McHenry Times

City of Crystal Lake City Council met Oct. 19.

Here are the minutes provided by the council:

Call to Order

Mayor Haleblian called the meeting to order at 7:00 p.m.

Roll Call

Mayor Haig Haleblian, Councilmembers Ellen Brady, Cathy Ferguson, Brett Hopkins, Cameron Hubbard, Ian Philpot and Mandy Montford were present. City Clerk Nick Kachiroubas was present.

Also present were Deputy City Manager Eric Helm, Assistant to the City Manager Nick Hammonds, Director of Public Works and Engineering Mike Magnuson, Director of Community Development Kathryn Cowlin, Finance Director Jodie Hartman, Fire Rescue Chief Paul DeRaedt, and Chief of Police James Black. City Attorney John Cowlin was also present. City Manager Gary Mayerhofer was also present via teleconference. Special Legal Counsel Victor Filippini was present.

Pledge of Allegiance

Mayor Haleblian led the City Council and the audience in the Pledge of Allegiance.

Approval of Minutes

Councilwoman Ferguson moved to approve the minutes of the October 5, 2021 Regular City Council Meeting. Councilwoman Montford seconded the motion. On roll call, all present voted yes. Motion passed.

Proclamation - World Polio Day

Mayor Haleblian welcomed Bill Broman of the Rotary Club of Fox Valley Sunset and proclaimed Sunday, October 24, 2021 "World Polio Day". Mr. Broman explained the Rotary Club's efforts to help eradicate polio and thanked Mayor Haleblian.

Accounts Payable

Councilwoman Ferguson moved to approve the Accounts Payable in the amount of $1,583, 190.82. Councilman Hubbard seconded the motion. On roll call, all present voted yes. Motion passed.

Public Presentation

Mayor Haleblian asked if anyone in the public would like to speak. No one wished to speak. Mayor Haleblian closed the Public Presentation portion of the meeting.

Mayor's Report

None.

City Council Reports

None.

Consent Agenda

Councilwoman Brady moved to approve a Consent Agenda including Items 10a and 10b, and adding Items 11, 12, 13, 16, 17, 18 and 20. Councilwoman Ferguson seconded the motion.

Mayor Haleblian asked if anyone wished to speak on the Consent Agenda. No one wished to speak.

On roll call, all present voted yes. Motion passed.

l0a. Approved the 2021 Festival of Lights Parade to be held on Friday, November 26, 2021, as requested subject to the staff conditions and a waiver of the Police Department chargeback fees (·--$1,843).

10b. Approved the issuance of a Class 20 Temporary Liquor License to St. Elizabeth Ann Seton Impactful Women's Group in order for the group to offer wine, in the package only, as a raffle prize for a fundraiser on Saturday, November 20, 2021.

11. Approved the Planning & Zoning Commission (PZC) recommendation and adopted an Ordinance granting a variation for an addition at 3 7 5 Spruce Lane.

12. Adopted an Ordinance to allow a 60 square-foot freestanding sign, a variation of 10 square feet, that is 9.5 feet in height, a variation of 1.5 feet for 350 W Terra Cotta Avenue.

13. Approved the Planning and Zoning Commission (PZC) recommendation and adopted an Ordinance granting the Special Use Permit to allow changes to the lighting standards for the tennis courts at Veteran Acres Park at 431 N Walkup Avenue.

16. Awarded a contract for liquid anti-icing and de-icing chemicals to the lowest responsive, responsible bidder, Industrial Systems Ltd., and adopted a Resolution authorizing the City Manager to execute a one-year contract with Industrial Systems Ltd. in the submitted bid amounts.

17. Adopted an Ordinance amending Ordinance No. 7722 authorizing acquisition of the property at 24 S. Oriole Trail for a flooding mitigation project.

18. Adopted an Ordinance amending the City Code instituting a 25 mph speed limit on local residential streets.

20. Adopted a Resolution accepting the Comprehensive Annual Financial Report of the City of Crystal Lake for the Fiscal Year ended April 30, 2021.

