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By Anita Varghese
Staff Writer

December 4 -- The owners of Ocean Park’s Fair Market won round two of their legal case last week to keep the popular neighborhood grocery store in its current location at 2225 Fourth Street.

A three-judge panel of California’s Second District Court of Appeal reversed a 2005 Los Angeles County Superior Court ruling declaring that Haque and Bakul Helal cease to operate their market business on the property.

The twisted tale that the small store finds itself in concerns obscure land use laws and the exact wording of an Agreement Imposing Restrictions on Real Property (AIR) and a Declaration of Covenants, Conditions, Restrictions and Reservation of Easements (CC&Rs).

“We conclude the AIR and CC&R’s did not properly lend themselves to an interpretation (by the trial court) that would prohibit the City from changing the permitted use or zoning,” the three judges wrote in the ruling on Thursday.

“The language of the documents is reasonably susceptible to the interpretation that the AIR and CC&Rs do not prohibit the City from exercising its police power to enact legislation concerning future use of the property,” they said.

Juanita Richeson and Eugene Kallman, co-owners of a condominium on the site, filed a lawsuit in 2004 to compel the City to close the Fair Market.

The plaintiffs allege the City is not enforcing deed restrictions governing the site and the Helals misrepresented and unjustly enriched themselves.

Fair Market was built in 1928 on land zoned as Class B-Income. The property was rezoned as Residential 2 in 1946, which made the store a nonconforming use.

In 1948, the City Council voted to remove commercial uses from residential zones within 25 years. However, the store was awarded conditional use permit extensions in 1973, 1976, 1979 and 1984.

Another permit in 1985 allowed the store to remain until 2000 at the site, which was rezoned again as Residential 3.

A property owner preceding Richeson and Kallman asked for and received permission from the City Council in 1987 to build two condominium units behind Fair Market.

The City required the store to be part of the property’s common area, condominium unit two and store ownership be intertwined, and the store area be landscaped as part of an unrestricted common area if Fair Market ever ceases to exist.

The City also required that neighborhood markets not open for business before 8 a.m. or after 9 p.m.

Fair Market’s permit requires it to close at 7:30 p.m., but the store is in business from 7 a.m. to midnight.

Provisions stemming from the 1987 development process were entered into the AIR and CC&Rs governing the property.

Richeson and Kallman purchased condominium unit one in 1994. The Helals purchased condominium unit two and the store in 2003, but they had been lease owners of the store since 1995.

The conditional use permit that was granted in 1985 called for the potential closure of the store and permit expiration in 2000, but the Helals filed an application and were given a new permit to continue market business until 2003.

This request received Richeson and Kallman’s blessing at numerous 2003 public hearings, judges said.

Court documents say that Kallman was “enthusiastic in supporting the continuation of Fair Market and that he essentially pleaded with the Planning Commission and the City Council to allow the market to remain in front of his property, for the good of the community and for the benefit of his property.”

The City Council adopted a 2003 ordinance to allow “for the continuation of nonconforming neighborhood markets which have served surrounding neighborhoods for a long period of time, which are located in areas of the city that have an insufficient number of grocery stores and which thereby reduce the need for residents to drive to less convenient commercial locations,” states court documents.

Neighboring residents of Fair Market spoke in admiration of the store at Planning Commission and City Council meetings years ago, the majority of them pleased with the store’s business hours and place as an Ocean Park social hub.

Planning staff, in an effort to help neighborhood markets survive mounting financial pressures, had recommended zoning law amendments that would give the Planning Commission and City Council greater flexibility to adjust land use requirements for nonconforming properties.

In their 2004 lawsuit, Richeson and Kallman said they regret supporting Fair Market’s last permit extension after realizing the permit is indefinite.

The trial court agreed with the plaintiffs on allegations that arose from the store’s nonconforming land use and ordered the Helals to stop conducting market business on the property.

The trail court also ruled the store building “must be removed and the underlying area must be landscaped or developed in a manner consistent with the CC&Rs,” says court documents.

City attorneys Marsha Moutrie and Barry Rosenbaum filed an amicus curiae with the Second Appellate Court on behalf of the Helals and Fair Market lawyers -- Harding Larmore Mullen Jakle Kutcher & Kozal, LLP -- arguing the 2000 closure date was a choice that store owners could make and the date was always subject to potential future changes.

The three-judge appeals court panel agreed with the defendants and ruled the trial court erred in reading the combination of AIRs, CC&Rs and conditional use permits.

“Land use regulations involve the exercise of the police power and the right to exercise the police power cannot be contracted away in the future,” the judges wrote.

“The AIR and corresponding CC&Rs therefore must be read as containing an implied provision reserving the City’s police power to modify its zoning regulations and conditional use permit for the property,” they said.

Legal battles may not be over because Richeson and Kallman can appeal the latest ruling by asking for a hearing before a full panel of the Second Appellate Court.

If the Second Appellate Court decides not to convene a full panel, the three-judge panel ruling stands in favor of the Helals.