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2015-16 - APPROVING A DEVELOPMENT AND OPERATING AGREEMENT WITH PDI MEDICAL III, LLC - 04/20/2015 4/13/2015 RESOLUTION NO.2015—1 A RESOLUTION APPROVING A DEVELOPMENT AND OPERATING AGREEMENT ("AGREEMENT")BETWEEN THE VILLAGE OF BUFFALO GROVE AND PD1 MEDICAL 111,LLC WHEREAS,the Village of Buffalo Grove("Village") is a Home Rule Unit pursuant to the Illinois Constitution of 1970 and; WHEREAS, a petition has been filed by PDI Medical 111, LLC for a Special Use fora Medical Cannabis Dispensing Organization for the property at 1623 Barclay Blvd,Buffalo Grove, IL 60089 and-, WHEREAS, Village may incur certain extraordinary costs as a result of the location of the Dispensing Organization into the Village and; WHEREAS, Such extraordinary costs include,but are not limited to costs for increased Police surveillance and monitoring, increased Fire Department monitoring, as well as increased costs for other departments necessarily incurred to protect and maintain the health, safety and welfare of Village residents and businesses and; WHEREAS,Village and PDI Medical 111, LLC agree to enter into a Development and Operating Agreement attached as Exhibit A. NOW, THEREFORE, BE IT RESOLVED by the President and Board of Trustees of the Village of Buffalo Grove, Cook and Lake Counties, Illinois as follows: 1. The agreement between Village and PDI Medical III, LLC, which is attached hereto as Exhibit A is hereby approved and; 2. The Village Manager is authorized and directed to execute the attached Agreement on behalf of the Village of Buffalo Grove. AYES: 4—Tri)I i tig, S Lis injan, Tersog, Stein NAYS: 0- None ABSENT: 2 —Berman, Ottetiheitner PASSED: April Z0 2015. APPROVED: April 20,2015. ATTEST: APPROV ViMfg8 Clerk J t -ainia'n,Village President DEVELOPMENT AND OPERATING AGREEMENT DISPENSING ORGANIZATION THIS DEVELOPMENT AND OPERATING AGREEMENT ("Agreement") is made and entered into as of this 201h day in April, 2015, by and between the Village of Buffalo Grove, Illinois, a Home Rule Illinois municipal corporation located in Cook and Lake Counties, Illinois (the "Village"), and P Medical 111, LLC ("Dispensary") an Illinois limited liability company. The Village and the Dispensary are sometimes referred to individually as "Party" and sometimes referred to herein as the"Parties". RECITAILS A. On August 1, 2013, the Illinois Legislature enacted the Compassionate Use of Medical Cannabis Pilot Program Act, 410 ILCS 130 et seq. ("Act"). The purpose of the Act was to distinguish between medical and non-medical cannabis and to "...protect patients with debilitating medical conditions,as well as their physicians and providers, from arrest and prosecution, criminal and other penalties, and property forfeiture if the patients engage in the medical use of cannabis." (410 ILCS 13015 (g)) B. The Act authorizes the State the right to issue a registration for operation ("Registration") to a Dispensing Organization(Section 115-(a))where medical cannabis can be sold. C. On February 3, 2015,the Dispensary received a Conditional Authorization from the State to proceed to register to operate a medical cannabis dispensary in District 27, Lake County, Illinois. Dispensary has represented to the Village that it intends to apply fora Registration to operate a medical cannabis dispensary organization(as defined as a"Dispensing Organization")within the corporate boundaries of the Village. Dispensing Organization further represents that it has no knowledge of any events or acts that would prevent Dispensary or any of its members from receiving a Registration. D. The Village has agreed that in the event the Dispensary obtains a Registration to open and operate a Dispensing Organization as required by the Act, that in exchange for good and valuable consideration as set forth herein, the Village will cooperate with Dispensary in allowing the Dispensing Organization to be located in the Village. E. The Corporate Authorities of the Village have taken all required actions prior to the execution of this Agreement in order to make the same binding upon it according to its terms. