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The Park at Cross Creek, LLC v. City of Malibu

California Court of Appeals, Second District, Third Division

June 21, 2017

THE PARK AT CROSS CREEK, LLC, et al., Plaintiffs and Respondents,
v.
CITY OF MALIBU, Defendant and Appellant DRU ANN DIXON-JACOBSON et al., Interveners and Appellants.

         APPEAL from a judgment of the Superior Court of Los Angeles County Ct. No. BS155299, James Chalfant, Judge. Affirmed.

          Jenkins & Hogin, Christi Hogin and Gregg W. Kettles, City Attorneys, for Defendant and Appellant.

          Hueston Hennigan, Marshall A. Camp, Padraic W. Foran and Leanne O. Vanecek for Plaintiffs and Respondents.

          Remcho, Johansen & Purcell, Robin B. Johansen, James C. Harrison, Thomas A. Willis and Margaret R. Prinzing for Interveners and Appellants.

          ALDRICH, J.

         In November 2014, the voters of Malibu enacted Measure R, an initiative designed to limit large developments and chain establishments. The Park at Cross Creek, LLC (The Park) and Malibu Bay Company (Malibu Bay), both of which were developing projects in Malibu, petitioned the trial court to have Measure R declared invalid. The court granted that petition. Appellants the City of Malibu and interveners Dru Ann Dixon-Jacobsen, Carol Moss and Michele Reiner (the official proponents of Measure R) appeal.[1] We conclude that Measure R exceeds the initiative power and is illegal. We therefore affirm the judgment.

         BACKGROUND [2]

         I. Malibu voters pass Measure R

         On November 4, 2014, Malibu voters approved Measure R, an initiative entitled, “Your Malibu, Your Decision Act.” Measure R seeks to preserve Malibu's “unique small-town, rural character” and to “protect natural resources by adopting provisions that will ensure our community remains a unique oasis in the midst of urban and suburban sprawl and generic development while at the same time ensure our City evolves in a sustainable manner that meets the needs of our residents and visitors.” (Your Malibu, Your Decision Initiative, Preamble, §§ 2(1), (3)(1) (Preamble).)

         To those ends, Measure R has two primary components designed to limit large developments and “formula retail establishments, ” i.e., chain stores. Measure R first requires Malibu's City Council to prepare a specific plan for every proposed commercial or mixed-use development in excess of 20, 000 square feet for the commercial area. (Malibu Mun. Code, ch. 17.02, § 17.02.045, subds. (B)(2) & (C)(1).)[3] The specific plan must comply with Malibu's general plan and local coastal program and must address: floor area; requirements “to ensure the retention of retail businesses serving local residents and visitors”; preserving important view corridors and vistas; traffic; public facilities, services, and economic analysis; open space; parking; enlargement of the commercial area; and geological, hydroelectrical and wastewater impacts. (Id., subd. (C)(3).) In addition to preparing a specific plan, the city council must prepare a report with full notice and public hearing. (Id., subds. (C)(3) & (D).)

         Following the city council's approval of a specific plan, the plan must be placed on the ballot for voter approval. (§ 17.02.045, subd. (C)(1).) Until the voters approve a specific plan, the city “shall take no final action on any discretionary approval relating to” the proposed development. (Id., subd. (E).) “ ‘Discretionary approval' ” means any discretionary land use entitlement or permit “of any type whatsoever” issued by Malibu. (Id., subd. (B)(5).) Following voter approval of a specific plan, under “no circumstances shall any subsequent permit or approval issued by any city department or official authorize, allow, or otherwise approve higher square footage, density, or intensities of uses, or less landscaping, open space, or mitigation requirements, including traffic mitigation and safety requirements, than were finally approved by the voters.” (Id., subd. (F).)

