The Park at Cross Creek: CUP is Not an Establishment-Specific Ad Hominem Privilege

Several years ago, Malibu voters passed Measure R, entitled “Your Malibu, Your Decision Act,” 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.” On June 21, 2017, California’s Second District Court of Appeal determined that Measure R is facially invalid in The Park At Cross Creek v. City of Malibu.

Among other things, Measure R implemented specific plan and voter approval requirements and required that chain retail establishments obtain a conditional use permit (CUP). Measure R attempted to subvert the well-established principle that a conditional use permit creates a right that runs with the land. Under Measure R, the right would have been establishment-specific, thus “improperly turning a CUP into an ad hominem privilege rather than a decision regulating the use of property.”

The City admitted that issuance of CUPs under Measure R would depend on the applicant and not on the use of the land. The City emphasized in its briefs that the CUP focused on the applicant, rather than the property owner or land itself, to ensure “a permitted ratio of chain stores and avoid[ ] the AnyMall, USA effect.” Accomplishing this, according to the City, requires a “thorough examination of a business.”

According to the court, the City’s admission underscored the problems with Measure R’s CUP provisions, designed to control not just chain stores in general but which specific chain stores may operate in the community.

Measure R supporters argued the establishment-specific provisions were necessary to ensure, for example, there are not two Starbucks in the area. The City suggested that Measure R’s CUP provisions could be saved by applying them to chains dedicated to the same use. That is, a chain coffee shop could transfer the CUP to a different chain coffee shop, e.g., Starbucks to Peet's. But, as the court determined, this still bases the CUP on the nature of the applicant as a chain rather than on the use that chain will make of the property, and is contrary to principles governing CUPs in California.