20.10.027 Restrictive covenants related to grocery stores.
A. Purpose. The purpose of this section is to promote public health and welfare by limiting the use of restrictive covenants that preclude the use of real property as a grocery store. Except in particular circumstances, restrictive covenants that limit or preclude the use of property as a grocery store are contrary to public policy, requiring regulation by the city of Bellingham under its police powers.
B. Definitions. For purposes of this section, the following definitions apply:
1. “Closure” of a store means the point at which a grocery store ceases the retail sale of groceries.
2. “Grocery store” means any retail establishment or portion thereof that sells a wide range of groceries intended primarily for home preparation and consumption, including fresh, packaged, canned, dry, prepared or frozen food or beverage products, and similar items. Grocery stores exclude drug stores, convenience stores, liquor stores, gasoline stations, or other retail establishments selling food products which are almost exclusively processed or prepared.
3. “Impose” means to execute, sign, record, or seek to enforce a legal instrument related to real property.
4. “Owner” includes any owner, past or present, of real property, and any agents of such owners, and incorporates the definition of “owner” set forth in BMC 1.04.010.
5. “Restrictive covenant” includes restrictive land covenants, use restrictions, negative easements and other similar legal clauses or provisions contained in deeds, recorded documents, contracts, agreements, leases, and other legal instruments that are executed by a private party and seek to limit the use of property for a particular purpose or seek to impose a cost on the use of property for a particular purpose.
6. “Retail center” means a multi-tenanted or multi-owner retail development with at least one shared common area and which is subject to common management or common control through one or more restrictive covenants or easements.
C. Prohibition Against Restrictive Covenants. Except as set forth in subsections (C)(1) and (C)(2) of this section, it shall be unlawful for any owner to impose a restrictive covenant on real property that prohibits or restricts the use of said property as a grocery store beyond the time period during which the owner has an ownership interest in the property.
1. The prohibition in this section shall not apply to an owner or operator of a grocery store that discontinues operations at a site for the purpose of relocating the grocery store if the following conditions are met:
a. The relocated store is similar in size or larger and similar in the scope of products sold when compared to the discontinued site;
b. The relocated store is located within one-half mile of the discontinued site;
c. Relocation and commencement of operations of the relocated store at the new site occurs within two years following closure; and
d. The restrictive covenant imposed on the prior site does not have a term in excess of three years from the date of closure.
2. The prohibition in this section shall not apply to a restrictive covenant that is used to limit competition or conflicting uses within the confines of a retail center; provided, however, that it shall be unlawful for any owner or operator who discontinues grocery store sales at a site for a period exceeding one year to seek to enforce a restrictive covenant regarding grocery sales within said retail center.
3. The director is authorized to adopt rules for the purpose of interpreting and applying the exceptions set forth in subsections (C)(1) and (C)(2) of this section, consistent with BMC 20.24.010 for interpretations generally; provided, that such rules shall be consistent with the purpose of this section.
4. The director shall have discretion to extend the distance limit in subsection (C)(1)(b) of this section to no more than one mile; the time requirement in subsection (C)(1)(c) of this section; the term limit in subsection (C)(1)(d) of this section; and the time period in subsection (C)(2) of this section upon written request of an owner or operator and such requesting party’s presentation of evidence establishing extenuating circumstances that demonstrate good cause for the extension. Factors to be considered in evaluating good cause shall be: (a) maintaining or increasing food access in the surrounding area, including the area around the discontinued site; (b) needs related to financing and construction for the new location; and (c) promoting private investment in the surrounding area. The director shall issue a written determination on the request.
D. Application. The provisions of this section do not apply to a restrictive covenant that becomes effective prior to the effective date of this section. The provisions of this section apply to restrictive covenants notwithstanding the provisions set forth in BMC 20.04.040(D) regarding agreements between private parties.
E. Director Determinations, Notice of Violation, and Appeal. Before the city initiates any of the enforcement actions set forth in subsection (F) of this section, the director shall make a determination that a violation has occurred and give the owner a written notice by personal service or by certified mail, return receipt requested, stating the existence of a violation, that enforcement action is contemplated, and that such person shall have a specified period of time in which to correct the violation.
Director determinations under the provisions of this section are Type I decisions under BMC 21.10.100 and appealable under BMC 21.10.250.
F. Enforcement.
1. Any restrictive covenant imposed in violation of this section is null and void and of no lawful force and effect.
2. To the extent allowed by law, enforcement of this section may be through a cause of action in a court of competent jurisdiction and may include declaratory relief, injunctive relief, or other appropriate legal or equitable remedy as appropriate to carry out the purpose and intent of this section.
3. Any owner who imposes a restrictive covenant on real property that is prohibited by this section shall be subject to denial, suspension, or revocation of a business registration under Chapter 6.05 BMC.
4. In addition to any other remedy provided by this section or allowed by law, any owner who imposes a restrictive covenant that is prohibited by this section shall have committed a civil infraction and shall be punished by a fine not to exceed $1,000. Each day that such restrictive covenant is of record or otherwise effective shall constitute a separate and distinct civil infraction.
G. Severability. If any section, sentence, clause, or phrase (i.e., provision) of this section or its application to any person or circumstance is held invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other provision and the remainder of this section, or the application of such provisions to other persons or circumstances, shall not be affected. [Ord. 2019-12-041 § 1].