City of Alachua to Get $1.8M Settlement after Medical Marijuana Firm Defaults on Agreement

ALACHUA ‒ The City of Alachua has prevailed to the tune of $1,851,740 in a settlement agreement with Harvest DCP of Florida, LLC, a medical marijuana company. The company purchased Building C at 1289 N.W. U.S. Highway 441 in the city of Alachua and eventually sold the property but remained the tenant in the building. Harvest DCP planned substantial renovations to Building C, which were projected to exceed 75 percent of the value of the building. Because of the scope of the renovations, the City of Alachua’s Land Development Regulations (LDR’s) required Harvest to submit a site plan to bring the property into compliance with the LDR’s.

Rather than waiting until completion of the work required to develop the site plan, which had not yet been submitted, and before it could pull the building permit and move forward with the renovations, on April 12, 2021, Harvest entered into a Developer’s Agreement with the City of Alachua. The agreement would allow the renovations to move forward and at the same time insure that a site plan would be submitted, approved, and the site plan improvements completed.

The Developer’s Agreement allowed Harvest to pull a building permit and commence work on the renovations but required submission of a site plan within 30 days and the work required by it be completed within six months of its approval.

By the middle of August 2021, when no site plan had been submitted, it became apparent that Harvest would not meet its time deadline for the completion of the improvements by the middle of October 2021.

On Aug. 28, 2021, the City and Harvest entered into an Amended and Restated Developer’s Agreement. In order to ensure that the improvements required by the site plan would be completed by Harvest, a condition of the Amended Agreement required Harvest to provide the City with a Common Law Performance Bond in the amount of $1,851,740.

According to the City, despite repeated attempts for updates, Harvest ignored all inquiries and the work was not done. After the deadlines in the Amended Agreement had passed, the City Commission authorized the city manager and city attorney to retain the services of a Board-Certified Construction law attorney, Don Niesen, to handle the default under the Amended Agreement.

On June 15, 2022, Niesen put the surety, United States Fire Insurance Company, (“USFIC”) and Harvest on written notice of the default. On Dec. 2, 2022, after going back and forth trying to resolve the default for nearly six months, Niesen provided a final detailed letter to USFIC, Harvest and to Trulieve, Inc., which merged with Harvest, demanding payment of the full penalty sum under bond in the amount of $1,851,740 on or before Dec. 22, 2022, or the complaint would be filed in Eighth Judicial Circuit.

USFIC (the bonding company), Harvest, and Trulieve agreed to pay the City of Alachua the full amount of the performance bond. Payment is required within 15 days of the settlement.

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