PLANNING COMMISSION AGENDA REGULAR MEETING OF THE PLANNING COMMISSION. CITY OF CERES, CALIFORNIA City Council Chambers, 2701 Fourth Street

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1 PLANNING COMMISSION AGENDA REGULAR MEETING OF THE PLANNING COMMISSION CITY OF CERES, CALIFORNIA City Council Chambers, 2701 Fourth Street Monday, April 16, :00 p.m. Mailing Address: Planning Division, 2220 Magnolia Street, Ceres, CA Phone: (209) Fax: (209) In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Public Works Director, (209) Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. (28 CFR ADA Title II) Members of the public are advised that all pagers, cellular telephones and any other communication devices are to be turned off upon entering the City Council Chambers. CALL TO ORDER by Chairperson Smith PLEDGE OF ALLEGIANCE to the flag led by Chairperson Smith ROLL CALL Commissioners Condit, Del Nero, Johnson, Kachel, Chairperson Smith CONFLICT OF INTEREST DECLARATION CITIZEN COMMUNICATIONS to the Commission on matters not included on the agenda (5 minutes). While the Planning Commission welcomes and encourages participation in Planning Commission meetings, adopted rules allow no more than 5 minutes (Resolution No ) for expression of non-agenda items. Matters under the jurisdiction of the Planning Commission, and not on the posted agenda, may be addressed by the general public; however, California law prohibits the Planning Commission from taking action on any matter which is not on the posted agenda unless it is determined to be an emergency by the Planning Commission. Citizens are entitled to address the Planning Commission on any agenda item subject to the 5 minute provision. 1

2 CONSENT CALENDAR All matters listed on the consent calendar are considered routine in nature and will be enacted by one motion. If discussion is required, that particular item will be removed from the consent calendar and will be considered separately. 1. Clerk s Report of Posting. The Agenda for the regular meeting of the Planning Commission of April 16, 2018 was posted on April 12, Approval of Minutes a. March 19, 2018 (all present) 3. Annual Progress Report on the Implementation of the City s Housing Element Information Item. CONSIDERATION OF ITEMS REMOVED FROM THE CONSENT CALENDAR PUBLIC HEARING(S) Public Hearings are generally required by regulation, where public comments go into the public record and the hearing is governed by rules concerning who speaks when and for how long and is overseen by a hearing official. 4. Ordinance Amendment to Cannabis Ordinances and ; Zoning Ordinance Text Amendment of Section of the Ceres Municipal Code, Relating to Adult Use Cannabis; Adoption of Resolutions to Recommend Adoption of Ordinances to Amend the Development Agreements between the City and Kase Manufacturing, Pacafi Cooperative Inc., and Kase s Journey; Development Agreement Annual Review for Kase Manufacturing. CEQA STATUS: Exempt per Section 15061(b-3), Review for Exemption and Section Existing Facilities REQUIRED ACTION: Adopt PC Resolution Adopt PC Resolution Adopt PC Resolution Adopt PC Resolution NEW BUSINESS None PUBLIC MEETING(S) Public Meetings are generally not required by regulation, involve an open, informal discussion between interested parties run by a moderator where comments may or may not be placed in the public record. None 2

3 UNFINISHED BUSINESS None MATTERS INITIATED BY PLANNING COMMISSION AND STAFF None REPORTS Commission Chairperson City Attorney City Staff ADJOURNMENT The next scheduled Planning Commission meeting will be held on Monday, April 30, ANY DECISION OF THE PLANNING COMMISSION CAN BE APPEALED TO THE CITY COUNCIL Such an appeal of a Planning Commission action from this meeting must be filed by 5:00 p.m., April 26, Any person who challenges any of the following actions in court, may be limited to raising only those issues that they or someone else raised at the Public Hearing, or in written correspondence delivered to the City of Ceres at, or prior to, the Public Hearing. The appeal must be filed in writing with a $ filing fee. I:\PLANNING\DEPT\PLANNING\PC\Agenda\2018\ doc. 3

4 PLANNING COMMISSION CITY OF CERES, CALIFORNIA Welcome to this meeting of the Ceres Planning Commission. Your interest in the affairs of Ceres is gratifying. The City of Ceres was incorporated February 25, 1918, and is a General Law City in the County of Stanislaus of the State of California. The purposes of the Planning Commission meeting are to make decisions on various permit applications and to make recommendations to the City Council on matters concerning land use and future development. The Planning Commission follows a regular order of business during its meeting. The agenda is prepared in advance by the Planning Division of the City Manager s Office. Copies of the agenda are available at the counter of the Planning Division from Friday morning through 5:00 p.m., Monday. After 5:00 p.m., copies may be obtained in the Council Chambers at the Planning Commission Meeting. If you have a matter to bring before the Planning Commission which is not listed on the agenda, you may be heard under CITIZEN COMMUNICATION. Please step forward to the podium and give your name and address before speaking to the Commission Planning Commission 8 9 PLANNING COMMISSION 1. Commissioner David Johnson 2. Commissioner Gary Del Nero 3. Commissioner Robert Kachel 4. Chairperson Laurie Smith 5. Vice Chairperson Couper Condit 6. City Attorney STAFF 8. Director of Engineering Services/City Engineer Daryl Jordan 9. Director of Community Development Tom Westbrook 10. Senior Planner James Michaels 11. Administrative Secretary/Deputy City Clerk Ann Montgomery Regular public meetings of other city government bodies are scheduled as follows: CITY COUNCIL Second and Fourth Mondays at 6:00 p.m. PLANNING COMMISSION First and Third Mondays at 6:00 p.m. I:\PLANNING\DEPT\PLANNING\PC\agenda seating chart.doc

