Draft Retail Diversification Ordinance Resurfaces

Two possible ordinances that seek to limit chain stores as part of an effort to preserve Malibu-owned businesses have emerged in research compiled by city staff over the past several months.

The first, known as the diversification proposal, seeks to regulate the percentage of retail outlets that can be chain stores within a shopping center. The second option, identified as the formula retail ordinance, would call for a ban or quota on chain businesses or specifications on how they can operate.

In March, the Malibu City Council directed city staff to draft a retail diversification ordinance as part of an effort to address residents' concerns, including maintaining Malibu's character in existing and planned development in the Civic Center and Trancas areas.

According to legal analysis dated Oct. 23, City Attorney Christi Hogin wrote that the city's zoning code allows the city to regulate aesthetics, density and other issues such as parking and noise at commercial centers. Hogin said both the federal and state constitutions protect the rights of property owners to bring in tenants to make a profit.

"The government may regulate the use of property for the public good to enforce aesthetic objectives and maintain community character," according to Hogin.

The council is expected to consider which ordinance it should pursue at its Nov. 13 meeting at Malibu City Hall.

Draft Commercial Diversification Ordinance

The draft commercial diversification ordinance would apply to shopping centers more than 10,000 square feet and with 10 or more tenant spaces.

The proposal calls for "maximum percentages" for five categories to ensure a diversity of businesses. Those categories are food and service; hard goods (such as books and jewelry); soft goods (such as clothing); retail service other than food; and businesses with more than 10 locations (known as chain or formula businesses).

Under the proposal, the centers would only be allowed to bring in a maximum of 20 percent of chain businesses, and 30 percent of the other types. The draft ordinance exempts banks, movie theaters and anchor tenants. However, the proposal would limit the centers from having no more than two anchors, according to the report. 

The ordinance would be implemented through a "use diversification permit," which would be required on all new commercial use at regulated centers, the report states.

Second option

The second option, known as the formula retail ordinance, would seek to limit businesses in the Civic Center with more than 10 locations worldwide. The draft also has an option to expand its reach to Trancas, Point Dume or across the entire city.

According to Hogin, an unchecked number of chain businesses "is widely regarded as destructive to unique community identity and ambiance." The businesses also draw complaints about driving up of the cost of leased commercial space, which is known to drive out local, independently owned businesses.

Similar ordinances have been enacted in other cities, including in Solvang, which has banned chain businesses in its downtown village area, where its ambiance has gained world recognition for its Danish architecture.

To go down this road, the council would first have to determine whether Malibu has a "cohesive character."

Save Point Pizza

In response to the draft ordinance, members of the Save Point Pizza group submitted a petition with 1,024 signatures supporting the local business. The petition has been circulating online and at two previous rallies protesting the upcoming closure of Point Pizza in December. A third rally is set for later this week, where organizers plan to gather more signatures.

Point Dume Village owner Zan Marquis said previously he opted not to extend Point Pizza's lease and to bring in D'Amore's Famous Pizza. 

D'Amore's has several locations throughout Southern California, including one already in Malibu that will remain open, and another in Las Vegas. The opening at the Point Dume Village will mark D'Amore's 10th location.

Protesters have said the ordinance, if applied to the Point Dume Village, would have required Marquis to seek a permit to bring in D'Amore's or another chain, and would have allowed the public to give input. 

A third rally protesting the closure is set for 4 p.m. Friday, Nov. 9 at Point Pizza, according to organizers.

Opposition

In response to the draft ordinance, attorney David Waite, who is representing several commercial property owners in Malibu, submitted several documents to the city, including a retail market analysis of Malibu.

At a public hearing in March, two Malibu shopping center owners, Zan Marquis and Matt Khoury, spoke out against the possibility of an ordinance.

Marquis, who owns the Point Dume Village on Heathercliff Road at PCH, said Malibu already has a difficult permit process.

"It would dramatically increase the building vacancies in Malibu," Marquis said. "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?"

Khoury, who is the majority owner of the Malibu Village shopping center on Cross Creek Road at PCH, said by implementing a diversification ordinance, local business owners in Malibu would be adversely affected.

"Please don’t implement some diversification ordinance," Khoury said. "It's really going to hurt the people you’re trying to save."