LAKE COUNTY, Calif. — For the third time this year, the Board of Supervisors overrode its planning commission and granted an appeal of a major cannabis operation.
In a 3-2 vote that followed about four and a half hours of testimony and discussion, the board upheld an appeal filed by Don and Margie Van Pelt against the Sourz HVR Inc. project on the 1,640-acre High Valley Ranch, the former PSI World property, located at 11650 High Valley Road in Clearlake Oaks.
The Lake County Planning Commission approved the project’s major use permit and adoption of initial study for a commercial cannabis cultivation license in July over the objections of neighbors like the Van Pelts.
The company, which also received permission for early activation of its project, proposed 80 acres of outdoor cannabis cultivation, five acres of nursery area, a distribution license to allow for transport of cannabis goods, the construction of 11 buildings for drying and storage totaling 111,000 square feet and the use of the existing 13,000 square foot conference center for packing, distribution and office space on a 649-acre portion of the ranch.
The Van Pelts, who own a number of local businesses including Cache Creek Vineyards and Winery, appealed the planning commission’s decision within a week, as is required by law.
They faulted the project on all of its key points — from dust and odor, to traffic, water usage and other issues that, together, they argued will detrimentally impact the quality of life in High Valley.
The appeal was scheduled to be heard on Oct. 19 but was held over for a month after the Van Pelts’ attorney, Brad Johnson, requested more time. At that point, the county was busy working to fulfill a large Public Records Act request submitted by Johnson on Sept. 17.
Late Monday afternoon, Johnson submitted a 145-page brief to the county elaborating on the existing arguments and placing additional emphasis on issues with grading.
But what appeared to be a larger problem for the project was the temporary installation of structures that Sourz said were hoop houses needed for drying cannabis.
County code states, “The early activation permit shall not allow any construction, grading, or removal of mature trees on the property.”
That put Sourz in a position where it didn’t have a facility for drying the crop, which led to erecting what the company’s attorney, George MacDonald, insisted were temporary structures.
On Oct. 25, Code Enforcement Officer Marcus Beltramo and Assistant Planner Katherine Schaefers visited High Valley Ranch and found 21 fully constructed 4,000-square-foot hoop houses, each 20 feet wide by 200 feet long, with another three under construction and a 2,000 square foot structure to be used for storage.
County staff said they didn’t meet the definition of hoop houses — which must not have electrical equipment. In this case, the structures had heaters, lights and fans. Hoop houses also are supposed to be made of translucent material, and the ones on High Valley Ranch were black materials over metal framework.
Beltramo’s inspection report said there was evidence to substantiate 25 violations of the conditions of approval for early activation and 25 violations of building code due to there being no electrical permits issued for the structures.
The county’s Code Enforcement Division subsequently issued a notice of violation for the structures.
Had the structures actually met the definition of hoop houses, they would have been allowed without a permit for the purposes of agricultural cultivation.
Attorney targets supervisor over text messages
Planning consultant Richard Knoll, who formerly served as the city of Lakeport’s Community Development director, was part of the team representing the Van Pelts, who he said asked for his help after the planning commission decision.
Knoll said he had suggested Don Van Pelt hire an attorney, and recommended Brad Johnson, who MacDonald pointed out later in the meeting is the attorney for two other large-scale cannabis projects, Bar X and Lake Vista Farms.
Knoll also is connected to Lake Vista Farms, having represented it before the Clearlake City Council last year. Last week, he represented Ogulin Hills Holdings LLC before the Clearlake Planning Commission in its 21-acre cannabis project. One of the partners in that project, Brian Pensack, is listed as the manager of Ogulin Hills Holdings as well as Lake Vista Farms, both of which are LLCs registered in the state of Delaware and share the same San Rafael address.
In his remarks to the board, Knoll said county ordinance seemed to require an objective analysis of the project to determine if it will be detrimental to health and safety. The ordinance, he added, doesn’t say it’s OK to simply refer to an initial study under the California Environmental Quality Act.
“The county has an opportunity handed to them to analyze this project in real-time,” Knoll said, and to look at the work done during the early activation, read comments and complaints, and assess if it’s actually creating detrimental impacts.
In his review, Knoll said the High Valley neighborhood didn’t get an objective or reasoned review, with Van Pelt and other neighbors being detrimentally impacted.
In his presentation, Johnson took an unusual approach when he used documents he received from his Public Records Act request to allege that county officials — in particular, Board Chair Bruno Sabatier — were showing favoritism toward Sourz. Specifically, he showed texts between Sabatier, county staff and Sourz staff discussing efforts to move the project along in an attempt to prove the point.
Johnson wanted Sabatier to recuse himself from the discussion, and Sabatier refused. When Johnson continued his statements about the text messages, Sabatier attempted to give context to the messages. Johnson told him to stop interrupting.
“I suggest counsel watch his tone with the board,” County Counsel Anita Grant said to Johnson in a rare admonishment.
Johnson faulted the project for inadequate analysis on myriad topics including traffic, the hoop houses and grading that led to violations from the California Department of Fish and Wildlife. He claimed county staffers were pressured by the applicant to push the project through the process.
