Council holds 1st vote to terminate agreement with cannabis retailer
SOUTH LAKE TAHOE, Calif. — The South Lake Tahoe City Council moved forward with canceling the development agreement with Perfect Union SLT, LLC during its meeting on Tuesday, June 1.
Perfect Union received a cannabis use permit in Nov. 2019 and the council approved a development agreement with them in Feb. 2020. As part of that agreement, Perfect Union SLT was required to be operational within a year of agreement being approved.
The business did not open its doors within a year, which they said was because of delays caused by COVID-19. The planning commission denied an appeal for an extension.
The company was given 30-days to cure the default or at least started the process of curing the default but city attorney Heather Stroud said they failed to do so.
Legal counsel for Perfect Union, David Wolfe, argued that the reason for the delay was a reasonable excuse under the development agreement which allows ‘delay beyond the reasonable control of a party caused by (a) calamities, including without limitation earthquakes, floods, and fire; (b) civil commotion; (c) riots or terrorist acts; (d) strikes or other forms of material labor disputes; (e) shortages of materials or supplies; or (f) vandalism.’ He said COVID did qualify as a reason for delay.
However, Stroud argued that while there were construction delays, internal disputes also caused delays which are not covered under the agreement.
Mayor Tamara Wallace, who originally was the sole supporter of a permit extension said that she was torn. She said she’d also undertaken a major construction during the pandemic and did experience delays; however, two other dispensaries were able to complete construction over the summer.
Wolfe said if they did terminate the development agreement, they would be forced to sue for breach of contract. During the legal proceedings, the city will not be allowed to award that cannabis use permit.
The council ultimately voted 4-0 (Cody Bass was recused) to terminate the development agreement. There will be a second reading of the decision during the June 15 meeting.
City Manager Joe Irvin gave the last official COVID-19 update. With trends continuing to look good, Irvin asked the council if they needed to see the standing agenda item each meeting and they said no.
If there are updates to be made, Irvin will likely do them during his update at the end of the meeting.
The next meeting will be held in person on June 15.
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