Tze v. City of Palo Alto CA4/3, G060401

Edgewood redeveloped a Palo Alto shopping plaza under Planned Community zoning (PC 5150), which envisioned the grocery building being used as a grocery store.
An amendment (PC 5224) added the sentence: “The commercial property owner shall ensure the continued use of the [grocery] building as a grocery store for the life of the Project.”
The Fresh Market leased and operated the grocery building on a 10‑year lease but corporate closure in 2015 left the space effectively vacant while the lease remained in place; Edgewood sought replacement tenants and eventually assigned the lease to Crystal Springs in 2017.
The City issued daily citations and escalating fines to Edgewood under PC 5224 for the vacancy; Edgewood paid many fines and timely administratively appealed only 14 of the then‑70 citations (citations 57–70).
The administrative hearing officer upheld those 14 citations; the trial court, on administrative mandamus, reversed as to citations 57–70, holding “continued use” means a use‑restriction (not uninterrupted operation). The trial court denied relief on the remaining citations because Edgewood failed to exhaust administrative remedies.
The Court of Appeal affirmed: PC 5224’s “continued use” restricts permitted use to a grocery store but does not require perpetual operation; exhaustion exceptions did not apply to Edgewood’s unchallenged citations.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Meaning of “continued use” in PC 5224	"Use" limits permitted purpose to grocery store; no affirmative duty to guarantee continuous operation	"Continued use" equals continued operation; owner must ensure a grocery store is operating	“Continued use” is a land‑use restriction (reserved for grocery use); not a requirement to keep a grocery continuously operating.
Exhaustion of administrative remedies for earlier citations	Exhaustion not required because administrative remedies were inadequate or citations were nullities; due process and equity excuses	Edgewood failed to exhaust available administrative remedies; exhaustion is jurisdictional and required	Edgewood failed to exhaust; exceptions (inadequate remedy, nullity outside narrow tax/subject‑jurisdiction cases, due process, equity) did not apply; citations remain valid.
Prepayment/hardship scheme & due process	Prepayment requirement of fines as condition to administrative review is unconstitutional and made administrative remedies inadequate	Prepayment/hardship scheme is facially valid; PAMC provides hearings and due process protections	No persuasive showing of facial due process violation; Edgewood did not adequately develop an as‑applied challenge and cannot avoid exhaustion on this basis.

Woodland Park Management, LLC v. City of East Palo Alto Rent Stabilization Bd., 181 Cal.App.4th 915 (2010) (ordinance interpretation is reviewed de novo)
Wasatch Property Management v. Degrate, 35 Cal.4th 1111 (2005) (distinguishes wording choices like “continuous operation” versus other phrasing)
Stolman v. City of Los Angeles, 114 Cal.App.4th 916 (2003) (explains technical meaning of “use” in zoning/land‑use context)
Coachella Valley Mosquito & Vector Control Dist. v. California Public Employment Relations Bd., 35 Cal.4th 1072 (2005) (administrative‑remedy exhaustion is generally required)
City of Lodi v. Randtron, 118 Cal.App.4th 337 (2004) (exhaustion inapplicable where agency lacked subject‑matter authority)
Ramirez v. Tulare County Dist. Attorney’s Office, 9 Cal.App.5th 911 (2017) (distinguishes nullity/authority exceptions to exhaustion when proceedings lack statutory authority)