Cedar Rapids OKs new rules for alcohol, tobacco shops looking to locate in urban core

CEDAR RAPIDS — Several commercial corridors in neighborhoods around Cedar Rapids have seen a growing concentration of alcohol and tobacco shops, prompting the Cedar Rapids City Council this month to OK more regulatory hurdles for businesses looking to set up shop in the increasingly residential city core.

The new code language adopted May 14 puts Cedar Rapids among Corridor communities including Iowa City and Marion weighing whether current code language is sufficient to address the rising number of alcohol and tobacco shops in certain parts of town, or whether they need to adopt other tools to regulate where these businesses go.

The proliferation of these shops can be a concern to city officials and residents because of their health impacts, perceived drag on property values and perception that they’re unsafe.

In some cases in Cedar Rapids, nearby residents have successfully opposed potential new projects, lobbying until the proposals are withdrawn or denied after a 2019 code update required businesses hold a neighborhood meeting and notify all residents within 300 feet of the proposed site. These businesses have to seek conditional use permits from the Board of Adjustment to operate in or near Cedar Rapids’ residential areas.

Around the U.S., more cities are exploring zoning code changes to better regulate where these shops can set up. Research shows that alcohol and tobacco shops disproportionately locate in more racially diverse, lower-income neighborhoods.

Areas like Center Point Road NE, Mount Vernon Road SE and First Avenue E in Cedar Rapids have seen multiple alcohol and tobacco shops spring up in proximity to one another.

Seeing that, council member Dale Todd — who represents District 3 which encompasses downtown and the neighborhoods including Mound View and Wellington Heights — implored city officials last fall to consider what could be done to discourage concentrations of alcohol and tobacco stores in inner city neighborhoods.

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“We make tons of investment but then these vampires come in only to further destabilize things,” Todd wrote in an email to other city officials last fall. “Let's figure out how we can help the existing retail in the neighborhood and discourage these obvious public health risks.”

Tighter regulations in Cedar Rapids’ city center

Todd pointed to a study published in 2020 in the Journal of Urban Health looking at a new City of Baltimore zoning ordinance that forced 76 liquor stores in residential areas to relocate, close or convert to an approved use.

It found that “affected stores are concentrated in high poverty, majority Black neighborhoods with high vacancy rates, and that liquor store closings are associated with a statistically significant reduction in violent crime on the block group in question with no negative spillover affects onto the nearby block groups.”

Ultimately, the Cedar Rapids council earlier this month signed off on zoning changes that ensure the city’s “urban form districts” — basically the downtown, New Bohemia District and MedQuarter — have tighter regulations governing where alcohol and tobacco shops can locate.

“Because of the additional housing that's going in, the shift in thinking of them as neighborhoods is really important,” Community Development Director Jennifer Pratt said. “This to me makes it consistent throughout the code.”

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Previous code language set two classifications, where businesses with 50 percent or less of sales coming from alcohol or tobacco needed a Level I certification to operate. Businesses where more than 50 percent of sales come from alcohol or tobacco are considered Level II.

Under the changes council approved, the city kept those classifications and created a Level III certification to differentiate businesses where a majority of sales come from alcohol or tobacco and products can be taken off-site for consumption. That more clearly differentiates between a bar and a liquor store, for example.

Instead of automatically permitting these Level III businesses in the city core, they’ll now have to seek city Board of Adjustment approval to operate.

The only existing retail store within the area that changes classification is Benz Beverage Depot at 501 Seventh Ave. SE, city planner Haley Sevening said, but under city code it is considered a legal, conforming use of the land despite the changes approved this month. Benz Beverage Depot would only need a conditional use permit if proposing a substantial change, like an expansion project.

The changes match standards for downtown to the practices that already exist in more residential areas. Essentially, these changes assure that downtown area residents have an opportunity to voice opposition or support for these businesses, potentially helping weed out the businesses if the proposed owner encounters few in favor of a proposed shop.

‘There gets to be a tipping point’

That’s what happened with a tobacco shop at 1561 First Ave. SE, formerly Subway, that Aftab Afridi proposed last fall. The proposal from Afridi — who owns three Pink Clouds Smoke Shops around Cedar Rapids — needed Board of Adjustment approval for a conditional use permit to operate within 300 feet of a residentially zoned district. The panel denied the request for a permit.

Phil Wasta, executive director of the MedQuarter and co-owner of five properties along First Avenue SE, wrote to the board asking the panel to oppose the project as “the area is not underserved for tobacco products.” At the time, Wasta said there were already seven tobacco retailers within a five-block radius of this address. Five of those were within 1.5 blocks.

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“A continued concentration of businesses that purvey products that have no health benefits to consumers is not needed and will not in any way enhance the area,” Wasta wrote.

Wasta told The Gazette there seems to be “insatiable demand” or perhaps competitors are trying to drive the others out with better products or prices, fueling these businesses to crop up in numbers around the same area.

“It's that rub between free enterprise and the fact that when you talk about the shops that are looking to locate there, they would only locate there if they think they can be successful,” Wasta said. “… You wouldn't have tobacco, vape, alcohol all jammed up against each other if there wasn't a market for it.”

Because “united voices are louder,” Wasta and others in the College District area like Carol Sindelar, president of the Mound View Neighborhood Association, banded together to oppose the project.