5 CITY OF CERES PLANNING COMMISSION MINUTES March 19, 2018 MEETING CALLED TO ORDER: 6:00 p.m. PLEDGE OF ALLEGIANCE: The Pledge of Allegiance was led by Chairperson Smith. ROLL CALL: PRESENT: ABSENT: Commissioners: Condit, Del Nero, Johnson, Kachel, Chairperson Smith None ALSO PRESENT: Director of Community Development Tom Westbrook, Director of Engineering Services/City Engineer Daryl Jordan, Senior Planner James Michaels, City Attorney Christopher LaGrassa, Administrative Secretary/Deputy City Clerk Ann Montgomery CONFLICT OF INTEREST DECLARATION: None CITIZEN COMMUNICATIONS: Leonard Shepherd 2841 Fowler Road, Space 71, Ceres, CA Mr. Shepherd reminded the Commission about water conservation, noting the issues in Cape Town, South Africa. He stated that we need to think of ways to re-establish our water supply. He also mentioned back in 1998, he said to the City Council at that time, there should be a 10-year moratorium on houses and people and they laughed. He thinks that Ceres is beyond the point of laughing, as there are too many people and not enough capacity for sewer, water, fire, police, roads; we re peopled out. CONSENT CALENDAR: 1. Clerk s Report of Posting. The Agenda for the regular meeting of the Planning Commission of March 19, 2018 was posted on March 14, Approval of Minutes a. March 5, 2018 (all present) Planning Commission Meeting - April 16, 2018 Agenda Item 2.a. - Page 1

6 Planning Commission Minutes March 19, 2018 ACTION: It was moved by Commissioner Condit; seconded by Commissioner Del Nero to approve the Consent Calendar. Motion passed by the following vote: AYES: NOES: ABSENT: Commissioners Condit, Del Nero, Johnson, Kachel, Chairperson Smith None None CONSIDERATION OF ITEMS REMOVED FROM THE CONSENT CALENDAR None PUBLIC HEARINGS: 3. Conditional Use Permit (CUP) 17-19; Proposal for a Conditional Use Permit to construct a 4,500 square foot 2-story building with retail uses on the first floor and a single-family residence on the second floor at 2436 E. Whitmore Avenue & th Street. GDR Engineering, Inc., applicant. Senior Planner, James Michaels presented the staff report. Brief Commission discussion ensued. The Public Hearing was opened at 6:15 p.m. Josh Jantz, GDR Engineering, Inc., 3525 Mitchell Road, Suite G, Ceres, CA Mr. Jantz stated that he is attending on behalf of the owner, Mohinder Kanda, who just arrived and is available to answer any questions that the Commission may have. Commissioner Condit asked what types of businesses he foresees going into these spaces. Mr. Jantz responded that one use will be Mr. Kanda s Notary business, and he plans to continue to live in the unit on the second floor. He s not sure what will be in the other three spaces. The Public Hearing was closed at 6:16 p.m. Chairperson Smith stated that it s an exciting idea, to have a mixed-use project. Mixeduse projects are something that s happening in downtowns all over the United States. It s a great addition and the building looks fantastic. She loves the idea of the owner living there and understands the reasons for security, but thinks it s a great opportunity for us to experiment with mixed-use in our downtown. She ll be supporting this project. Commissioner Del Nero remarked that he agrees with Chairperson Smith, but it is a new concept for us. He does recall the idea being talked about at Planning seminars and by Mr. Westbrook in the past. He thinks it s pretty exciting too. 2 Planning Commission Meeting - April 16, 2018 Agenda Item 2.a. - Page 2

7 Planning Commission Minutes March 19, 2018 Commissioner Kachel stated that in his career of over 45 years here in the valley, this scale mixed-use project is the first he has had come before him for consideration. He used to read about it in Planning School, and has seen it in other communities, but it s nice to see it before the Commission this evening. It s a nice looking building and he thinks it s a great idea. Commissioner Condit interjected that the Commission needs to think about downtown. We just did this major improvement and we don t want to piece-meal downtown. If we make this decision, we re going to be stuck with this parking for years. If the property to the south wants to develop, they re going to have to deal with this. We really don t have a real vision for this lot, and this plan is going to shape it. He doesn t know if this is the right design or the right shape; maybe it should face 5 th Street or 6 th Street, rather than Whitmore. Chairperson Smith remarked that she understands Commissioner Condit s concerns, but wanted to point out that future development in downtown is leaning towards the formbased code approach, which doesn t include parking requirements, and is more of a pedestrian based transportation mode. Modesto has done that and there are no parking requirements for commercial or a mixed-use or residential. That is the direction of planning; to get people out of their cars and stop making these requirements of land for parking, when land can be used for job developing, businesses or residential uses. Also, get people out of their cars and use the new ACE train that s going to be coming on the other side. While she appreciates Commissioner Condit s concerns, she believes we re moving away from that parking requirement. ACTION: It was moved by Commissioner Kachel; seconded by Commissioner Johnson to approve PC Resolution Motion passed by the following vote: AYES: NOES: ABSENT: Commissioners Del Nero, Johnson, Kachel, Chairperson Smith Commissioner Condit None 4. Site Plan Approval (SPA) 17-20; Proposal to add three separate industrial buildings that total 31,440 square feet to an existing industrial facility at 1900 Kinser Road. L Street Architects, Limited, applicant. Senior Planner, James Michaels presented the staff report. The Public Hearing was opened at 6:25 p.m. Bob DeGrasse, L Street Architects, 1414 L Street, Modesto, CA Mr. DeGrasse remarked that the owner of the project, Peter Clark is in attendance this evening and noted that they ve read and gone through all of the conditions of approval. There were a couple of small questions, which they addressed with Mr. Michaels, and now understand all of those. We are currently in the process of doing the construction documents and we are incorporating the conditions of approval into those plans to make sure that we re consistent. The owner is currently working with a real estate firm in a moderate way until they re approved. Tonight, hopefully we can get this approved and be working to market this steadily. It is what we called a long time ago, incubator 3 Planning Commission Meeting - April 16, 2018 Agenda Item 2.a. - Page 3

