Joseph Smith
From: Preserve Malibu
Attached is Preserve Malibu's letter regarding: Malibu's Draft (version) Formula Business Ordinance.
Thank you. Joseph Smith Aprit 11, -2013 Senior Planner, City Of Malibu
DearJoseph,
After six years, thousands of Malibu resident signatures, overflow crowds. at city meetings, and community hard work, residents are gratified that finally Malibu's Formula Business Ordinance is moving forward. The following listed items are critical oversights in Malibu's Draft Formula Ordinance that must be, and can be easily amended. Properly written, California Formula Business Ordinances (case point Coronado) have been proven fully legal in a Court of Law, are successfully improving, and lawfully enacted in cities across this Nation.
Summary of Items:
Item 1: STANDARD/ZED MERCHANDISE AND MENU The definition wording: Standardized array of merchandise, or a standardize
menu, is the very essence of the definition of a Formula business. Malibu Draft's Ordinance excludes the most primary qualifier as defined by every Formula Ordinance enacted into law across the nation. Without this crucial definition, many Formula Retail giants (such as: The Gap) would not qualify as a Formula business solely in the city of Malibu. This is a fatal flaw and needs immediate correction.
Item2: DEFINITION FORMULA BUSINESS: Location parameter This Draft proposes an unprecedented clause that limits the number of businesses that qualify as Formula by specifying that 6 locations must be located in So. CA. This definition creates a flagrant loophole that is not present in any city ordinance in this country. This weakens Malibu's Ordinance and puts our city on precarious legal footing by discriminating against businesses based solely on location.
Second fact, Malibu is marketed as a global destination not only by Malibu's retail developers, but by the City of Malibu's own marketing plan. Malibu's Formula Ordinance must reflect this inarguable fact.
Item 3: DEFINING RETAIL: Eliminate affrce use This is a serious oversight; this Draft definition of "Retail Establishment" creates a severe loophole that renders Malibu's Draft Ordinance 100% ineffective at protecting Malibu's future.
Commercial establishments such as private offices do not meet the criteria of "retail", fail to provide walk-in sale of goods or services to the general public and must be excluded from both: the definition of "Retail Establishment" and the formula percentage that regulates each center. In this present draft form, centers could lease their retail sections to 100% Formula chain corporations. A correction here is mandatory. Item 4: 50% PERCENTAGE FORMULA CAP PER CENTER City Council directed staff to use a 40% percentage as the maximum number Formula cap per center. This is still extremely lenient. The City town-hall polling meeting also confirmed the cap criteria at a lower percentage. The calculation percentage must be adjusted downward to reflect both the decision of Council and residents. Malibu residents will not accept half of their Civic Center given away to Formula businesses.
BREAK DOWN
ITEM 1: DEFIN/NG FORMULA AS STANDARDIZED MERCHAND/SE/MENU
From Malibu's Draft Ordinance: "Formula retail" means any type of retail sales activity and/or retail service activity conducted within a retail establishment which, along with 6 or more other existing, operational retail establishments located within Southern California (as defined by the counties of San Luis Obispo, Kern, San Bernardino, Santa Barbara, Ventura, Los Angeles, Orange, Riverside, San Diego, and Imperial), is required to maintain two or more of the following features: 1)standardized color scheme; 2) standardized decor; 3)standardized facade; 4)standardized layout; 5)standardized signage, a service mark, or a trademark; and 6) uniform apparel."
The City has removed the NUMBER ONE most critical and standard definition of what constitutes a Formula Business: features a standardized array of merchandise, or a standardize menu
For this Ordinance to be credible, this essential description must be the core definition of "Formula". Without that primary definition, an absurd loophole exists where corporate giants such as THE GAP would be arbitrarily, and exclusively to the city of Malibu, not be defined as a chain store/formula retail.
The Gap has no standardized uniform. Decor, color scheme, layout, etc., can vary from store to store and -can be easily altered to fit into this significant and unwarranted Malibu loophole. The core "formula" of their business model is based on their standardized merchandise and image ads.
Merchandise that is sold at The Gap in Seattle, is sold at The Gap in Costa Mesa, is sold at the Gap in NY =the definition of standardized. Not basing Malibu's Formula definition directly on: standardized array of merchandise, or a standardize menu, renders this Ordinance essentially worthless.
As stated in the last edition of the Los Angeles Business Journal, a legal expert
states regarding Malibu's Draft Ordinance: ", . ,it's definition of a Formula Business (is) potentially too vague and arbitrary ro survive legal challenges': The demand for this critical correction is indisputable. Every Formula Ordinance uses this "standardized" definition, a few examples:
O,JAI Definitions. "Formula Business" means a type of commercial business establishment, retail sales or rental activity and retail sales or rental establishment, including restaurants, hotels and motels,-which, along with ten (10) or more other establishments, maintains two (2) or more of the following features: (i) standardized array of merchandise or standardized menu; (ii) standardized facade; (iii) standardized decor or color scheme; (iv) uniform apparel;(v) standardized signage; or (vi) trademark or service mark; provided, however, a "formula business" shall not include an automated, standalone vending machine.
