Central Kenai pot store permitted on second try

A strip mall location in central Kenai is both a blessing and a curse for the planned marijuana retailer East Rip, whose city permit was narrowly approved Wednesday by the Kenai Planning and Zoning Commission. The commissioners at their previous meeting Nov. 8 had narrowly denied the permit, but reconsidered and reversed the decision.

At the Nov. 8 meeting, opponents said marijuana’s odor and image would hurt other businesses in the building and would be incompatible with a nearby vacant lot which has been sometimes used for recreation. The seven-member planning and zoning commission — with chair Jeff Twait absent — denied the permit with a 2-4 vote.

East Rip’s owner Ryan Tunseth appealed the decision. Members of the Kenai City Council, who serve as a board of adjustment to decide on appeals of commission decisions, were scheduled to hear the appeal on Jan. 16.

Commissioner Joseph Halstead initially voted against permitting the shop, but in a Nov. 20 letter to the other commissioners wrote that he “was not comfortable with my decision.”

“It is easy for us to decide to ‘kick this up’ on an appeal to City Council, however I believe that this is a matter that can be resolved within our Commission,” Halstead wrote.

Reconsidering the issue on Wednesday, the commission voted 4-2 to permit the shop. This time Twait was present and voted for the permit. Commissioner Diane Fikes, who had initially voted against the permit, was absent.

With its city permit granted, East Rip is now going through its state permitting.

Location

Though East Rip is the third marijuana retail store planned or existing in Kenai, it’s the first to seek property in the dense commercial center of town. Kenai code prohibits marijuana businesses within 1,000 feet of schools and 500 feet of churches, correctional facilities, drug abuse treatment centers, and recreation centers.

Central Kenai’s density of churches, playgrounds, and schools have pushed marijuana retailers to the town’s periphery — the existing Red Run Cannabis store is on the city’s eastern edge and the planned retailer and grower Majestic Gardens is toward its northwest side. Central Kenai properties, Tunseth said, are “few and far between.”

“We love this location because right from the start, it looked like it afforded us the ability to have good access for our customers, the ability to have discrete access for our customers,” Tunseth said. “…We were willing to fight for it, for sure.”

East Rip is planned to occupy one store space of the four-store strip mall at the intersection of the Kenai Spur Highway and Bridge Access Road. Like the nearby Arby’s franchise, the building belongs to Zan, Inc, a business owned by the Navarre family which includes former Kenai Peninsula Borough Mayor Mike Navarre and Kenai city council member Tim Navarre, who are also Tunseth’s uncles.

The centrality that may benefit East Rip’s business also stirred opposition among neighboring business owners who feared that the smell and stigma of marijuana would drive away customers. East Rip would share its building with three other Zan, Inc. tenant businesses: Hammer Tax and Accounting, Kelsi’s Kloset clothing shop, and Denali Family Dentistry. The owners of two of these businesses — plus an accounting business in an adjacent building — urged the planning and zoning commissioners not to permit the shop.

“While I realize marijuana is legal in the state of Alaska, it is not legal federally,” said owner Kathy Hammer of Hammer Tax and Accounting. “Being an enrolled agent, I am licensed federally. I would hate for this type of establishment to have any effect on my license to practice or on my clients’ perception of my professionalism. I would have the same objections to a permit allowing a liquor store, a tobacco store, or a strip club in this location. It is not an appropriate location for these controversial businesses.”

Fikes said her largest concern was that East Rip was in a shared space — the first such marijuana business to seek a permit from Kenai. Her concern was shared by owner Cassie Kiel of Kelsi’s Kloset, who feared the smell could stick to the clothing she sold.

The Alaska Marijuana Control Board has ventilation, air filtration, and odor control requirements for marijuana businesses. Tunseth said merchandise sold at the store would arrive prepackaged.

Millennium Square

Across Frontage Road from the planned location of East Rip is the vacant city-owned field which the Kenai City Council designated Millenium Square in 2002 and has since planned to develop as a convention center, park, or outdoor stage. Though $35,000 was appropriated to study these possibilities in 2016, the funding was later withdrawn and the lot remains “the last large city-owned parcel of undeveloped land in the city’s downtown core overlooking the Kenai River,” according to Kenai’s 2017 comprehensive plan.

Though the land has no official recreational designation and is zoned as central mixed use, Commissioner Halstead said at the Nov. 8 meeting that the occasional soccer and softball games that happen on the property “make it just as significant as a certified park area.”

“With that being a park area, that is my primary concern,” Halstead said.

Commissioner Robert Springer asked Kenai City Planner Matt Kelley whether Millenium Square would be considered a buffered recreational area under city code.

Kelley said the definition of recreation or youth center in Kenai City Code requires the facility to be designated by the state or “operated by a public or private organization licensed to provide guidance to persons under 21 years of age.” Millenium Square did not meet these conditions, he said.

Kenai city attorney Scott Bloom said in a later interview that a marijuana shop within 500 feet would not preclude the future development of Millenium Square as a park or event space. An already-existing marijuana shop within 500 feet would also be allowed to continue in this situation.

After the Nov. 8 denial — in which commissioners Victoria Askin, Fikes, Springer, and Halstead voted against the permit — Halstead wrote that he was reconsidering the arguments against permitting East Rip, including the potential for its accessible location to “cause a potential risk to youth, and other unwanted elements.”

“I believe that I am allowing my personal bias to marijuana consumption to cloud my view on this matter,” Halstead wrote. “The building located next door has operated as a bar for many years, and has not had a negative impact on the surrounding area.” The bar he referred to is the neighboring Backdoor Lounge, which is in the same block of businesses and also across Frontage Road from Millennium Square.

Halstead wrote that he’d also come to believe that the state’s requirements for odor containment and air handling would force the shop to prevent the spread of smell, and that protecting the other businesses in the building is not a city matter.

“I feel that it is the right of the property management to say who is allowed or not allowed in this location, and is not for the Planning and Zoning Commission to decide,” Halstead wrote. “If the other tenants decide that it is in their best interests to move out, then that is on the property management company. This should not be a matter for Planning and Zoning.”

At the Dec. 10 reconsideration, the permit was granted with opposing votes from Askin and Springer.

Reach Ben Boettger at ben.boettger@peninsulaclarion.com.

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