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements herein contained, and other good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows: RECITALS PART OF AGREEMENT The representations,covenants and recitations set forth in the foregoing recitals are material to this Agreement and are hereby incorporated into and made a part of this Agreement as though they were fully set forth in this Article I. MUTUAL ASSISTANCE The Parties agree to take such actions, including the execution and delivery of such documents, instruments, petitions and certifications, as may be necessary or appropriate, from time to time, to carry out the terms,provisions and intent of this Agreement and to aid and assist each other in carrying out said terms, provisions and intent. III DISPENSARY'S ACKNOWLEDGMENTS AND REPRESENTATIONS 3.01 DispensMy's A lication fora Registration for Operation. Tp_ A. Dispensary hereby represents and warrants that it intends to complete and submit an application t o t he Illinois Department of Financial and Professional Regulation ("Department") fora Registration to operate a Dispensing Organization within the Village. Dispensary further represents that it has no criminal background nor any other reason set forth in the Act that of be a basis forte State to deny such Registration. Dispensary shall notify the Village in writing within five (5) calendar days after it learns of the State's disposition of Dispensary's application. If Dispensary is granted a Registration, it shall deliver a copy of the Registration to the Village within five (5) calendar days after its receipt of the same, and in the event the Registration is renewed annually as required by the Act, Dispensary shall deliver a copy of the renewed Registration. Should the Dispensary not receive a Registration by the State, then this Agreement shall be deemed null and void. 3.02 Village License. A. In order to facilitate the implementation of the provisions of this Agreement, the Village reserves the right to enact an Ordinance which would require Dispensary to obtain a license ("Village License") to operate a 2 Dispensing Organization in the Village, provided, however, that any such Village License requirement shall not alter, amend, change or otherwise adversely affect the provisions of this Agreement.Any Village License issued by the Village shall be for the sole benefit of and in the name of the party that has received a Registration from the State and shall not be transferred or assigned to a third party or encumbered. IV ZONING AND BUILDING 4.01 Building Site for Dispensing OKganization. A. Zonin . Dispensary hereby agrees that upon receipt of its Certificate of Occupancy issued by the Village, it shall only be permitted to open and operate the Dispensing Organization located at 1623 Barclay Blvd, Buffalo Grove, Illinois. Dispensary will comply with all of the requirements of the Buffalo Grove Municipal Code and the Special Use Ordinance. B. Tenant Space.The Dispensary facility is a 3,250 square foot tenant space in the Arthur Rogers Industrial Park located at 1623 Barclay Blvd, Buffalo Grove, Illinois(the"Premises"). 4.02 Building Material and Dgsja. A. esi . Dispensary hereby agrees that the Village shall have the right in its reasonable discretion to approve the Premises design and materials. B. Site Lighting.All parking areas for the Premises will be appropriately lighted to ensure safety for all who work and conduct business at this facility, and shall meet all Village requirements for parking lots. C. Si age/Exterior Visibility. All exterior signage shall be in compliance with the Sign Regulations established in Chapter 14 of the Buffalo Grove Municipal Code. In addition,no exterior signage or window signage shall use the word"marijuana," "cannabis," or any other word, phrase o r s ymbol commonly understood to refer to marijuana or cannabis. The display of merchandise and/or products related to medical cannabis shall not be visible from the exterior oft e Premises. D. Odor Containment.The Premises' ventilation system or odor containment system shall be constructed in such a manner so as to comply with all applicable Codes and Ordinances. 4.03 Loading Docks/Refuse Containers. A. All products shall be loaded internally. VAnle delivery vehicles are being loaded and unloaded,the dock doors shall remain closed. All refuse containing cannabis or cannabis-infused products shall also be kept within the 3 Premises until it is either returned to a licensed cultivation center or destroyed and disposed of pursuant to the Dispensary Rules adopted by the Department(the "Rules"). 