Title
1) First Reading of an Ordinance Amending Various Sections of the Zoning Code to Modify Regulations Pertaining to the Sale of Tobacco-Related Products and E-cigarette-Related Products within City Limits, and 2) Adoption of an Ordinance Terminating an Existing Temporary Zoning Moratorium to Prohibit in New Locations the Sale of Tobacco and Tobacco-Related Products, as well as New Tobacconist/Cigarette Stores throughout the City
Staffreport
COUNCIL PRIORITY
• Economic Development
SUMMARY AND RECOMMENDATIONS
Staff proposes Zoning Code amendments to update regulations regarding the sale of tobacco-related products and e-cigarette-related products within City limits.
Staff previously presented recommended code amendments to City Council on July 7, 2025. The City Council held a public hearing and directed staff to perform additional community engagement with stakeholders (including local convenience store owners) prior to returning for adoption. Staff performed additional public engagement and, based on the feedback received, proposes modified Zoning Code amendments. The Planning Commission held a public hearing to consider the revised code amendments on October 2, 2025 and recommended adoption by the City Council.
Staff recommends that the City Council introduce an Ordinance amending the Zoning Code as shown in Attachment A, Exhibit A. Staff further recommends that the City Council adopt an Ordinance terminating the existing temporary Zoning Moratorium prohibiting, in new locations, the sale of tobacco and tobacco-related products, as well as new Tobacconist/Cigarette Stores throughout the City upon adoption of the new regulations.
BACKGROUND AND ANALYSIS
Purpose
In recent years, staff observed the establishment of unpermitted Tobacconist/Cigarette Stores (businesses devoted primarily to the sale of tobacco-related and e-cigarette-related products) in violation of the City’s Zoning Code. Under the City’s current Zoning Code, a Tobacconist/Cigarette Store is defined by: (1) devoting 20% or more of total floor area or display area to; or (2) deriving 75% or more of gross sale receipts from, the sale or exchange of tobacco-related products.” The Zoning Code limits Tobacconist/Cigarette stores to three zoning districts (CC, SA-1, SA-3) as a conditionally permitted use. Additionally, the Zoning Code requires Tobacconist/Cigarette stores be located at least 1,500 feet from certain sensitive uses like schools and parks, as well as other Tobacconist/Cigarette stores.
Under the City’s current Zoning Code, businesses may sell tobacco-related products within the City of San Leandro without being classified as a Tobacconist/Cigarette store so long as the percentage of the business dedicated to tobacco products is less than the thresholds referenced above. This is significant because it allows a business to be legally established without complying with the separation requirements or more stringent Conditional Use Permit review process applicable to Tobacconist/Cigarette stores. Some of these businesses are legitimate businesses, such as Convenience Stores or Supermarkets. However, other businesses may initially abide by the limit on a maximum of 20-percent of the total floor area or display area for tobacco products, only to later illegally expand the percentage of the business dedicated to tobacco products. This loophole enables illegal smoke shops to arise covertly and often quickly.
On June 3, 2024, the City Council enacted a Zoning Moratorium (Attachment E) to prohibit the sale of tobacco related products or electronic-cigarette-related products in new locations (except premium cigar retailers and supermarkets greater than 20,000 square feet) and prohibit the establishment of new Tobacconist/Cigarette stores. On July 1, 2024, City Council extended that 45-day Zoning Moratorium (Attachment F) to a full two years to allow staff the time to study the issue and prepare code amendments.
Initial Proposal
In April 2025, staff prepared draft Zoning Code amendments for public review. Key provisions included:
• Prohibition of new tobacco retailing, except as an accessory use to:
o Drugstores
o Beer and wine stores
o Liquor stores
o Supermarkets greater than 20,000 square feet
o Premium cigar retailers
• Limits on accessory tobacco retailing, including:
o Maximum 10% of gross floor area used for tobacco-related products
o Maximum 10 linear feet of display area for tobacco-related products
o Maximum 25% of gross receipts derived from tobacco-related products
On July 7, 2025, the City Council held a public hearing to consider the recommended amendments and directed staff to conduct additional community engagement, particularly with Convenience Store owners, before bringing the amendments back for adoption.
Public Engagement
In response to Council direction, staff conducted additional outreach in August 2025:
• August 5: Online Zoom meeting with 11 participants
• August 20: In-person office hours with one participant
• August 28: In-person outreach meeting with four participants
At these meetings, staff clarified that the new limitations would apply only to new retailers, not existing permitted retailers. Participants asked questions and suggested helpful revisions.
Based on stakeholder feedback, staff propose the following revisions to the recommended Zoning Code amendments:
1. Allow tobacco retailing at new Convenience Stores as an accessory use. Add Convenience Stores to the list of primary uses that could accommodate tobacco retailing as an accessory use.
2. Require a Conditional Use Permit for new Convenience Stores in the Bay Fair Transit Oriented Development (B-TOD) zoning district. This would align B-TOD requirements with other zoning districts and ensure public review and Planning Commission oversight for all new Convenience Stores selling tobacco products.
3. Increase maximum tobacco display area from 10 linear feet to 15 linear feet. Convenience Store owners advocated for this revision to match standard shelving configurations. Staff finds this adjustment reasonable.
These revisions are reflected in the proposed Zoning Code amendments attached to this report (Attachment A, Exhibit A).
Stakeholders also suggested amending the Municipal Code to allow for the automatic transfer of a valid Tobacco Retailer’s License (TRL) when a business is sold or ownership changes. Staff does not recommend this amendment, as a new owner can readily apply for a new TRL at the time of sale. The TRL application process requires the new owner to attest that they have complied, and will continue to comply, with all City tobacco retailing regulations. Staff does not recommend eliminating this important step.
Planning Commission Recommendation
On October 2, 2025, the Planning Commission held a public hearing on the revised Zoning Code amendments and voted 7-0 to recommend City Council adoption of the draft amendments. There were no public speakers at the Planning Commission meeting. Prior to the meeting, staff received a letter from the California Fuels and Convenience Alliance expressing a neutral position on the proposed amendments (Attachment D).
GENERAL PLAN CONFORMANCE
The proposal is consistent with numerous policies and actions in the City’s General Plan, including:
Policy LU-1.2: Code Enforcement. Maintain aggressive code enforcement and nuisance abatement programs to ensure that San Leandro’s neighborhoods remain attractive and free of public nuisances.
Action LU-7.3.A: Zoning Review. Regularly review the Zoning Code to respond to real estate market and development trends, as well as changes in technology.
ENVIRONMENTAL REVIEW
The proposed action is exempt from the requirements of the California Environmental Quality Act (CEQA) in that it is not a Project that has the potential for causing a significant effect on the environment under CEQA Guidelines Section 15061(b)(3). No further environmental review is necessary.
PUBLIC NOTICE
A notice of public hearing was published for this project in the East Bay Times Daily Review newspaper and at City Hall. Additionally, interested parties and businesses that recently sold or currently sell tobacco products were sent written notices. A project webpage was provided with information about the revised proposal.
FINANCIAL IMPACTS
No financial impacts are anticipated from the proposed amendments to the Zoning Code.
ATTACHMENTS
A: Ordinance 2025-XXX adopting code amendments
Exhibit A: Zoning Code Amendments (Clean Version)
B: Ordinance 25-XXX terminating Temporary Zoning Moratorium
C: Zoning Code Amendments (Redline-Strikethrough Version)
D: Public Communications
E: Ordinance 2024-007 establishing Temporary Zoning Moratorium
F: Ordinance 2024-010 extending Temporary Zoning Moratorium
PREPARED BY:
Wayland Li, AICP, Planning Manager
Community Development Department