Haverhill’s first cannabis retailer is getting back about 70% of its disputed “community impact” fees from the city after both sides filed a “Stipulation of Dismissal” Friday with Essex County Superior Court in Salem.
The agreement, which WHAV obtained Tuesday, settles Haverhill Stem’s suit brought in April of 2021 against both the City of Haverhill and former Mayor James J. Fiorentini. Owner Caroline Pineau filed suit about a year after opening, demanding Haverhill “provide the required documentation and substantiate the (impact) fee.” Stem argued the store had not made more of an impact on the city than any other kind of business.
While Stem, of 124 Washington St., Haverhill, made community impact fee payments to the city totaling about $887,488, the settlement calls for Haverhill to return $612,500 without interest or reimbursing Stem for the cost of its lawyers. The refund must be paid within 30 days.
Nearly simultaneously, the two sides also reached agreement on a new host community agreement. A 2022 change in state law regarding host pacts prohibits impact fees based on “a certain percentage of…total or gross sales.
The court settlement was filed four days after a Jan. 13 deadline set by Superior Court Judge James F. Lang. Christine Lindberg, chief of staff to Haverhill Mayor Melinda E. Barrett, told WHAV the final filing was held up by lawyers for both sides as they negotiated the new host community agreement and parking license.
Besides the impact fee, Haverhill also collects a 3% local tax, as allowed under state law for adult-use cannabis retail sales. Haverhill’s and Stem’s agreement also continues to allow the collection of “local taxes, fees and charges, to the same extent as required of other businesses operating in the city.”
The settlement calls for renewal of the previous parking license, allowing Stem access to two dedicated spaces owned by the city. The original parking agreement took effect Jan. 16, 2020 and it expired at the end of 2024. Terms now call for use of the parking spaces to be renewed for five years at $6,000 the first year and increased by inflation annually over the following four years.
An unusual provision of the agreement calls for “joint press statement”—which WHAV aired and published more than two months ago. The pact notes, however, “such language will be the sole public disclosure regarding the underlying litigation and this settlement by both parties.”
The new host agreement, dated Jan. 14, continues to authorize Stem to operate as a “marijuana retailer” and preserves the city’s right to collect community impact fees to recover such potential costs as infrastructure, police and fire services and “unforeseen expenses.” Contrary to the earlier, disputed contract, the city agreed any such “reasonably related” costs be detailed on an “itemized invoice.” In addition, the city will “not explicitly or implicitly require the company to make a promise of upfront or future monetary payments, in-kind contributions or charitable contributions to the municipality…” and, in no instance, “exceed 3% of the gross sales of the company, nor be calculated on a certain percentage of the company’s sales.”
The host agreement also prohibits the city from attempting to collect such impact fees after Stem has held its license for more than nine years.