         To further prevent Malibu from becoming “Anything Mall, USA, ” Measure R's second component restricts formula retail establishments, defined as an establishment having 10 or more retail establishments in the world and maintaining two or more of the following features: standardized array of merchandise or menu; standardized color scheme; standardized decor, façade, layout or signage; a servicemark or a trademark; “and” uniform apparel. (§ 17.66.130, subd. (E).) Chains may not exceed 2, 500 square feet and may not occupy more than 30 percent of a shopping center's square footage or leasable tenant spaces per floor. (Id., subd. (B)(4), (5).) These limits apply to new chain establishments and to existing ones wanting to relocate, expand by 200 or more square feet, or increase service area by 50 or more square feet. (Id., subd. (A).)

         Formula retail establishments also must obtain a conditional use permit (CUP).[4] To approve a CUP, the planning commission, in lieu of the findings required in section 17.66.080, [5] shall find that the proposed formula retail establishment complies with the size and occupancy limitations, “will not impair the city's unique, small-town community character by promoting a predominant sense of familiarity or sameness, with consideration for all existing formula retail establishments, ” and will promote a diverse commercial base. (§ 17.66.130, subd. (B)(2), (3).) Approved CUPs “shall run solely with the operation of the formula retail establishment for which it was approved and continue to be valid upon change of ownership of the formula retail establishment, the land, or any lawfully existing building or structure on the land.” (Id., subd. (D).)

         II. Proposed developments in Malibu

         The Park owns property at 23401 Civic Center Way in Malibu. Since 2009, The Park has invested $11.4 million to develop a Whole Foods project, which will include a 38, 424 square foot shopping center comprised of a 24, 549 square foot store, four smaller retail spaces, outdoor dining, a parking area, green walls, new trees, a park and playground for children, a community education garden, and a public gathering space in case of wildfire. The proposed Whole Foods store will occupy more than 30 percent of the center's square footage. In 2011, The Park's application to develop the project was approved. An environmental impact report was prepared, received public comment and awaits public hearings.

         Malibu Bay owns property at 23575 Civic Center Way. Since 2012, it has invested $6.6 million to develop Malibu Sycamore Village, a mixed-use commercial project. One development plan includes office, retail, and restaurant establishments; community gathering spaces; and a children's play area. A second development plan includes a 5, 000 square foot urgent care center.

         III. The Park's and Malibu Bay's petition for a writ of mandate

         In May 2015, The Park and Malibu Bay filed a verified petition for a peremptory writ of mandate to have Measure R declared facially invalid on the grounds, among others, it subjects administrative acts to public vote, creates an illegal CUP, and violates their substantive due process rights.[6] The Park and Malibu Bay and the City of Malibu stipulated to have the petition resolved on cross-motions for judgment on the pleadings.

         The trial court held that Measure R's specific plan and voter approval requirements exceeded the scope of the initiative power and violated substantive due process. The court also held that Measure R created an illegal CUP that was “establishment-specific” and did not run with the land. The court thus declared Measure R facially invalid and enjoined Malibu from enforcing it. Thereafter, the court allowed the official proponents of Measure R to intervene but denied their request for a stay pending appeal. We, however, granted the interveners' petition for writ of supersedeas, thereby staying the lower court's judgment.

         STANDARD OF REVIEW

         Our review is de novo. (So v. Shin (2013) 212 Cal.App.4th 652, 662 [review from motion for judgment on the pleadings]; Citizens for Planning Responsibly v. County of San Luis Obispo (2009) 176 Cal.App.4th 357, 366 [construing initiative's language is subject to de novo review].) Notwithstanding the de novo standard of review, we are also bound by “ ‘the long-established rule of according extraordinarily broad deference to the electorate's power to enact laws by initiative. The state constitutional right of initiative or referendum is “one of the most precious rights of our democratic process.” [Citation.] These powers are reserved to the people, not granted to them. Thus, it is our duty to “ ‘ “jealously guard” ' ” these powers and construe the relevant constitutional provisions liberally in favor of the people's right to exercise the powers of initiative and referendum. [Citation.] An initiative measure “ ‘must be upheld unless [its] unconstitutionality clearly, positively, and unmistakably appears.' ” [Citation.]' ” (Citizens for ...


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