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HomeMy WebLinkAboutCOW 2025-08-25 Item 4A / 5A - Public Hearing - Ordinance Updating Cannabis Use RegulationsCOUNCIL AGENDA SYNOP il !ifeng Dal Prepared Of enteals Mayer s reveele Comm/ 'men ITEM No. .-i ' 8/25125 9/8/25 NG NG 4.A. & 5.A. ITEM INFORMATION STAMP SPONSOR: NORA GIERLOFF ORIGINAL AGENDA DATE:8/25/25 AGENDA ITEM TITLE Cannabis Zoning Regulation Update (Ordinance) CATEGORY aseussion AN Date 8/25/25 I I Motion AN Date 9/8/25 PI Resolution Mt, Date Z Ordyname Aft Date 918/ 25 Fri Bid Awaal Mi?, Date j Public Hearing Mq,, Date 8/25/25 Other 3e f 1; Date SPONSOR Conned SPONS R'S The SUMMARY establishments The •Major City Council 0 Admen Svcs Z DCD Finance El F er Council requested options to potentially expand and staff has developed an ordinance reflecting is being asked to consider and approve the ordinance. •Pe-R allowed [1 Polite •Pa" zoning for cannabis PCD Committee retail direction. REVIEWED BY Li TtansMnbastructute Svcs li Community Svcs/Safety H Finance & Governance X Planning & Community Dev. LTAC P1 Arts Comm, — Parks Comm. H Plannmg Comm. DATE: 7/14/25, 8/11/25 COMMITTEE CI {AIR: HENDRICK RECOMMENDATIONS: SPONSOR/ADMIN. Department of Community Development commariTEE Unanimous Approval; Forward to 8/25/25 Committee of the Whole COST MPACT / FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED Fund Source: Comments: No MTG. DATE cost to imp/ement, retail sales would generate revenue RECORD OF COUNCIL ACTION 8/25/25 MTG. DATE ATTACHMENTS 8/25/25 InformationaI Memorandum dated 7/14/25 - amended 8/5/25 A. Map showing current cannabis zoning and buffers in Tukwila B. Map showing 300 foot cannabis buffers C. Map showing 500 foot cannabis buffers D. Draft Ordinance - updated after 8/11 PCD Committee Meeting Minutes from the 8/11/25 PCD Committee Meeting Map showing additional zones and 300 foot cannabis buffer - add . after 8/11 PCD 2 City of Tukwila Thomas McLeod, Mayor INFORMATIONAL MEMORANDUM TO: Planning & Community Development Committee FROM: Laurel Humphrey, Legislative Analyst Nora Gierloff, DCD Director CC: Mayor McLeod DATE: July 14, 2025 amended August 5, 2025 SUBJECT: Cannabis Retail Business Zoning Considerations ISSUE The City Council requested options to potentially expand zoning for cannabis retail establishments and staff has developed an ordinance reflecting Committee direction. BACKGROUND Initiative 502 passed in November 2012 and created a comprehensive regulatory approach on cannabis with state -licensed producers, processors and retailers. Initiative 502 received a yes vote in all but one Tukwila precinct. HB 2870 created a Marijuana Social Equity Program in 2020 to address historic racial inequity in enforcement of marijuana laws. In 2022, 2SHB 1210 replaced all references to "marijuana" in state statutes and regulations with the word "cannabis." • On September 3, 2013, the City Council adopted Ordinance 2407 to implement Initiative 502, determining that cannabis retailers, producers and processors are permitted uses in Tukwila Valley South and Heavy Industrial Zones, subject to the 1,000-foot exclusion rule (see attachment A). • In 2015, 2SSB 5052 and HB 2136 allowed cities to reduce buffers from 1000 to 100 feet around all entities except elementary and secondary schools and public playgrounds. • In 2017, the City Council received two separate requests to expand permitted cannabis retail zones but denied both on February 13, 2017. • In September 2019, the Finance Committee discussed revenue and zoning considerations and decided against recommending any changes to the City Council at that time. • In June 2021, the Finance & Governance Committee discussed revenue potential and decided against recommending any changes to the City Council. • On May 13, 2024, the Planning and Community Development Committee discussed expanding retail cannabis zoning and recommended the topic return to the full Council for discussion in November 2024. • On June 10, 2024, the Council discussed expanding retail cannabis zoning, heard pro and con public comments, and reached consensus to continue further discussions in 2025. • On July 14 the PCD Committee discussed retail cannabis locations