4.04 Operations. A. Storage of Product. No medical cannabis, cannabis-infused product, or related paraphernalia shall be displayed or kept so as to be visible to the general public from within or outside the Premises. All cannabis, cannabis-infused products, or related paraphernalia shall be kept and warehoused in the Premises' restricted access area (as defined in the Rules), out of view from the general public. Cannabis, cannabis-infused products,or related paraphernalia may only be removed from the Premises' restricted access area upon sale to a registered patient or if being returned to a licensed cultivation center for destruction or disposal. B. Hours of Operation. Dispensing Organization hours of operation shall be limited to 8am to 6 Monday— Friday and 9am to 3prn on Saturday, except as may be otherwise approved by the Village. C. Onsite Use is Prohibited. No marijuana shall be smoked, eaten or otherwise consumed or ingested in the Premises or the parking lot that serves Premises. D. Plan for Disvosal. Dispensary shall provide the Village, for approval, a plan for disposal of any medical cannabis orb roducts that are not sold to a patient or primary caregiver in a manner that protects any portion thereof from being possessed or ingested by any person prior to commencing dispensary operations, and shall abide by applicable State regulations. V ICS 1 RITY 5.01 A. Dispensary shall design and implement a security plan and security system that satisfies the requirements of Section 130(c)of the State Act and any additional requirements as may be reasonably imposed by the Village. Dispensary shall deliver to the Village a copy of its security plans and the Village hereby represents and warrants it will use its best efforts to keep all security related documents confidential. The security plan shall include facility access controls, surveillance systems, on-site security personnel, and other security measures required by State regulations. The security plan shall be reviewed and approved by the Police Department. 5.02 E ergency Points of Contact. M� A. Dispensary shall provide the Police Department with up to-date emergency contact information for the Dispensary and Dispensing Organization owners. In addition,the Dispensary shall provide up-to-date contact 4 information for all Dispensing Organization managers. Dispensing Organization managers are those key decision makers who will be on-site and authorized to make operational decisions. 5.03 Security Connection. A. Dispensary shall provide that all alarms and panic buttons and other applicable security features at the Premises are directly connected to Northwest Central Dispatch. 5.04 Video Camera Sec jj�t Syste . A. Dispensary shall provide the Police Department with access to their facility's video camera security system and video footage. Moreover, the Dispensary shall maintain and store video footage and also have redundant storage off-site. Video footage shall be provided of inside and outside of the Building. Outside video feed shall include coverage of the Dispensary entrance and parking lots and shall be able to legibly capture license plates of all vehicles entering and leaving the parking lot. The Police Department shall have access to all current and archived video footage. Should the Police Department need additional hardware and software to access the Dispensary video camera security system, Dispensary will be required to provide Police Department with necessary hardware and software at the cost of the Dispensary. 5.05 On-site Personnel. A. Dispensary shall provide no fewer than two (2) personnel to be onsite at all times during hours of operation, set forth in Section 4.04 B hereof. 5.06 On-site Security Personnel. A. Dispensary shall provide on-site security personnel during the hours of operation, set forth in Section 4.04 B hereof. 5.07 Sprinkler&Fire Protection System. A. Dispensary shall be required to have an approved automatic sprinkler and fire alarm system throughout the entire tenant space. 5.08 Health&Public Safety Inspections. A. Dispensary shall permit the Village to conduct inspections to ensure the health and safety oft e general public and occupants of the Premises, in accordance with the Rules. 5 5.09 Health & Public Safety Meetings. A. Dispensary agrees to meet with the Village, upon request, in order to maintain open lines of communication and discuss operations. VI FEES/CONTRIBUTIONS 6.01 Village Fee. A. Dispensary hereby acknowledges that the Village will incur certain extraordinary costs as a result of the location of the Dispensing Organization in the Village's Industrial Park. Such extraordinary costs include,but are not limited to costs for increased Police surveillance and monitoring, increased Fire Department monitoring, as well as increased costs for other departments necessarily incurred to protect and maintain the health, safety and welfare of Village residents and businesses. Dispensary agrees to pay to the Village a fee (the "Village Fee"), the designation of such as a sales or use tax, impact fee or otherwise to be determined at a later date giving due consideration to applicable State regulations cone g said fees. The payment from the Dispensary is considered to be a voluntary