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HomeMy WebLinkAbout03092026 City Council LAYDOWN - TuftedPuffinLaydown March 9, 2026 CC Meeting JDW COUNSEL ALIGNED FOR EXCELLENCE March 9, 2026 Honorable Mayor Sue McClure Honorable Members of the Seward City Council City of Seward P.O. Box 167 Seward, Alaska 99664 Jana D. Weltzin Licensed in Alaska & Arizona 901 Photo Ave, Second Floor Anchorage, Alaska 99503 Phone 907-231-3750 JDW, LLC jana@jdwcounsel.com Re: Ordinance 2026-004 — Clarification Requested Regarding "Substantial Change in Use or Business" Dear Mayor McClure and Members of the Council: Our firm represents The Tufted Puffin, which owns two existing marijuana retail establishments located in Seward that received both state and local approvals prior to March 1, 2026. At the outset, our client appreciates the Council's effort to establish clear policy regarding marijuana establishments and to preserve the ability of already -approved businesses to continue operating under the regulatory framework that existed when they were approved. The ordinance appears intended to accomplish precisely that by allowing establishments approved prior to March 1, 2026 to continue operating notwithstanding the new restrictions. However, we write to respectfully raise a concern regarding one specific provision in the ordinance materials. The agenda statement explains that existing establishments may continue operating, "understanding that any substantial change in use/business would be subject to the laws that exist at the time of the change. " The concern is not with the policy goal, but with the absence of any definition or standard for what constitutes a "substantial change." 1. Undefined standards create administrative uncertainty From a land -use administration perspective, this type of undefined standard can create significant practical problems for both applicants and City staff. Land use regulations are most effective when they provide clear, objective standards that can be applied consistently and predictably. When key terms are not defined, the result can be uncertainty for applicants and inconsistent interpretation by administrators, which can lead to avoidable disputes regarding how the code should be applied. Clarifying this standard at the time of adoption will help ensure the ordinance is easy for City staff to administer and will reduce the likelihood of future interpretive disputes. 2. The ordinance appears intended to recognize vested approvals The ordinance materials indicate that the March 1, 2026 date was included specifically to allow existing marijuana establishments that already received City and State approval to continue operating. That approach is consistent with standard land -use practice. Businesses that have obtained permits and invested in reliance on existing regulations are typically allowed to continue operating even when regulations change later, so long as the underlying use of the property remains the same. However, if "substantial change" is not defined, the scope of that protection becomes unclear and could unintentionally undermine the very grandfathering provision the ordinance appears intended to provide. 3. Clear standards benefit both the City and businesses From an implementation standpoint, the most effective codes are those that provide clear, objective standards that can be applied without subjective interpretation. For that reason, municipalities typically do one of the following when regulating changes to existing uses: 1. Define the term explicitly, with objective criteria; or 2. Limit the restriction to specific defined events, such as relocation of the business or expansion beyond the approved premises. Either approach would give both staff and operators a clear rule to follow. 4. Potential unintended consequences Without clarification, routine and necessary business actions could arguably trigger application of the new regulations. For example: • A business sale or transfer of ownership • Interior renovations to improve safety or compliance • Reconfiguration of space within an existing building • Redevelopment of the property, including construction of a new building on the same parcel • Construction of additional amenities associated with the existing business, such as a rooftop deck or similar customer space None of these activities changes the underlying land use of the property. Rather, they represent normal improvements or reinvestment in an already -approved business location. 2 I Page For example, a property owner may reasonably wish to improve or redevelop an existing site over time, including constructing a new building on the same parcel or enhancing customer areas within the approved premises. These types of improvements are common for commercial properties and typically do not alter the underlying land use of the site. Without clearer language, however, it is uncertain whether such reinvestment in an existing approved establishment could be interpreted as a "substantial change," which would create uncertainty for both businesses and the City staff responsible for administering the ordinance. 5. Suggested clarification Our client respectfully requests that the Council clarify the ordinance to ensure that existing approved establishments may continue operating at their current premises unless the business relocates or materially expands beyond what was previously approved. To assist the Council, we have attached two possible approaches that would accomplish this while maintaining the policy goals of the ordinance. The first option provides a definition of "substantial change" that creates objective standards for staff to administer. The second option provides a simpler structural clarification that eliminates the ambiguity entirely and instead focuses on relocation or expansion of the premises. Both options are intended to confirm that normal reinvestment in an existing approved establishment —including construction of a new building on the same parcel, interior remodeling, redevelopment of the property, or development of outdoor customer areas such as rooftop decks — does not constitute a substantial change in use. Our client values its role as a local business in Seward and intends to remain a responsible operator within the community. The purpose of this letter is simply to ensure that the ordinance language reflects the Council's apparent intent to allow already -approved establishments to continue operating without uncertainty. Clear definitions at the time of adoption will help prevent future administrative disputes and make the code easier for City staff to implement. Thank you for your thoughtful consideration. Truly and Sincerely Yours, Jana D. Weltzin, Esq. 3 1 Page Attachment A Option 1— Define "Substantial Change" Add the following definition to Seward City Code § 15.10.140: "Substantial change in use or business" means a change that alters the location or fundamental nature of the marijuana establishment. A substantial change includes: 1. Relocation of the marijuana establishment to a different parcel or premises. A substantial change does not include: A. Transfer of ownership of the marijuana establishment or state license; B. Interior remodeling or reconfiguration of the premises; C. Changes in business name, hours of operation, or management; D. Improvements required to comply with state regulations, building codes, or health and safety requirements; E. Construction of a new building, structural improvements, or redevelopment of the property within the same parcel and licensed premises; or F. Development of outdoor customer areas associated with the existing establishment, including "rooftop decks or other vertical or outdoor customer areas located on the same parcel or similar improvements located within the approved premises. Attachment B Option 2 — Clarification of Existing Marijuana Establishments A marijuana establishment that received approval from both the City of Seward and the State of Alaska prior to March 1, 2026, may continue operating in accordance with the approvals granted at that time. Such establishments shall not be subject to the restrictions contained in this ordinance unless: 1. The marijuana establishment relocates to a different parcel or premises. A transfer of ownership, transfer of a state license, interior remodeling, reconfiguration of the premises, construction of a new building on the same parcel, redevelopment of the property, or development of outdoor customer areas associated with the existing establishment, including rooftop decks or other vertical or outdoor customer areas located on the same parcel, or similar improvements located within the approved premises, shall not be considered a new establishment or subject the business to the restrictions adopted by this ordinance.