further. DISCUSSION Zoning Currently, cannabis retail, production and processing are only permitted in the Tukwila Valley South, Tukwila South Overlay, and Heavy Industrial Zones. (Read more in the 8/26/13 staff report.) The City has received requests to expand those zones to include Regional Commercial Mixed Use (RCM) and the Southcenter area. Within the Southcenter area, the Tukwila Urban Center Commercial Corridor and Workplace Districts (TUC -CC and TUC-WP) might be most appropriate as they only allow limited residential uses and are largely unaffected by the State buffers even if those are kept at the maximum 1,000-foot distance. INFORMATIONAL MEMO Page 2 Buffer Distances State regulations listed in WAC 314-55-050 prohibit issuance of Ilicenses for cannabis businesses within 1,000 feet of the following uses: (a) Elementary or secondary school; (b) Playground; (c) Recreation center or facility; (d) Child care center; (e) Public park; (f) Public transit center; (g) Library; or (h) Any game arcade (where admission is not restricted to persons age 21 or older), Cities may reduce those buffer distances to not less than 100 feet except for schools and playgrounds. Attachments A, B and C show the effect of the 1,000, 300 and 500- foot buffers around the above uses. Reducing these buffer distances where allowed would increase the location options for cannabis businesses. Which, if any, buffers would the Council consider reducing? Cunrent Licenses Through thel-502 rulemaking process, the Liquor and Cannabis Board adopted regulations on the number of cannabis retail store licenses for jurisdictions, determining a maximumof two for Tukwila. A third cannabis retail license was granted in Tukwila as part of the social equity effort per E2SHB 2870 and SB 5080. All cannabis licensing is regulated and enforced by the Washington State Liquor and Cannabis Board. There are currently active licenses for Tukwila's three retail allotments: Mount Baker Retail Partnership, LLC (12539 E Marginal Way S), Dash & Wrigley ILLC (13003 Tukwila lInternational Boulevard), and Kahn Holding (5301 Southcenter Blvd, Suite B). None of these are open and operating currently, likely due to difficulty finding appropriate Ilocations. Licensed retailers are required to be open and operational, but licenses can be held without opening if they obtain a title certificate relieving them of the requirement to be open based on a moratorium, ban, or other zoning restriction, or if the business is temporarily discontinued while they move locations. Sales, B&O and Excise Tax Revenue Active cannabis retail stores would generate three separate revenue streams: excise tax, sales tax, and B&O tax, The state cannabis excise tax and its distribution has changed over time and can be altered in any future legislative session. The State currently taxes cannabis through a single excise tax of 37% at the time of retail sale, in addition to the regular state and local sales tax, and $30M of that statewide revenue is shared with cities, towns and counties. There are two components to the distributions: 1) per capita share to all jurisdictions that allow the siting of producers, processors and retailers; 2) retail share to all jurisdictions where licensed retailers are physically located and in proportion to total statewide retail sales, Tukwila does not have any open and operating cannabis businesses and therefore does not receive sales -based revenue, Tukwila's per capita distribution has been: Year* 2024 Revenues S37,276 202.3 S36„.302. 2022 S32,334 2021 S24,013 202 523,419 2019 S23,123 2018 523,364 ate Fiscal Year: Jiily 1 - J rie 30 3 INFORMATIONAL MEMO Page 3 Beyond the excise tax, cannabis retail operations would generate sales and B&O tax. For every $1 million in cannabis sales, the City could expect to receive $9,000 in annual sales tax revenue (10% tax rate less the fee taken by the state for collection). Staff looked up average retail sales within 5-miles of a cannabis retailer in the Ikea District of Renton, and for Jan -December 2023, the average per store was $4.1 million. Hypothetically, if three retailers in Tukwila had combined yearly sales of $12M, the City could receive $108,000 of sales tax and $6,000 in