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Council approves two development agreements for Olympic Drive cannabis suites with lower fee rate
Summary
Clear Lake approved two development agreements converting existing cannabis use permits to new operators at Olympic Drive; the city set a 1% development-agreement fee (down from prior 5%) for three-year agreements with extension options.
The council approved two development agreements for existing permitted commercial cannabis suites at the Olympic Drive Industrial Plaza. Staff explained the city municipal code requires permitted cannabis projects to execute a development agreement when a new operator takes an issued use permit; several permitted suites had not become operating businesses in recent years.
City staff proposed and the council approved agreements that set the city's development-agreement fee at 1% of gross receipts for a three-year term with the option to extend for up to seven additional years and include language allowing renegotiation of fees if market conditions warrant. "At this point, it's been 5% of 0," staff said, explaining there has been no recent revenue at the 5% rate because permitted suites had not operated.
Council moved to approve Ordinance 273-2024 (DA2024-41 with Elite C and C Enterprises LLC, suites C–F) and Ordinance 274-2024 (DA2024-42 with June Bugs for other suites); both motions passed unanimously.
What happens next: The agreements convert existing permits to the new operators under the 1% fee structure. Staff said the agreements will be monitored and may be renegotiated at renewal.
