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Voters’ bid to curtail commercial development curtailed by court

Commercial Real Estate development and the landowners took a serious “hit” when the voters in Malibu voted to curtail commercial development.  Anyone who has been to or lives in the city of Malibu may agree that the city is “a unique oasis in the midst of urban and suburban sprawl and development.” The supporters of Measure R contended it was necessary in order to preserve the city’s charm and character. Residents last year approved Measure R; a city ordinance that would essenially curtail large scale commercial real estate development.  The court did not agree.

Measure R essentially limited the footprint of any commercial retailer to 30 percent of a particular development, required each new chain store to obtain a non-transferable conditional use permit which means if a store were to be sold or otherwise transferred or a lease expired, then any new “store” would be required to obtain a new conditional use permit. Measure R further required that detailed plans of every proposed commercial or mixed use development over 20,000 square feet to be put before voters for approval.  The provisions of Measure R resulted in eliminating most commercial development.  Fortunately, as stated above, the court agreed Measure R went too far in restricting the land use.

The above certainly does not define or set forth everything of importance related to Measure R and the related litigation.

In following Measure R, a proposal to build a 38,000 square foot shopping center that included a 24,000 square foot Whole Foods Market was rejected by Malibu residents. However, the property owner and its developer filed suit earlier this year asking that the measure be struck down.

After the case meandered from federal court to state court, a superior court judge agreed and ruled in favor of the developer and the property owner. The judge reasoned that a number of Measure R’s provisions overstepped the bounds of an initiative, and took power reserved for the City of Malibu. Additionally, the judge found that requiring chain stores to obtain non-transferrable conditional use permits because of who the business was instead of what services it provided was contrary to California law.

To read more on this case, here is the decision for The Park at Cross Creek, LLC et al v. City of Malibu, case No. 2:2015cv00033, which was filed with the Superior Court of California County of Los Angeles. 

The story is a prime example of why experienced legal counsel is needed in securing property for commercial real estate developments.