B&O tax in addition to the increased excise revenue described above. Another hypothetical example comes from the City of Covington, which has two cannabis retailers and a residential population similar to Tukwila. In 2023, the two Covington retailers had combined sales of $12.8 million. Using this as another hypothetical scenario, the City could receive $173,000 in sales tax and $9,000 in B&O tax. It is difficult to estimate what Tukwila would receive for its tax share if the three state -issued licenses were open and operational businesses. The excise tax formula depends not only on population but also on cannabis retail sales as a proportion of total retail sales, as well as the number/total population of cities and counties that prohibit marijuana. MRSC used to offer an estimate calculator but discontinued it due to complexity of the formula. While the revenue potential is difficult to predict, we can look to neighboring jurisdictions for insight, while recognizing that their larger residential populations result in greater shares than Tukwila would receive in similar circumstances. The chart below shows the 2024 cannabis excise revenue for neighboring cities with open retailers: City (number of locations) Population 2024 Cannabis Excise Revenue* Burien (2) 50,216 $164,000 Auburn (4) 83, 757 $238,000 Des Moines (2) 32, 177 $135,000 Renton (4) 102,716 $300,000 Covington (2) 21,374 $104,942 *State Fiscal Year: July 1 - June 30 Based on these scenarios, if three retail locations were open and operational, Tukwila could expect to see between $200,000 and $275,000 in tax revenue annually. Crime & Safety around Retail Locations Cannabis retail stores are frequent targets for theft, typically in the form of armed robberies or smash and grab burglaries. Cannabis retailers have access to state -chartered credit unions and banks for financial services, and there are a number of institutions in Washington that provide service to the industry. The table below demonstrates the incidents of all robberies and burglaries in the state. It is important to note that in 2021, the State changed the police pursuit law, limiting the ability of officers to pursue suspects. In 2023, the law was changed to again allow police to pursue drivers if there is reasonable suspicion that a crime has occurred. This took effect on June 6, 2024. 4 INFORMATIONAL MEMO Page 4 120 100 80 60 40 20 0 Robberies and Burglaries at. Cannabis Stores �A State 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Uncle Ike's i502 Robbery Tracker Alarms and surveillance systems are required at cannabis locations per WAC 314-55-083. Through the code update process, the City Council could consider establishing permitting requirements designed to address theft and crime concerns. Some suggestions are bollards to prevent cars from being used to smash open doors, commercial -grade non-residential door locks and/or window locks, and shatter resistant window film. RECOMMENDATION The Committee provided direction on the following topics: • Any additional zones to allow cannabis retail uses: RCM, TUC -CC, and TUC-WP; • Any changes to buffer distances from sensitive uses: Retain 1,000' buffers around schools, playgrounds and parks and potentially reduce others to 300' or 500'; and • Any security features above those required by the State: Require bollards, commercial door and window locks, shatter resistant window film and lighting. The draft ordinance in Attachment D reflects this guidance. The Council is being asked to hold a public hearing at the Committee of the Whole meeting on August 25th and consider approval of the ordinance at the September 8th, 2025 Special Meeting. ATTACHMENTS A. Map showing current cannabis zoning and buffers in Tukwila B. Map showing 300 foot cannabis buffers C. Map showing 500 foot cannabis buffers D. Draft Ordinance 5 6 Cannabis Prohibited Zoning District HI TVS 111 111 Faci Restrictions on Cannabis ities (1 MO ft) Cannabis. facilities are currently only permitted in the HI and TVS zoning districts. 