Serious legal questions were brought to the attention of City Officials and staff this week by Malibu residents and small business owners Brian and Shamra Strange, mega-brand James Perse and Washington Prime Group, the current leasing agent for the Malibu Lumber Yard, a City-owned property.
Last week, the Malibu Daily News broke the story of the pre-meditated Perse takeover at the Malibu Lumber Yard which has been in play for years and well after the City adopted the Formula Retail Ordinance, put in place to prevent this very issue of national and/or global chain stores dominating our rural coastal community and preserve prime retail space for locally-owned small businesses.
Business owners Brian and Shamra Strange were the last local business to be ousted by Washington Prime Group in favor of Perse. The Stranges, who have been at MLY since 2019, were manipulated by WPG into moving into another space upstairs, which required an adjustment of their liquor license (and took the City and additional 10 months to complete the process), only to have WPG strategically back out of their lease agreement with the Stranges for Perse to assume their current space, new space and the amended liquor license for that space.
At press time, the Strange’s liquor license was still visible in the window of the upstairs location.
Shortly before MDN broke the story of Perse’s impending takeover at the Lumber Yard, Malibu City Council member Steve Uhring made inquiries to City Manager Steve McClary and Malibu City Planning Department Director Richard Mollica, regarding the potential violations at the city-owned Lumber Yard.
Interim City Attorney Trevor Rusin was copied and both he and Mollica responded to Uhring’s inquiry, in writing, that every tenant in the Lumber Yard is subject to the Ordinance. City Manager Steve McClary did not respond to the violations.
However, Planning Director Mollica also did not address Rusin’s question as to whether Perse’s second, monstrous, Malibu Home store at MLY went through the planning department process (it did not).
In fact, while Perse’s original clothing store was grandfathered in the FRO, his newer retail locations, including a vintage furniture store and smaller home store, both opened before the larger James Perse Malibu Home location, were/are subject to comply with City regulations and permitting – of which Perse reportedly ignored.
It is evident the City is blatantly violating their own ordinance, possibly colluding with Perse to allow the additional un-permitted location to exist at the Lumber Yard – and now more locations are planning to pop-up under the Perse product umbrella and in process of opening at the Lumber Yard.
This definitively puts the Perse mega-brand footprint well over the 4000 sq. ft. limit allowed per the FRO and the City, WPG and Perse, are willfully continuing to violate it by refusing to enforce the intended use of the property.
Why is the City of Malibu purposely favoring Perse’s takeover of the majority of the property?
Richard Mollica, Malibu Planning Director states in his email that every one is subject to the Formula Retail Ordinance yet his department did not approve this second Perse project which was in clear violation of the City’s own ordinance. Perse is said to have executed the remodel without the proper city permits.
According to sources at City Hall, it is Perse’s intention to assume control of the Washington Prime Group Lease on the City-owned property and push forward saturating the Lumber Yard with his “Perse brand eco-system”.
As labor day weekend approached, one of the highest grossing weekends of the year for retailers, Strange Wines was in the process of moving out of their Lumber Yard space, forced to close to make way for the heavily talked about Perse takeover which included the Strange’s liquor license they went through painstaking efforts to amend per their new lease agreement with WPG.
City Planning staff was contacted by Council member Steve Uhring and told to investigate the complaints regarding the FRO violations.
Simultaneous to the walk-through by City staff at MLY, City Council members were being informed that Perse was not just strategically swallowing up the majority of the retail locations at MLY, he was also planning to assume the MLY lease from Washington Prime Group.
According to the lease agreement with Washington Prime, the City of Malibu must be officially notified of the impending lease transfer. The City then has 30 days to act.
Council member Uhring told Malibu Daily News he believed that the potential transfer would traditionally go through a process of closed session negotiations, however, Uhring said he planned to push for the issue to be heard publicly and with the community’s involvement in the interest of transparency.
Given the Pandora’s Box of FRO violations Perse openly committed over the years at MLY and his intended actions for the property that have now been exposed, it is possible the lease transfer could be coming to a grinding halt.
Council member Uhring, furious with how the City staff has failed to oversee WPG and their responsibilities at MLY and the failure to manage FRO violations, is adamant Perse should not be given an opportunity to take over the lease of the City-owned property and gave this exclusive quote to Malibu Daily News:
“If the allegations against Perse prove to be accurate, why on earth would we want someone who violated the Formal Retail Ordinance for years, to manage that same property, only to continue to misuse it for his own personal financial gain, completely disregarding the will of the citizens? It’s pure insanity to consider him as a viable option.”
