AGENDA ITEM – STAFF REPORT TO: HONORABLE CHAIRPERSON AND COMMISSIONERS FROM: JEFFREY O’NEAL, AICP, CITY PLANNER SUBJECT: APPLICATION NO. 20-23, THE VALLEY AGRICULTURAL HOLDINGS, LLC COMMERCIAL CANNABIS PROJECT DATE: DECEMBER 29, 2020 ISSUE In the matter of Application No. 20-23, the Valley Agricultural Holdings LLC project, shall the Planning Commission: 1. Make a determination pursuant to the California Environmental Quality Act, make a determination of General Plan consistency for the disposal of real property, and approve a conditional use permit; and 2. Make recommendations to the City Council regarding a general plan amendment, rezone, and development agreement? BACKGROUND The State of California’s Medical and Adult Use Cannabis Regulation and Safety Act (MAUCRSA) is the primary statute that regulates personal, medicinal, and commercial cannabis activity in the state. In addition to MAUCRSA, Chapters 8.37 (Commercial Cannabis Businesses) and 17.99 (Commercial Cannabis Overly District) of the Mendota Municipal Code (MMC) provide regulations applicable to non-personal cannabis activities at the local level. Pursuant to these local regulations, an applicant wishing to undertake commercial cannabis activities must meet certain location criteria, receive approval of a conditional use permit, and enter into a development agreement with the City. Dating to early 2019, the City has been in discussions with various entities regarding development of a commercial cannabis facility on a portion of a City-owned parcel (APN 013-030-68ST) adjacent to the City’s wastewater treatment plant (WWTP). In October 2019, the City entered into a purchase and sale agreement with Valley Agricultural Holdings, LLC. On October 13, 2020 the Planning Department received an application from Valley Agricultural Holdings, LLC requesting a variety of entitlements and actions to facilitate the construction and operation of a commercial cannabis facility as discussed. The Department accepted the application as complete on October 31, 2020 and notified the applicant accordingly. Owner: City of Mendota Applicant: Valley Agricultural Holdings, LLC Representatives: Dustin Moore, Daniel Pocius, Kevin Schmidt Location: APN 013-030-68ST (portion) See attached map and photo 1 Site Size: Approximately 59 acres of an existing 114-acre parcel1 General Plan: Public/Quasi-Public Facility Zoning: P-F/CO (Public Facilities with Commercial Cannabis Overlay District) Existing Use: Vacant Surrounding Uses: North – Wastewater ponds, vacant; P-F (portion with CO) East – Vacant; AE-20 (Fresno County) South – Inactive biomass plant; M-2/CO West – CalRENEW-1 solar PV facility; P-F/CO Street Access: None. Proposed access to be via easement to Belmont Avenue The Project Site is currently vacant, although the northwestern panhandle of the parcel in question supports an approximately-15-acre pond occasionally utilized by the City for disposal (evaporation) of excess treated effluent from the WWTP. The parcel to the immediate west contains an operational solar photovoltaic (PV) electricity generation facility. All other surroundings parcels are vacant, although APN 013-030-61S to the southwest contains the remnant infrastructure of the Mendota Biomass (Covanta Energy Corporation) facility, which ceased operation in 2015. The Fresno Slough runs generally south-to-north approximately 2,000 feet to the east. ANALYSIS Application No. 20-23 proposes construct and operate a facility for the cultivation, processing, and distribution of commercial cannabis. It proposes approximately 39.7 acres (1.7 million square feet (SF)) of outdoor cultivation area and approximately 68,000 SF of structures housing employee workspaces, offices, and ancillary facilities along with nurseries, and processing areas. To meet Fire Department requirements, the Project will likely require installation of a pumping station and/or one or more tanks for water storage. Two basins totaling approximately 2.6 acres would provide storm drainage retention. The remainder of the Project Site consists of vehicular and pedestrian circulation areas, parking, and open area. Access to the Project Site would be provided via a new 26-foot wide paved or all-weather access road that would extend 1,400 feet east from the northwest corner of the Project Site along and adjacent to the northern boundary of the neighboring PV facility, then south approximately 1,900 feet to the current terminus of Belmont Avenue. Alternately, access could be provided from the south via an easement through APNs 013-030-62S and 66S from Belmont Avenue to the southwestern corner of the Project Site. The proposed internal circulation, an all-weather-surface road, would follow the perimeter of the Project Site to provide access to the structures and outdoor cultivation areas and would circle the stormwater and fire pump facilities. The employee parking area would provide approximately 64 delineated parking spaces located directly north of the employee buildings. An emergency vehicle hammerhead turnaround would be constructed in the north-central region of the Project Site. The site would be enclosed by a seven (7)-foot chain- 1 The parcel abutting to the west, APN 013-030-67ST, is not a separate legal parcel, but rather a lease parcel owned by the City and leased to CalRENEW-1, LLC for the construction and operation of the solar PV facility. Therefore, APNs 013-030-67ST & 68ST are simply two portions of an existing legal parcel containing approximately 164.80 acres. For the sake of simplicity and since one component of the proposed project consists of the conveyance of the 59-acre Project Site within 68ST to the applicant, this report and accompanying documents treat 68ST as a standalone parcel. 