8 Planning Commission Minutes March 19, 2018 space. Smaller businesses will start in these spaces and we ve modularized this so that these buildings can be leased in modules; 1, 2, 3 or 4 in the larger buildings or 2, 3 or 1 in the smaller buildings. We envision sheet rock contractors and different kinds of business start-ups and those places that would need a small office and some work space in the back. Mr. DeGrasse asked the Commission if they had any questions and then requested their approval of this project. Commissioner Johnson asked if they have been working with any possible tenants at this point. Mr. DeGrasse responded they have not, and explained that they have been introducing that to the commercial field. They haven t specifically locked down a particular tenant, as they didn t want to market it too heavily until they received approval of the project. Commissioner Kachel asked Mr. DeGrasse if he had any comments or what s being done to deal with any potential noise effects to the south, on the south property line where there s residential on the other side. Mr. DeGrasse explained one of the things that they did, if they pulled it back 10 feet from the property line, and we have not specifically introduced particular sound comments, but your comment tonight leads him to think that maybe we might want to address that once we have a tenant in there. Depending on how they finish up their interiors, we make sure, depending on what the business is, that we re addressing that issue, and we can put notes in the plan to that effect. The Public Hearing was closed at 6:29 p.m. Brief discussion ensued. ACTION: It was moved by Commissioner Condit; seconded by Commissioner Kachel to approve PC Resolution Motion passed by the following vote: AYES: NOES: ABSENT: Commissioners Condit, Del Nero, Johnson, Kachel, Chairperson Smith None None NEW BUSINESS: None PUBLIC MEETING(S): None UNFINISHED BUSINESS: None 4 Planning Commission Meeting - April 16, 2018 Agenda Item 2.a. - Page 4

9 Planning Commission Minutes March 19, 2018 MATTERS INITIATED BY PLANNING COMMISSION AND STAFF None REPORTS: Commissioner Condit announced that Friday, March 23 rd, the Centennial Committee is hosting their big Gala, and advised everyone to get their tickets, as there are only a few left. Deputy City Clerk, Ann Montgomery reported that she attended a City Clerks Workshop in Lodi with City Clerk, Diane Nayares-Perez. Not only did she learn a lot, she won a raffle prize of a Laserfiche scanner for the office. Director of Community Development, Tom Westbrook announced: As Commissioner Condit mentioned, the Centennial Gala is this Friday, March 23 rd at 6:30 p.m. at the Community Center. Pancakes and Politics Breakfast, hosted by the Chamber is coming up on Friday, March 23 rd at 7:00 a.m. at the Howard Training Center. It s a free event, but preregistration is required. Don Cool, Artist Spotlight, will be held on Thursday, March 22 nd at 5:30 p.m., at the Community Center, 2 nd Floor lobby. Mr. Cool will be showing some photos that he has taken of the Virginia horses in Nevada. Those will be for sale, if you re interested. The public comment period for the Environmental Impact Report for the General Plan Update will be closing at 5:00 p.m. on March 26 th. To date, we ve only received one letter from CalTrans, which was effectively advising the City to keep working with them. He s certain we ll be receiving the balance of those letters this week regarding that effort. ADJOURNMENT: The Commission adjourned at 6:33 p.m. to the next regularly scheduled meeting of Monday, April 16, APPROVED: ATTEST: Laurie Smith, Chairperson Tom Westbrook, Secretary I:\PLANNING\DEPT\PLANNING\PC\Minutes\2018\ draft.doc 5 Planning Commission Meeting - April 16, 2018 Agenda Item 2.a. - Page 5

10 STAFF REPORT AND RECOMMENDATION CITY COUNCIL Chris Vierra, Mayor Ken Lane Bret Durossette Mike Kline Linda Ryno MEETING DATE: April 16, 2018 TO: Planning Commission FROM: Tom Westbrook, Director of Community Development, SUBJECT: Annual Progress Report on the Implementation of the City s Housing Element Informational Item INTRODUCTION Pursuant to Section of the California Government Code, local governments must provide by April 1 st of each year, an annual progress report on the effectiveness of the City s housing policies and programs, to the Department of Housing and Community Development (HCD) and the Office of Planning and Research (OPR). BACKGROUND The City s adopted Housing Element of the General Plan serves as a blueprint for meeting the City s housing needs. The Housing Element identifies housing conditions and needs, as well as outlines the goals, objectives, and policies to assist in meeting the housing needs of the community. The Community Development Department has completed the required 2017 Annual Element Progress Report, which outlines the City s progress towards implementing the policies and programs of the adopted Housing Element. CEQA The 2017 Annual Element Progress Report is exempt from the California Environmental Quality Act (CEQA) Guidelines Section (b) 3, which states that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject of CEQA. Planning Commission Meeting - April 16, 2018 Agenda Item 3 - Page 1

