HomeMy WebLinkAbout08.b. Receive AgLantis 2017 Annual Report, 2018 Business and Strategic Plan, and Status updated related to CoCo San Sustainable Farm Project Page 1 of 90
Item 8.b.
Central Contra Costa Sanitary District
May 17, 2018
TO: HONORABLE BOARD OF DIRECTORS
FROM: DANEA GEMMELL, PLANNING AND DEVELOPMENT SERVICES DIVISION
MANAGER
REVIEWED BY: JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL
SERVICES
ROGER S. BAILEY, GENERAL MANAGER
SUBJECT: RECEIVE AGLANTIS 2017ANNUAL REPORT, AGLANTIS 2018 BUSINESS
AND STRATEGIC PLAN, AND STATUS UPDATED RELATED TO THE COCO
SAN SUSTAINABLE FARM PROJECT; AND PROVIDE DIRECTION WITH
REGARD TO ANYADDITIONAL INFORMATION NEEDED AND THE
PROCESS FOR FUTURE EVALUATION OF THE PROJECT FOR ANY
POTENTIAL DISTRICTACTION
Please see the attached, comprehensive memorandum regarding the Update on the AgLantis/CoCo San
Sustainable Farm.
Roger S. Bailey Kenton L. Alm
General Manager District Counsel
Strategic Plan re-In
GOAL SIX: Embrace Technology, Innovation and Environmental Sustainability
Strategy 1 -Augment the Region's Water Supply
May 17, 2018 Regular Board Meeting Agenda Packet- Page 354 of 534
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ATTACHMENTS:
Memo -AgLantis/CoCo San Sustainable Farm Update
1. 2017 AgLantis Annual Report
2. 2018 AgLantis Business and Strategic Plan
3. Land Use Permit LP 14-2051
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Central Contra Costa Sanitary District
May 11, 2018
TO: HONORABLE MEMBERS OF THE BOARD
VIA: ROGER BAILEY, GENERAL MANAGER
KENT ALM, DISTRICT COUNSEL
FROM: DANEA GEMMELL, PLANNING AND DEVELOPMENT SERVICES
DIVISION MANAGER
SUBJECT: ASSESSMENT OF AGLANTIS 2017 ANNUAL REPORT ON
PERFORMANCE AGREEMENT (SUBMITTED ON APRIL 1, 2018) FOR
THE COCO SAN SUSTAINABLE FARM PROJECT
Central San approved the Lease Agreement (Lease) with AgLantis for the CoCo San
Sustainable Farm Project (Farm) on April 17, 2014 with a 10-year term that expires on
April 16, 2024. The terms of the Lease provide for an Annual Report and an updated
Business and Strategic Plan (Business Plan) be submitted annually by April 1 st
AgLantis submitted the two attached documents on April 1, 2018 for its 2017
performance.
Additionally, the Real Estate Environmental and Planning (BEEP) Committee
recommended on February 14, 2018 that "the Board review the Farm update and make
a decision about the future of the project." The REEP Committee had reviewed a
quarterly update, but as the Annual Report was forthcoming, staff waited for the more
comprehensive materials to put the matter before the Board.
This memo is an assessment of the report elements and adherence to minimum
performance goals outlined in the Lease and provides the facts as staff understands.
Timeline
On July 3, 2014 when the Lease commenced, a Land Use Permit was needed for
Contra Costa County (County) to allow farming on the heavy-industrial zoned parcel.
Per the terms of the Lease, "The District will apply for the initial land use permit within
two months of the commencement of this Lease. The Tenant will be responsible for
obtaining all other necessary permits prior to the commencement of any activity
requiring a permit."After numerous meetings with the Airport Land Use Committee and
Community Development staff, a County Land Use Hearing was held on December 21,
2015 and Central San obtained the Permit effective January 1, 2016, subject to 10
findings and 61 conditions of approval (COA).
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Of the total 61 COAs outlined in the Land Use Permit, Central San is responsible for
six,' while AgLantis is responsible for the remainder. Many COAs pertain to operation
restrictions and requirements to obtain building permits.
