ACTION REQUESTED:
Title
Communication from the City Manager with a Request to Authorize Staff to Provide LETTERS OF SUPPORT to Applicants for Permits for CANNABIS CULTIVATION and/or DISPENSING OPERATIONS.
Body
BACKGROUND:
At its August 12, 2014 meeting, the City Council approved marijuana cultivation operations as permitted uses within the City's industrially zoned areas. Staff also determined that marijuana dispensary operations would be permitted uses within any zoning district in which a pharmacy would be allowed. The state will soon be releasing final version of the permit applications for both cultivation and dispensary operations. The state will issue one cultivation permit in each of its 22 Illinois State Police (ISP) Districts. Peoria is in District 8 which includes Peoria, Tazewell, Woodford, Stark and Marshall counties. To date, media reports indicate potential applicants have expressed interest in Pekin, Lacon, Delavan, and potentially a location in Stark County. For dispensaries, a total of 60 permits will issued. These permits are not tied to ISP Districts, but rather will be "geographically dispersed throughout the State to allow all registered qualifying patients reasonable proximity and access to a dispensing organization." Given the size of the Peoria metropolitan area, staff believes that two dispensaries will be permitted in this area.
Over the past few months, City staff has been contacted by a number of different organizations seeking to obtain a license for a either a cultivation or dispensing operation inside the City. Given the buffer restrictions and other economic factors, there are a very limited number of viable locations for cultivation operations. Still, interest in Peoria is strong from both segments.
"5) Local Community/Neighborhood Report: The applicant may provide comments, concerns or support regarding the potential impact of the proposed location to the local community and neighborhood. This may include the local community's concerns or support regarding the proposed location's proximity to substance abuse treatment centers, day care centers, schools and halfway houses."
These bonus points appear to be important differentiators. The technical and business portions of the application can be awarded a total of 1,000 points. There are a total of 160 additional bonus points, twenty for each of the eight areas. The application for a dispensary permit is nearly the same except that the bonus sections are only worth a total of 100 points above the technical/business total of 900 points (<http://www2.illinois.gov/gov/mcpp/Documents/Draft%20Dispensary%20Application%20080814.pdf>). For both types of permits, the absence of evidence of community support could cause an application to be scored lower than others, not only in Peoria, but across ISP District 8.
At the August 12 Council meeting, Councilman Spain suggested that staff create a process by which the City could decide to whom, if anyone, the City might lend its support. State law concerning these permits provides no guidance on this issue. Some interested organizations have sought an "exclusive" letter of support. Given the limited number of points available, such exclusivity would give them a competitive advantage over other applicants. Staff does not recommend granting exclusive support for two reasons:
1) It forces the City to choose between potential investors and would require more knowledge about the business than staff possesses.
2) It might weaken the competitiveness of Peoria applicants who do not receive the City's exclusive support in competing against the broader regional applicants. The location of these operations in Peoria could be an important jobs creator and a significant investment. City support should not be limited to one "winner" but rather to any applicant that meets a certain standard.
In consideration of the above, staff proposes that applicants seeking the City's support provide the following written information:
1. The address of the proposed operation.
2. A description of the level of control the applicant has over the identified property (leased, owned by applicant, purchase option obtained, letter of intent signed, negotiating, etc.).
3. Verification that the location fits within State and City rules for siting of the operation (zoning, buffer).
4. A description of the proposed operation. This should include an explanation of the business model, description of investors, and identification of key leaders including their experience in this area.
5. The following sections of the state application, from the "bonus points" section, that will be submitted to the State (language below is taken directly from the draft cultivation application; wording slightly different for dispensaries):
a. Community Benefits Plan: The applicant may provide the Department with a detailed description of any plans the applicant has to give back to the local community if awarded a cultivation center permit.
b. Labor and Employment Practices: The applicant may describe any plans it has to:
1) Provide a safe, healthy and economically beneficial working environment for its employees, including, but not limited to, its plans regarding workplace safety and environmental standards, codes of conduct, healthcare benefits, educational benefits, retirement benefits, and wage standards.
2) Recruit and/or hire minorities, women, veterans, disabled persons and Illinois residents.
c. Substance Abuse Prevention Plan: The applicant may provide a detailed description of any plans it will undertake, if awarded a cultivation center permit, to combat substance abuse in Illinois, including the extent to which the applicant will partner, or otherwise work with existing substance abuse programs.
d. Environmental Plan: The applicant may demonstrate an environmental plan of action to minimize the carbon footprint, environmental impact, and resource needs for the production of medical cannabis. The applicant may describe any plans for the use of alternative energy, the treatment of waste water and runoff, and scrubbing or treatment of exchanged air.
6. Any additional information the applicant feels would support their request to the City.
The deadlines for applications for both cultivation and dispensary permits is September 22, 2014. Since there is not another regular City Council meeting before then, staff proposes that Council authorize it to provide letters of support if the above information is provided. Staff will refuse to provide a letter should the information be deemed insufficient or poorly constructed. Applicants would be informed that all information might be subject to disclosure under the Freedom of Information Act but would not be released, if requested, unless required by law or until an award or final selection is made. Applicants who submitted their requests to the City by September 16 would be provided either a letter of support or written rejection by September 18. At Council's discretion, a small workgroup of up to three members of Council could be assembled to review requests along with staff.
FINANCIAL IMPACT: Unknown. While neither cultivation nor dispensing of medical cannabis is subject to local taxation, there may be some secondary financial impacts, including increased property taxes, job growth, and for dispensaries, taxation on paraphernalia and supplies. Additionally, the "Community Benefits Plan" submitted as part of the application might indicate either direct or indirect financial benefits to the City or community at large.
NEIGHBORHOOD CONCERNS: Unknown. There was no public comment at the Planning and Zoning Commission regarding the change in the zoning code that allows cultivation in industrial zones. Permit locations for either line of business are unknown which makes gauging neighborhood opinion difficult.
IMPACT IF APPROVED: Staff will issue letters of support as outlined.
IMPACT IF DENIED: The City will not issue letters of support. Given the competitive nature of the application process, the lack of solid community support would likely hurt an applicant's chances at obtaining a permit. It is probable that such lack of support would result in locations within the City being eliminated from consideration. If denial of this request occurred, individual members of the City Council might be requested to write personal letters of support.
ALTERNATIVES: The City Council could call a special meeting prior to September 22 to review and select which, if any, applicants to support.
EEO CERTIFICATION NUMBER: Not applicable.
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL'S 2014 - 2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Grow Peoria: Businesses, Jobs, and Population
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Grow employers and jobs.
DEPARTMENT: City Manager's Office