11 REQUIRED ACTION No Action is required; the attached Report is for the Commission s information. Attachment: Ceres 2017 Annual Element Progress Report Planning Commission Meeting - April 16, 2018 Agenda Item 3 - Page 2

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20 Planning and Building Division 2220 Magnolia Street Ceres, CA Fax CITY COUNCIL Chris Vierra, Mayor Ken Lane Bret Durossette Mike Kline Linda Ryno STAFF REPORT AND RECOMMENDATION April 16, 2018 TO: FROM: SUBJECT: Planning Commission Toby Wells, City Manager Ordinance Amendment to Cannabis Ordinances and ; Zoning Ordinance Text Amendment of Section of the Ceres Municipal Code, Relating to Adult Use Cannabis; Adoption of Resolutions to Recommend Adoption of Ordinances to Amend the Development Agreements between the City and Kase Manufacturing, Pacafi Cooperative Inc., and Kase s Journey; Development Agreement Annual Review for Kase Manufacturing Location: 4111 Brew Master Applicant: Kase Manufacturing Parcel size: /- acres Zoning: PC-50, Planned Community - 50 General Plan: LI, Light Industrial Applicant: Owner: Kase Manufacturing (JMR Management Group) 4111 Brew Master Ceres, CA JMR Manufacturing Group LLC 3848 McHenry, Suite 135 Modesto, CA Location: 1442 Angie Avenue Applicant: Patient Care First Parcel size: /- acres Zoning: IP, Industrial Park (Mitchell Road Corridor Specific Plan) General Plan: LI, Light Industrial Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 1

21 Applicant: Owner: Pacafi Cooperative, Inc. (PCF or Patient Care First) 1442 Angie Avenue Ceres, CA Guaranty Holdings of California, Inc Mitchell Road Ceres, CA Location: 4030 Farm Supply Drive Applicant: Kase s Journey, Inc. Parcel size: /- acres Zoning: PC-50, Planned Community - 50 General Plan: LI, Light Industrial Applicant: Owner: Kase s Journey 3308 Keswick Lane Modesto, CA Hoy Road Ranch LLC 120 Country Club Drive, Suite 5 Incline Village, NV PROJECT AND SITE DESCRIPTION The City of Ceres (the City ) and applicants are requesting the adoption of amendments for three previously approved development agreements for two existing cannabis dispensary operations at 1442 Angie Avenue and 4030 Farm Supply Drive and a manufacturing operation at 4111 Brew Master (the DA Amendments ). The proposed amendments would allow for medicinal and adult-use cannabis operations and other minor amendments at these locations. The manufacturing/cultivation operation was approved in May 2017 and the dispensary operations were approved in November 2017 and January 2018, respectively. PROJECT PROPOSAL DA AMENDMENTS Background On October 9, 2015, Governor Jerry Brown signed 3 bills into law (AB 266, AB 243, and SB 643) collectively known as the Medical Cannabis Regulation and Safety Act ( MCRSA ), which established a statewide regulatory and licensing structure governing medicinal cannabis. On November 8, 2016, California voters approved Proposition 64 The Adult Use of Marijuana Act ( AUMA ). AUMA legalized the adult-use, possession, and commercial sale of cannabis by persons 21 years of age. On December 12, 2016 and March 13, 2017, the Ceres City Council (the City Council ) reviewed the various issues related to both medicinal and adult use cannabis and Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 2

22 provided direction to staff. In May of 2017, City Council approved the City s Medical Cannabis Pilot Program pursuant to Ordinance At the same time, City Council approved the development agreement between the City and Kase Manufacturing for the operation of a medicinal cannabis manufacturing business (the Kase Manufacturing Development Agreement ). On June 27, 2017, Governor Jerry Brown signed into law the Medicinal and Adult-Use Cannabis Regulation and Safety Act ( MAUCRSA ), which consolidated MCRSA and AUMA to create a single regulatory scheme for both medicinal and adult-use cannabis businesses. MAUCRSA retains the provisions in the MCRSA and AUMA that granted local jurisdictions control over whether businesses engaged in commercial cannabis activity may operate in a particular jurisdiction. On August 28, 2017, staff gave a presentation to City Council updating the status of the Kase Manufacturing Development Agreement and the changes in State law due to MAUCRSA. On October 23, 2017, the City Council approved Zoning Text Amendment ( ZOTA ) to provide for the city-wide land use regulation of cannabis businesses on a case-by-case basis. On December 7, 2017, California state agencies adopted emergency regulations applicable to all cannabis businesses within the state (the Emergency Regulations ). The Emergency Regulations provide state licensing and operating requirements. On November 13, 2017, the City Council approved a development agreement between the City and Pacafi Cooperative, Inc. for the operation of a medicinal cannabis dispensary. On January 8, 2018, the City Council approved a development agreement between the City and Kase s Journey for the operation of a medicinal cannabis dispensary. Discussion A. Ordinance Amendment to Cannabis Ordinances and The City s existing cannabis ordinance and , only allows medicinal cannabis businesses within the City. Ordinance and were contemplated prior to the Emergency Regulations. However, the DA Amendments now require an amendment to the previous ordinances to allow for the adult use provisions as proposed. B. Revised Cannabis Zoning Ordinance The City s existing cannabis zoning ordinance, ZOTA 17-11, only allows medicinal cannabis businesses within the City. ZOTA was also contemplated prior to the Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 3