0,5 1 Miles 2/24/2025 vt: Cannabis Facilities Prohibited School/ Playground —1 Public Park Zoning District MI RCM ME TUC -CC TUC-WP HI TVS Restrictions on Cannabis Facilities 300 ft) Fewer restrictions could allow cannabis facilities in more commercial and industrial zoning districts, if permitted. Illllli IMI 11111111111111111 Schools, playgrounds, and public parks maintain a 1,000 ft buffer. 'Ra 0 OE5 1 Miles 7 7/24/2025 8 Cannabis Facilities Prohibited School/ Playground �:.�...:..b Public Park Zoning District RI RCM inJJ TUC -CC TUC-WP HI TVS Restrictions on Cannabis Facilities 00 ft) Fewer restrictions could allow cannabis facilities in more commercial and industrial zoning districts, if permitted. Schools, playgrounds, and Public parks maintain a 1,000 ft buffer. 0 Miles 7/24/2025 NOTE: Shaded text denotes changes made after the August 11, 2025 Planning and Community Development Committee meeting. See pages 3 and 4. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, UPDATING CANNABIS USE REGULATIONS; AMENDING ORDINANCE NOS. 2741 §3 (PART) AND 2765 §87; AS CODIFIED AT TUKWILA MUNICIPAL CODE TUKWILA MUNICIPAL CODE (TMC) CHAPTER 18.06, "DEFINITIONS," AND TMC SECTION 18.50.210; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, on November 6, 2012, Initiative 502 was passed by the voters of the State of Washington, providing a framework under which cannabis producers, processors, and retailers can become licensed by the State of Washington; and WHEREAS, the Washington State Liquor and Cannabis Board ("LCB") has issued three licenses for cannabis retailers within the City of Tukwila; and WHEREAS, cities, towns, and counties in Washington State can choose to prohibit or to designate appropriate zones for state -licensed cannabis businesses because Washington local governments have authority to enact legislation regulating land uses within their jurisdictions; further, cities, towns, and counties may file objections to the granting of a state license at a particular location, and the LCB must give "substantial weight to objections"; however, the LCB has final authority over whether to grant or deny a state license to operate a cannabis business in Washington State per RCW 69.50.331(10); and WHEREAS, the City Council has studied the land use and other secondary impacts of recreational marijuana use, and intends to update the zoning ordinance controlling these uses; and WHEREAS, the State Environmental Policy Act (SEPA) Responsible Official issued a threshold decision for this draft ordinance on July 22, 2025, which was not appealed; and WHEREAS, on August 25, 2025, following adequate public notice, the City Council held a public hearing on the draft zoning ordinance; and 2025 Legislation: Title Cannabis Regulations Version: 8/18/25 Staff: N. Gierloff Page 1 of 5 9 WHEREAS, the City Council after due consideration, believes that certain amendments to the City's zoning code are necessary addressing use districts, buffer distances, and safety features; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: Section 1. Ordinance Nos. 2741 §3 (part) and 2765 §87 (part), as codified at various sections of Tukwila Municipal Code (TMC) Chapter 18.06, "Definitions," is hereby amended to read as follows: 18.06.551 Canna is " arijuana annaJl iii "means all parts of the plant Cannabis, whether growing or not, with a THC concentration greater than 0.3 percent on a dry weight basis; the seeds thereof; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin. The term does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. 18.06.552 Cdnnqllllliun Processor "ManJuana '° °"ip°ia.Ilsis processor" means a person licensed by the state Liquor and processj i,mp°ip°iimllsii, whether medical or recreational, into Cannabis Board to an uan i:: ° , marijuanacannalislis concentrates, useable rij a :m.i..�....°.....�..land rijua wl infused products; package andlabel anijuanaiilinJ!s concentrates, useable - :o , bI s and marijuanai d i„p„°„pp„°„pii„Ili ios-infused products for sale in retail outlets; and m anJ uana�i�'���'�;'��:�i'�!i.!L.:.L.:.�iI�I�I�Ii.�.1..i;���. J oo.. tI . and sellmanJuanai":�''iII°:i!L°:iillllJ"II:" concentrates, useable �nan uan�i,'�'J.L.:....:....`;J....L:". rij a ai;d'i!I::i!nilil !o infused products at wholesale to arij i;d'i!I::iU°:iillllJll !L:" retailers. 