CITY OF COMMERCEAGENDA REPORTCITY OF COMMERCEAGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
Item No. Item No.
Item No.
Item No.
TO: Honorable City Council
FROM: City Manager
SUBJECT: An Ordinance Approving Billboard Development Agreement No. BDA-26-01 (Off-Site Digital Billboard Display – 6300 Telegraph Road) MEETING DATE: October 13, 2026
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RECOMMENDATION:
It is recommended that the City Council consider:
Opening the public hearing and taking testimonial and documentary evidence; After closing the public hearing and considering the submitted evidence:
Reading by title only, waiving further reading, and introduce Ordinance No. 840, approving Billboard Development Agreement No. BDA-26-01 between the City of Commerce and 6300 Telegraph LLC to allow the operation of a new billboard sign at 6300 Telegraph Road (Assessor’s Parcel Number 6336-008-033)(“Project”); and Determining that adoption of the Ordinance is exempt from the California Environmental Quality Act (“CEQA”) pursuant to Title 14 California Code of Regulations Section 15061(b)(3), based on the findings in the Ordinance and the record before the City Council and that none of the exceptions to the exemptions under Section 15300.2 of the CEQA Guidelines apply; and Taking such additional, related, action that may be desirable PUBLIC HEARING REQUIREMENTS:
The public hearing notice was published in the Los Cerritos News on September 25, 2026. Additionally, notices were mailed to property owners within a 500-foot radius of the subject property on September 24, 2026.
EXECUTIVE SUMMARY:
The applicant, Morley Justman on behalf of 6300 Telegraph LLC (“Applicant”), submitted a request for Development Agreement No. BDA-26-01 to allow the conversion of a previously approved freeway-oriented on-premise digital sign into a commercial off-premise digital billboard sign. The subject property is located at 6300 Telegraph Road within the M-1 (Light Manufacturing) zoning district, immediately adjacent to the Interstate 5 (I-5) freeway.
The Project leverages the fully vested height and structural dimensions (100-foot height, 20' by 60' sign faces) established under prior entitlements and an active building permit, requiring no physical expansion beyond the previously approved structure. The proposed Development Agreement establishes a 10-to-30-year operational framework that secures substantial public benefits for the City, including a one-time development agreement payment, guaranteed annual revenues (Minimum Annual Guarantee (“MAG Fee”) starting at $75,000), integrated physical city signage, dedicated emergency and public service broadcast time, and strict operational and illumination controls.
On September 21, 2026, the Planning Commission reviewed the Project and recommended approval to the City Council with a 5-0 vote. Staff has evaluated the Project and determined that the billboard sign and associated Development Agreement are compatible with surrounding industrial uses, satisfy all necessary municipal code findings, align with the Commerce General Plan, and are exempt from the California Environmental Quality Act (CEQA).
DESCRIPTION OF PROPERTY:
The subject site is a parcel located at the southeast corner of Washington Boulevard and Telegraph Road, measuring approximately 2.88 acres (125,375 square feet). It is generally flat in nature, situated in the City’s Light Industrial Zoning District (M-1), and is surrounded by retail to the north, office use to the west, and the Interstate 5 (I-5) freeway located adjacent to the east. The site is currently developed with a 77,688-square-foot manufacturing building.
BACKGROUND:
Pursuant to Chapter 19.25, Division 4 of the CMC, billboard signs are permitted subject to the execution of a Development Agreement, which requires review and recommendation by the Planning Commission and final approval by the City Council. Pursuant to CMC Section 19.25.020, "Billboard sign" means a sign soliciting public support or directing public attention to the sale, lease, hiring or use of any objects, products or services not associated with the property where the sign is located ,as regulated by California Business and Professions Code Sections 5200—5499. For purposes of this chapter, a billboard sign shall not include a sign solely advertising the business(es) located on the premises where such sign is erected and maintained. A billboard sign may consist of either static or digital displays, as defined in this section, and may be referred to in the Commerce Municipal Code as “static billboard sign” or “digital billboard sign”. See "Off-site sign.
The site history for 6300 Telegraph Road includes prior land use and entitlement approvals for on-premise industrial development and accompanying signage as follows:
On July 25, 2018, the Planning Commission approved Plot Plan No. 990 for the construction of a 77,688-square-foot light industrial building.
On October 27, 2021, the Planning Commission approved Plot Plan No. 990 (Modification), Conditional Use Permit No. 544, and Variance No. 21-01, establishing a comprehensive sign plan for the site that authorized an on-premise digital sign and wall signs.
To accommodate refined site plan configurations and operational needs, the applicant, Morley Justman on behalf of 6300 Telegraph LLC (“Applicant”), sought approval of Variance No. 24-06 to modify Variance No. 21-01 to allow a taller and larger on-premise digital sign. On November 20, 2024, following deliberations regarding the sign design, I-5 corridor freeway visibility, operational illumination, and display hours, the Planning Commission conducted a public hearing and approved Variance No. 24-06. This approval authorized an additional 36 feet in height for the digital sign structure and an additional 528 square feet of display area per sign face for on-premise promotional messaging.
To date, construction for the digital sign has commenced. This active construction preserves the Applicant’s vested rights to complete construction, allowing the structure to be built and converted directly into a billboard sign pursuant to the proposed Development Agreement.
The current request, submitted by the Applicant seeks approval of Billboard Development Agreement No. BDA-26-01 to convert this previously approved on-premise digital sign into a billboard sign. The proposed Project is located within the Light Manufacturing (M-1) zoning district and is consistent with the goals, policies, and objectives of the Commerce General Plan.
