In a move seemingly aimed at attracting more businesses, the Lompoc City Council voted Tuesday night to not attempt to place any additional taxes on commercial cannabis operations in the city.
The decision to not seek out additional tax revenue was not made easily. The council debated the topic for more than an hour, and the conclusion was reached with a split 3-2 vote. Councilman Jim Mosby led the push for not attempting to implement any new taxes and made the motion that ultimately succeeded. He was supported by fellow councilmen Dirk Starbuck and Victor Vega.
“We have a lot of vacant buildings out there, a lot of empty buildings, and I really think that we need to do what we can to entice (business) into this community,” Mosby said during the discussion.
Along with the vacant commercial spaces, Mosby also cited the city’s high unemployment rate while arguing his position. He suggested that the city would be better-served in the long run by having an edge over nearby communities — like Santa Barbara, for example — in attracting marijuana operators and could potentially go back and look at taxes after seeing how the market establishes itself in Lompoc.
Interim City Manager Teresa Gallavan confirmed Tuesday night that the city has received just two completed commercial cannabis applications since beginning to accept them on March 1, a low figure that Mosby also used to defend his plan to not seek any new taxes.
Following the meeting, Mosby added that he didn't want the city council to be "blinded" by tax dollars and have that affect any potential future moves to limit or ban cannabis activities in the city.
Mayor Bob Lingl and Councilwoman Jenelle Osborne both voted against the motion to decline local taxation.
Osborne, who helped draft the city’s cannabis ordinance, first began advocating for bringing the commercial cannabis industry into Lompoc during her 2016 campaign. She said Tuesday that a big reason she supported having the industry in the city was because it would enable the city to bring in funding that could be used for services like public safety.
“I am not looking to strip the industry of its profits, and this will not solve our budget issues, but this is a new revenue stream,” she said.
“For us to claim to be (fiscally) responsible and (that we) want to solve some of our current issues with public safety and paying our employees well enough so they want to stay and work and protect our community and improve our parks, this is income that I can’t leave on the table,” she added. “I don’t want to over-tax. I don’t want to go above and beyond what the county and city of Santa Barbara is doing, but it is irresponsible of us to think that zero tax is an incentive.”
If the council had decided to seek out additional city taxes, it would have needed to introduce a ballot measure to be voted on by the public.
The council’s vote Tuesday doesn’t mean the industry won’t be taxed in the city, just that it won’t pay added city taxes. State and county taxes would still be implemented where appropriate, and a small percentage of those tax dollars would ultimately go back to the city.
Tuesday’s discussion began with a presentation from John Bliss, the president of SCI Consulting Group, which was contracted by the city to help it regulate the local marijuana industry.
Bliss, who said his firm is working or has worked with several other communities, went over different tax methodologies and recommended that the council institute low taxes on retail, cultivation, manufacturing and distribution, and no taxes on testing.
Using figures from other communities, he suggested that Lompoc could bring in an additional $700,000 to $1 million per year if it were to set taxes based on his company’s models. He said a tax measure would probably be successful since most voters likely wouldn’t be cannabis users and therefore wouldn’t have to pay any additional taxes.
In other action Tuesday night, the council approved a zoning change that helped clear the way for Community Health Centers to build a 28,000-square-foot medical facility on a 5.18-acre parcel of land in the 1200 and 1300 blocks of West Ocean Avenue.
The council voted 5-0 to follow a recommendation from the city’s Planning Commission and approve the first reading of an ordinance that would convert the land from being zoned residential to commercial. With the vote, the council also directed city staff to return at a later date with more information on how the project will affect the city economically, and to engage in negotiations with the developers of the project on potential Payment In Lieu of Taxes, or TOTAL, funding to the city since representatives of the CHC, a nonprofit, have indicated that they will seek to have the property be tax-exempt.
By making the move to switch the land from residential, the city effectively eliminated the prospect of having 51 homes built on the property.
The initial plans for the project were approved by the Planning Commission on Feb. 14.
The next Lompoc City Council meeting is scheduled for 6:30 p.m. April 3 at Lompoc City Hall, 100 Civic Center Plaza.