18.06.553 C;m:Innlllllliiis Producer "MarijuanaCannabOs producer" means a person licensed by the state Liquor and Cannabis Board to produce and sell marijuanas:aiin,.Inab.i.s, whether medical or recreational, at wholesale to marijuanacaninall is processorsj inn II�'�s producers. andother manuana qL............�.....IL...... 18.06.554 Canna llliiiis Retailer "Marijuanaapnpnglbiis retailer" means a person licensed by the state Liquor and Cannabis Board to sell marijuanacaninalbiis concentrates, useable marijuanasa,pnpnglbii,s, and marijuanacapnpnglbiis infused products in a retail outlet, for either recreational or medical use. 18.06.557 Cdnn1llll is -infused Products "Mari uana�,, ��� -infused products" means products that contain mJ .. �A.i,i.il°:i.il°:ii i.sil.i:`. arij a i;;;,;iill°:ip°iiilli iii; or arij a i;;;,;dip°ip°iiilliios extracts; are intended for human use, whether medical or recreational; and have a THC concentration within the limits set forth in RCW 2025 Legislation: Title Cannabis Regulations Version: 8/18/25 Staff: N. Gierloff Page 2 of 5 10 69.50.101. e term"marijuanac-infused products" does not include either :il''''�!I::�!I°:�� �...!L". useable marijuanaganog21,a or marijuanagar21240J1 concentrates. 18.06.558 anlllis Concentrates " an uana��" ��� concentrates" is as defined under RCW 69.50.101. J .. �A.� �.il°:i.il°:i.1IIIg1'.L1:`. 18.06.864 Useable C aIllrlllrlll'i "Useablemarijuana;,,,,,;; II°:II°:lllll" Ios" means dried marijuananahrhabos flowers. The term "useable marijuana ;d 11::11::plill.11 .!L" .�' does not include marijuana;,,,,,,d' .,II°:i..II':i.lilt 21,1" infused products. Section 2. Ordinance Nos. 2741 §3 (part) and 2765 §87 (part), as codified at TMC 18.50.210, "Marijuana Related Uses," is hereby amended to read as follows: II i.h.. p..uuuu..i...0 II i.h. ..0 ..uuId.. of aut(00000 Il..uuu..uIi.hu 2025 Legislation: Title Cannabis Regulations Version: 8/18/25 Staff: N. Gierloff Page 3 of 5 11 fi„„„fi b II II rys arS boll Dards at Ei,',,firfit ra andS lh a rE'fiLs II:!,„st a nt 11"i II ruruo n a II II n d \,,,E,',fi! \ Al 0 n d „ II II dc)c)r a n d Al 0 n d c)w S lh a II b ruruo a II ra d „ (:„Efirfinab0"(3 bfi„„„fis t ry„; S lh a II II Violations. 1. Any violation of this section is declared to be a public nuisance per se, and, in addition to any other remedy provided by law or equity, may be abated by the City under the applicable provisions of this code or state law. Such violations shall be enforced and appealed with the procedures set forth in TMC 8.45. Each day any violation of this section occurs or continues shall constitute a separate offense. 2. Any person violating or failing to comply with the provisions of this section of the Tukwila Municipal Code shall be subject to enforcement as prescribed in TMC 8.45 and the issuance of a Notice of Violation and Order, in accordance with TMC 8.45.070, that shall carry with it a cumulative monetary penalty of $1,000.00 per day for each violation from the date set for compliance until compliance with the Notice of Violation and Order is achieved. 3. In addition to any penalty that may be imposed by the City, any person violating or failing to comply with this section shall be liable for all damage to public or private property arising from such violation, including the cost of restoring the affected area to its condition prior to the violation. 4. Any penalties imposed under this section may be doubled should the violation(s) occur within 1,000 feet of the perimeter of the grounds of any elementary or secondary school 02„“j11211L0221„7- i2r playground or W lh r 300 o 15- recreation center or facility, child care center, public park, public transit center, or library, or any game arcade to which admission is not restricted to persons aged 21 years or older, as such terms are defined in WAC 314-55-010 as now enacted or hereafter amended. G. Medical • • canna fis : Growth of medical marijuana c fis for the personal medical use of an individual qualifying patient as defined in RCW 69.51A.010 is subject to strict compliance with all state regulations, procedures and restrictions as set forth or hereafter adopted at RCW 69.51A. on • Cooperative prohibited: The establishment, location, operation, licensing, maintenance or continuation of a cooperative, as described in RCW 69.51, or medical 2025 Legislation: Title Cannabis Regulations Version: 8/18/25 Staff: N. Gierloff Page 4 of 5 12 cannabis collective gardens or dispensaries as described in RCW 69.51A.085, is prohibited in all zones of the City. Any person who violates this subsection (TMC 18.50.210.D) shall be guilty of a gross misdemeanor and shall be punished by a fine not to exceed $5,000.00, or by imprisonment in jail for a term not exceeding one year, or by both such fine and imprisonment. 