Sindelar said these businesses are a drag on how people perceive the surrounding neighborhoods and don’t project an image of public safety.

“There are a lot of places where you can buy alcohol and you can buy tobacco, and I didn't think we needed another one,” Sindelar said. “… There gets to be a tipping point.”

Wasta took issue with the health consequences that come with these products being easier to access. He said these businesses should more clearly notify area residents when they want to locate in a neighborhood and be forthcoming about the products they sell.

But will the city “be the judge to decide when enough is enough?” Wasta asked.

“This guy just wants to do business … and yet at the same time, it won't raise the neighborhood,” Wasta said.

Having proposed investing millions in the store, Afridi said the city and state should ease regulations for businesses to locate here because “business is the only thing that gives you prosperity.” He operates other tobacco and vape stores in Dubuque, Vinton and Ottumwa.

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Afridi said businesses should be allowed to locate where they desire because customers will find a way to satisfy their cravings or addictions, no matter the distance, pointing to recreational cannabis being legal in the border states of Minnesota, Illinois and Missouri.

“They will take the money, they will drive for hours … and they will get their stuff,” Afridi said.

Changes ‘give neighborhoods better leverage’

It’s that word-of-mouth, signage and notification from the city that Todd said Cedar Rapids has relied on to block these stores from concentrating in a neighborhood.

Before the city completed its zoning ordinance overhaul in 2019, there were no requirements for alcohol- and tobacco-related uses. They were just considered retail. With no 300-foot buffer from residential development, there were fewer restrictions on where they could locate. The 2019 update created more “checks and balances,” Sevening said.

Since Jan. 1, 2019, Zoning Administrator Seth Gunnerson said the city has received 25 conditional use applications for Level II alcohol or tobacco uses, including a couple of bars. Of those, there were 16 approved, two denied and seven withdrawn or voided after the applicant stopped communicating with the city about the project.

The zoning changes approved this month are “an effort to be more proactive and give neighborhoods better leverage and a fighting chance,” Todd said.

“It has been on my bucket list for a long time, and it is a good step in the right direction, but I have challenged staff to ask the question, ‘Can we do more?’ Will this fully address the concern?’ I have been told it will, but only time will tell,” Todd said.

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There’s no cap on the number or density of alcohol and tobacco shops that can locate in a certain area. Sevening said it could be challenging from an administrative standpoint and for applicants to limit the number within a certain area.

“That's a tool that other communities use,” Sevening said. “I think we feel comfortable with having the conditional use public hearing process as a first step because that can come out through those meetings.”

Other cities explore regulations

Other Corridor communities are increasingly exploring how to regulate alcohol and tobacco shops.

Though it’s not aimed specifically at alcohol and tobacco permits, the Marion City Council last fall enacted a moratorium temporarily restricting certain commercial uses in Marion’s growing commercial districts — stretches of Tower Terrace Road, Highway 13 and Uptown Marion.

Alcohol, tobacco and vape shops are among the restricted uses under the pause, which is in effect until Oct. 5 while Marion refreshes its comprehensive plan, a long-term guide for physical improvement and development.

And the Iowa City Council on May 7 unanimously passed a moratorium halting the issuance of new retail tobacco permits in the city until Jan. 1, 2025.

According to the meeting agenda, this moratorium is intended to give the city time to look into other measures to curb access to tobacco, nicotine and vapor products. Iowa City has recently seen an increase in businesses primarily focused on selling these kinds of products.

At the meeting earlier this month, City Attorney Eric Goers said he will come up with possible measures the city could implement, such as capping the number of tobacco permits issued or enacting distance requirements from other retail outlets or “vulnerable populations,” such as schools. Those measures could be discussed as early as the July 16 council meeting.

Council member Andrew Dunn told The Gazette the main concerns that led the Iowa City Council to pursue a tobacco moratorium and other regulations were public health and safety, especially for minors, as well as economic concerns.

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Dunn said the city has seen tobacco retailers cropping up in accessible places, such as downtown. Studies also have shown that more underage individuals are using tobacco products, especially vapor products, he said.

According to a 2022 study by the U.S. Centers for Disease Control and Prevention, more than 14 percent of high school students and 3 percent of middle school students reported current e-cigarette use. Since 2014, e-cigarettes have been the most used tobacco product by minors in the nation, the study states.

In addition to health concerns, the increased presence of tobacco retailers downtown also has meant that other businesses that do not sell tobacco products can’t take up prime downtown locations, Dunn said.

“They’re also taking away really, really vied-for business locations, like downtown, from other people that might want a good plot in a great location,” Dunn said.

Another concern is the sale of products like kratom in tobacco shops, Dunn said. Kratom is an opioid-like herbal substance that is currently legal in the U.S. According to the U.S. Food and Drug Administration, kratom can have several ill effects, including liver problems, seizures, addiction and sometimes death.

Dunn said he hopes to see vapor products and products like kratom become more regulated not just in Iowa City, but also on the statewide level. On May 17, Gov. Kim Reynolds signed a bill into law that bans retailers from selling vapor products not listed on a state-certified directory.

The misuse of tobacco products also seems to be on the minds of community members, who Dunn said frequently reach out with concerns.

“ … It's a big problem,” Dunn said. “There's major health and safety concerns for the broader community with things being so close to educational institutions and just being so readily accessible.”

Isabelle Foland of The Gazette contributed to this article

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