While the County did not outline which of the COAs were the applicable conditions that
needed to be satisfied to allow farming activities, both AgLantis and Central San
completed specific COAs towards that end.
Land Use Permit COA#4 states "Applicant shall be allowed to begin farming activities
prior to requesting building permits for approved structures or buildings, given that all
other applicable conditions of approval have been satisfied."This condition is consistent
with the Lease as it does not require the greenhouse construction until the third
operational year and allows traditional farming the first year.
The following items were completed in 2016 and the beginning of 2017.
Date COA Activity
July #35 AgLantis submits Wildlife Management Plan to County.
2016
Sept #3 Central San and AgLantis jointly draft compliance report matrix;
2016 which AgLantis submits to County in addition to application and
$500 deposit.
Dec #46 Central San completes Public Works approved roadway
2016 #47 improvements including installation of safety signs, paving
#48 driveway to meet minimum 100 feet of asphalt at each
#49 entrance. Gates are relocated to 40 feet from street pavement.
#50
Feb #39 Central San sends County letter confirming indemnification
2017
On January 30, 2017, the County sent a letter noting that the September 2016
Compliance Report and submittals were incomplete. A meeting was set up on
March 24, 2017 with Department of Conservation and Development, Public Works,
Central San and AgLantis to clarify the requirements and meet the COAs in order to
begin farming activities. During the meeting Carolyn Phinney, AgLantis President, noted
that construction of the greenhouse would follow a parallel timeframe as the traditional
farming on the site. As such, County staff stated that the submittals of the COAs with
proof of completion should be done at one time to avoid piecemeal submittals and
additional costs for processing the compliance report.
Central San is responsible for Condition No. 39 and Nos.46-50 of the Land Use Permit(Attached)
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Defining First Year of Operation
Though the lease commenced on July 3, 2014, the County Land Use Permit, was not
approved and effective until January 1, 2016. Exhibit D "Minimum Performance
Standards included in Business Plan" outlines standards and goals to be included
annually as well as specific Performance goals for the first three years of the lease term.
This matters because functional operation of the Farm could not commence until
January 1, 2016 at a minimum, delaying the start of the three-year performance goals.
On July 20, 2017, the Board received a "Farm Status Update" presented by Danea
Gemmell and Bethallyn Black of AgLantis. Staff presented an explanation of delays on
the Farm project during 2016 owing to communication difficulties with the County and
the recommendation to consider calendar year 2017 as the first operational year.
Though this information was presented, the Board did not take any formal action at the
meeting. In its Business Plan, AgLantis has presented and assumed 2017 as the first
operational year and documented its activities accordingly.2 For purposes of the
following discussion, the first year of operation has been assumed to be 2017, although
the Board has not taken formal action. Therefore, direction by the Board on whether to
start Operational Year 1 in 2016 or 2017, as recommended by staff, is necessary to
assess specific performance by AgLantis.
Year 1 Performance Goals (Potentially 2017)
The 2018 Business Plan outlines specific objectives for the first three years and general
goals for the next five years. AgLantis does not state whether the specific objectives for
the first operational year (2017) were achieved,3 however there is general discussion in
the narrative, sprinkled throughout both documents, to assess performance compared
to first year Performance Goals outlined in the Lease.
• Amount of Produce provided to Food Bank or other non-commercial institutions
The Annual Report did not indicate that produce was grown in 2017 nor specifically
identify an amount of produce for the following year, but did identify plans to install
irrigation after the Title 22 Permit was approved and noted that "Irrigation is essential
because rain has been too unpredictable to even grow a winter cover crop.114 Crops
from the greenhouse will be available by Year 4 to provide produce for the Food
Bank.5
2 Pages 29 and 30 of Business Plan
s Pages 29 and 30 of Business Plan
a Page 3 of Annual Report
s Page 34 of Business Plan
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• Construct perimeter fencing around all aboveground improvements (except fencing
around green manure crop and some simple farm infrastructure to allow planting)
Currently, no aboveground improvements have been constructed which would
require perimeter fencing. In July 2017, AgLantis installed six-foot high chain link
fencing along the Runway Protection Zone (RPZ) as required by COA #15.