23 Emergency Regulations. However, the DA Amendments now require an amendment to the City s zoning code to allow for medicinal and adult-use cannabis within the zones currently permissible: General Industrial (GI), Industrial Park (IP), and Light Industrial (LI) (the Revised Cannabis Zoning Ordinance ). The Revised Cannabis Zoning Ordinance accomplishes this task by making the necessary conforming changes to Section of the Ceres Municipal Code. C. DA Amendments All three approved development agreements allow medicinal cannabis operations only. All three were negotiated prior to the adoption of the Emergency Regulations. However, after review of the Emergency Regulations, the state requirements imposed upon medicinal and adult-use businesses are almost identical. On January 22, 2018, staff provided the City Council an update of the Emergency Regulations and an overview of the state s temporary license procedure. Pursuant to a majority vote in favor, the City Council directed staff to allow all three cannabis businesses to conduct both medicinal and adult-use operations. On February 12, 2018, the City Council approved the circulation of three side letters to provide each business owner official notice of the City Council s decision. The DA Amendments revise the provisions necessary for the businesses to operate medicinal and adult-use cannabis businesses. The changes relative to the Emergency Regulations, also make it necessary for most operations to also have a Distributor (type 11) license to allow for transport of product between the different license types. The DA Amendments include Distributor (type 11) for all three Development Agreements. The DA Amendments also make technical, non-substantive amendments to remove the transporter license type from the Kase Manufacturing Development Agreement because the Emergency Regulations no longer issue that license type. The DA Amendments make no changes to the term of the agreements. D. DA Annual Review Kase Manufacturing Section 8.2 of the Kase Manufacturing Development Agreement requires the City to review the business compliance with the terms of the agreement every twelve (12) months. Such periodic review by City is limited in scope to compliance with the terms of this agreement pursuant to California Government Code section The Kase Manufacturing Development Agreement was approved by City Council on May 22, 2017, signed by the parties on June 17, 2017, and recorded on June 23, The effective date of the Kase Manufacturing Development Agreement is June 23, Cannabis Business Permit was issued to Kase Manufacturing on November 2, Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 4

24 Under the terms and conditions of the Kase Manufacturing Development Agreement, the first payment of $50,000 was advanced prior to the execution of the agreement to cover the costs of the processing and is applied to the first month, December The second payment was made in January To date, all payments have been timely. For the current fiscal year, the revenue associated with this development agreement is on target for the budgeted amount of $300,000. City staff finds that Kase Manufacturing has demonstrated good faith throughout the first year of the Kase Manufacturing Development Agreement and is in substantial compliance with the terms and conditions of the agreement. Staff Comments The proposed DA Amendments can be supported based on the following reasons: 1. Currently, each cannabis business is required to pay a public benefit to the City that is based upon the revenue generated by that business (the Public Benefit ). Allowing adult use cannabis operations would increase the Public Benefit generated from each project due to increased sales from that additional revenue stream. 2. Allowing adult use cannabis operations would increase the City s sales tax revenue. The sale of adult use cannabis is subject to a cannabis specific state excise tax, the standard sales tax, and any local excise tax such as Measure H. The retail sale of medicinal cannabis is not subject to the cannabis specific state excise tax. The exact amount of additional sales tax revenue the City would receive is unknown because it is not clear what amount of cannabis sales would be for adult use or medicinal sales purposes. CEQA A. Ordinance Amendment to Cannabis Ordinances and The Ordinance is exempt under California Environmental Quality Act ( CEQA ) because MAUCRSA provides an exemption from CEQA for any ordinance, rule, or regulation by a city that requires discretionary review and approval for commercial cannabis activity. 1 Additionally, the Revised Cannabis Zoning Ordinance does not constitute a project under the CEQA, because it does not establish any entitlements or authorize any projects within the City. 2 B. Revised Cannabis Zoning Ordinance 1 Bus. & Prof. Code, 26055, subd. (h). 2 Pub. Res. Code, 21065, Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 5

25 The Revised Cannabis Zoning Ordinance is exempt under CEQA because MAUCRSA provides an exemption from CEQA for any ordinance, rule, or regulation by a city that requires discretionary review and approval for commercial cannabis activity. 3 Additionally, the Revised Cannabis Zoning Ordinance does not constitute a project under the CEQA, because it does not establish any entitlements or authorize any projects within the City. 4 C. DA Amendments The DA Amendments are not a project and therefore exempt from CEQA because they will cause no direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. Additionally, the DA Amendments are categorically exempt from CEQA as existing facilities that involve a negligible or no expansion of use. 5 D. DA Annual Review Kase Manufacturing The DA Annual Review for Kase Manufacturing is not a project and therefore exempt from the California Environmental Quality Act ( CEQA ) because it will cause no direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. STAFF RECOMMENDATION Staff recommends the Ceres Planning Commission (the Planning Commission ) adopt the resolutions recommending that the City Council adopt an ordinance amending three development agreements for cannabis businesses between the City and Kase Manufacturing, Pacafi Cooperative, Inc., and Kase s Journey. Staff also recommends the Planning Commission approve a resolution recommending City Council approval, by ordinance, of the Revised Cannabis Zoning Ordinance. REQUIRED ACTION Approval of this project requires the following action by the Planning Commission: 1. Accept that the DA Amendments are consistent with CEQA Guidelines Section 15061(b-3) Review For Exemption, and Section Existing Facilities. 2. Recommend the City Council approve a Zoning Ordinance Text Amendment to modify Section of the Ceres Municipal Code, thereby effectuating the Revised Cannabis Zoning Ordinance (Draft PC Resolution 18-07). 3 Bus. & Prof. Code, 26055, subd. (h). 4 Pub. Res. Code, 21065, CCR Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 6