111 j . Additional Relief. The City may seek legal or equitable relief to enjoin any acts or practices and abate any condition which constitutes or will constitute a violation of this section of the TMC. The remedies and penalties provided herein are cumulative and shall be in addition to any other remedy provided by law. Section 3. Corrections by City Clerk or Code Reviser Authorized. Upon approval of the City Attorney, the City Clerk and the code reviser are authorized to make necessary corrections to this ordinance, including the correction of clerical errors; references to other local, state or federal laws, codes, rules, or regulations; or ordinance numbering and section/subsection numbering. Section 4. Severability. If any section, subsection, paragraph, sentence, clause or phrase of this ordinance or its application to any person or situation should be held to be invalid or unconstitutional for any reason by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of the remaining portions of this ordinance or its application to any other person or situation. Section 5. Effective Date. This ordinance or a summary thereof shall be published in the official newspaper of the City, and shall take effect and be in full force five days after passage and publication as provided by law. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2025. ATTEST/AUTHENTICATED: Andy Youn-Barnett, CMC, City Clerk Thomas McLeod, Mayor APPROVED AS TO FORM BY: Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Office of the City Attorney Ordinance Number: 2025 Legislation: Title Cannabis Regulations Version: 8/18/25 Staff: N. Gierloff Page 5 of 5 13 City of Tukwila City Council Planning & Community Development Committee Meeting Minutes August 11, 2025, 5:30 p.m. - Hybrid Meeting; City Council Conference Room & MS Teams Councilmembers Present: Hannah Hedrick, Chair; Verna Seal Staff Present: Laurel Humphrey, Marty Wine, Max Baker Chair Hedrick called the meeting to order at 5:30 p.m. BUSINESS AGENDA A. Ordinance: Cannabis Retail Zoning Staff followed up the Committee's previous direction with a draft ordinance that would allow cannabis retail in the Regional Commercial Mixed Use, Tukwila Urban Center Commercial Corridor, and Tukwila Urban Center Workplace zones, and require enhanced security measures. Committee members discussed the proposal including the new requests for additional zones submitted by industry members. Committee members expressed approval of RCM, TUC -CC and TUC-WP zone proposal and 300-foot buffers for all categories but parks, playgrounds and schools. Item(s) for follow-up: Provide additional maps reflecting inclusion of CLI, TUC -RC, and TUC-TOD zones and in relation to allowed residential uses. Committee Recommendation * Forward to August 25, 2025 Committee of the Whole. B. Washington State Renter Protection Update Staff provided an overview of the provisions in House Bill 1217 as well as the last draft tenant protection ordinance before the City Council in 2024. Committee Recommendation Discussion only. Return to Committee in 4th Quarter. MISCELLANEOUS The meeting adjourned at 6:26 p.m. HH Committee Chair Approval 14 Cannabis Facilities Prohibited School/ Playglraund Public Park Zoning District C/LI - Commercial/Light Industrial S1 RCM - Regional Commercial Mixed -Use TUC-TOD Transit Oriented Development TUC -RC - Regional Center TUC-P - Pond NO TUC -CC - Commercial Corridor TUC-WP - Workplace HI - Heavy Industrial TVS - TukwiiIIa Valley South Fa c i Restrictions on Canna b i s lities (300 ft) Fewer restrictions could allow cannabis facilities in more commercial and industrial zoning districts, if permitted. Schools,. playgrounds, and public parks maintain a 1,000 ft buffer. 0,5 Muller 15