14. 1200 S. McHenry Avenue (Crystal Lake South High School), High School District 155 - Special Use Permit Amendment to Special Use Permit Ordinance No. 7195 to allow an additional accessory structure and a variation from Article 3-200 to allow a 30-foot tall accessory structure (football scoreboard), a variation of 15 feet; and Application Fee Waiver

Kathryn Cowlin, Director of Community Development, provided the Mayor and City Council with an overview of the petitioner's request. Ms. Cowlin stated High School District 155 would like the City Council to consider a 30-foot tall scoreboard instead of the smaller scoreboard recommended by the Planning and Zoning Commission (PZC).

Troy Singer, Director of Operations for High School District 155, explained the District would like a 30-foot tall scoreboard in order to help prevent damage to the scoreboard or injury to students and athletes.

Councilmembers Brady, Philpot, Ferguson, Montford and Hubbard said they support the request for the 30-foot scoreboard.

Mayor Haleblian said he understood the need for the higher scoreboard as well.

Councilwoman Brady moved to adopt an Ordinance granting a Special Use Permit Amendment and Variation for a new 30-foot tall scoreboard at 1200 S. McHenry Avenue with the conditions outlined in the staff supplement and to waive the $355 application fee. Councilman Philpot seconded the motion. On roll call, all present voted yes.

15. 501 Pingree Road, CL Dispensary - Special Use Permit for a Cannabis Dispensary and a Variation from the 500-foot buffer from a religious establishment requirement to allow a 350-foot buffer

Kathryn Cowlin, Director of Community Development, provided an overview of the petitioner's request. Ms. Cowlin said two items, a Special Use Permit (SUP) to allow a cannabis dispensary and a variation from the 500-foot buffer from religious establishments to allow a 350-foot buffer. She said according to City Ordinance, the buffer is measured from the property line of the sensitive use to the proposed building, which triggers the variation request. The church use is on a property zoned Manufacturing and other surrounding uses are zoned B-2 Commercial.

Andrew Scott, legal representative for CL Dispensary LLC and Americanna Dream, introduced himself, Tara Meyer with the applicant, Adam Rak, Land Planner for WBK Engineering, and Ed Ferrell, Silver Star Protection Group, the security company for the project.

Mr. Scott said representatives of the project would explain dispensary operations and address staff comments.

Mr. Rak explained the buffer requirement and the zoning for surrounding properties. He reviewed the 2030 Comprehensive Plan, which identifies area land uses as primarily commercial with less manufacturing. Access to the property is from Tracy Trail and Pingree Road. Mr. Rak said the project provides over twice the amount of parking required for the use.

Ms. Meyer provided an operational overview of the proposed dispensary. She said Americanna Dream is committed to complying with all State and local laws, rules and licensing regulations.

The company partners with Silver Star Protection, industry leaders in security and protection for cannabis-related industries and businesses.

Ms. Meyer said customer service and comfort is Americanna Dream's top priority, and the dispensary will provide a high-end, luxury experience. The company also offers education and outreach opportunities regarding the health benefits and responsible cannabis use. She said Americanna Dream will be a good steward of the community, and will be active in the Chamber of Commerce and local events.

Ms. Meyer said the company will invest about $1 million in enhancements to the property, as it has been vacant since 2018. Improvements will be made to the fayade and floor plan, as well as for security. She provided an overview of a typical experience for a dispensary customer. No cannabis will be available on the sales floor, it will be secured in a restricted access area. Customers can either have a consultation or go to the point of sale and place an order. Identification will be checked upon entry to the building and at the point of sale. Dispensary agents will process orders and place items in a sealed opaque bag.

Ms. Meyer outlined the floor plan of the dispensary, highlighting public, limited and restricted access areas. The number of persons allowed in the public and limited access areas at one time is also limited. Only agents have access to restricted areas, and then some areas are restricted based on seniority.

Ms. Meyer said about thirty full-time employees will be hired for the location, with about seven or eight working per shift. She also reviewed the company's no consumption on premises and no loitering policies. She said the State of Illinois has one of the most stringent cannabis laws, and quarterly inspections and compliance checks are completed every 30 days by the State Police.