26 3. Recommend adopting three separate ordinances that amend three development agreements for cannabis businesses between the City and Kase Manufacturing (Draft PC Resolution 18-08), Pacafi Cooperative, Inc. (Draft PC Resolution 18-09), Kase s Journey (Draft PC Resolution 18-10). Attachments: Vicinity Maps Draft PC Resolution 18-07; a Resolution of the Planning Commission Recommending the City Council Adopt Ordinance and Adopt a Zoning Ordinance Text Amendment of the Ceres City Council Amending Section of the Ceres Municipal Ordinance Amendment to Cannabis Ordinances and A Zoning Ordinance Text Amendment (17-11 amended) of the Ceres City Council Amending Section of the Ceres Municipal Code First Amendment to the Development Agreement between the City and Kase Manufacturing Draft PC Resolution 18-08; a Resolution of the Planning Commission Recommending the City Council Adopt the First Amendment to the Development Agreement Between the City and Kase Manufacturing (JMR Management Group) Ordinance No , Adopting the First Amendment to the Development Agreement between the City and Kase Manufacturing (JMR Management Group) First Amendment to the Development Agreement between the City and Pacafi Cooperative Draft PC Resolution 18-09; a Resolution of the Planning Commission Recommending the City Council Adopt the First Amendment to the Development Agreement between the City and Pacafi Cooperative Ordinance No , Adopting the First Amendment to the Development Agreement between the City and Pacafi Cooperative First Amendment to the Development Agreement between the City and Kase s Journey Draft PC Resolution 18-10; a Resolution of the Planning Commission Recommending the City Council Adopt the First Amendment to the Development Agreement Between the City and Kase s Journey Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 7

27 Planning Commission Agenda April 16, 2018 Application Nos DA Amendment & DA Amendment Ordinance No Adopting the First Amendment to the Development Agreement between the City and Kase s Journey I:\PLANNING\DEPT\PLANNING\PC\staff reports\2017\17-12 DA Amendment & DA Amendment (April 16, 2018 PC Meeting).doc; staff report {CW } Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 8

28 HEARING TO CONSIDER THE FIRST AMENDMENT OF TWO PREVIOUSLY APPROVED DEVELOPMENT AGREEMENTS FOR TWO EXISTING CANNABIS DISPENSARY OPERATIONS AT 1442 ANGIE AVENUE AND 4030 FARM SUPPLY DRIVE. THE PROPOSED AMENDMENTS WOULD ALLOW THE SALES OF BOTH MEDICINAL AND ADULT-USE CANNABIS OPERATIONS AT THESE TWO LOCATIONS. Project Site 4030 Farm Supply Drive, Ceres, CA NORTH Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 9

29 Project Site 1442 Angie Avenue, Ceres, CA NORTH Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 10

30 RECORDING REQUESTED BY: CITY OF CERES When Recorded mail to: City of Ceres Planning and Building Division 2220 Magnolia Street Ceres, CA DRAFT RESOLUTION NO A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF CERES RECOMMENDING THE CITY COUNCIL ADOPT ORDINANCE AMENDING ORDINANCES NO AND CHAPTER 9.120, CANNABIS BUSINESSES, OF THE CERES MUNICIPAL CODE; AND ADOPT A ZONING ORDINANCE TEXT AMENDMENT OF THE CERES CITY COUNCIL AMENDING SECTION OF THE CERES MUNICIPAL CODE WHEREAS, on October 9, 2015, Governor Jerry Brown signed three bills into law (Assembly Bill 266, Assembly Bill 243, and Senate Bill 643), which are collectively referred to as the Medical Cannabis Regulation and Safety Act ( MCRSA ). MCRSA established the first statewide regulatory system for medical cannabis businesses; and WHEREAS, in 2016, the voters of California approved Proposition 64 entitled the Control, Regulate and Tax Adult Use of Marijuana ( AUMA ). AUMA legalized the adult-use and possession of cannabis by persons 21 years of age and older and the personal cultivation of up to six cannabis plants within a private residence. However, AUMA authorizes local jurisdictions to reasonably regulate personal cultivation; and WHEREAS, on June 27, 2017, Governor Jerry Brown signed into law the Medicinal and Adult-Use Cannabis Regulation and Safety Act ( MAUCRSA ), which created a single regulatory scheme for both medical and adult-use cannabis businesses. MAUCRSA retains the provisions in the MCRSA and AUMA that granted local jurisdictions control over whether businesses engaged in commercial cannabis activity may operate in a particular jurisdiction; and WHEREAS, on May 22, 2017, the Ceres City Council adopted Ordinance No to establish a comprehensive policy to regulate medicinal cannabis business within the City of Ceres (the City ) through a pilot program ( Medical Cannabis Business Pilot Program ); and Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 11

