Company wants to open McHenry marijuana cultivation center

Company seeks McHenry’s support; would pay city at least $20K a year

McHENRY – In exchange for a letter of support, a company looking to open a marijuana cultivation center in McHenry would make annual payments to the city totaling at least $300,000 under a proposed agreement.

The McHenry City Council is set to vote on an economic contribution agreement with Phoenix Farms of Illinois at its meeting Monday evening.

The agreement has already been reviewed by the company’s attorney and its partners, Deputy City Administrator Doug Martin said.

The agreement is designed to bolster the company’s application to be one of the 22 cultivation sites allowed under the state’s medical marijuana pilot program, Martin told the council in a memo.

“Obtaining a license for a cultivation center is an extremely competitive process and while full zoning approval is not required at the time of application to the state, it places companies without full approval at a disadvantage,” Martin wrote in the memo.

Phoenix Farms of Illinois hasn’t received that approval.

A Planning and Zoning Commission hearing is scheduled for Sept. 17, five days before the two-week application period closes. The McHenry City Council wouldn’t consider the zoning request until Oct. 6 at the earliest.

The agreement wouldn’t ensure the company receives zoning approval, Martin said. If the city doesn’t grant the request, the agreement would become void.

It would also become void if Phoenix Farms doesn’t receive a license from the state.

Under the agreement, the company would make contributions of $20,000 or 1.75 percent of its net earnings, whichever is greater, to the city for five years starting in April 2015 and then payments of $40,000 or 3.5 percent of net earnings for the next five years. Contributions could follow in subsequent years if the agreement is extended.

The company would also make annual contributions to the McHenry Riverwalk Foundation and the Historic Petersen Farm Foundation of $5,000 total for the first five years and then $10,000 total for the following five years. These contributions could also continue beyond that period.

The city could also change which organizations or the number of organizations that receive the community contribution, the agreement said. The total amount given, though, would not change.

Phoenix Farms has received letters of support from other communities, but its representatives have said that McHenry is their first choice, Martin said

In exchange for the contributions, the city would “cooperate with Phoenix” in allowing the cultivation center to be located in the city and would provide a letter of support as well as assistance in completing a local community report and community benefits plan.

Patrick Buck, the manager of Phoenix Farms of Illinois, did not returned a call for comment.

Buck is a managing director at TARIS Real Estate, a Chicago-based investment and development firm that specializes in apartments, condominiums, hospitality and retail properties.

The site Phoenix Farms of Illinois is pursuing is 1515 Miller Parkway, a 44,000-square-foot building located on the far southwest corner of the McHenry Corporate Center on the far southwest side of McHenry, just east of the Prairie Trail, Martin said. The company has negotiated a purchase agreement for the location, a former manufacturing site that has been vacant for about three years.

The city’s zoning ordinances do not yet address marijuana cultivation centers, which is where the marijuana is grown, or dispensaries, which is where it sold, but the council is set to vote on amendments Monday.

Under those proposed changes, marijuana cultivation centers could not be located within 2,500 feet of a school, day care, residential care home or property zoned residential at the time. Dispensaries could not be located within 1,000 feet of the same types of buildings or be located on the same property as any building that houses a residence.

These are the stipulations laid out in state law, which also prohibits local governments from completely banning marijuana cultivation centers or dispensaries.

The changes received an unanimous recommendation from the Planning and Zoning Commission.

“A lot of properties aren’t going to meet that requirement,” Martin said, adding that the city had been contacted by multiple people about locating cultivation centers and dispensaries in the city. The city wasn’t actively marketing the site for that purpose.

The building at 1515 Miller Parkway was also considered by another company as a cultivation center, according to city documents.

The McHenry Planning and Zoning Commission had been set to consider a zoning request from Green Star Growing in August, but the company pulled out of the process the day before the hearing.

Martin directed questions on why the company was no longer pursuing the variance to the company.

A woman who answered the phone at Green Star Growing declined to comment and hung up. An email to Jonathan Loiterman, the chairman of the company’s board of directors, was not returned.

If you go 

The McHenry City Council will meet at 7 p.m. Monday, Sept. 8, in the council chambers of McHenry City Hall, 333 S. Green St.

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