One Haverhill city councilor publicly broke with the city administration’s stance on cannabis “impact fees” last week and accepted a ceremonial check in non-disputed payments from a downtown retailer.
Standing in front of City Hall Thursday, City Councilor Michael S. McGonagle accepted a ceremonial check for $365,796 from Stem Haverhill owner Caroline Pineau. The amount represents local option tax payments to the city during Stem’s first year of operation. McGonagle explained to WHAV why he is endorsing the local retailer.
“I don’t think Caroline has gotten the right amount of credit for what she has done in opening her business. She has an economic empowerment designation, and she has come in and not asked to be given anything,” he said.
The payments reflect 3% of Stem’s gross sales and do not include any disputed amounts. Stem, which filed suit against Haverhill, argues it should not pay the additional 3% fee because the business has caused no adverse impacts and the city has not identified any.
Responding to Stem’s suit, the city argues the 124 Washington St. business must pay “community impact” fees, not necessarily because of state law, but because the adult-use marijuana business agreed to do so in a contract. Haverhill added it is too early to document “impacts” Stem may have caused especially in light of the health pandemic and not enough time has passed to verify and negotiate community impact costs. The case will be heard in court next month.
The city councilor said there might have been an appropriate time to consider potential negative impacts, but the city failed to do so then.
“We could have hired some school counselors. We could have done some surveys. We could have done some things in advance of what might happen down the road and we did not do that. I feel, and I have stated this, I think we made an error,” he said.
McGonagle said Stem represents the kind of business the city needs.
“The city seems to keep going after this young lady for some things that might not be appropriate for us to have, the impact fee because there’s been no impact, except positive,” he said.
Although acknowledging he bought and sold a building that will house his brothers-in-law’s Mellow Fellows cannabis shop, the city councilor said he has no investments in the industry.
“It has been an amazing, if trying, first year of operations considering the challenges posed by the pandemic,” Pineau said in a statement, adding, “But, we couldn’t be more happy to be able to create jobs, serve our wonderful customers and contribute tax payments to help the city of Haverhill and its citizens.”
In addition to the sales taxes, Stem has contributed $51,571 in donations to Haverhill-based charities, created 25 full- and part-time jobs, its diverse employees have contributed 104 hours of community service and the business paid an additional $13,667 to the city in property taxes.