During peak holidays and other peak times a texting que system is set up to help with customer traffic. Ms. Meyer also explained how deliveries will be handled.

Mr. Ferrell of Silver Star Protection Group, provided an overview of security for the site. He said the company looks at this as a partnership with the community and law enforcement and that safety and security are paramount. He said that the security measures in place are very stringent and above State of Illinois requirements. They work with cannabis businesses in four states, and use a multi-layered system, which includes an inventory management system.

In addition, Mr. Ferrell said all agents and security staff will be trained using the State's Responsible Vendor Program, undergo a Federal background check and a robust vetting process as employees.

Mr. Rak explained the petitioner's request for a 150-foot variation from the 500-foot buffer requirement. He said the ordinance requires the buffer be measured from the dispensary building to the closest property line of the sensitive use, which is 377 feet in this case. He also indicated the Illinois General Assembly no longer considers a religious establishment a sensitive use.

Mr. Rak said the request for relief is caused by the location of the religious establishment in a manufacturing district, which is uncommon and allowed only by a Special Use Permit.

Ms. Meyer said the City is anticipated to receive $500,000 in tax revenues per year from the dispensary and employees will be paid a living wage. She said she was directly involved with the State of Illinois when cannabis rules were developed and have extensive knowledge on how a high-quality dispensary should be run.

Ms. Meyer said they are looking forward to working with the City and thanked the Mayor and City Council for the opportunity.

Mayor Haleblian asked if there was anyone in the public who wished to speak regarding the petitioner's request.

A resident expressed his opposition for this project. He said the dispensary does not meet current ordinance buffer requirements and is located close to Rosecrance, a substance abuse recovery facility.

Melissa Loesch, Director of Rosecrance McHenry County, spoke to the Mayor and City Council in opposition to the proposed dispensary. She said Rosecrance McHenry County provides different services to 2,500 people, and 2,000 people for substance recovery. The Rosecrance facility at 422 Tracy Court in Crystal Lake is located .2 miles from the proposed location.

Ms. Loesch said people use the facility daily, between 8:30 a.m. and 8:00 p.m. She asked the Mayor and City Council to please consider the people struggling with addiction that could be triggered by seeing the dispensary when going for treatment.

Mr. Philpot asked Ms. Loesch how many people use that facility for marijuana addiction. Ms. Loesch said she does not have the number for marijuana addiction patients, but mostly youth patients are those that are treated for marijuana addiction.

Lucy Hernandez, a twenty-one year resident, spoke in opposition to the dispensary at this location. She asked the Mayor and City Council to respect the ordinance in place, do not change it, and not allow a dispensary at this location.

Jim Crystal, told the Mayor and City Council he loves Crystal Lake and he thinks the proposed location is appropriate, and he supports the request. He said he visited the dispensary in Lake in the Hills and it was very well run. He said addiction is a terrible thing and must be considered, but this a very well run business and it is a great opportunity for the City.

Ms. Hernandez added she is not against a dispensary, but said there is a better location for the dispensary.

Mayor Haleblian closed public comment for this request.

Councilman Hopkins asked City staff what the regulations are for liquor licenses regarding buffers. Deputy City Manager Eric Helm stated there is a 100-foot buffer requirement from schools and churches. Ms. Cowlin said the distance is measured from the property line.

Councilman Hopkins asked if it was because the property is zoned Manufacturing. Ms. Cowlin explained the neighboring church parcel is unique in that is very large and the building is set back 270 feet from the property line, instead of 30 feet as is typically found in this type of zorung.

Councilman Hopkins clarified this parcel is being measured from building to building instead of building to property line. Ms. Cowlin said this is correct.

Councilman Hopkins asked the petitioner what is special about this property and if other properties were considered. Mr. Scott said other parcels were considered. He indicated the proposed site is, in many ways, the perfect site in terms of land use - being in a very commercial area, the building has been vacant for three years and would be an adapted reuse.

