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.
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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
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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
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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.
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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
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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.
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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
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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.
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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
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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.
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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,
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