He also questioned the project’s use of water from nearby Brassfield Winery via an aboveground pipeline that MacDonald said has been dismantled.
“Today’s discussion is not about who’s right,” but whether there is enough information submitted that there is a fair argument that the project may have a significant impact on the environment, Johnson said.
If so, he said the county has to do an environmental impact report, or EIR, on the project.
Johnson went on to ask the board to grant the appeal, deny the project, abate the current activities and start the EIR. He said he was concerned that county staff would attempt to resubmit the project after the violations were abated and before an EIR was done.
Applicant’s attorney points to conflicts
For his part, MacDonald argued that nothing new with regard to the project had been revealed due to Johnson’s Public Records Act request. Rather, MacDonald stressed Johnson’s conflicts of interest.
In a 19-page letter to the board submitted on Nov. 12, MacDonald said, “the involvement of Mr. Johnson in this matter should be viewed by the Board of Supervisors with great scrutiny because he is representing the interests of market competitors ‘Bar X’ and ‘Lake Vista Farms.’”
Bar X proposes to grow up to 80 acres of cannabis on the Bar X Ranch, located on 1,600 acres near Middletown. Lake Vista Farms, located at 2050 and 2122 Ogulin Canyon Road, Clearlake, plans for nearly 26 acres of cultivation.
“Mr. Johnson’s clients, Bar X and Lake Vista Farms, are large scale commercial cannabis operations in Lake County. Thus, the Sourz Project is a direct market competitor of these similar Projects,” wrote MacDonald.
He said Bar X’s prospectus supplement, used to attract investors and shareholders, “boasts that the Bar X project will have a maximum ‘capacity to grow up to 80 acres of cannabis’ and that it ‘will be the largest cannabis cultivation operation in the region.’ Once the Sourz Project becomes fully operational, these representations made by Bar X to its investors and shareholders will no longer be true. Thus, Bar X, and its attorney Bradley Johnson, are highly motivated to disrupt and interfere with the Sourz Project for pure market competition and manipulation purposes having nothing to do with environmental concerns.”
Regarding the results of the Public Records Act request, “Appellant has cherry picked text messages and taken them out of context to say they prove things they don’t,” MacDonald told the board on Tuesday, adding that what occurred at the meeting was textbook for “dirty litigation practices,” and constituted “trial by ambush.”
MacDonald said High Valley is an agricultural area, that there is a right to farm act in California, and that PSI Seminars had far more traffic than this project is expected to have.
He maintained that the planning commission didn’t approve it due to preferential treatment.
Regarding the hoop house structures, MacDonald said that as soon as the violation was filed against them, the work started to take them down. As of Monday night, six had been removed.
Praise and criticism
During public comment, Richard Derum, a Realtor, cannabis grow and consultant who has supported the project as it has made its way through the county’s approval processes — including making appearances at planning commission meetings — told the board that the plan is the most comprehensive he’s seen.
He called opposition to it “NIMBY on steroids” — NIMBY standing for “not in my backyard” — and that the applicants have been put through too much.
On the other side was neighbor Maria Kann, a consistent project opponent who has lived in High Valley for 22 years. She said she’s experiencing harm from the project, citing issues of dust, stress, litter, unsafe and impaired drivers, noise and traffic around the lock.
Another neighbor, Bryan Valentine, also stated his opposition due to noise, smell, traffic, environmental destruction and water usage. He said they needed to do what’s right, and that it’s not all about the “mighty dollar.”
Lake County Cannabis Alliance President Jennifer Smith said the project meets the land use components for the county’s cannabis program.
She called it a “landmark situation” that will set the tone for the rest of Lake County and impacts projects still in the queue.
Sabatier had indicated a desire to continue the public hearing to early December to give time to review the additional documents and testimony. He felt the noncompliant hoop houses were a glaring issue but he still wanted to find a way to say yes to the project.
However, Supervisor EJ Crandell in whose district the project is located, said the project needed more mitigation for neighbors. Crandell, attending the meeting via Zoom, moved to uphold the appeal. Supervisor Moke Simon seconded the motion.
When the vote was called, Crandell and Simon voted yes, and supervisors Tina Scott and Jessica Pyska voted no. Sabatier, who continued to struggle with finding a legitimate pathway forward, finally added his own yes vote.
In voting 3-2 to uphold the appeal, the board granted it without prejudice, which allows Sourz HVR to reapply.
Last month the board granted an appeal of Blue Lake Organics LLC’s project in Upper Lake and remanded it back to the planning commission for further environmental review and earlier this year upheld an appeal of the WeGrow project near Hidden Valley Lake, also without prejudice, citing a faulty environmental document. WeGrow is set to appear before the Lake County Planning Commission this week with the newest version of its project.
Email Elizabeth Larson at This email address is being protected from spambots. You need JavaScript enabled to view it.. Follow her on Twitter, @ERLarson, or Lake County News, @LakeCoNews.
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Board of Supervisors grants appeal of High Valley Ranch cannabis operation - Lake County News
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