• Plant a crop (such as green manure crop) - 5 acres
In mid-2016 AgLantis started placing 25 acre-feet of wood chip mulch, donated by
PG&E and EcoMulch. In 2017, a large donation of horse manure was placed on top
of the wood chip structure to create a "lasagna compost" on the site. Bethallyn Black
presented to the Board in July 2017 AgLantis' sustainable farming method, the
Carbon Farming-No Till methodology, which AgLantis had substituted as an
alternative methodology to planting a green manure crop. Central San did not
approve nor take any action regarding the change in methodology.
At the end of 2017, AgLantis planted a cover crop on top of the lasagna compost.
However, with no rain in December 2017 or January 2018, the "drought killed what
we planted.116
In addition to the specific performance objectives for the first three years, the Lease also
requires general standards and goals that need to be addressed annually. The table
below outlines these items and how AgLantis has responded to each in the 2017
Annual Report. It does not provide an assessment on the reasonableness of each item,
but it serves as a checklist to show that these items were addressed.
'Page 7 of Annual Report
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Annual Standards and Goals 2017 AgLantis Response Summary
outlined in Lease
Annual Operating Budget 2018 Operating Budget is $128,501
Proposed Capital Improvements for Items proposed include (1) short road,
following year (2) fencing, (3) electrical engineering
plan for PG&E submittal, (4) water tanks
for Fire, (5) water lines, and (6) some or
all greenhouse foundation and structure.
Number of people served by the None to date
Farm
Number of volunteers 100 volunteers
Number of people that participated in 16 students and community leaders
other Sustainable Farm programs from University of Wisconsin
delivered offsite Cooperative Extension's Leadership
Wisconsin Program visited on
September 13, 2017;
"Drawdown" event on October 17, 2017
hosted 100 attendees
Annual financial reports to the Income: $27,506.33
District setting forth the operating Expenses: $20,480.96
costs and profit and loss statements 2017 Net Income: $7,025.37
Operational Requirements AgLantis states the following needs to
be addressed to make progress: C-3
resolved with Public Works, Fire
Approval, County Zoning Administrators
approval of revised Site Plan, and Title
22 Permit amended and recycled water
connection installed by Central San.
Updates to Business Plan Submitted April 1 , 2018
Year 2 Performance Goals (Potentially 2018)
The Business Plan outlines sixteen objectives to meet the second year Performance
Goals stated in Exhibit D of the Lease.'
• Plant a crop (such as green manure crop) - 5 acres
As stated above AgLantis substituted the Carbon Farming-No Till methodology, to
provide soil amendments. AgLantis addressed planting a 2018 crop as Objective
No. 7 in the Business Plan. There are also plans to apply for grants to purchase
Page 30 of Business Plan
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irrigation equipment after the Title 22 Recycled Water Permit is approved for
agriculture. Staff initially requested irrigation plans form AgLantis on
December 29, 2015. AgLantis experienced a number of delays in developing an
irrigation plan. The first was when a pro-bono irrigation designer from the USDA -
Natural Resources Conservation Service left the organization. The second plan was
drawn by Bethallyn Black and a third prepared by a local engineer who donated time
involved revising the site layout plant to reduce impervious surfaces. AgLantis
resubmitted its final irrigation plan on April 27, 2018 with staff submitting the
application to the Department of Drinking Water on May 3, 2018. A response is
expected within the next two months which coincides with the plan to install the final
connection and meter box.
• Provide goods to a market or Donate goods to Food Bank or School District
(Quantity as fourth in Business Plan)
The Business Plan does not address the provision of goods to market in 2018.
• Develop a teaching plan curriculum
In spring 2018, Bethallyn Black, faculty in charge of horticulture, utilized Diablo
Valley College students in spring 2018 to eliminate invasive exotic plant species
from the Farm. While a teaching plan curriculum is not detailed, AgLantis cited
many potential education partners in the Business Plan, including Contra Costa
County Community College Board and John F. Kennedy University to develop
relevant course offerings and create high-tech agriculture programs and certificates
that include high tech greenhouse production and management training.
• Increase volunteer's participation by 15% from previous year
An additional fifteen volunteers in 2018 are needed to comply with this metric.
