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HomeMy WebLinkAbout3/2/2016 - STAFF REPORTS - 00 Jay Thompson From: larry <desert.ratking@earthlink.net> Sent: Wednesday, March 02, 2016 3:35 PM To: Jay Thompson Subject: please share comments with council members re: development and conservation I am veryconcerned that government groups in the Coachella Valle are not adequately considering issues of g g p Y 9 V g environmental sustainability as new housing, hotels, and commercial development are approved. Given our obvious current drought and the somewhat more subtle (and insidious) changes in climate, I urge the Palm Springs Council to carefully evaluate how development plans in the City will impact limited environmental resources.What will be the impact,for example, of the current redevelopment program on Palm Canyon Drive?Are buildings under consideration being built to high LEED standards? What sort of offsets exist to account for increased power needs for this development. While it is very difficult to agree to a limit on new development, the Desert can simply not support unlimited new development. Respectfully Laurence D. Fechter, Ph.D. Environmental Toxicologist 1 3 Jay Thompson From: Jane Vogt <jevogt@icloud.com> Sent: Wednesday, March 02, 2016 3:14 PM To: Jay Thompson Subject: Green Building Standards Jay, good afternoon. I encourage the Palm Springs council members to create a green building standard for all new commercial buildings. The City of Palm Springs has helped fund approximately 900,000 square feet of new buildings downtown. It is vital that the city incorporate the highest green building standards to mitigate the green house gases (GHG)from the electricity and gas which heats, cools, and lights this valuable expansion. I recommend that all new construction should ideally be net zero (with no carbon emissions). At the very least, all new construction should meet LEED Gold standards to assure minimal GHG emissions. Please let me know if you have any questions or would like assistance in formulating the policy.This is one step we can take together to reduce the negative impact of greenhouse gases. Thank you for your consideration. Jane Vogt Palm Springs, CA 92264 760-567-3071 (cell) 715-747-6396 (Madeline Island) 1 Jay Thompson From: sidney roberts <sidneymroberts@gmail.com> Sent: Wednesday, March 02, 2016 3:05 PM To: Jay Thompson Subject: Green building standards Dear Mr Thompson, Palm Springs needs to step up to the plate and require LEED Gold standards for developers doing projects that the City helps fund. Of course, no carbon emission energy is what is ideal and something to go toward, but in the meantime, making a concerted effort to change the building standards is crucial. Following by example is courageous and forward thinking. Best regards, Sidney Roberts 1010 East Deepwell Rd Palm Springs, Ca 92264 t Jay Thompson From: Susan Adrian <susan.adrian@gmail.com> Sent: Wednesday, March 02, 2016 2:48 PM To: Jay Thompson Subject: Require Commercial Buildings to meet LEED Gold Standards Hi Jay, I'm urging you to help turn Palm Springs into a green city. Not only is it good for residents but it's GREAT for business. Palm Springs needs to attract a new generation of visitors. Marketing the city as green makes it MUCH more interesting and desirable to a younger demographic who we want to encourage to come to Palm Springs. Not only will they give the city a good vibe and new business, it will also create a new, young market from whom the city can benefit for the next 50 years. An amazing ROI. Best, Susan Adrian r Jay Thompson From: Susan Brimhall <killybee@msn.com> Sent: Wednesday, March 02, 2016 3:58 PM To: Jay Thompson Subject: Building Standards...GREEN Dear Jay, have been reading about all the construction planned for Palm Springs and I am concerned about standards for these projects. We are in a critical time with our environment! Warming temperatures and increased pollution indicate a critical need to do something to curtail the rise of greenhouse gases! As Palm Springs continues to build new buildings, I believe, we must have strict regulations to be followed, supervised, and checked on over time. These regulations would make sure buildings have as little and ideally no carbon emissions! There are construction standards, the LEED Gold, that would assure minimum GHG emissions. At the city council meeting I hope you will be pro-active in creating a new green building standard for new commercial buildings. New technologies are available now to aid in achieving this goal, please be an advocate! It is imperative the city council be advocates also, helping our city be a role model for the future and protecting our planet in a safe environmental way. Thanks, for presenting this! Environmentally concerned resident of Palm Springs, sue brimhall t Study& Report to the City of Palm Springs from Rick Pantele&Steve Rosenberg—January 27, 2016 Study and Report to the City of Palm Springs on Medical Cannabis from Rick Pantele & Steve Rosenberg January 27, 2016 Qul3�--i� L�ca2MFNr 1 Study& Report to the City of Palm Springs from Rick Pantele&Steve Rosenberg—January 27, 2016 WE NEED TO REVISE OUR CANNABIS ORDINANCES The time is now and here is why... i ice. ;elk 000 Q INTRODUCTION In 2015 we were pleased to see our City take united action in voting to approve new zones for Collectives, lessen impinging restrictions, add two additional Collective Permits and