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City Staff to Draft Retail Diversification Ordinance

City staff will examine what limits and locations can be put on chain stores.

The Malibu City Council on Monday directed the city staff to draft a preliminary retail diversification ordinance.

Staff will examine, among other things, what percentage of retail outlets can be chain stores, as well as the areas of the city where the ordinance should be applied.

The Preserve Malibu group has asked that no more than 20 percent of stores in Malibu be chain stores, a number that council members were split on. 

"We do all shop and eat at chain stores," said Mayor Laura Rosenthal, who felt that 20 percent was too low. "They can afford to pay the big rents and we need to look at this closely."

Councilmember Pamela Conley Ulich, who recently proposed an urgency ban on chain stores in Malibu, supported a number near 20 percent.

Eighty people addressed the council on the diversification proposal for close to three hours.

If approved, the ordinance would require a broader offering of services within the city by requiring a balance between local-serving shops and larger chain stores.

“I believe the citizens have made it quite clear that this is the way we need to proceed,” said Missy Zeitsoff, who is currently running for a seat on City Council. “We’re not saying there can be no chain stores. We’re saying there needs to be a balance that can serve our residents and tourists.”

Preserve Malibu members attended the meeting, equipped with signs that read “Together, We Can Preserve Malibu,” among other things.

“I really don’t think it’s that big of a deal,” said council candidate Hamish Patterson. “We’re just asking for a little fairness in how the businesses are laid out. It’s our town. Malibu should have some say on what should be put in these shopping centers.”

As Zeitsoff mentioned, the ordinance would not seek to ban chain stores. However, local property owners, such as Point Dume Village owner Zan Marquis, commented that implementing a diversification ordinance would merely worsen an already difficult permit process.

“It would make a difficult permit process even more complicated for any new business,” Marquis said. “It would dramatically increase the building vacancies in Malibu. What happens when a merchant vacates a space? Does it just sit vacant until a user that matches what the city wants occupies that vacancy?”

Matt Khoury, majority owner of the Malibu Village shopping center, said that by implementing a diversification ordinance, local business owners in Malibu would actually be adversely affected.

Khoury explained that local shops and restaurants in Malibu Village are allowed to rent their spaces at a lower monthly cost because larger chain stores can afford to pay higher rents.

That extra money, according to Khoury, allows him to offer discounted rates to local businesses.

“We’re trying to support local residents,” Khoury said. “It’s in my best interest to do that. I like those guys.”

“Please don’t implement some diversification ordinance,” he added. “It’s really going to hurt the people you’re trying to save.”

J. Flo March 27, 2012 at 11:02 PM
Many of these developers are also doing an excellent job of alienating their local Malibu customer base. They're succeeding. And the fight against the needs of Malibu isn't over from them . . . just watch! One would hope they'd work with - not constantly against the needs of so many Malibu residents.
Susan Tellem March 28, 2012 at 10:02 PM
Thanks J. Weren't the developers poor mouthing it last night? Didn't we give this guy a break on his rent at the lumberyard???????!!!!!!!!!!!!!!!!! I'm so confused. http://www.huffingtonpost.com/2012/03/28/la-villa-contenta-malibu_n_1385090.html#s162636
Alex Quilici March 29, 2012 at 03:40 AM
There are actually a number of reasons why it can be better to keep space vacant vs. leasing it. At least four quick ones are: (1) the financing for the property has debt covenants around minimum rent, and the proposed tenants and rent are below the minimums, (2) a lower rent would result in a lowered appraisal of the overall property (based on the most recent per square footage rental), making it harder to refinance and put the proceeds into a newer property with higher returns, (3) a reasonable belief that some future tenant will sign a lease at a materially higher rent for a longer period of time, (4) a conflict with the proposed tenant and terms of leases granted to other tenants (e.g., only one business selling XYZ, or a most favored nation rental agreement where a tenant is guaranteed a match of the lowest rent of any other tenant). And it's not like we haven't seen some places stay empty for an extended period of time, like the old Granita space.
paula marchetti June 15, 2012 at 05:18 AM
Trust me ...Those chains got Deals to be there
paula marchetti June 15, 2012 at 05:20 AM
yeah right. Trust me .. Those chains got deals to be there................

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