2020-01 - APPROVING A DEVELOPMENT AND OPERATING AGREEMENT BETWEEN THE VILLAGE OF BUFFALO GROVE AND PDI MEDICAL III, LLC - 01/06/2020 RESOLUTION NO. 2020—01
A RESOLUTION APPROVING A DEVELOPMENT AND OPERATING AGREEMENT
("AGREEMENT") BETWEEN THE VILLAGE OF BUFFALO GROVE AND PDI MEDICAL III, 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 III, LLC for a Special Use for an Adult Use
and Medical Cannabis Dispensary ("Dispensary")for the property at 830-840 Milwaukee Ave, Buffalo
Grove, IL 60089 and;
WHEREAS, Village may incur certain extraordinary costs as a result of the location of the
Dispensary 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 III, 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 —Stein Johnson Smith Pike
NAYS: 1 -Weidenfeld
ABSENT: 1 - Ottenheimer
PASSED: January 6, 2020
APPROVED: January 6, 2020
Beverly Suss dlage President
ATTEST:
Janet ... irabian, Village Clerk
DEVELOPMENT AND
OPERATING AGREEMENT FOR DISPENSING ORGANIZATION
830—840 MILWAUKEE AVENUE BUFFALO GROVE ILLINOIS
THIS DEVELOPMENT AND OPERATING AGREEMENT ("Agreement") is made and
entered into as of this 6`h day of January, 2020, 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 PDI Medical III, 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".
RECITALS
A. On August 1, 2013, the Illinois Legislature enacted the Compassionate Use of Medical
Cannabis Pilot Program Act, 410 ILCS 130 et seq. ("Medical Cannabis 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 130/5 (g))
B. The Medical Cannabis 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 December 7, 2015, the Dispensary received an Authorization from the State to operate a
medical cannabis dispensary in the Village, District 27, Lake County, Illinois.
D. On June 25, 2019, the Illinois Legislature enacted the Cannabis Regulation and Tax Act, 410
ILCS 705, et seq. ("Adult Use Cannabis Act"). The purpose of the Adult Use Cannabis Act
was to legalize the use of cannabis for persons 21 years of age and older(410 ILCS 705/10-5).
E. The Dispensary requested a special use permit to allow the Dispensary to commence the sale
of adult use cannabis which may or may not include medical cannabis from the same
dispensary.
F. The Village has agreed 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 and to dispense both medical cannabis and adult use cannabis.
G. 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 acknowledge, the Parties do hereby agree as follows:
I
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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.
II
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 Dispensary's Application for a Registration for Operation.
Dispensary hereby represents and warrants that it has obtained or will obtain from the
Illinois Department of Financial and Professional Regulation("Department") the authority
to operate a medical cannabis dispensary and an adult use cannabis dispensary within the
Village, pursuant to the Medical Cannabis Act and the Adult Use Cannabis Act
respectively. Should the Dispensary not receive approval from the State, then this
Agreement shall be deemed null and void.
IV
ZONING AND BUILDING
4.01 Building Site for Dispensing Organization.
A. Zoning. Dispensary hereby agrees that upon receipt of its Special Use Permit and
Certificate of Occupancy issued by the Village, it shall be permitted to open and operate
the Dispensing Organization at 830—840 Milwaukee Avenue, Buffalo Grove, Illinois.
Dispensary will comply with all of the applicable requirements of the Buffalo Grove
Municipal Code and the Special Use Ordinance.
B. Tenant Space. The Dispensary facility is approximately 4,900 square feet in the Shops
of Buffalo Grove at 830 — 840 Milwaukee Avenue Buffalo Grove, Illinois (the
"Premises").
4.02 Building Material and Design.
A. Design. 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 approximately lighted to
ensure safety for all who work and conduct business at this facility, and shall meet all
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Village requirements for parking lots.
C. Signage/Exterior Visibility. All exterior signage shall be in compliance with the Sign
Regulations established in Chapter 14 of the Buffalo Grove Municipal Code and the
Adult Use Cannabis Act. In addition, no exterior signage or window signage shall use
the word "marijuana," "cannabis," or any other word, phrase or symbol 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 of the
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 Refuse Containers.
All refuse containing cannabis or cannabis-infused products shall also be kept within
the 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 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 customer,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
gam to 10pm Monday - Sunday, except as may be otherwise approved by the
Village.
C. Onsite Use and Sampling is Prohibited.No marijuana,cannabis,or cannabis infused
product shall be smoked, eaten, sampled or otherwise consumed or ingested in the
Premises or the parking lot that serves Premises.