SAN FRANCISCO Formula Retail Use. Formula retail use is hereby defined as a type of retail sales activity or retail sales establishment which, along with eleven or more other- retail sales establishments maintains two or more of the following features: a standardized array of merchandise, a standardized facade, a standardized decor and color scheme, a uniform apparel, standardized signage, a trade mark or a service mark.
SAUSALITO "Formula Retail" means a type of retail sales activity or retail sales establishment, including food service, which is required to maintain any of the following: standardized ("formula")-array of services and/or merchandise, trademark, logo, service mark, symbol, sign, decor architecture,. layout,_ uniform, or similar standardized feature.
CORONADO 86.04.682 Retail, Formula. "Formula Retail" means a type of retail sales activity or retail s-ales establishment (other than a "formula fast food restaurant") which is required by contractual or other arrangement to maintain any of the following: standardized( "formula") array of services and/or merchandise, trademark, logo, service mark, symbol, decor, architecture, layout, uniform, or similar standardized feature.
ITEM 2: DEFINITION OF FORMULA BUSINESS "Formula retail means.any type of retail sales activity or retail service activity conducted within a retail establishment which, 6 or more operational retail establishments located within SOUTHERN CAL/FORNIA."
By determining that to qualify as a Formula, 6 business locations must be in So CA, this Draft Ordinance mandates an unwarranted loophole for established national and global corporate Formula powerhouses. The entire point of enacting this Ordinance is to balance Formula corporations with smaller, independent, and unique businesses. This clause defeats this purpose and serves to encourage more evictions. This is easily demonstrated by the proliferation of high-end international chains such as Lavin, Missoni, and Henry Beguelin into the Civic Center. Corporate businesses that establish a storefront primarily-for their advertising purposes, by the use of the name "Malibu", driving out Malibu's unique and independent venues.
The unintended consequences of this clause are severe. This prejudicial requirement puts our city on precarious legal footing by discriminating in favor of national and global companies and penalizing in-state, regional businesses. For this reason alone, this requirement must be eliminated.
This clause removes Malibu from its authentic context, which is that Malibu is not
merely a regional destination it is a global destination. Malibu has no need to
distinguish itself in Southern California; Malibu competes on a state, national and global level
Here are examples of recognized chains that have been in the Civic Center that this Malibu's loophole would exempt. Nobody can state with any legitimacy that these are not Formula Businesses:
CHROME HEARTS NEW YORK LAS VEGAS HONOLULU, HI LOS ANGELES MALIBU LONDON PARIS HONG KONG KOWLOON, HONG KONG TOYOKO,JAPAN SHIBUYA-KU, TOKYO OSAKA,JAPAN FUKUOKA,JAPAN AICHI, JAPAN GINZA, JAPAN HYOGO,JAPAN SEOUL, KOREA TAIPEI, TAIWAN TAIPEI, TAIWAN (2ND LOCATION
HENRY BEGUELIN USA: COLORADO: Aspen CALIFORNIA: Los Angeles Malibu San Francisco CHICAGO, ILLINOIS NEW YORK ITALY: Milan 2nd Milan Rome Koloaki Athens RUSSIA: Moscow St. Petersburg JAPAN: Tokyo Fukuoka Kobe Osaka KOREA Seoul 2nd Seoul 3rd Seoul 4th Seoul 5th Seoul
JOHN VARVATOS NEW YORK: Soho Bowery East Hampton LAS VEGAS: Hard Rock Hotel and Casino The Forum Shop sat Caesars FLORIDA: South Beach CALIFORNIA: Los Angeles San Francisco Malibu Costa Mesa
NOBU BAHAMAS BEIJFNG BUDAPEST CAPE TOWN DALLAS DUBAI HONG KONG USA: Las Vegas, Hard Rock Las Vegas, Caesars Palace Los Angeles San Diego Malibu San Diego New York: Next Door Fifty-Seven LONDON OLD PARK LANE LONDON BERKELEY ST MELBOURNE MEXICO CITY MIAMI MILAN MOSCOW PERTH TOKYO WAIKIKI LANAI
LANVIN USA: CHICAGO BAL HARBOR CALIFORNIA: Costa Mesa Los Angeles Las Vegas Malibu New York SOUTHAMERIGA: Brazil EUROPE: FRANCE Paris GREECE ITALY: Forte Dei Marmi Milan Bologna Rome MONACO POLAN D RUSSIA: Samara Moscow Ekaterinburg SPAIN SWITZERLAND UNITED KINGDOM TURKEY ASIA: AZERBAIJAN HONG KONG CHINA: Shenyang Shanghai Beijing INDONESIA JAPAN SINGAPORE TAIWAN THAILAND MIDDLE EAST: JORDAN BAN RAI N KUWAIT LEBANON QATAR ARAB EMIRATES SAUDI ARABIA NORTH AFRICA: MOROCCO
MISSONI AUSTRABRAZIL FRANCE: Cannes Paris Saint-Tropez GERMANY HONG KONG INDIA ITALY: Alba Barberino Battipaglia Capri (NA) Fidenza Forte dei Marmi Menzago diSumirago Milan Porto Cervo (SS) Portofino (GE) Positano (SA) Rome Venice Vicolungo JAPAN LEBANON MOROCCO -QATAR RUSSIA: Moscow Saint Petersburg SAUDI ARABIA SINGAPORE SOUTH KOREA SPAIN: Madrid Marbella SWITZERLAND: Lugano Mendrisio TAIWAN: UNITED ARABEMIRATES UNITED KINGDOM USA New York Malibu
ALICE AND OLIVIA NEW YORK: Meatpacking Madison Ave. Bryant Park Americana Manhasset Southampton CONNETICUTT JAPAN CALIFORNIA: Los Angeles Malibu .San Francisco
