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HomeMy WebLinkAboutMerv Simchowitz- CONSENT CALENDAR ITEM #15 - CITY COUNCIL MEETING AUGUST 19, 2020_RedactedFrom:Merv To:Public Comments Cc: Subject:CONSENT CALLENDAR ITEM #15 - CITY COUNCIL MEETING AUGUST 19, 2020 Date:Wednesday, August 19, 2020 2:52:38 PM AUGUST 19, 2020: CITY OF SAN BERNARDINO MAYOR AND CITY COUNCIL MEMBERS: THE FINAL READING OF ORDINANCE MC-1541 REGARDING THE NUMBER OF CANNABIS BUSINESS PERMITS IS #15 ON THE CONSENT CALENDAR TONIGHT. I have heard from reliable sources that the Council intends to pull this item off the Consent calendar and bend from the pressure of political contributors and the unsuccessful disgruntled applicants that are currently suing the City. The City licensing process has been a two (2) year grueling and expensive roller coaster ride and now the Council intends to change the rules mid-stream and penalize the legally approved licenses by reneging on its original legal Ordinance and meticulous procedure rules and regulations created by its own Community and Economic Development Cannabis Departments together with outside third party adjudicators. The City is now opening itself up to huge legal action from legitimate approved applicants that have invested large amounts of funds, entered into expensive binding contracts and financing obligations that will now be affected. These legitimately approved license holders have real quantitative expensive damage claims not like the existing frivolous lawsuits from disgruntled license losers. The City is also now dealing with the numerous other law-suits that have recently surfaced and it becomes clear that San Bernardino has created an environment that explains it tenuous fiscal situation and confirms that it is anti-business development because it cannot be relied on or trusted. If the Council enlarges the number of retail dispensaries from 11 to 17, plus the existing two (2) illegal operators and the about 90 current black market operators in this City, all of which do not pay any taxes to the City, then no one will make a living. There will be bankruptcies and the anticipated taxes to the City will be minimal. Just like Moreno Valley and Santa Ana. Over the past forty (40) years, I have successfully developed and leased over 1 Million square feet of buildings and energized the south part of this City by bringing reputable national and international tenants here who contribute hugely to the tax base. I respectfully request that the Council approve the final reading of the Ordinance as accepted and voted on in the first reading. Sincerely, Merv Simchowitz Managing Member Pure Dispensaries, LLC cc: Sonia R. Cavalho Esq. – City Attorney Teri Ledoux – City Manager Michael A. Huntley- Director Community & Economic Development SENT OUT TO THE COUNCIL FOR THE AUGUST 5 MEETING FIRST RERADING: Members of the City Council: You have the first reading of the proposed adjustment to the Cannabis Ordinance before you tonight. All five (5) successful retail cannabis applicants that were legally approved by the rigorous, expensive and time-consuming conditions, rules and regulations set up by this very City Council together with the assistance of the outside third party adjudicator firm, HdL, are now being unfairly undermined. This sudden illegal alteration to magically expand the number of retail licenses to 17 in the City is unethical and makes a joke of your process. This appears as an easy way for the City to resolve and satisfy the baseless lawsuits from disgruntled applicants that did not make the final top five (5) list. The message this conveys to the world is that all you have to do to get what you want from the City of San Bernardino is to sue them and they will buckle. Not only is this both illegal and unethical to change the rules after we have already complied downstream but also makes the city vulnerable to future lawsuits from the original successful applicants. Seventeen (17) retail locations in a City of this size is over saturation that devastated the cannabis retailers in Cities like Santa Anna and Moreno Valley, etc. where they allowed for too many retail licenses and now they are dealing with bankruptcies, vacant stores, blighted areas and increased unemployment resulting from minimal taxes flowing to the city. This encourages the illegal virulent cannabis Black Market who provide untested, adulterated and impure product to be digested by the Cities citizens. These illegal operators have the advantage by not having to adhere to stringent laws from the State Bureau of Cannabis Control or the City and do not have to pay the approximate 47% tax to the State, County and Cities on product sold. If the concern is that because it takes about a year to complete the requirements and construction the improvements security required to get to a Cannabis Business License to start operating and receive taxes, then place some deadline for a penalty of loss of the retail license if any of the five (5) approved licenses do not perform and open timely and replace them with the next applicant in line from the HdL Phase 3 Result List. It takes about a year to complete the requirements necessary to obtain a legal Cannabis Business License plus the time, effort and expense for construction, building improvements, installation of secure systems, etc. to start operating. So, if the City is concerned that any one of the five (5) legally licensed operators does not open in a specific time frame, then replace them with the next applicant in line in the HdL adjudication list. Do not penalize the successful applicants by making it impossible for them to succeed in a City with too much competition where no one wins, especially the City. It is important to note that staff recommended allowing for more flexibility and imposing deadlines on the timing of the successful retail applicants to perform and open for business. I support that and the idea to impose a deadline for those holding legal license to react timely or loose their license. Additionally, staff was not in favor of expanding the number of retail licenses to those applicants that did not qualify or were selected as the top five (5) by the stringent criteria that staff created with the assistance of the third party adjudicating company, HdL I reiterate. The net result of this inequity is that the City is opening itself upon for lawsuits from the successful applicants with legitimate licenses who have spent, time and money to follow the very rules that this City Council themselves set up and imposed which would be unethical and illegal. Most of the approved dispensaries are in the South side of the City with everyone competing against each other will cause bankruptcies, store vacancies, blight and new unemployment with the City not gaining any tax income the way it has happened other Cities. Sincerely, Merv Simchowitz Managing Member Pure Dispensaries, LLC Merv Simchowitz