31 WHEREAS, the Ceres City Council determined that allowing only medicinal cannabis businesses in the City of Ceres through the Medical Cannabis Business Pilot Program was prudent until the State of California completed regulations for all cannabis businesses; and WHEREAS, on December 7, 2017, the Bureau of Cannabis Control, Department of Agriculture, and the Department of Public Health issued final emergency regulations relating to all cannabis businesses allowed under MAUCRSA (collectively, the Emergency Regulations ). These Emergency Regulations include licensing and operating requirements that are nearly identical for medicinal and adult-use cannabis businesses alike; and WHEREAS, the City Council now desires a comprehensive policy to address both medicinal and adult-use cannabis businesses within the City of Ceres; and WHEREAS, the City Council finds that allowing for continued limited cannabis businesses in the City through a pilot program ( Cannabis Business Pilot Program ) is in the best interest of the health, welfare, and safety of the public; and WHEREAS, the City Council desires to amend Ordinance to allow and regulate medicinal and adult-use cannabis operations under the Cannabis Business Pilot Program; and WHEREAS, the proposed zoning ordinance text amendment (the ZOTA ) revises the City s existing zoning restrictions to apply equally to medicinal and adult-use cannabis businesses. The ZOTA does not permit any specific cannabis business; and WHEREAS, the Ceres Planning Commission ( Planning Commission ) finds that an ordinance approving the ZOTA will allow the City to adequately regulate medicinal and adult-use cannabis businesses in the City in accordance with state law and the Emergency Regulations; and WHEREAS, the Planning Commission finds that the ZOTA is in the best interest of the health, welfare, and safety of the public. NOW, THEREFORE, BE IT RESOLVED, that the Planning Commission of the City hereby recommends by this resolution that the City Council of the City of Ceres adopt the proposed Ordinance No and the ZOTA to amend Section of the Ceres Municipal Code. I HEREBY CERTIFY that the foregoing resolution was duly and regularly adopted by the Planning Commission of the City of Ceres at a regular meeting of Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 12

32 said Planning Commission held on the 16 th day of April 2018, by the following vote: AYES: NOES: ABSENT: ATTEST: TOM WESTBROOK, SECRETARY OF THE CERES PLANNING COMMISSION CITY OF CERES i:\planning\dept\planning\pc\resolutions\2018\reso ZOTA for Cannabis Ord (Sec , April 16, 2018).doc Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 13

33 ORDINANCE NO AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CERES, AMENDING ORDINANCES NO AND CHAPTER 9.120, CANNABIS BUSINESSES, OF THE CERES MUNICIPAL CODE WHEREAS, in 2015, the Ceres City Council (the City Council ) adopted Ordinance No , adding Chapter to the Ceres Municipal Code, banning all commercial cannabis activity and cultivation, thereby deeming those activities nuisances; and WHEREAS, on May 22, 2017, the City Council (the City Council ) adopted Ordinance No to establish a comprehensive policy to regulate medicinal cannabis business within the City of Ceres (the City ) through a pilot program ( Medical Cannabis Business Pilot Program ); and WHEREAS, at that time, the City Council determined that allowing only medicinal cannabis businesses in the City through the Medical Cannabis Business Pilot Program was prudent until the State of California completed regulations for all cannabis businesses; and WHEREAS, on December 7, 2017, the Bureau of Cannabis Control, Department of Agriculture, and the Department of Public Health issued final emergency regulations relating to all cannabis businesses allowed under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (collectively, the Emergency Regulations ). These Emergency Regulations include licensing and operating requirements that are nearly identical for medicinal and adult-use cannabis businesses alike; and WHEREAS, the City Council now desires a comprehensive policy to address both medicinal and adult-use cannabis businesses within the City of Ceres; and WHEREAS, the City Council finds that allowing for continued limited cannabis businesses in the City through a pilot program ( Cannabis Business Pilot Program ) is in the best interest of the health, welfare, and safety of the public; and WHEREAS, the City Council desires to amend Ordinance to allow and regulate medicinal and adult-use cannabis operations under the Cannabis Business Pilot Program; and NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CERES DOES ORDAIN AS FOLLOWS: SECTION 1. Title 9, Public Peace, Safety and Morals, of the Ceres Municipal Code is amended to replace Chapter 9.120, Medical Cannabis Businesses, which shall read as follows: Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 14

34 Chapter Cannabis Business Pilot Program Declaration of Purpose. A. The City finds and declares that the purpose of this chapter is to regulate all commercial cannabis activityin the City of Ceres, to the extent authorized by state law and in a manner designed to minimize negative impacts on the City, and to promote the health, safety, morals, and general welfare of residents and businesses within the City. B. It is the purpose and intent of the City Council to implement state law by regulating cannabis businesses and to ensure that commercial medical cannabis activity does not result in the diversion of cannabis for illicit purposes. C. The regulations in this chapter do not interfere with a qualified patient s right to obtain and use cannabis as authorized under state law, nor do they criminalize the possession or cultivation of cannabis by qualified patients or their primary caregivers. Cannabis businesses shall comply with all provisions of the Ceres Municipal Code, state law, and all other applicable local and state regulations. It is neither the intent nor the effect of this chapter to condone or legitimize the illegal use, consumption, or cultivation of cannabis under federal, state, or local law Definitions. A. Adult Use of Marijuana Act or AUMA has the same meaning as Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act approved by California voters at the November 8, 2016, election, and any applicable rules and regulations promulgated thereafter. B. Business means a profession, trade, occupation, gainful activity, and all and every kind of calling whether or not carried on for profit. C. City Manager shall mean the Ceres City Manager or designee. D. Commercial cannabis activity includes the cultivation, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or sale of cannabis or cannabis products that requires a state license. E. Cannabis business shall mean any person or business that engages in commercial cannabis activity. F. Cannabis business permit shall mean any permit issued to a medical cannabis business Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 15