begin requiring laboratory testing. By doing so, the City has given its patients better access to quality controlled medication. All of these elements are bringing planned growth to the cannabis businesses in our City. But we feel the City can do better. We are currently limiting ourselves in several ways. These limitations ultimately affect the patients and the City, which by extension includes all of our residents. In the decade our City has been discussing medical cannabis; public perceptions about cannabis have improved significantly. As a result, the political climate has changed at the Federal, State and City levels. Most landlords are no longer afraid to rent their properties for cannabis operations. The discussion that follows identifies the problems we see and the solutions we propose for them. We note with great interest that the solution to one problem often solves several other problems. This is particularly true with"the illegals", and we are not referencing our Hispanic and Latino residents. 2 Study& Report to the City of Palm Springs from Rick Pantele&Steve Rosenberg—January 27, 2016 THE PROBLEMS & SOLUTIONS LICENSING & TAXES There are currently five (5) licensed collectives operating in Palm Springs. They are all reporting and paying their 10% cannabis AND 9% sales taxes monthly. Almost half of the 9% sales tax (4-1/16%) directly benefits the City. (It includes the embedded 1% municipal tax, the embedded 2-1/16% local fund taxes and the I% Measure J tax.) A sixth license is pending. There are also four(4) un-licensed operations in the City that are reporting and paying their 15% cannabis taxes monthly. Unfortunately, it is not known if these illegal operations are paying sales tax. It is not even known if they are non-profit collectives as required by state law. There are ten (10) additional un-licensed operations which are either storefronts or delivery services in the City that are paying NO taxes. Again, it is not known if they are non-profit collectives. We have a list which is available to you. In summary, only five (5) of the nineteen (19) operations (26%) in Palm Springs are legal and compliant with City and State law. Worse yet, only nine (9) of the nineteen (19) operations (47%) are paying the cannabis tax, let alone the sales tax. 3 Study& Report to the City of Palm Springs from Rick Pantele&Steve Rosenberg—January 27, 2016 We recommend the following solutions: The illegal operations must be shut down once and for all. Notify all of them (in a legal fashion) that the gig is up. Give them no more than 90 days to become compliant including any unpaid taxes. If becoming compliant requires moving to a new location, the City Manager at his discretion may allow an additional 60 days. dL e 1 We should issue additional permits only for those that comply. After that, use Police and other enforcement powers to close the others down. Incentivize reporting of illegal operations with cash rewards. Calling 800-ILLEGAL should be similar to calling Crime Stopper hotlines or a program designed to call code compliance at city hall and or the city manager and attorney. 4 Study& Report to the City of Palm Springs from Rick Pantele&Steve Rosenberg—January 27, 2016 HEALTH ISSUES & POTENTIAL LIABILITY FROM ILLEGALS M# d , By far the most important concern is the health of patients. It is not known if these illegal operations are testing their products as is required by City ordinance. This obviously poses health risks for patients. These risks include contaminants such as mold, mildew, pollen, fungicides and pesticides. There is also the risk of patients over or under dosing because the THC levels of their medications are not known. * There are reported incidents where patients have over dosed themselves using edibles which have resulted in psychotic episodes leading to death. We propose a major educational initiative here for patients, law enforcement, paramedics and other treating professionals. * While the City is pursuing some of these illegal operators from a compliance and legal perspective, they continue to operate. By accepting tax payments from some of them the City is implicitly allowing them to operate_ It will only take one tragic incident (or heaven forbid a death)to spark a lawsuit saying the City did not do enough to stop these operations, was complicit, and contributorily negligent. The issue isn't whether the City would or would not be found liable. The issue is how to avoid being involved in such litigation. The potential liability for the City is substantial. The only solution: Close the illegals, as we recommended above. *See attached pdfs with related information- 5 Study& Report to the City of Palm Springs from Rick Pantele&Steve Rosenberg—January 27, 2016 J SAFE AND CONVENIENT ACCESS FOR PATIENTS Current City ordinances only allow collectives to operate in certain commercial, R&D, manufacturing, energy and airport zones. By definition, many of these zones are devoid of activity after three or four in the afternoon and on weekends. These areas typically do NOT have street lights and the collectives will be operating after dark for approximately 8 months of the year. Combined with the isolation, darkness makes patients more vulnerable to crime than if the collectives were in active retail areas. We have attached several pictures that illustrate the problem. 