’Twas the night before Halloween at Malibu City Hall Monday, when the Planning Commission resurrected a chain store restriction for shopping centers from the ashes of a voter initiative that was tossed out by the courts.
The commission endorsed much of the proposal from city planners and attorneys, but removed the part that defined shopping centers, and re-inserted such language from Measure R, the citizens’ initiative that passed by a 3-2 margin three years ago.
The two-pronged Measure R would have required a “yes” vote from voters on all large commercial projects, and set tough limits on chain stores in shopping centers—a move aimed to protect local businesses. The election half of the regulation was tossed out as unconstitutional, but the state Court of Appeal said the retail limits section of Measure R might be valid if a slight change were to be made.
That change would take away the power of elected officials to vote on particular businesses, and instead set up a checklist of requirements, with the city planning director determining if the proposed store is a chain and, if so, if it met a 30 percent per shopping center limit on so-called formula retail stores.
The new ordinance would prevent chain stores from being clustered in specific parts of shopping centers. Supermarkets, drugstores, banks and certain other stores would be exempt.
A who’s who of Malibu commerce interests, and also backers of Measure R, spoke before the vote. Shopping center owners said they need flexibility in order to keep local businesses on low-cost leases, while charging more to national chains.
Longtime Malibu shopping center owner Steve Soboroff—who recently broke ground on the much-anticipated Whole Foods and the Park project, the development that kickstarted the push for Measure R—noted the departure of the Malibu Cinemas from the shopping center he used to own on Cross Creek Road.
“I warned ‘ya,” Soboroff said, as he recounted how he had been able to subsidize local or small businesses by charging more rent to large chains.
Attorneys representing the Civic Center shopping centers all spoke against the chain store limits.
“Retail is changing very rapidly; the internet is wiping out entire business sectors,” said Blake Pomeroy, attorney for the Malibu Country Mart. “Placing additional restrictions on our ability to lease to different tenants would inevitably lead to more vacancies, more pop-up stores and less permanent tenants.”
The lawyer who won the Measure R invalidation in court told the Planning Commission there is no court precedent for a city in California telling landowners what variety of tenant they can rent to.
“In our view, there is no formula retail ordinance of this kind that can be immune or impervious to legal challenges,” said Marshall Camp.
“These sorts of ordinances exist ... right now in a legal gray zone,” he warned. The statement was accompanied by a request from the shopping center owners to—in their words—work together on this issue.
Matt Ogden, chairman of the Malibu Association of Realtors, said the chain store ordinance would simply add to the number of vacant stores in Malibu.
Advocates from the Preserve Malibu side of the issue were not amused by the mention of future lawsuits.
“I just find it really ironic that the lawyers come up and they say, ‘It would be great if we all work together’ but we are going to sue you,” noted Jae Flora-Katz, one of the Preserve Malibu activists behind Measure R.
She countered the hint of a developers’ lawsuit with the hint of another ballot initiative.
“A ballot is not off the table; a ballot can be done again, very easily,” she said. “We’ve learned a lot.”
Other advocates noted the landslide 2014 vote came down nearly 60 percent “yes,” in favor of the combined retail ordinance and requiring a public vote for new commercial development.
The Planning Commission made a few mostly technical adjustments to the proposed chain store restriction, including restoring the original Measure R definition of a shopping center. Led by commissioner John Mazza, an outspoken Measure R advocate, the board recommended that each floor of multifloor commercial shopping centers have no more than 30 percent chain stores, to prevent all the local stores from being sent upstairs.
Commissioners also said the planning director should file reports for all chain stores getting clearance from City Hall to open in Malibu.
The proposed chain store restrictions go on to the city council for a final decision.