Should Perse accomplish assuming the lease on the property, would it then make it legal for Perse to achieve his brand takeover?
Not according to the terms of the Formula Retail Ordinance which states that any one retailer cannot assume more than 4000 sq. ft. and less than 30% of the entire square footage of MLY.
Although City Manager Steve McClary maintains Perse is not in violation stating that Perse has not taken over more than 30% of MLY leasing space, he is openly turning a blind eye to obvious – Perse is already in possession of the following spaces as we speak and City staff appears to be either ignorant, or colluding with Perse to facilitate the takeover.
As of 9/6/2023, James Perse merchandise and/or brand owned possessions, furniture, collaborations has been noted in every one of these locations recently.
E100-3015’ – JP main clothing store
D160 – 1730’ – JP vintage store
D150-1200’ – JP furniture
D140 -800’ – JP collaboration – Local Authority
C100-700’ – JP surfboards and furniture
C110-600’ – JP Malibu Home
C120-600’ – JP Malibu Home
C130. -792’ – JP Malibu Home
C140-600’ – JP Malibu Home
Totally Sq. Ft. = 10,037’
This footage number does not include new restaurants and other plans of expansion sources maintain are occurring.
A video was recorded by Shamra Strange this week of the spaces Perse has assumed and is currently housing his product in anticipation of opening the new locations.
A Public Records Act Request was submitted asking to review the current leases on those spaces, who is listed as the tenant, if the rent on those spaces is being paid and by whom.
Additionally, Bryan Strange, a prominent attorney, clearly laid out the sections of the ordinance Perse is openly violating with the Malibu Home store and the other spaces which currently are awaiting Perse’s products to complete his “brand eco-system” and subsequent takeover at MLY.
PROFIT TAKES PRECEDENCE OVER THE WILL OF THE PEOPLE
As indicated in our first article, former disgraced City Manager Reva Feldman was in control of the City, its Council (her employers) and its money, actively destroying the foundation of our City’s mission and vision statement.
In typical Feldman fashion and mentioned in the Malibu Times (a week after the Malibu Daily News story broke on the Perse take-over), the language designed to protect small locally owned businesses, was removed with the intent to decimate the spirit of the Formula Retail Ordinance in favor of the developers who lined her pockets.
Feldman completely duped Council members and anyone without the ability to comprehend the process or a legal background pushing through the changes to the Ordinance that the community fought so hard to put in place to preserve our rural coastal community and the livelihood of local businesses.
Coincidentally (or not), this was a few short months after Perse announced his brand expansion at the Lumber Yard in detail to LA Magazine.
Once council member Silverstein was made aware of Feldman’s amendments via the Malibu Times article, he reviewed the January 2020 meeting and supporting documents offering the following assessment:
The MLY purposely denied leases turning the city-owned property into veritable retail ghost town as part of the carefully calculated takeover by Perse and executed by a corrupt city manager, staff and her co-colluding council members.
The MLY was therefore knick named the “Slumber Yard” because of the empty storefronts, some even falling for the facade deeming Perse the “hero” for “upgrading” and “saving” the center with his second Malibu Home location.
The level of disregard Feldman had for the community and the intent to manipulate her employers, Malibu City Council, seems to have bled into the new breed of City staff put in place after her departure in May, 2021.
City Manager Steve McClary, carrying the torch with the same intention it seems, purposely withheld critical information from Council members regarding the potential Perse takeover of the lease and the city official’s position on MLY’s compliance, instead divulging the alleged result of the City’s “investigation” to the Malibu Times before informing City officials.
PAY TO PLAY
As more information comes to light, there is no question the Perse takeover at MLY screams of Pay-to-Play, a subject I am very familiar with on a national level.
The actions of the former disgraced City Manager Reva Feldman, former members of City Council who passed the calculated, well-thought out amendments to the FRO in order to serve mega brands like Perse ( and seemingly specifically for Perse in this case), as well as the continued stonewalling by the City, send the same message that resulted in the September 14th, 2022 raids (I was present for) and a subsequent, currently active, criminal investigation by the California Department of Justice against former LA County Supervisor Sheila Kuehl and former LA Metro CEO Phil Washington.
Corruption at Malibu City Hall has been rampant for decades – and so far, without repercussion, supporting an environment of blatant disregard for local, state and federal laws.