Mr. Scott said the church is kind of an anomaly, being located in a manufacturing zoning district. He said most are in residential and commercial areas. The atypical location of a church on property zoned for manufacturing (with a Special Use Permit) and the lot shape (if squared off it would meet ordinance requirements) are reasons for the hardship.

Councilman Hopkins said there are actually several churches located in manufacturing areas in the City. He asked City Attorney John Cowlin if there would be an issue if the variation was granted. Mr. Cowlin said the Council had the ability to grant the variation.

Councilman Hopkins clarified there is nothing in the ordinance that would allow the location of a substance abuse treatment facility to be used as a reason for denial.

Councilwoman Brady agreed, stating this is also not listed in the City's liquor ordinances.

Councilman Hopkins asked if there was intent to place signage on Route 14. Mr. Scott said no signage would be placed on Route 14. He said signage will be tasteful - a business identification sign and possible a monument sign, but no signage will be off site.

Councilman Hopkins said a sign variation is not an option for him. He said signage must meet the ordinance. Mr. Scott said the petitioner will not be back to the City Council asking for a sign variation.

Councilwoman Montford asked what would be on the signage. Mr. Scott said the Americanna Dream name would be on the sign to identify the business.

Councilman Hubbard said he thought the buffer was too restrictive. He said there is a 7-11 in the Coventry Plaza that sells alcohol and that is right next to a school. He said there is no difference in this case. He said the setback from the church is far enough and he is in support of the request.

Councilwoman Brady asked if the church received notice of the variation. Ms. Cowlin said signage was posted on the property, and that notification is sent to properties within 200 feet. She said it was also posted in the newspaper and on the City website. Ms. Cowlin said they met all notification requirements.

Councilwoman Brady said she agreed with Councilman Hubbard that the buffer requirement was too restrictive. She said the proposed dispensary is in a good location and due to the building location on the property that there is a hardship.

Councilman Philpot asked Ms. Cowlin if staff knew the distance from the dispensary to the Rosecrance facility. Ms. Cowlin said Rosecrance is classified as a medical use and there are no buffer requirements from a medical use. She said it is over 250 feet away.

Councilman Philpot asked the petitioner if they would have additional security and/or work with the police on high-traffic days. Mr. Ferrell said yes, and this is standard for all dispensary locations. He said staff would meet with the Police Department and review the security plans.

Councilman Philpot asked Chief Black if this was satisfactory. Chief Black said he has reviewed the security plans and they are consistent with guidelines and regulations. He said the department would be happy to sit down with the petitioner for a review.

Councilman Philpot asked if there has been an increase in citations for marijuana use since the dispensary opened in Lake in the Hills. Chief Black said he is not aware of an increase, but this was one of the department's concerns when the ordinance first passed. He said cannabis is hard to detect because there is not a test (like a breathalyzer) easily available.

Councilman Philpot said he agrees with Councilman Hubbard and Councilwoman Brady that the buffer is restrictive. He said he is in support of the request.

Councilwoman Ferguson said she spoke with a Lake in the Hills police officer regarding drug crime rates. She said there has been an increase in traffic, not crime numbers.

Councilwoman Ferguson said she worked with many substance abuse cases in her work. She appreciated concerns regarding triggers in the location near Rosecrance, there can be many other triggers throughout the City. She said Rosecrance is located over 1,000 feet away. She said she is in favor of the proposal.

Mayor Haleblian said he is in support of the project. He said the use will fill a building that has been vacant for three years, and the company is top notch. In addition, the location is near but not on Route 14, and has plenty of parking.

Victor Filippini said the petitioner is in support of the small changes made to the ordinance that was posted to the website. He suggested the motion incorporate the changes to the ordinance.

Councilwoman Montford thanked the petitioner for investing in the community.

Councilwoman Brady moved to adopt an Ordinance granting the Special Use Permit with Variation to the buffer requirement to allow CL Dispensary, a Cannabis Dispensary at 501 Pingree Road with conditions in the staff report and changes outlined by Mr. Filipinni. Councilman Philpot seconded the motion. On roll call, all present voted yes.

