All eyes will be on City Hall Monday when the Malibu City Council deliberates a hot-button proposal to regulate the number of chain stores in the Civic Center. The polarizing issue has pitted a grassroots Malibu coalition against influential shopping center owners in the Civic Center, and the fallout from Monday’s meeting is likely to include either a court battle or a ballot measure in 2014 depending on which side does not get its way.
The law, formally called a formula retail ordinance, would require chain stores with 10 or more franchises to obtain a conditional use permit (CUP) from the City of Malibu in order to lease a commercial space in one of the Civic Center shopping centers in central Malibu. Grocery stores, banks, real estate offices and gas stations are among 10 exempted business types.
The council will consider on Monday whether to pass the law, reject it, send it to a zoning subcommittee for further discussion or send the draft of the ordinance back to city planning staff for further revisions.
Regardless of the council’s decision, the chain store law saga is not expected to end anytime soon. If the ordinance passes, shopping center owners in the Civic Center have hinted at pursuing legal action against the city. If the council rejects or buries the proposal, activist group Preserve Malibu has vowed to bring a similar ordinance directly to voters through a November 2014 ballot measure.
The idea of a formula retail ordinance has come about as many in Malibu have become displeased with the disappearance of locally owned “mom and pop” businesses and an influx of high-end clothing stores and other national retailers.
Similar laws have been passed in several other California cities, including San Francisco, Ojai, Coronado and Carmel. Supporters believe regulations on chain stores in Malibu would help preserve what is described as a rural, small-town feel with independently owned businesses while also lessening the number of expensive national retailers that tend to attract tourists to the center of Malibu and make the town a shopping destination.
The council voted 3-2 last year to draft the ordinance, with Councilmembers Laura Rosenthal, John Sibert and Mayor Pro Tem Skyler Peak voting in favor.
“Asking for a CUP for formula retail is not outrageous,” Rosenthal said last November. “It’s not saying that [chain stores are] not going to be able to come in…but we want to be able to preserve what our Civic Center looks like now.”
But a group of property owners and shopping center owners in the Civic Center argue the proposal violates principles of the free market and would harm their business.
The owners allege an ordinance limiting national retailers would violate the Commerce Clause in the U.S. Constitution by enacting “regulatory measures to benefit in-state economic interests by burdening out-of-state competitors,” according to attorney David Waite.
Waite’s clients include Malibu Village shopping center owner Matt Khoury, Malibu Country Mart owner Michael Koss, Malibu Bay Company President David Reznick and prominent businessman Steve Soboroff, who has a project to open Whole Foods in the development pipeline.
Waite warned of “balkanizing and fever-pitched litigation for many years to come” if the city moves forward with the law.
Mayor Joan House and Councilman Lou La Monte sided with this argument last November in voting against drafting the ordinance, fearful that regulation would place the city in the middle of a Constitutional debacle.
“I’d like to preserve [Malibu] the way it is, but I don’t want to do it at the expense of the free enterprise system, private property rights and taking on the legal minefield of attacking the U.S. Constitution and state law,” La Monte said.
After the council voted to draft the ordinance last November, multiple public meetings were held to gather public input on the ordinance. Several versions of the draft ordinance were also released for public analysis and comment.
In July, the Planning Commission voted 4-1 to recommend against the law, with the majority arguing that the city staff’s draft was flawed and needed further revisions and study.
To review the draft ordinance in its entirety, visit malibucity.org. The City Council will hold a public hearing and decide on the item Monday at 6:30 p.m. at Malibu City Hall.