When stars collide in Malibu growth plan

"You can't handle the truth!"

That wasn't uttered in a movie last week, it was shouted by actor-director Rob Reiner in a fiery debate over a measure to require voter approval for large commercial development in Malibu, California. You think your local election is heated this year? Here in paradise, the low-key ambiance of surf and sun along the Pacific Coast Highway has given way to accusations of backroom deals and lies.

"There have been some dirty tactics," said Reiner, standing in a spot overlooking the gleaming Pacific. Once again, he has put his money where his mouth is in California politics. Sixteen years ago, Reiner spearheaded an initiative to impose a 50 cent tax on cigarettes to provide hundreds of millions of dollars for early childhood education, a measure that narrowly won.

Hollywood actor and activist Rob Reiner in Malibu, Calif.
Harriet Taylor | CNBC
Hollywood actor and activist Rob Reiner in Malibu, Calif.

Now he's backing Measure R, which would require all future commercial development in the city of Malibu over 20,000 square feet to require voter approval. In addition, any new development could not have more than 30 percent set aside for chain stores. This could potentially mean a planned 25,000-square-foot Whole Foods may be on the rocks, though supporters of Measure R say it won't impact the planned store. The proposed law is, however, about controlling growth.

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"Absolutely this is NIMBYism! This is 100 percent NIMBYism," Reiner said. "It's the entire citizenship of Malibu basically saying, 'Not in my backyard.' It's not just a rich person saying, 'Don't put an oil derrick outside my window.'"

"I think that Rob Reiner is a funny guy trying to do the right thing the wrong way," said developer Steve Soboroff, Reiner's main opponent on Measure R, and the man who wants to build that Whole Foods. "Just because someone is funny or a big shot or rich doesn't mean they should go around the process to make law."

By the way, neither Reiner nor Soboroff can vote on Measure R. They're technically not residents of Malibu, though both have property here. However, the caustic, personal nature of the campaign has left residents feeling battered. "You see that?" said Reiner, jokingly pointing to a red mark on his nose. "Steve Soboroff punched me right there in the nose! I'm kidding." Well, sorta.

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Mom-and-pop stores along PCH strongly support the measure. "You look around, and you can see all the brands around now," said Bill Miller, who owns Malibu Kitchen. "I know where Whole Foods has been threatening to come here for years. And if they do, it will probably wipe me out."

Soboroff bristles at chain stores getting a bad name. "To say that someone who works hard to build a business, and once they get to 11 stores becomes the devil, that's absurd," he said. "There's a Subway in Malibu owned by a Malibu resident, advertises in the Malibu paper, supports all the Malibu schools."

Campaign signs posted on the planned site of a new Whole Foods store in Malibu, Calif.
Harriet Taylor | CNBC
Campaign signs posted on the planned site of a new Whole Foods store in Malibu, Calif.

Robert Cohen, Southern California president of RKF, a commercial real estate development firm which has done work in Malibu, said Measure R could scare off investors who want to bring high-quality shopping to the area.

"The return they need to get is very high, and that only comes with national retail," he said. "I think the taxable revenue that comes out of these stores, the employment that comes from the nationals hiring people, the locals just can't afford to run a business like the nationals can."

Celebrities like Cher are encouraging people to vote "yes" on Measure R, and Reiner's side has spent at least $400,000 so far. On Election Day, supporters were out along PCH holding up signs. "Once you start overdeveloping and putting in these big shopping centers and these large chains like Costco, it just loses its charm," said Raffi Agopian.

But Soboroff's side has ramped up its own spending beyond the latest $50,000 reported, and there seemed to be more "No" signs than "Yes" posted along the highway.

"I'm not sure where this thing lands," said Cohen. "All I know is that I think Malibu should grow, it's a very dangerous thing to basically go backwards in time."

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Reiner said Measure R doesn't stop growth, just gives it more oversight. "I think with smart, intelligent development we can keep this wonderful charming rustic community."

In response to a request for comment from CNBC, Whole Foods said this: "As a brand, Whole Foods Market is sensitive to any involvement with the debate over Measure R as we do not have a position on the measure, but we are excited to confirm that we have a signed lease and aim to bring a second-to-none shopping experience to Malibu in this development. We are committed to serving the needs of Malibu residents."

—With reporting from CNBC's Harriet Taylor.