D. Plan for Disposal. Dispensary shall provide the Village, for approval, a plan for
disposal of any cannabis or byproducts that are not sold to a patient or primary
caregiver or to any person 21 years of age and older 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
PUBLIC SAFETY SECURITY
5.01 Security.
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Dispensary shall design and implement a security plan and security system that
satisfies the requirements of the Medical Cannabis Act and the Adult Use Cannabis
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 and will do its best efforts to notify the Dispensary in advance
of disclosing the information. 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 Emergency Points and Contact.
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 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.
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 Securitv S stem.
Dispensary shall provide the Police Department with access to its 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 both 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.
Dispensary shall provide no fewer than two (2) personnel to be onsite at all times
during hours of operation as set forth herein.
5.06 On-Site Security Personnel.
In addition to and exclusive of on-site sales staff, Dispensary shall provide on-site
security personnel during the hours of operation, set forth herein.
5.07 Sprinkler & Fire Protection S sue.
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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.
Dispensary shall permit the Village to conduct inspections to ensure the health and
safety of the general public and occupants of the Premises, in accordance with the
Rules.
5.09 Health & Public Safety Meetings.
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. 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 an
impact fee(the"Village Impact Fee"). 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. 1% for the first $2,000,000 in gross receipts received by Dispensary from the
sale of medical cannabis or medical cannabis-infused products and 2%of gross
receipts received by the Dispensary from the sale of medical cannabis or
medical 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 medical cannabis
or medical 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
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part by the promises of the Village made within this Agreement, and does not entitle
the Village to any role 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 Impact 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.
E. In addition to the Village Impact Fee, Dispensary agrees to pay to the Village the
Village's full share of the sales tax in the amount of three (3%) percent of the gross
receipts from the sale of cannabis and cannabis infused products, in addition to the one
(1%) retail occupation tax and the one (1%) Buffalo Grove Home Rule Tax ("Taxes")
from the period of January 1, 2020 to the date that the State of Illinois commences
collection of these Taxes,which is anticipated to be on or about July 1, 2020.
F. The Village's prepared food and beverage tax payable on those items to which the
Village's prepared food and beverage tax applies, shall also be paid to the Village
commencing January 1, 2020.
VII
GENERAL PROVISIONS
7.01 Default.
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, or if unable to do so fails to take good
faith efforts to cure the default, the non-defaulting party may seek such remedies that are
available in a court of law, including specific performance and/or revocation of Village
zoning approval.
7.02 Entire Agreement Z Amendment.
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 Severability.
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
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be severable.
7.04 Applicable Law.
This Agreement shall be construed in accordance with the laws of the State of Illinois.
7.05 Notices.
Any notice required pursuant to the provisions of this Agreement shall be in writing
and be sent by certified mail or express courier to the following addresses until notice
of change of address is given and shall be deemed received on the fifth calendar day
following deposit in the U.S. Mail or one day after deposit with an express courier.
If to Dispensary: John Sullivan
Cresco Labs
Senior Vice President
400 W Erie Street, Suite 110
Chicago, IL 60654
Copy to: Daniel Shapiro
Shapiro &Associates
618 Academy Drive, Unit B
Northbrook, IL 60062
If to Village: Village Clerk
Village of Buffalo Grove
50 Raupp Blvd.
Buffalo Grove, IL 60089
Copy to: Patrick T Brankin, Esq.
Schain Banks
70 W. Madison Street, Suite 5300
Chicago, IL 60602
7.06 Counterparts.
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 Assignment.
Dispensary may not assign, or otherwise transfer or encumber all or any part of its
interest in this Agreement or the State License.
7.08 Term_/Renewal.
A. Term. The term of this Agreement shall commence after execution by the Parties
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and commencement of operations by the Dispensing Organization and terminate
when the Dispensary no longer operates a Dispensing Organization in the Village.
B. Termination. So long as Dispensary maintains a valid Registration and valid State
License, this Agreement shall automatically be renewed annually for each and
every year subsequent to the date wherein this Agreement is continued. 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 to thereafter relocate the
Dispensing Organization within ten(10) miles 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 Agreement.
A. Litigation. If, during the term 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 to the
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
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amended sales tax returns to the Village,clearly identifying them as an amendment
of a sales tax return previously submitted to the Village.
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 of the sales tax as reflected on the Illinois
Department of Revenue forms from Dispensary certified by Dispensary to the Village
as being true and accurate copy of the originals thereof.
7.11 Miscellaneous.
A. Nothing in this Agreement shall be construed to amend or terminate any existing other
Agreement between the Parties.
B. In addition to all other required security measures,Dispensary agrees that the Village
may conduct random unannounced compliance checks of its operations.
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 fast above written.
VILLAGE OF BUFFALO GROVE PDI MEDICAL III
By:Z"- 194444A&Z By:
Beverly Sussm Village President Joe C to ian rued Representative
ATTEST: A
By: 1 By:
Janet S' " , VILLAGE CLERK AntliV CaKccio,Attorney
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