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The Curious Case of Parcel 106-101-054 

How a Florida corporation tripped over regulations during the Green Rush

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Nine acres isn't much when it comes to agricultural land. It's big enough for a barn and a couple of cows. For many years, this particular parcel, tucked away off of Grizzly Bluff Road in Ferndale, sat on the market uncourted. The owners, Sally and Milton Conley, bought it for $250,000 shortly before the 2009 market crash. Sally Conley considered it a retirement investment, but as the market waned she and her husband realized it would probably sell at a great loss. Then, as the price dipped to $196,000 in November of 2015, something strange happened. Two buyers expressed interest in the land on the very same day. A bidding war started, pushing up the price. It sold for $210,000 on Dec. 7, to a newly-minted corporation headquartered in Miami, Florida.

"It was really a bizarre thing," says Conley. It was about to get even more bizarre.

To understand the context of parcel 106-101-054's surprise sale, you have to understand the speculation that was playing out across headlines and in the offices of real estate developers in the fall of 2015. In September, Legislature approved a trio of medical marijuana regulations, effectively legitimizing and regulating a booming industry that had gone unchecked for two decades. The bills established a brand new Bureau of Medical Marijuana, and mandated counties to develop individual ordinances before March 1, 2016, or cede control to the bureau. In Humboldt County, there was a mad scramble to finalize an ordinance. As the details were hammered out, there was speculation that outdoor cultivation could be limited to land zoned agriculture exclusive or rural residential agriculture. And on the other side of the continent, a chiropractor with deep pockets took notice.

On Oct. 7, 2015, TFG Ventures, LLC was officially founded. There is little information available about the company — it has no website and no associated contact information. But its principal, Dennis H. Bonneau, is a seasoned investor. A licensed chiropractor, he is listed as the principal for nine active Florida corporations, most related to health and rehabilitation. He is also principal for 11 dissolved corporations. The mysterious TFG was just his latest project. What drew Bonneau's interest to the Ferndale parcel is unknown: He did not return multiple calls from the Journal. But his newly formed venture, under the name TFG Group, Inc., filed one of the first forms registering for commercial cannabis production with the county, date-stamped Dec. 21, 2015. The signee was not Bonneau, but one Randy Nunez.

In his communications with the Journal, Nunez was tight-lipped about the young company, confirming only that he and his coworkers had been in the county for six months and that TFG Group was a mutual benefit corporation dedicated to research. A quick web search filled in some details. Nunez, like Bonneau, is from Florida and a former chief training officer at AndeGen, another Bonneau holding. In his mid-30s, Nunez is a former sergeant with the U.S. Army. The full name of the company for which Nunez is director of operations? Task Force Green.

Task Force Green's web presence is currently limited to Nunez's Facebook page and an Instagram account. But according to social media and an event listing on the Humboldt chapter of the National Organization for the Reform of Marijuana Law's website, its mission is to provide, "Clinical Research effort to discover the optimal ratio between cannabinoids to treat Veteran patients with PTSD, [minor traumatic brain injuries], or both." And, according to all accounts, they hit the ground running. When the Journal drove past parcel 106-101-054 in early May, a shipping container sat next to an RV on the site. The container's doors were open, leaving row after row of healthy cannabis plants illuminated by artificial light in plain sight from the road. Just beyond the container were the bare bones of a barn, its skeleton stretching hungrily into the sky. It may never be finished, and the plants may soon have to be moved. Despite having applied for a commercial cannabis permit and a building permit, TFG broke ground before either permit was approved by the county planning and building department.

The county took notice of construction and cultivation after being contacted by neighbors, and on Feb. 8, TFG was served with a county stop work order. It is unknown why the contractor responsible for excavating the site and erecting the barn, Dennis Wendt, proceeded before receiving approval. Wendt did not respond to our requests for comment. It is also unknown if TFG was aware that Wendt, who filled out the original application, had not yet received the go-ahead from the county. Ordinarily, these obstacles would be easily overcome. TFG could cool its heels, wait for the building permits to be approved and use that time to properly fill out a land use permit application for cultivation, which the county began accepting on Feb. 26. But Task Force Green and its investors hadn't anticipated a final spanner in the works: The California Coastal Commission.

Mike Pigg, the real estate agent who facilitated the sale of parcel 106-101-054, says that TFG's investment prior to the finalization of county regulations was a gamble.

"They were basing their speculation on what was coming," says Pigg, adding that he largely refrains from opining on whether or not a property will meet guidelines, instead referring clients to the county. "They were doing their due diligence, trying to do research. They were making good phone calls, trying to contact people."

When the Board of Supervisors adopted the Commercial Medical Marijuana Land Use Ordinance, an important caveat was included: Applications for projects located in the Coastal Zone are not being accepted. As a state entity, the California Coastal Commission has a separate process for approving commercial grows and jurisdiction over the Coastal Zone.

"You have to wait another four to six months to get approval from the coastal commission," Pigg says glumly, adding that the CCC is "bogged down." Both he and Conley said the zoning was not a secret at the time of the sale, although the county's map of the coastal protection zone reveals some irony. About a third of the verdant Eel River Valley, with its prime agriculture land, falls under the jurisdiction of the coastal commission. The parcel purchased and partially developed by TFG is less than a mile away from its borders.

Despite the aura of uncertainty, Pigg and his cohort are busy. Agricultural land is selling at a premium, the prices steadily ticking upward: $1.375 million for 54 acres in Myers Flat; $4.5 million for 2,357 acres in Petrolia; $22 million for a 5,000-acre ranch in Blocksburg. Pigg says most clients are looking for the same three things: flat land, water and privacy.

"Even if you're going to do something legally, you still want privacy," he says. Nunez confirms that Task Force Green is currently looking for a new site, but has yet to find one that meets the county's standards. It's difficult to say what was ultimately responsible for the Floridians' setback: Nosy neighbors, a careless contractor, bureaucratic torpor or their own heedless zeal. But their mission has received a timely boost and urgency from Washington: In May, Congress approved an amendment allowing the Department of Veteran's Affairs to prescribe medical marijuana. And, whether or not they manage to secure their place in the green rush, they should at least recoup their investment. Parcel number 106-101-054 is up for sale again, this time for $330,000, almost two times its listing price just seven months ago.

Editor's Note: The original version of this story contained a factual error, noting that the property's price dipped to $106,000. In fact, the lowest price was $196,000, and it was put up for sale recently at nearly twice -- not three times -- that figure. The Journal regrets the error.

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