By Tracy F. Seelye, Express editor
editor@whitmanhansonexpress.com
WHITMAN – The Select Board hear – and expressed – concerns over the financial impact of changes to the host community agreement concerning retail cannabis business Berkley Botanicals, and over the effect of increased interest rates on the Whitman Middle School project at the board’s meeting on Tuesday, July 23.
“We recently heard from one of the holders of the host community agreement license – Berkley Botanicals, hoping to open a recreational marijuana store on Bedford Street – that the Cannabis Control Commission had rejected the host community agreement with the town of Whitman,” said Select Board member Justin Evans. “The short explanation for why is that, after we adopted the … agreement with Berkley Botanicals, as well as our other two licensees, the regulations changed.”
That left Whitman’s agreement with Berkely signed before the date of effective regulations with the state.
There are a couple of options open to the town, he said.
Town Administrator Mary Beth Carter outlined those options:
- Resubmit the existing host community agreement with a new effective date;
- Amend the existing HCA in a way that the town’s and Berkley’s lawyers negotiate and agree is “minimally compliant” with the law;
- Adopt the model HCA with modifications – adding some of the existing HCA provisions into the model;
- Adopt the model HCA. There are meaningful differences between the existing Whitman HCA and the model; or
- Waive the HCA requirement.
Town counsel has made no recommendations about which option the town opts for, he is looking for direction from the board. The one recommendation he did make was to reject the last option.
Evans recommended agreeing to the model HCA to get the business open. He said the town could use the revenue. He also noted that Whitman has spent a ‘fair amount of money’ negotiating with the business – as well as two others – and the town is effectively throwing that money away in signing the model agreement.
The Select Board opted to table the matter until its Aug. 20 meeting in the absence of town counsel, ZBA Chair John Goldrosen and Select Board Chair Dr. Carl Kowalski. Evans said he would support drafting some points to discuss at that meeting.
“There would likely be some benefit to adopting the model with some modifications, but it would likely get approved down the line somewhere not as quickly,” Evans said.
There is also a provision in Whitman’s HCA that, if a more favorable agreement is reached between the town and any cannabis business, the town would reach out to the others and renegotiate their HCAs, he added.
“We’ve seen very little progress with two of them and quite a lot of agreement in one of them – the one that’s reaching out to us to get open soon, so I think we may ‘feel out’ if the other two businesses are still interested in pursuing recreational marijuana dispensaries in town, or if they may want to turn their licenses back in,” Evans said. “That might be a side benefit of changing our HCA.”
Putting it off for another six months or so does not benefit the community, either, he said.
“What we’ve heard so far is that … the CCC has released the model and are only accepting the model to approve,” Evans said. “The thoughts of Berkley Botanicals’ lawyer is that, if the town were to adopt the model HCA and sign the agreement with them or waive the requirement that there’s an HCA – they’d get approved within the next round.”
That round of agreements is expected to be approved in the next 90 days, Evans said.
“If we did anything else, [town counsel] opinion, or perhaps gut feeling, was that they would reject it and, initially, we would have to submit some reason for why.”
That could delay things yet another 90 days, he explained.
The major differences, according to town counsel were a lot of zoning controls relating to noise, smell, Evans reported. He said he likes the timeline for effectiveness, which removes community impact hearings and vehicle management requirements.
“Those are the kinds of things we put in to be over-protective that aren’t in the model HCA,” he said. “I know something that was close to [Select Board member Shawn Kain] when we were negotiating it, was some of the specific community impacts that we carved into our HCA to say, ‘This is something the town considers a community impact,’ they agreed to it, and would have theoretically mad it easier to have made it easier to collect for impacts they are having to the town that other, non-marijuana related businesses have not had on the community.”
Whitman Middle School interest rates
“Why I’m here is because I’m still following [the Middle School] meetings and trying to stay up with the information and over the last couple of months I’ve heard a lot of positive information from the middle school,” Galvin said
In a discussion not included on the agenda, the board heard questions raised by resident John Galvin concerning interest rate’s impact on the bottom line.
Galvin had served on the Whitman Middle School Building Committee, resigning when he no longer supported the project.
“But that’s not why I’m here,” he said, outlining his concern, despite good news he’s heard on the project’s budget. “The concern that I have is not the cost of the project, but the cost of the borrowing for the project.”
The building committee has been able to bond the amount of money that had arrived at this year and the interest rate that came along with that financing “is not pretty,” he said.
“It’s considerably higher than what we just recently borrowed for the DPW building,” he said. “I think it’s important that this board makes it a concern as well, because if we continue along this track, it’s my understanding that next year we will probably do another similar bond to what we did and then, the year after that, the big bond hits.”
Ending up borrowing against the same interest rate being paid now would cost taxpayers a “significant amount of money,” Galvin said, noting his rough calculations put that cost at almost $25 million more over 30 years for the same building if the bond percentage stays at the interest rate the district is now getting.
He also mentioned the district audit that both towns are demanding.
“I don’t know where that stands, but I would plead that both towns move forward with that as quickly as possible, because it’s not looking pretty right now with the borrowing for the Whitman Middle School,” he said.
Asked for a comment by Salvucci, Carter said she is very aware of the BAN taken out – expected to be at $4 million at 4 percent, the BAN the Schools took was $8 million at 5.87 percent, because more money had been needed up-front.
“Once [the towns] get both of their audits done, hopefully they’ll have their bond rating reinstated, allowing them to move forward with a more favorable rate,” she said, noting she has been told no additional borrowing until, at least, after the first of the year.
Salvucci – noting the Moody rating is down because the incomplete audits increased interest rates – asked, if a special Town Meeting would be required, should interest rates go up.
“Town Meeting voted the amount of the project,” Carter said. “The amount of the project they should stay on track with, however, the interest rate they applied to that project does make a difference in the end result to the taxpayers. … They’re waiting for a new cashflow for the financial adviser to update the strategy and planning on borrowing.”
Salvucci also asked if any consideration has been give toward making the project smaller.
Kain expressed hope that, after the audits are complete, the project can be “back on tract and rectified, adding that the issue “Is definitely on our radar.”