At the August 28th city council meeting, Council member Uhring spoke publicly about the actions of City Manager McClary and Interim City Attorney Trevor Rusin who circumvented Planning Director Richard Mollica and turned what appears to be a negotiated $10,000 Pay-to-Play to push through an event that was against City code and ordinances. The payment was creatively renamed an “enforcement payment” to justify breaking local laws put in place to safeguard homeowners and stakeholders.
Council member Uhring made the following statement, on record, addressing the Pay-to-Play actions of City Manager McClary and City Attorney Rusin:
“I have serious concerns regarding the decision making of the individuals who are running the day to day operations of Malibu. I believe Malibu residents want to have confidence that their city officials are honest and treat all resident equally. Introducing a “Pay to Play” precedent in a city with wealthy residents and struggling enforcement efforts, erodes that confidence. It also sends a terrible message to staff.
Is “Pay for Play” a city policy and if so, how do they participate? I question our commitment to enforce our ordinances. City rules serve to safeguard the public’s well-being and create a harmonious and functional urban environment. These rules are the cornerstone of urban governance and help balance individual property rights with the collective interest of the community. Watering our rules down with a “pay to play’ program, jeopardizes this important balance.”
MISMANAGEMENT, MOLD AND MAYHEM
According to local tenants, Washington Prime Group has grossly mismanaged the property over the years, including renting unfinished spaces in the Lumber Yard with serious health and safety risks.
WPG subjected multiple local small business owners in desperate need of a space for their business, in many cases, the sole income in their family, to a laundry list of less than ideal, if not, dangerous circumstances.
Hazardous health conditions that could lead to permanent long term health issues from unfinished ceilings with toxic insulation exposed and the presence of deadly black mold were left unattended to by management. This was documented and reported by MLY tenants who were pushed out of the Lumber Yard by WPG.
The mismanagement of WPG also extends to failure on the administrative side, failing to cash rent checks, sometimes as long as 6 months, with no regard for how it affected the day to day finances of theses small businesses. All the while, many spaces within the Lumber Yard were closed or used as storage for James Perse when they should have been used as they were intended, for an eclectic mix of local small businesses that could breathe life into MLY as was promised when the City purchased the land with taxpayer funds.
As the Stranges moved out of the Malibu Lumber Yard, a new sign surfaced, visible for visitors with a specific set of rules and regulations, who some might argue are discriminatory towards the beach-going tourists that flock to the area after visiting our world-renowned seaside destinations.
Perse’s influence regarding the new rules, which the City of Malibu maintains is not in violation of the FRO, or any other city ordinances, is evident given his desire to target only a specific demographic shopping at the MLY.
Again, these news rules can – and most likely will – be construed as discriminatory and potentially met with resistance and damaging backlash from visitors to the area.
Perse is no stranger to pulling the entitlement card when it comes to the Malibu brand and is far from popular with many local small businesses who have been bullied by Perse, not just at MLY, but in other parts of the community as well.
One small local retailer near Zuma Beach was allegedly threatened with legal action by Perse for using graphics on their t-shirts and sweats that included the names of famous Malibu beach destinations. Perse, who also uses those names on his products to profit from their popularity, acted as if the use was exclusive to his brand, which it is not.
This violations at the Lumber Yard and the potential transfer of the lease to Perse will be discussed at the City Council meeting on Monday September 11th.
At the Planning Commission Meeting on September 5th, Planning Director Richard Mollica directed staff members to bring back a presentation on the Formula Retail Ordinance at a future staff meeting.
Ironically, the chair of the Planning Commission, Skylar Peak, was one of the City Council members who voted to remove the local business protections in the Formula Retail Ordinance in 2020 and will once again be in a position to further weigh in favor of the mega-brand as he has done in the past. Peak has shown little to no regard for the will of the people who voted for the Ordinance and of whom he swore to serve.
Historically, Peak is no stranger to controversial acts and decisions both personally and politically.
His history of mental health issues are disturbing and landed him in trouble multiple times with law enforcement. The mental health issues have been widely reported on by multiple local and national publications including the LA Times and Huffington Post casting an embarrassing light on the City nationally and globally.
Meanwhile, despite the negative publicity, numerous displays of questionable ethics, behavior and actions, he continues to be put in positions of power. Council member Maryann Riggans is responsible for Peak’s current appointment to the Planning Commission.
Riggans, a former employee and ardent follower of disgraced former City Manager Feldman, was elected to council in 2022.
Faithfully following Feldman’s allegiance to pro-development, when questioned this week about her support of the City upholding the FRO and putting a halt to the Perse takeover, Riggans stated she “would not tell them what to do with the property.”
This is a developing story.