01 J A ' 6 Study& Report to the City of Palm Springs from Rick Pantele&Steve Rosenberg—January 27, 2016 The permitted areas also tend to have fewer transportation options for those who do not drive. Often patients have to walk or bike several blocks (or more) from a main thoroughfare to get to these isolated dispensaries. Finally, zoning limitations have caused a concentration of collectives in one area of town, while providing no service to patients in other areas. MIN We recommend the following solutions. We must change zoning regulations to allow collectives to operate in most shopping centers. Remove the Palm Canyon Drive restriction, or at the very least change the Palm Canyon Drive restriction to apply only to the Downtown and Uptown areas, say from Vista Chino to Ramon. Issue two additional collective licenses for these expanded zones. 7 Study& Report to the City of Palm Springs from Rick Pantele&Steve Rosenberg—January 27, 2016 WIDE VARIETY OFAVA ILA BLE & A FFORDA BLE MEDICA TION Currently only collectives are allowed to cultivate. At this time none of the cultivations in Palm Springs are of substantial size. There are 3 primary types of cannabis, namely Sativa, Indica and Hybrid. Each of these primary types has as many as 75 different strains. Different strains are used to treat different medical problems. For instance, strains used to treat PTSD are not indicated for relieving pain and vice versa. It is difficult for any collective to stock the many varieties available. It is impossible to cultivate more than a handful of strains without a large operation. As a result many strains are not available or the supply is limited. Collectives have to "import" their medications from out of town. The converse is NOT true, as collectives are not allowed to sell medications to other collectives outside of Palm Springs. This restriction may have made sense in the beginning when adjacent cities were not allowing any form of medical cannabis. However, the situation has changed. In simple terms, we are not retaining Palm Springs dollars in our City, nor are we retaining Valley dollars in our local area. Economics 101 tells us that the prices patients will have to pay are high, and for some strains VERY high- 8 Study& Report to the City of Palm Springs from Rick Pantele&Steve Rosenberg—January 27, 2016 We recommend the following solution: We must allow legal sales outside of the City immediately. We must change City ordinances to allow for cultivation only licenses. This will allow for many more strains to be grown for the patients in our City. We can debate how many and what size later, but we are facing deadlines to get this ordinance on the books NOW as is explained below. MISSED FINANCIAL OPPORTUNITES Investment Opportunity Based on figures provided by the Department of Finance, the City is currently on track to collect $1.3 million in cannabis taxes in the current fiscal year. That is based on currently reported revenues. There is a distinct possibility that there is under reporting due to the cash nature of the business. As noted above, the City is missing out on enormous tax revenues from illegal operations that are not paying at all. If they were all paying, the City could easily double its cannabis tax revenue to $2.6 million. It is worth noting that IF the City were to permit deliveries from other than permitted collectives, there is no tax mechanism in place to collect revenues from deliveries. 9 Study& Report to the City of Palm Springs from Rick Pantele&Steve Rosenberg—January 27, 2016 IF OPPORTUNITY DOESN'T KNOCK, DOORSBUILD A On Tuesday night, January 19, 2016, Desert Hot Springs moved ahead on allowing five massive cultivations totaling over 1.59 million square feet. It is estimated that the revenues of these cultivations will exceed $1 BILLION dollars within 2 years. Their cultivation annual tax is $25 per square foot for the first 3,000 square feet, and then $10 per square foot after that. This tax is extraordinarily low considering the value of the crops that will be grown, yet it will yield over $15 million annually for Desert Hot Springs when fully developed. There is no limit on the number of cultivation licenses that may be issued. Cathedral City and other Desert Cities are also moving ahead on cultivation. Clearly, our permitted collectives will be buying product from these cultivations and potential Palm Springs dollars will be flowing into adjacent City coffers along with the tax revenues. If Palm Springs does NOT enact an ordinance allowing cultivation before March 1", 2016 then the City will have lost its right to regulate or tax those cultivations. Sacramento will be in control. We will have lost this opportunity forever. 