contribution to the Village, but given in response to the pledges made by the Village in this Agreement. B. Irrespective of the determined designation and exclusive of any sales tax the Village may receive from the State, the fee shall be as follows: a. I% for the first $2,000,000 in gross receipts received by the Dispensary from the sale of cannabis or cannabis-infused products and 2% of gross receipts received by the Dispensary from the sale of cannabis or cannabis-infused products greater than$2,000,000,payable quarterly with payment being received the last day of the month following the end of the previous quarter. There shall be a 10%late fee penalty that compounds monthly the first day of every subsequent month until the full payment is received. Dispensary shall submit to the Village a copy of the tax return required to be filed with the Illinois Department of Revenue with respect to Dispensing Organizations,which return shall set forth the gross sales for each monthly period submitted.The return shall be accompanied by payment to the Village of the Village Fee as above set forth. C. The payment of the Village Fee to the Village, though established in an amount equal to a percentage of the gross receipts of the Dispensary from the sale of cannabis or cannabis-infused products shall not in any way make the Village a partial owner of the Dispensing Organization. Such contribution is a voluntary one induced in part by the promises of the Village made within this Agreement, and does not entitle the Village to any role 6 whatever in the operations of the Dispensary other than any the exercise of such powers as it may choose to carry out as a governmental body. D. Should the designation of the Village Fee be challenged by the State or any other party for whatever reason, Dispensary shall not object or challenge any re-designation, it being understood that the Village is entitled to such payment, irrespective of form or designation, unless the payment, irrespective of form or designation, is declared by the State or a court of competent jurisdiction to violate the Act and/or other applicable law. VII GENERAL PROVISIONS 7.01 Default. A. If any Party to this Agreement shall fail to perform any of its obligations under this Agreement, the other non-defaulting Party may notify, in writing,the defaulting Party and advise of the alleged failure and demand that same be remedied or cured. No default or breach of this Agreement shall be deemed committed if the breach or default is remedied within thirty(30)calendar days,of receipt of such notice. If the defaulting party fails to remedy the default within thirty(30) calendar days, the non-defaulting party may seek such remedies that are available in a court of law, including specific performance and/or revocation of Village license. 7.02 Entire Agreement/ Amendment. A. This Agreement constitutes the entire agreement between the Parties and there are no oral or parole agreements, representations or inducements existing between the Parties which are not expressly set forth herein and covered hereby, This Agreement may not be amended or modified except by written agreement signed by all of the Parties. 7.03 Severabilit . A. If any provision, covenant, agreement or portion of this Agreement, or its application to any person, entity or property, is held invalid, such invalidity shall not affect the application or validity of any other provisions, covenants or portions of this Agreement and,to that end, any provisions, covenants,agreements or portions of this Agreement are declared to be severable. 7.04 Applicable Law. A. This Agreement shall be construed in accordance with the laws of the State of Illinois. 7 7.05 Notices. A. Any notice required pursuant to the provisions of this Agreement shall be in writing and be sent by certified mail or express courier tote following addresses until notice of change of address is given and shall be deemed received on the fi fth calendar day following deposit in the U.S. Mail or one day after deposit with an express courier. If to Dispensary: Joseph Friedman Agent in Charge 10 Queens Way Lincolnshire, IL 60069 Copy to: Stuart Gimbel General Counsel 120 S. Riverside Plaza, Suite 1625 Chicago, IL 60606 If to Village: Village Clerk Village of Buffalo Grove 50 Raupp Boulevard Buffalo Grove, IL 60089 Copy to: William G. Raysa, Esq. Tressler LLP 22 S. Washington Ave Park Ridge, 1 6 0068 7.06 Counterparts. A. This Agreement may be executed in several counterparts,each of which shall be deemed an original and all of which shall constitute but one and the same agreement, 7.07 Assignmet. A. Dispensary may not assign, or otherwise transfer or encumber all or any part of its interest in this Agreement or the Village License. 