Haverhill won the latest round against a suit brought by a downtown cannabis retailer, but the Superior Court judge expressed no confidence the city will eventually succeed.
Superior Court Judge James F. Lang called his own decision “constrained” by the need for more factfinding. Stem Haverhill previously asked the court to quickly conclude the case over disputed local impact fees in Stem’s favor. The case was heard Nov. 15 in Newburyport and the decision was made public Monday. Stem argued in 2021 that it should not pay any fees until or unless the city proves there is an added cost to hosting the cannabis business. Haverhill’s outside attorney said in a statement the decision “confirms many of the positions that the city has taken.”
“In particular, the court’s decision reflects that the legal issues for which Stem has taken an ‘all or nothing’ approach, are not quite so clear as Stem would like, or as it has portrayed to the community at large,” said attorney Michele E. Randazzo.
Stem owner Caroline Pineau acknowledged requests for speedy conclusions are “uphill battles,” but cited Stem’s own victories in the decision.
“We’re very encouraged with the credibility that Judge Lang gave to our expert witness and flaws she exposed in the city’s report of supposed impact costs. We always intended to see this case to its conclusion. Once we’ve had the opportunity to flesh out all of the relevant evidence, we feel confident we will succeed on all additional counts and receive a full refund on all impact fees paid to date,” she said.
Stem paid about $359,000 after its first year of operation and, last May, made a second payment of a similar amount.
In her statement, Randazzo hinted Haverhill would accept something less than the amount it charged, saying it would agree to a “mutually agreeable compromise.” The city’s lawyer, however, did not detail what form a compromise might take.
During the Nov. 15 court hearing, Haverhill sought to bar testimony from Stem’s expert witness, Marion McNabb. Lang denied the request, ruling McNabb “appears to have sufficient qualifications to offer testimony on the subject matter.” He added, however, any objections would be further weighed during the trial.
Lang said both the city and Stem agree any impact fees must be “reasonably related” to actual expenses. The judge acknowledged both state law and the host agreement between the two parties are “silent” on what documentation satisfies requirements. Still, Lang appears to express some doubt over the accuracy of the city’s assessments.
“To be sure, the city’s efforts to date to justify nearly $700,000 in assessed impact fees in a two-year period as reasonably related to anticipated or actual costs the city has borne as a result of Stem’s operations appear somewhat anemic to the court,” Lang wrote. He added McNabb’s list of shortcomings in the city’s expense list “and her critique may eventually carry the day.” In a footnote, Lang explained, “If the city cannot address and rebut such critiques at trial, and instead rests on its assertion that nothing more is required of it to justify the fees that have been assessed…that may well result in the factfinder finding a breach of contract and awarding Stem the full amount of such fees.”