST OF FUTURE DEVELOPMENT APPROVALS
Future Development Approvals may include the following:
I Site PIan and Design Review
�.J Tentative and final subdivision maps
• Variances
• Conditional Use Permits
• Grading, building and other similar permits
• Certificate of Occupancy
• Business License
• Environmental assessments
• Any amendments or modifications to those plans, maps, permits, and entitlements.
viii
ORDINANCE NO. 18-1824 (Exhibit "A")
01007 00051515778.6 CFN Page 74 of 76
EXHIBIT G
SCHEDULE OF PERFORMANCE
October 30, 2018
ix
ORDINANCE NO. 18-1824 (Exhibit "A")
01007.000515 [5778 6 CFN Page 75 of 76
Item To Be Performed
Time For Performance /
Agreement
Responsible Party
Reference
1.
Submit Planning applications for
January 31, 2018 / Developer
Administrative Review (DOR or
other required Planning applications)
2.
Review and approval of Planning
May 31, 20I8 / City
applications (permits required for,
and specific to, individual tenants
may be obtained at a later date based
upon anticipated tenant occupancy)
3.
Effective Date of the Development
January 4, 2019
Agreement
4.
Submittal of the Site Plan and Design
30 days after Effective Date of
Review Application
the Development
Agreement/Developer
5.
Approval of the Site Plan and design
4 months from #4/City
Review Application
6.
Submittal of construction plans for
5 months from #5 / DeveIoper
City review
(may submit prior to approval
of Site Plan and Design
Review applications with
approval of a Hold Harmless
agreement)
7.
Issuance of Building / Grading
4 months after #6 April 1,
Permits
2020 / City
81
Start of construction
15 days after #7/ Developer
9.
Completion of construction
I year after #8/ Developer
14.
Start of operations
15 days after #9/ Developer
ix
ORDINANCE NO. 18-1824 (Exhibit "A")
01007.000515 [5778 6 CFN Page 75 of 76
J
It is understood that the foregoing Schedule of Performance is subject to all of the terms
and conditions set forth in the text of the Agreement. The summary of the items of performance
in this Schedule of Performance is not intended to supersede or modify the more complete
description in the text; in the event of any conflict or inconsistency between this Schedule of
Performance and the text of the Agreement, the text shall govern.
The time periods set forth in this Schedule of Performance may be altered or amended
only by written agreement signed by both Developer and the City. A failure by either party to
enforce a breach of any particular time provision shall not be construed as a waiver of any other
time provision. The City Manager shall have the City approve extensions of time without City
Council action not to exceed a cumulative total of 180 days.
x
ORDINANCE NO. 18-1824 (Exhibit "A")
01007 00051515778.6 CFN Page 76 of 76