Year 3 Performance Goals (Potentially 2019)
Performance Goals for the third year are outlined as follows:
• Provide remaining fencing around food crops and aboveground improvements
• Provide goods to a market or Donate goods to Food Bank or School District
(Quantity as forth in Business Plan)
• Get Building Permit and construct Green House
• Provide a teaching facility and start sustainable curriculum
• Complete long term Strategic Plan
• Submit Performance Requirements for Years 4, 5 & 6 (which shall be subject to
approval by District)
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The Business Plan identifies eighteen specific objectives for the third operational year,
however does not identify construction of the greenhouse among these objectives, but
only loosely states construction within the next five years. Further detail within the Plan
identifies that "2023 may be the first year of significant production."$ Discussion on the
greenhouse construction schedule is discussed in more detail in the Section Farm
Updates and Schedule below.
Third Year of Operation Discussion
To be consistent with the timing discussed in this memo, the third year is assumed as
2019. As outlined below, this language clearly suggests that the understanding of
Central San at the time the Lease was negotiated is that by the third year there would
be substantial progress on development of a productive farm. The Lease specifically
considers the third year and provides opener for renegotiation of rent and recycled
water terms after the third year is reached.
Per Section 2.2 Rent, "It is the intention and expectation of the Parties that during
the Term, the Sustainable Farm project will generate revenues from donations and
the sale of farm products and related services. It is further understood and agreed
that it will take several years for the Sustainable Farm prosect to reach a level where
it may generate funds sufficient to pay Rent in excess of the One Dollar($1.00) per
year... it is agreed that within ninety (90) days from the expiration of the third year of
the Term, the Parties will meet and confer to discuss the potential viability of the
Sustainable Farm project and paying additional Rent to District."
Per Section 4.10 Utilities, "District will permit Tenant to connect to District's facilities
for the use of recycled water, which recycled water will be provided at no cost for a
minimum of three (3) years and thereafter shall be metered separately and billed to
Tenant or may continue to be free of charge at the sole discretion of the District."
With the timeframe of the Land Use Permit process taking until January 1, 2016, it
seems that delay has caused the 10-year term to run out-of-sync with the first three-
year Minimum Performance Standards as outlined in Exhibit D. The referenced Lease
terms for rent and recycled water are effectively tolled to run concurrent with the
operational Performance timeframe.
Clarifications to AgLantis Annual Report and Business Plan
AgLantis has made several statements in both the Annual Report and Business Plan
that which Central San staff is not in agreement and may require clarification and
correction.
8 Page 34 of Business Plan
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1. AgLantis contends that additional C-3 Requirements were added to the Farm
by Central San.
"We learned that Central San in paving the fill station driveway was going to pave
the first 100 feet up to the farm gate as described in the Land Use Permit, but
Central San would have exceeded the 10,000 square feet allowed without tripping
C-3, and they would have had to mitigate for their fill station, so instead Central San
did not complete the connection to the farm and stopped around 9,977 square feet
(or some such) leaving the farm to deal with the consequences of Central San's
construction project and requiring the farm to pave approximately 25 feet of land not
rented by AgLantis and not described as our pavement in the lease or LUP."9
Response:
It is difficult to understand why so much emphasis is given to this issue as typical
C.3 storm water mitigations for impervious surfaces include directing runoff to
adjacent landscaping that are self-retaining and providing zero runoff from the site.
Since the Farm is effectively "heavy duty landscaping with a purpose" and
encompasses a site that is 14.8 acres in size, C.3 mitigations should be
straightforward and easy to address.
C.3 requirements consider rooftop areas as impervious surfaces. Based on the
design that AgLantis submitted for the Land Use Permit, the approved site plan
includes 6,048 square feet of Greenhouse rooftop, 1,000 square feet of barn rooftop,
and approximately 36,000 square feet for the access road and parking area. This, in
and of itself, exceed the 10,000 square feet C.3 impervious surface exemption and
would require onsite mitigation of storm water runoff. AgLantis is now seeking to
modify its site plan to reduce impervious surfaces and this revised site plan needs to
be approved by the County.