35 pursuant to the provisions of this chapter. G. Cannabis Business Pilot Program shall mean the City s permitting process and procedures pursuant to the provisions of this chapter for the purpose of determining and evaluating the feasibility and desireability of regulating multiple cannabis businesses within City limits. H. Medicinal and Adult-Use Cannabis Regulation and Safety Act or MAUCRSA has the same meaning as Chapter 1 (commencing with section 26000) of Division 10 of the California Business and Professions Code, and any applicable rules and regulations promulgated thereafter. I. Primary caregiver shall have the same meaning as set forth in California Health and Safety Code section (d). J. Qualified patient shall have the same meaning as set forth in California Health and Safety Code section (f) Cannabis Business Pilot Program. A. Cannabis businesses shall only be permitted to operate in the City following application, investigation, verification, approval, and issuance of a development agreement approved by the City Council, and a cannabis business permit issued by the City in accordance with the criteria and procedures set forth in this chapter. No land use entitlement, permit (including building permit) approval, site plan, certificate of occupancy, zoning clearance, or other land use authorization for a cannabis business shall be granted or permitted unless it complies with the provisions of the Ceres Municipal Code. B. All persons who are engaged in or who are attempting to engage in commercial cannabis activity in any form shall do so only in strict compliance with the terms, conditions, limitations and restrictions of this chapter, AUMA, and MAUCRSA, as it applies, the provisions of the Ceres Municipal Code, as may be amended from time to time, and all other applicable state and local laws and regulations. C. The City Manager is authorized to make policies and procedures consistent with the intent of this chapter concerning the applications, the application process, the information required of an applicant, the application procedures, and the administration and procedures to be used and followed in the application and hearing process All State and Local Licenses and Permits Required. Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 16

36 A. No cannabis business shall operate unless it is in possession of all applicable state and local licenses and permits. B. Every cannabis business shall submit to the City Manager a copy of any and all of its state and local licenses and permits required for its operation. C. If any other applicable state or local license or permit required for a cannabis business operation is denied, suspended, modified, revoked, or expired, the cannabis business shall notify the City Manager in writing within ten (10) days of such denial, suspension, modification, revocation, or expiration Permits Not Transferable. Cannabis business permits issued pursuant to this chapter are not property and have no value. Cannabis business permits may not be transferred, sold, assigned or bequeathed expressly or by operation of law. Any attempt to directly or indirectly transfer a cannabis business permit shall be unlawful and void, and shall automatically revoke the permit Development Agreement. A. Prior to operating in the City, and as a condition of issuance of any applicable permits, including, but not limited to, a cannabis business permit, the applicant seeking to operate a cannabis business shall enter into a development agreement with the City setting forth the terms and conditions under which the cannabis business will operate. Such development agreement shall be in addition to the requirements of this chapter, including, but not limited to, public outreach and education, community service, payment of fees and other charges as mutually agreed upon, approval of architectural plans (including site plan, floor plan, and elevation), and such other terms and conditions that will protect and promote the public health, safety, and welfare of all persons in the City. B. Every development agreement approved by the City pursuant to this chapter shall be subject to an annual review by the City Council to determine compliance with the terms of the development agreement, applicable local and state laws and regulations, this chapter, and the Ceres Municipal Code. The City Council may from time to time determine whether to allow additional cannabis businesses as part of the Cannabis Business Pilot Program Nonconforming Use. Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 17

37 Any cannabis business established or operating in the City in violation of this chapter shall not be considered a lawful or permitted nonconforming use, and no such cannabis business shall be eligible for issuance of any permits or approvals under the Ceres Municipal Code. Further, any such unlawfully established cannabis business shall constitute a public nuisance subject to abatement by the City Relationship to Other Laws. Except as otherwise specifically provided herein, this chapter incorporates the requirements and procedures set forth in Chapter 1 (commencing with Section 26000) of Division 10 of the California Business and Professions Code, or its successors. In the event of any conflict between the provisions of this chapter and the provisions of that chapter or any other applicable state or local law, the more restrictive provision shall control Statewide Regulation. This chapter, and the provisions herein, shall be read consistent with any statewide regulation of cannabis that is promulgated by the legislature or by voter approval Severability. Should any provision of this chapter, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, that determination shall have no effect on any other provision of this chapter or the application of this chapter to any other person or circumstance and, to that end, the provisions hereof are severable. SECTION 2. If any section, subsection, sentence, clause, phrase, or word of this Ordinance is for any reason held by a court of competent jurisdiction to be unconstitutional or invalid for any reason, such decision shall not affect the validity of the remaining portions of the Ordinance. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more section(s), subsection(s), sentence(s), clause(s), phrase(s), or word(s) be declared invalid. SECTION 3. This Ordinance shall become effective thirty (30) days from and after its final passage and adoption, and publication of the Ordinance shall occur in a newspaper of general circulation at least fifteen (15) days prior to its effective date, or a summary of the Ordinance published in a newspaper of general circulation at least five (5) days prior to adoption and again at least fifteen (15) days prior to its effective date. Planning Commission Meeting - April 16, 2018 Agenda Item 4 - Page 18

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