10 Study& Report to the City of Palm Springs from Rick Pantele&Steve Rosenberg—January 27, 2016 New Nr)OF- z z 0 In fairness, we must note A1321, which will remove this deadline, is on its third reading in the Assembly. Senate concurrence and the Governor's signature are anticipated in a timely manner. It is our opinion that we cannot take any chances and should not rely on the extension. There is a very high (no pun intended) probability that there will be an initiative on the November 1, 2016 statewide ballot to permit recreational use of cannabis. And there is a high probability it will pass. Some have described this as California's Second Gold Rush. The dollars and potential taxes generated from recreational use will put medical cannabis in a distant second place. Experiences in Colorado and Oregon indicate that reported usage will triple. Washington State is expecting $1 billion dollars of revenue from cannabis in the current fiscal year. We recommend the following solutions: As noted previously, we need to close the illegal operations. If for some reason we are unable to do so, we must find a liability free way to collect taxes from all of them. We must enforce our ban on deliveries from outside the city. If we did confiscations of a few delivery vehicles, this problem would probably disappear pretty quickly. If this cannot be done, then we need to develop a mechanism to license and tax them. We must explore the enormous financial potential of cultivation. We must develop a cultivation only ordinance. At the very least, we need to have a place marker ordinance on the books before March 1'. This could even be an urgency ordinance. We should begin discussions now on how we will regulate and tax recreational cannabis use should it be approved by the voters in November. 11 Study& Report to the City of Palm Springs from Rick Pantele&Steve Rosenberg—January 27, 2016 Final Thoughts Palm Springs operated with a balanced budget, even during the worst of times, because of the proactive leadership of the City Council. They made tough choices during a tough recession. As a result, we find ourselves in the enviable position today to have restored our staffing levels and hours and have begun catching up on a lot of deferred maintenance. We are the only City in the Valley that is moving ahead with major redevelopment downtown and elsewhere. That's the good news. As Mayor Moon has pointed out, the City is carrying a heavy debt load from bonds, many of which were issued years ago. The City has refinanced many of these bonds at lower interest rates. Now is the time to pay them off. The City has reserves that would cover many, but not all, contingencies. Now is the time to make those reserves comfortable and not merely adequate. The recommendations above will generate construction jobs for local contractors and long term employment for those working in the cannabis industry. Wouldn't you like to have the"buzz" pay for The Buzz? The suggestions above would allow you to expand AND pay for The Buzz for the next decade! We refer the doubting Thomases to the separate spreadsheet provided. Palm Springs has been the leader of the pack when it comes to dealing with medical cannabis in a thoughtful, productive and positive way. We are the first, and so far only, City to require testing. We care about our patients and help them with progressive well thought out ordinances. As we have learned, we have not been afraid to amend our ordinances. The time has come to do so again. We stand to miss out on these golden opportunities to help our patients and our City by bringing in revenue unless action is taken immediately. Thank you for taking time to review and discuss this report. J ante&and Stem 91"enfi"g 12 With the potential for hundreds of millions of dollars in new revenue on the table, California lawmakers are pursuing a 15 percent medical marijuana sales tax. Sen. Mike McGuire, D-Healdsburg, on Wednesday introduced legislation to set a statewide assessment; local jurisdictions would still be allowed to pass their own additional sales taxes. McGuire said he was committed to following long.-awaited regulations approved by legislators in the final days of session last September, nearly two decades after voters first legalized medical marijuana,with a funding source for the enforcement structure the law created. "We know these dollars will be put to strengthening our communities,"he said. Annual sales of medical marijuana are estimated at more than $i billion in California, according to McGuire, meaning that his tax could bring in more than $15o million for the state. It would be divided primarily between the general fund and grants for local oversight agencies, with some money for state parks, environmental restoration projects on land damaged by illegal marijuana cultivation, and county drug and alcohol treatment programs. The 15 percent tax mirrors what proponents of a leadin initiative.to legalize recreational pot have included in their November measure. McGuire pointed to the experience of Colorado, where the number of medical marijuana patients actually increased after voters legalized recreational use of the drug in 2012 because they paid a lower tax rate. "The identical tax rate has worked best,"he said. McGuire's bill needs a two-thirds vote in the Legislature, which will require at least some Republicans, who are usually unwilling to support tax increases. Both the Senate and Assembly Republican caucuses declined to comment on the proposal; however, many of their members joined with Democrats to pass the medical marijuana bills last year. Assemblywoman Melissa Melendez, R Lake Elsinore, who did not vote for the regulations, said lawmakers might be reluctant to tax something that people rely on as medicine. "I anticipate that it will be a difficult choice for members of both parties," she said. But McGuire said taxes have not hindered patients'access to medical marijuana in Colorado and Washington, which also legalized recreation pot in 2012. He added that there is a difference between federally regulated prescription drugs,which are not taxed, and medical marijuana, which doctors can only recommend. "I'm not saying it's right, but there has to be a clear distinction,"he said. s� 9 ��