7.08 Term/Renewal. A. Tenn. The to of this Agreement shall commence upon execution by the Parties and terminate when the Dispensary no longer operates a Dispensing Organization in the Village. B. Termination. Should the Act be repealed or not extended beyond the initial Pilot period, then this Agreement shall terminate and Dispensary shall cease doing business in the Village. Should the State extend the time period for the Act or enact new legislation enabling the Compassionate Use of Medical Cannabis Program(or its successor) to continue, then, so long as Dispensary maintains a valid Registration and valid Village 8 License, this Agreement shall automatically be renewed annually for each and every year subsequent to the date wherein this Agreement is continued. Notwithstanding the above referenced termination by Dispensary, Dispensary shall have the right to terminate this Agreement and cease operations within the Village by giving the Village written notice of its intention to terminate at least ninety(90)calendar days prior to the termination date in effect; provided, however that in the event that Dispensary terminates this Agreement, without cause, and ceases operations,Dispensary covenants and agrees not tot ereafter relocate the Dispensing Organization outside of the corporate limits of the Village for a period of one (1)year after the date of such termination. 7.09 Litigation and Defense of Agree me A. Litigatio . If, during the to of this Agreement, any lawsuits or proceedings are filed or initiated against either Party before any court, commission, board, bureau, agency, unit of government or sub-unit thereof, arbitrator,or other instrumentality,that may materially affect or inhibit the ability of either party to perform its obligations under, or otherwise to comply with, this Agreement ("Litigation"), the party against which the Litigation is filed or initiated shall promptly deliver a copy of the complaint or charge related thereto to the other party and shall thereafter keep the other party fully informed concerning all aspects of the Litigation. B. Defense. The Village and Dispensary each agree to use their respective best efforts to defend the validity of this Agreement, and all ordinances and resolutions adopted and agreements executed pursuant to this Agreement, including every portion thereof and every approval given, and every action taken, pursuant thereto. 7.10 Release of Information A. Dispensary shall cause to be delivered to the Village, on a quarterly basis, the Illinois Retailers' Occupation Tax,Use Tax and Service Occupation Tax returns and/or other documentation submitted by Dispensary to the Illinois Department of Revenue, which detail the amount of Sales Tax that Dispensary paid to Illinois Department of Revenue with respect to the gross sales. If necessary, Dispensary shall provide the Village with a limited power of attorney,addressed to and in a form satisfactory to the Illinois Department of Revenue, authorizing the Illinois Department of Revenue to release to the Village all gross revenue and Sales Tax information submitted by Dispensary to the Illinois Department of Revenue. Additionally, in the event that the Illinois Department of Revenue does not make available to the Village said documentation, Dispensary shall provide alternative documentation that details the amount of Sales Taxes that Dispensary paid t o t he Illinois Department of Revenue. B. In the event that any sales tax returns by Dispensary that have been submitted to the Village are amended, Dispensary shall promptly forward a photocopy of such amended sales tax returns to the Village, clearly identifying them as an amendment of a sales tax return previously submitted to the Village. 9 C. The sales tax returns and any amended sales tax returns submitted to the Village shall be certified by Dispensary to the Village as being true, accurate and complete copies of the originals thereof D. Dispensary shall provide to the Village prior to any sales tax rebate payment a copy of the original cancelled checks for payment oft e sales tax as reflected on the Illinois Department of Revenue forrns from Dispensary certified by Dispensary to the Village as being true and accurate copy of the originals thereof. IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their respective proper officials duly authorized to execute the same as of the day and the year first above written. VILLAGE OF BUFFALO GROVE PD1 MEDICAL 111, LLC B�y B JE FA RAI MAN, Village President U ATTEST: ATTEST: 0 By B y VILLAGE CLERK lq-77 ®r�, r 7 > C el, 10