INTERMIX: NEW YORK CITY: Madison Avenue Fifth Avenue Columbus Prince Street Bleecker Street/ Washington Street Americana Manhasset South Hampton East Hampton CONNETTICUT: Westport Greenwich ILLINOIS Chicago: Rush St. Armitage Bucktown FLORIDA: Miama Bal Harbour Boca Raton CALIFORNIA: Los Angeles Brentwood Beverly Hills Costa Mesa Malibu CONNECTICUT: Westport Greenwich MASSACH ESETTS: Boston DISTRICT OF COLUMBIA: Georgetown TEXAS: Dallas NEVADA: Las Vegas GEORGIA: Atlanta MICHIGAN: Somerset Mall TORONTO, CANADA: Bloor Street
These businesses are acknowledged Formula corporations. Every other Formula Ordinance in the nation bases their definition of Formula on the number of commercial outlets either nationally or globally, not limited to a specific small regional area. This unnecessary clause deviates dramatically from established legal Ordinances, and leaves Malibu vulnerable in court. Never in any MalibW meeting, discussion, testimony, research, polling, council, or public comment has a Southern California limit ever been discussed.. This must be corrected.
ITEM 3: DEFINING RETAIL ESTABL/SHMEIVT "Retail establishment" means a commercial establishment that provides goods and/or services directly or indirectly to the consumer such as eating and drinking places, beauty, personal services, lodging, finance, real estate and insurance, amusement and recreation services, health, fitness, educational and social services, museums, and galleries." This is a critical problem. Commercial establishments, such as private offices that do not provide general walk-in service or goods to the public must be excluded from an accurate definition of a "Retail Establishment". Examples include offices of: physicians, alternative health centers, lawyers, insurance salesmen, realtors, property managers, interior decorators, etc.
Unless corrected, this Draft defines almost any type of business erroneously as RETAIL in Malibu. A crucial distinction must be established that differentiates "retail establishment" from "office space". This can be accomplished by a distinction into the definition of either "Retail Establishment" or "Shopping Center" or with excluded office uses in the 50% cap requirement.
Many centers in the Civic Center have built or plan to build significant office space. Immediately, this Draft would allow a center such as the Country Mart to include their top floor private office space in the %calculation. If so, the Country Mart could bring in 13 MORE retail chains. This defeats the purpose of regulation.
Even more dangerous to our city, new commercial developments such as LaPaz could lawfully lease their second floor space to private offices and then lease the ground floor to 100% formula retail chains.
This loophole defeats the entire purpose of the ordinance and again, renders Malibu's proposed Formula Ordinance completely useless at regulating formula business in the City of Malibu. This is unacceptable.
A crucial point: no other city's ordinance defines the meaning of the word: RETAIL. They define: FORMULA. By defining "Formula Businesses", they cast a wide net that catches any commercial business that has a certain number of locations, whether that is retail goods or retail services. This approach has effectively worked across the country.
ITEM 3: 50% PERCENTAGE FORMULA CAP PER CENTER "Approval of the formula retail establishment will not result in more than 50 percent of a shopping center, as determined by the percentage of overall square footage or the number of leasable tenant spaces, whichever is greater, from being occupied by formula retail."
The City Council instructed staff that the percentage or Formula should be no higher than 40% at any Civic Center retail center.
The City's Pepperdine Davenport Poll town-hall confirmed this number when 33% of respondents voted for no more than 25% retail formula businesses in a center and only another 9% of attendees would allow the limit up to 50%. Malibu's Ordinance percentage needs to be lowered to reflect both Malibu's City Council and its residents. Malibu residents are unwilling to hand over 50% of this city's primary retail centers to corporate formula chain establishments.
We, along with a majority of Malibu residents, thank you and Joyce for your hard work in writing Malibu's Draft Formula Business Ordinance. Based on our recent conversations, we realize that this is simply that - a draft, a starting point. We look forward to the necessary changes and corrections in Malibu's Formula Ordinance that will render it effective at meeting the objectives of our city to: • Preserve the rare, historic character of Malibu for residents and worldwide visitors, To help support both residents living needs and shopping access for tourists, • To encourage economic growth by planning a future that includes a vibrant mix of businesses, and exciting opportunities for independent entrepreneurship.
Thank you,
Preserve Malibu Citizens