2 link fence. Each of two entrances would have a 15-foot-high double-gate entry with a manned guardhouse including cameras and security lighting. The applicant estimates the Project will use between 100 and 150 acre-feet (AF)2 of water per year, or roughly the equivalent of 180-420 residences.3 On September 8, 2020, the City issued a Conditional Will-Serve Letter to Valley Agricultural Holdings, LLC stating the City’s willingness and capability to provide municipal water to the Project subject to certain conditions. There is no timeline under which the Project must secure an alternative source of water. The Project will connect to the City’s water system via installation of a 6-inch water main extending west approximately 1,400 feet from the Project Site along the northern boundary of the PV facility, then south approximately 2,300 feet within the Belmont Avenue alignment, where it will connect to the end of an existing 10-inch water main. The Project will connect to the City’s 20-inch South Side Sewer Interceptor, which runs due south-north within the Belmont Avenue right-of-way and its prolongation, approximately 1,400 feet west of the Project Site. The Project would employ approximately 20 persons on a year-round basis and an additional 40 persons during planting and harvesting (April through October). Employee commuting would comprise the majority of vehicles trips; distribution via van (more likely) or truck (less likely) would result in approximately six (6) daily trips. The City intends to convey the Project Site to the applicant via recordation of a deed and accompanying legal description. That action is not subject to the approval or recommendation of the Planning Commission, but rather is entirely within the purview of the City Council. However, as described below, the conveyance is subject to a determination by the Planning Commission as to whether disposing of the property conforms to the General Plan. GENERAL PLAN & ZONING The site is currently designated for Public/Quasi-Public Facilities (P/QP) by the General Plan and is zoned P-F/CO (Public Facilities/Commercial Cannabis Overlay District). While, at the time the CO district was created and applied, it may have been the City’s intention to allow cannabis uses on land carrying this zoning or any other zoning,4 a reading of General Plan Policy LU-13.1 notes that the P/QP designation is intended for land owned by public or institutional agencies (i.e., not private entities) and is to be used for educational, governmental, and public safety purposes. Because zoning is required to be consistent with the general plan (Gov. Code section 65860; also discussed in the Land Use Element of the General Plan), a zoning provision cannot supersede a general plan policy, i.e., a privately-owned commercial operation cannot be approved on land within the P/QP designation regardless of a zoning regulation that appears to allow it. 2 One acre-foot contains approximately 326,000 gallons. 3 City of Mendota Water Master Plan. October 2019. Assumes Medium Density Residential range of 3.6-6.0 dwelling per acre as stated in the City of Mendota General Plan Update 2005-2025. 4 Section 17.99.030 of the MMC reads in its entirety: “Where a conflict occurs between the Commercial Cannabis Overlay District and any other section of the zoning code, or any provision of the Mendota Municipal Code, the Commercial Cannabis Overlay District regulations shall prevail.” 3 To facilitate the Project, the applicant proposes to amend the Land Use Element of the General Plan to reflect APN 013-030-68ST as Light Industrial and to concurrently amend the zoning map to reflect it as M-1/CO (Light Manufacturing/Commercial Cannabis Overlay District). General Plan Policy LU-8.1, which describes the intent of the Light Industrial land use designation, states that “permitted uses generally include industrial or manufacturing uses”, and the corresponding M-1 zone expressly allows agriculture and agricultural processing. The Project straddles the various definitions, as it is an agricultural use that includes onsite processing, and thus is appropriate in an LI/M-1 area. Under Gov., Code section 65358(b), a city may not amend a single element of its general plan more than four times per calendar year.