The Lease states that all permit conditions imposed by the County as part of the
Land Use process are the Farm's responsibility. Section 5.1.1 of the Lease states
"Tenant shall not look to District for any satisfaction or execution of any conditions
imposed by a land use permit that are not in the District's control or jurisdiction."
Central San retained control of the frontage property along Imhoff Drive for access
and did not include this area in the Lease. AgLantis and Central San ratepayers who
use the automated recycled water fill station have access. The Land Use Permit
LP14-2051 (Conditions #46 to #50) required frontage improvements that included
paving "the first 100 feet of the access driveway, measured from the existing edge of
pavement of Imhoff Drive into the property, to allow vehicles to pull completely off
the roadway and still remain on a paved surface, and to prevent dust, gravel and
debris from spilling onto Imhoff Drive."
9 Page 2 of Annual Report and page 28 of Business Plan
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In 2016, County Public Works approved improvement plans which were designed to
meet the required roadway improvements identified under the Land Use Permit,
including approximately 4,400 square feet of pavement for the driveway approaches
(22 feet wide and 100 feet long). There were no C.3 mitigations required as the work
stayed under the 10,000 square foot exemption for impervious surfaces. Dr. Phinney
asserts that Central San left out 25 feet of pavement, up to the farm gate, which is
outside of her Lease. This section was constructed with Class 2 Aggregate Base at
95% compaction. The improvements were inspected by Public Works and finaled in
December 2016. Central San was not required to pave up to the farm gate and the
sign-off from the County further proves this fact.
Dr. Phinney also asserts that "Central San could have processed a separate permit
for their fill station or fulfilled C-3 with self-treatment on the east side of the Kiewit
property." There is nothing in the Lease that suggests an obligation for Central San
to provide AgLantis a reservation on the C.3 exemption area or that it is
inappropriate for Central San to utilize the exemption, especially when it should be
considered that almost half of the paving was a COA for the Land Use Permit.
2. Contra Costa Fire was not engaged during the Land Use Permit process and
has disallowed recycled water for fire.
We have encountered another unexpected barrier. It was always discussed that the
farm would use recycled water for fire as no potable water is available on that
section of Imhoff that leads to the farm or any other tenant. After the March 24, 2017
meeting Dr. Phinney went to talk to the Fire Department. The person at the desk
provided helpful information and went back to talk to the Fire Marshall, who said he
had never heard of this farm and that Fire should have been consulted before the
Land Use Permit was issued. We were told a special permission would be needed to
use recycled water for fire. Later conversations took place with Fire Inspectors by
Mike Milani and also with Dr. Phinney. We were both told that same thing, that
special permission would be required. Then, the Fire Marshall disallowed such
use.'°
Response:
Fire suppression is a requirement related to the building permit necessary for the
greenhouse, for which AgLantis is responsible in obtaining Advisory Notes are
provided at the end of the Land Use Permit Conditions. Advisory Note F states "Prior
to applying for a building permit, the applicant is strongly encouraged to contact the
Contra Costa County Fire Protection District (Fire) to determine if additional
requirements and/or additional permits are required as part of the proposed project."
10 Page 3 of Annual Report and page 29 of Business Plan
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As part of the Land Use Permit process, the full application and site plan were
routed to various agencies for comments which are used to develop the conditions
of approval. Fire was no exception and received plans on September 16, 2014 from
County Department of Conservation and Development. Tad Leach of Fire responded
on October 1, 2014 wtih the following comment "Any development on this parcel
shall be subject to review and approval by the Fire District."
As discussed previously AgLantis has chosen to construct the greenhouse on a
parallel track as initiating traditional farming onsite. Fire suppression is a
requirement related to the building permit necessary for the greenhouse, for which
AgLantis is responsible in obtaining. The Land Use Permit allows farming as an
allowable use for the Heavy-Industrial zoned parcel. It does not allow the
construction of the greenhouse until after a building permit application is reviewed
and approved.
3. AgLantis assertion that Central San staff were instructed to interfere with
Airport Land Use Commission (ALUC) approval
"One Central San staff member told Dr. Phinney he had been instructed to make
efforts to interfere with the ALUC's approval of the farm. It took nearly a year for the
AL UC to finally approved the farm on May 15, 2015.