19. Video Gaming Push Tax

Finance Director Jodie Hartman provided the Mayor and City Council with an overview of the proposed tax. She explained the evolution of video gaming in Crystal Lake as well and the number of licensed establishments and the amount of revenue collected by the City over the past several years.

Ms. Hartman explained the shared revenue formula for video gaming. She said the State receives 25%, 1 % is for video gaming communication software, the City receives 5%, and 69% is shared between establishments and gaming companies.

Ms. Hartman explained that the video gaming push tax is a fairly new tax, which was first passed by the Village of Oak Lawn and was effective in 2020. Tinley Park and Waukegan adopted similar taxes in 2020, and Decatur did as well in 2021. Schaumburg, Hanover Park, Joliet and others are currently considering a tax similar to Crystal Lake.

She said Illinois Senate Bill 521 seeks to grant the State exclusive rights to tax or impose fees on gaming from June 2021 forward. Currently the bill will allow municipalities with ordinances establishing the tax prior to June 2021 to keep but not modify the tax. New ordinances could not be established after this date. It is still unknown if, and in what form, the bill will pass.

Ms. Hartman explained how the City's proposed tax would work. She said the player is charged $0.01 for each bet ("push"). The gaming operator and establishments are responsible for collecting and remitting the tax to the City.

Due to pending litigation in other communities, the exact amount of revenues to be collected is unknown. City staff estimates based on the amount of money put into machines, $70,000 to $80,000 annually based on one-dollar bets and $130,000 - $200,000 annually based on two dollar bets (based on the amount of money played including winnings). There is a lot of uncertainty in this area as not a lot of information is forthcoming from the State (how many "pushes" were made).

Councilman Hubbard asked Ms. Hartman to clarify how the numbers were figured and asked if more tax would be collected if more $1 pushes were made. Ms. Hartman said staff wanted to take a conservative approach and explained more money is collected if pushes are made including monies won (played) on games. For example, a person bets $10 and wins $50 and continues to play with the $60. More money has been played in the system. She said the State of Illinois recently raised the maximum amount allowed per play from $2 to $4, which would double the potential amount collected.

Mayor Haleblian asked if there was anyone in the public who wished to speak on this item.

Paul Leech, owner of the Cottage and other local restaurants, said he has looked at both sides of this issue. He asked where does the penny tax come from? The gaming operators say that this penny comes out after the State takes their portion.

Special legal counsel Victor Filippini said it is coming from the player. He explained that instead of paying a $1 bet prior to the ordinance, the player would now pay $1.01 after the ordinance in terms of each play.

Mr. Leech asked how the City will get the money, stating that it is his understanding that the machines are not programmed to take the extra penny. He said he did not want local small businesses to have to start paying more taxes coming out of the pandemic.

Mr. Leech said, that the money is already divided up amongst the State, City, establishment and . . gammg companies.

Councilwoman Brady said the City Council is not trying to hurt small businesses. She said the City is in a time crunch, needing to get a placeholder in before the State legislation passes.

Councilwoman Brady said the City has no intention of enforcing the ordinance right away, and has many questions as well. She said staff spoke with the Village of Oak Lawn and the small gaming companies paid the tax, it was the larger gaming companies that had the issue. She said the terminal programming is designed to do whatever you want it to do and there is a limited number of companies that program the machines.

Councilwoman Brady said the City is putting its placeholder in so that if things work out for everyone with the legislation, this is another revenue source for the City. She said the tax is not designed to hurt small businesses. She said the City will need to figure out the mechanics of how the tax is implemented, and will work with other municipalities like Oak Lawn, Schaumburg, Hanover Park and Joliet.

Councilwoman Brady said if it is determined that the small business owners are paying the tax, she will not support enacting it. She said it is not the intention of the City to add another tax on small businesses.

Mr. Leech said he was happy to hear this is the case.

Councilwoman Brady said the City will have to see how things play out, but if the City Council does not act today and establish the placeholder, the City will not be able to do anything in the future to establish the tax as a revenue source.

