A state appeals court has upheld a lower court’s ruling that Malibu can’t limit chain stores or force major projects to be put to a vote of the people.

The decision filed late Wednesday handed a victory to developers and for a project that would bring a Whole Foods store to the city. The Second District Court of Appeal ruled that a lower court decision in December 2015 overturning Malibu’s Measure R should stand.

Measure R, which Malibu voters passed in November 2014, prohibits any shopping center in the city from leasing more than 30 percent of its space to chain stores and requires any commercial project of more than 20,000 square feet of retail, commercial or mixed-use space to be placed before voters. Actor-director Rob Reiner backed Measure R.

A group of Malibu property owners, including Steve Soboroff, developer of a retail center project near the civic center that would include a Whole Foods store, filed suit in April 2015 challenging the constitutionality of the law. The retail project has all of its entitlements except voter approval as required under Measure R.

Los Angeles Superior Court Judge James Chalfant declared Measure R to be invalid in his December 2015 ruling. He said it was illegal for the chain store cap to be based strictly on the type of tenant as opposed to the use of the space.

He said the requirement to place any commercial project of more than 20,000 square feet before voters illegally usurped the city’s proper administrative land use role.

A three-judge panel at the Second District Court of Appeal concurred with that reasoning.

“We conclude that Measure R exceeds the initiative power and is illegal,” the ruling stated.

Specifically, the panel said in the ruling that the measure would unconstitutionally limit the discretionary administrative power of the city by essentially requiring major projects to be submitted to voters. The panel also called unconstitutional the chain store limits, saying conditional use permits cannot be required solely on the basis of the nature of the store.

Malibu business leaders welcomed the appellate court ruling.

“We are extremely pleased with the ruling,” said Rod Bergen, immediate past president of the Malibu Chamber of Commerce. “It’s positive for both the business community and for the community overall.”

Malibu City Attorney Christi Hogin said the city is now reviewing the ruling to see if there is grounds for appeal to the state Supreme Court. She noted that the City Council had previously stated that the city will do everything it can to defend Measure R.

“If there are sufficient grounds for appeal, then it’s the Council’s direction that an appeal be filed,” Hogin said.

Public policy and energy reporter Howard Fine can be reached at hfine@labusinessjournal.com. Follow him on Twitter @howardafine.

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