Two property developers on Monday filed a federal lawsuit against the city of Malibu to block a ballot measure voters approved in November to limit chain stores and large commercial projects.
Steve Soboroff, who wants to bring a Whole Foods store to the city, and Jerrold Perenchio’s Malibu Bay Company, which has plans nearby for a retail and office center, allege in their lawsuit that the ballot measure, called Measure R, violates both the federal and state constitutions.
“The restrictions enacted by Measure R infringe on our constitutional rights to a point where we had no choice but to file this complaint,” Soboroff said in a press release accompanying the filing of the lawsuit.
Measure R was spearheaded by actor and producer Rob Reiner; it passed on Nov. 4 by a 59-41 margin. It limits the proportion of chain stores in new developments to no more than 30 percent by square footage. It also requires that any commercial development of more than 20,000 square feet be submitted to voters for approval.
The 18-page, nine-count lawsuit filed in U.S. District Court in Los Angeles alleges that the measure’s chain store limit discriminates against stores with out-of-state owners and thus violates the interstate commerce clause of the U.S. Constitution.
“Measure R has the practical effect of eliminating the ability of many out-of-state businesses from operating in Malibu,” said David Waite, an attorney in the Los Angeles office of Cox Castle & Nicholson, which represents the plaintiffs.
The lawsuit also alleges the measure violates the state constitution’s requirement that ballot initiatives may only concern a single subject matter. The chain store limit and requirement to have projects over 20,000 square feet be put to voters are two separate regulatory matters, the lawsuit claims.
The latter restriction also takes projects that have until now been subject only to bureaucratic approvals and unlawfully converts them into projects requiring voter approval, according to the lawsuit.
“This lawsuit raises fundamental questions about how far a law can go in constraining the rights of a select few property owners by altering detailed and legal land-use rules in a community,” Soboroff said.
Soboroff has plans for a 25,000-square-foot Whole Foods store and park on property he owns near Malibu’s civic center. Soboroff, who is president of the Los Angeles Police Commission, was an outspoken critic of Measure R, taking on sponsor Reiner in a spirited debate last fall.
Malibu Bay Co., the development firm founded by billionaire Malibu landowner Perenchio, has plans for an 80,000-square-foot project. The plan includes 38,000 square feet of shops, 22,000 of office space, 15,000 of restaurants and a 5,000-square-foot urgent care center.
After Measure R passed, Malibu Bay President David Reznick told the Business Journal that a lawsuit was being considered.
“Despite the election results, municipal and constitutional lawyers believe Measure R contains legal flaws that threaten the rights of Malibu’s businesses and property owners,” he said. “No one should be surprised if one or more legal challenges are filed.”
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