Mr. Leech said the State is already taking a large share of the monies from gaming. Councilwoman Brady agreed, and added every year there are more unfunded State mandates that the City has to pay for, including wastewater treatment fees and body cameras, so the City needs to protect itself.

Councilwoman Brady said the City would approve the ordinance as a placeholder but not take further action at this time. She said the City will wait to see what happens with the State legislation and pending litigation to determine how to move forward.

Mayor Haleblian closed the public comment on this item.

Councilman Hubbard said he is willing to approve the ordinance as a placeholder but he is not ready to enforce the ordinance at this time. He said the math seems like a shell game where money is skimmed off the top.

Councilwoman Brady said there are still many details that need to be figured out, but unfortunately, legislation was introduced at the State level that would prohibit municipalities from enacting taxes and also takes big steps to restrict what the City can control.

Councilwoman Montford said her concern is the tax would put Crystal Lake small businesses at a competitive disadvantage. She asked if the penny push would cause people to go to Cary or another community that did not have the additional tax.

Councilwoman Brady said people have spent 9 million dollars so far this year on gaming, and she felt a penny is not going to change this. She said she views it similarly to credit card fees paid by the consumer at certain establishments.

Councilwoman Brady said she could be completely wrong, but she views the machines as an added convenience at establishments, the consumer is not going to a casino. She said it is such a small amount, she does not see people going to other communities.

Councilwoman Montford said she understands, but this is a concern.

Councilwoman Brady said Oak Lawn has not seen a decrease in the amount of funds collected since enacting their ordinance. Councilwoman Montford said this is good information.

Councilman Philpot added that the Council has not heard from anyone who gambles about how they feel about the tax. He said he think that if people felt strongly about it, they would talk to a Councilmember or attend the meeting.

Councilmembers Montford and Hubbard said they are not sure many people know this is being discussed.

Councilwoman Ferguson said she struggles because she has consistently voted against video gaming. However, she said she can support the ordinance tonight as a placeholder only.

Councilman Hopkins agreed and said it would be prudent to pass the ordinance as a placeholder and take the time to figure out the rest of the information needed.

Mayor Haleblian said he thinks that the placeholder needs to be approved, but said for the record, he will not enforce the ordinance if it will hurt small businesses.

Mayor Haleblian said the State is constantly adding unfunded mandates making it harder for municipalities to do get things done and if this is a revenue stream that the City can tap into that will not hurt local businesses it needs to be explored. He said no one on the City Council wants to harm small business, especially the hospitality industry.

Councilwoman Brady moved to adopt an Ordinance amending Chapter 268-3 of the City Code, regarding Video Gaming. Councilman Philpot seconded the motion. On roll call, all present voted yes. Motion passed.

Mayor Haleblian thanked Mr. Leech for attending the meeting and sharing his concerns.

Councilwoman Brady asked Mr. Leech to please talk to the City if he hears anything more about this issue.

Council Inquiries and Requests

Councilwoman Brady asked to revisit the cannabis ordinance and cut all buffer distances in half. She also said she had heard the petitioner state that the State no longer recognizes religious establishments as a sensitive use. As such, she asked how this impacts the City's liquor, tobacco and other ordinances. She said she would like to see these ordinances line up as well.

Councilman Philpot said he would like the buffers changes to also include cannabis related businesses.

Councilwoman Ferguson said many temporary liquor licenses are approved for religious establishments.

Adjourn to Executive Session

Councilman Hopkins moved to adjourn to Executive Session for the purpose of discussing matters of pending and probable litigation, the sale, purchase or lease of real property, collective bargaining and personnel. Councilman Hubbard seconded the motion. On roll call, all present voted yes.

Reconvene to Regular Session

Councilman Hopkins moved to reconvene to Regular Session. Councilman Philpot seconded the motion. On roll call, all present voted yes.

Adjourn

There being no further business, Councilwoman Ferguson moved to adjourn the meeting at 8:44 p.m. Councilman Hopkins seconded the motion. On voice vote, all present voted yes. Motion passed.

https://ecode360.com/documents/CR2206/public/629073666.pdf