Response:
As the Planning and Development Services Division Manager, I was assigned by the
General Manager to serve as Project Manager for the Sustainable Farm and chief
point of contact, starting in December 2012 to present day, approximately five and
one-half years. During that time, I have never been told to nor did I interfere with the
approval process or give an instruction to staff working on the project to interfere.
4. There is an incorrect timeline presented and representation of the vote to
approve the farm lease.
The Central San Board approved the Lease with AgLantis on April 17, 2014 in a 4-1
vote, not on October 3, 2013 in a unanimous vote.12 The motion on October 3, 2013
directed staff to pursue a lease with CoCo San Sustainable Farm covering the west
side of the property and formed an Ad Hoc Committee to negotiate terms of a lease.
" Page 27 of the Business Plan
'Z Pages 10 and 27 of the Business Plan
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5. There is an inaccurate amount cited for expenditures related to the May 8,
2015 Kickoff event.
Central San spent approximately $4,800 on expenses and $3,600 on staff time to
host over 200 guests. The correct total is $8,393.55 and not "$25,000 plus staff
time."13
Farm Updates and Schedule
At the July 20, 2017 meeting, Board members expressed frustration at the lack of
progress on the Farm and wanted to make a motion to have it treated more like a
project with a budget, schedule, completion date and quarterly updates. Since the
matter was not agendized for action at that meeting, it was the consensus of the Board
to have a future agenda item.
An item was placed on the August 17, 2017 consent calendar to adopt a project
schedule approach, with quarterly updates and accept the milestone dates presented at
the July 20, 2017 meeting. The item was continued with unanimous support by the
Board, because it did not include milestone dates related to the County Land Use
Permit, nor did it include a realistic budget for the next 12 to 18 months. On
November 16, 2017, Dr. Carolyn Phinney presented an updated project schedule and
budget and answered specific questions. The Board approved a motion to receive the
updated project budget and schedule for the CoCo San Sustainable Farm and directed
staff to limit Farm-related work to that contractually required of Central San by the
Lease and Land Use Permit.
The Annual Report and Business Plan did not provide updates to the project schedule
and budget presented to the Board in November 2017. In a response to an April 2, 2018
request to update the Annual Report with this information, Dr. Phinney emailed the
following response:
"No, I'm sorry, you are making requests that are not part of the lease. As I told you
previously, I do not have time to do anything more. I already added a Strategic Planning
section to the Business Plan that is not part of the lease requirements. All of this took
me more than two months of work. I need time to engage in the other activities required
for AgLantis.
Please read what I sent you. One of my board members suggested that Central San is
trying to cripple us with non-lease requests to make us fail. We speak to this in the
Business Plan."
13 Page 11 of the Business Plan
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Potential Modification of Minimum Performance Standards
As previously discussed, the Board needs to provide clarity on the start of the first
operational year. Staff has recommended this as 2017 to provide reasonable
accommodation for communication difficulties with the County and Land Use conditions
completed by Central San. Formally defining the start of operations allows clear
assessment of the Minimum Performance Standards outlined in the Lease.
As presented, the current schedules that AgLantis submitted on April 1, 2018 with
respect to the third year, do not demonstrate that produce will be provided to the Food
Bank or other non-commercial institutions in 2019. Separately, and of equal importance,
the attached documents do not demonstrate that greenhouse will be constructed per
Exhibit D of the Lease. The schedule provided in the Business Plan deviates from
milestone dates presented to the Board on November 17, 2017. In particular,
construction of the greenhouse has changed from completion by December 31, 2019 to
"Goals for the next five years" in the Business Plan with no date.
Based on the schedules submitted, the project activities may not comply with the
minimum performance standards for the third year. This suggests to staff that future
discussions may be necessary to either revise the Business Plan schedules, modify the
Minimum Performance Standards or the future of the project as a whole.
Therefore, it may be appropriate for the Board to consider this and other actions for both
the future and near term of the AgLantis CoCo San Sustainable Farm project.
Attached Supporting Document:
1. 2017 Annual Report
2. 2018 Business and Strategic Plan
3. Land Use Permit LP14-2051
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