Sausalito Eases Formula Retail Restrictions

City plans to allow larger chains in Marinship area, more boutique businesses in other zones.

Published on Feb. 25, 2026

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The city of Sausalito, California has unanimously approved updates to its 'formula retail' ordinance, allowing larger chain stores with 50 or more locations in the state to operate in the Marinship area, while also inviting more boutique businesses into other commercial zones. The changes come after years of wrestling with the formula retail rules, aiming to provide more certainty and clarity for businesses while still preserving the city's unique character.

Why it matters

Sausalito, like many Marin County municipalities, has struggled with vacant storefronts downtown, and city officials hope these changes will help attract new businesses and revitalize commercial areas. However, some local business owners express concerns about the potential impact of national chains on the city's delicate ecosystem of small, organically-grown enterprises.

The details

The updated ordinance defines 'formula retail' as businesses with 50 or more locations in California. Those larger chains will now be allowed 'by right' in the Marinship shopping district, while smaller chains with under 50 California locations can more easily open in other commercial zones without additional zoning clearance. Certain business types like grocery stores, pharmacies, and service stations are exempt from the formula retail rules. City officials say the changes are a 'modest step' and 'cautiously optimistic' move to support new business growth while preserving Sausalito's unique character.

  • In 2017, a court overturned a successful Malibu ballot measure that banned certain businesses.
  • In late 2024, the Planning Commission developed a code update that defined formula retail as a business with six or more locations worldwide.
  • In spring 2025, the City Council felt the 6-location definition was too restrictive and created a study group to develop a more nuanced approach.
  • On February 17, 2026, the City Council unanimously approved the first reading of the updated formula retail ordinance.

The players

Ian Sobieski

Sausalito City Councilmember who helped lead the study group on the formula retail code update.

Jill Hoffman

Sausalito City Councilmember who helped lead the study group on the formula retail code update.

Matthew Mandich

Sausalito city planner who provided details on the updated formula retail definition and application.

Carlo Berg

Owner of Marinship properties in Sausalito who praised the code revisions for providing more certainty and clarity for businesses.

Justine Kahn

Founder of Botnia cosmetics, a Marinship-based business who expressed concerns about formula retail competition in certain areas of Sausalito.

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What they’re saying

“If you have 50 or more locations in California, you will qualify as formula retail, and you will be allowed in the shopping center district. By right, if you have 50 or below, you will not qualify as formula retail, and you'll be able to locate in the city's commercial zones accordingly.”

— Matthew Mandich, Sausalito City Planner (marinij.com)

“The thing that businesses need in town is certainty and clarity of process and ease of process. For too long, formula retail and the ordinance in general has been something that people have twisted themselves into contortions to get around.”

— Carlo Berg, Marinship Property Owner (marinij.com)

“If I was to expand into a storefront, the cost of renting downtown is astronomical and not friendly to local businesses here. It does scare me a little bit to have formula retail take over certain areas of town, especially near Mollie Stone's, where we have a delicate ecosystem of light manufacturing.”

— Justine Kahn, Founder, Botnia Cosmetics (marinij.com)

What’s next

The updated formula retail ordinance must still receive a second reading and final approval from the Sausalito City Council before taking effect.

The takeaway

Sausalito's measured approach to updating its formula retail rules aims to strike a balance - allowing larger chains in certain commercial zones to help fill vacant storefronts, while still preserving opportunities for smaller, locally-grown businesses to thrive in the city's unique commercial ecosystem.