On August 12, 2026, the City Manager issued samples for physical municipal signage to be attached to the proposed billboard sign. Subsequently, the applicant and City finalized terms set forth in the Letter of Intent (LOI) to establish public benefit allocations, site operational guidelines, and physical structural enhancements. Development Agreement No. BDA-26-01 formalizes these site design requirements, public service allocations, operating restrictions, and community contributions per the Letter of Intent signed by the Applicant on September 10, 2026.
Following the publication and posting of a public notice, the Planning Commission reviewed the Development Agreement application at a public hearing on September 21, 2026. After taking testimonial and documentary evidence, the Planning Commission adopted Resolution No. PC 26-11, recommending that the City Council approve Development Agreement No. BDA-26-01 subject to the Conditions of Approval, and find the Project exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15301 (Class 1 – Existing Facilities) and Section 15061(b)(3) (Common Sense Exemption), with no exceptions under Section 15300.2 applying. The matter is now before the City Council for final consideration and public hearing.
PROJECT OVERVIEW:
The Project scope entails the conversion of a previously approved on-premise digital sign into a billboard sign. This conversion involves minor physical alterations to the previously approved structure with no expansion of its existing dimensions or height.
ANALYSIS & KEY DEVELOPMENT AGREEMENT PROVISIONS:
The proposed Development Agreement provides the regulatory framework governing the operation, financial obligations, and performance specifications of the proposed billboard sign. Some of the key provisions of the Development Agreement include the following:
Term. The proposed Project will operate under an initial term of ten (10) years, commencing on the date the digital display becomes operational. Additionally, the Applicant has the option to extend the agreement for four (4) additional extension terms of five (5) years each for a possible total term of thirty (30) years, subject to compliance with the performance and notice provisions outlined in the agreement.
One-Time Development Agreement Payment. Applicant will pay a one-time Development Agreement payment of twenty-five thousand dollars ($25,000.00) to the City within five (5) days of the agreement's effective date or expiration of appeal periods, which the City may use the one-time payment to offset consultant, legal costs, staff time, or any other public purpose. Any amounts previously paid by the Applicant apply towards this required fee.
Minimum Annual Guarantee & Revenue Share. Applicant will pay an annual MAG Fee of seventy-five thousand dollars ($75,000.00) per year during the initial 10-year term in quarterly installments. In addition, the City is entitled to 15% of the annual gross revenue that exceeds the MAG Fee (“Percentage Fee”) in any year, Applicant will pay the difference as a Percentage Fee subject to an aggregate maximum of the MAG Fee and the Percentage Fee of $110,000 during years 1-10. In years 11-20, the MAG Fee is $90,000 with an aggregate maximum MAG Fee and Percentage Fee of $134,000. In years 21-30, the MAG Fee is $130,000 with an aggregate maximum MAG Fee and Percentage Fee of $190,000.
Integrated Physical City Signage. Applicant will integrate and permanently attach physical City of Commerce signage, including the official City logo, directly into the billboard structure at Applicant's sole cost, adhering strictly to design criteria provided by the City Manager.
Public Service Announcement Airtime. Applicant will reserve and allocate 10% of total available message display time across a 24-hour day to the City free of charge for emergency alerts, municipal messaging, and public service announcements on a space-available basis.
Prohibited Advertising & Casino Restrictions. Applicant will not utilize any display face to advertise tobacco, cannabis, firearms, adult content, sexually explicit material, false/misleading content, or illegal activities. Additionally, the agreement explicitly restricts advertising for non-local gambling, gaming, cardroom, or casino operations located outside the jurisdictional limits of the City of Commerce.
Local Business & Emergency Benefits. Applicant will provide a 5% rate reduction on billboard advertising to local businesses or economic groups with a business address located within the City that possesses a valid business license. The display will also be made available at no cost for CHP/Caltrans Amber Alerts and National Emergency Network notifications.
City Infrastructure Access & Ancillary Revenue. The City retains the right to install public safety telecommunications equipment on the pole at no cost. Should Applicant license the structure for third-party cellular or wireless data devices, Applicant will pay the City an annual fixed facility fee equal to 10% of the gross revenue collected.
Operational, Maintenance, & Safety Controls. Applicant is responsible for continuous site maintenance, dust control, and graffiti removal within 48 hours of notice. Displays must utilize automatic dimming controls (max 0.3 foot-candles over ambient), maintain an 8-second minimum display hold without transitional effects, and immediately blank or shut off any face experiencing a 10% or greater malfunction.
Assignment & Transfer Controls. Applicant will not transfer, assign, or sell rights under this Agreement without prior City Council consent and proof that the transferee possesses adequate operational experience and financial capacity.
Annual Review & Audit Rights. The City may conduct an annual review to confirm good-faith compliance. The City also retains the right to audit Applicant's financial books and records annually, with Applicant reimbursing audit costs if gross revenues are understated by more than 3%.
Indemnification & Insurance. Applicant will maintain comprehensive general liability insurance ($2M per occurrence / $4M aggregate) and defend, indemnify, and hold harmless the City from any claims, damages, or liabilities arising from the construction, operation, or maintenance of the billboard sign.
ZONING CODE COMPLIANCE:
The subject property is located within the Light Manufacturing (M-1) zoning district. Pursuant to CMC Title 19, Chapter 19.25, Division 4, off-site digital billboard signs are permitted within this designation subject to the review and execution of a Development Agreement.
The Project entails the conversion of a previously approved on-premise digital sign into a billboard sign. While the advertising classification transitions from on-premise to off-premise, the underlying physical dimensions and structural parameters are fully vested. Specifically, the overall 100-foot height of the structure is legally vested due to the prior approval of Variance No. 24-06 (modifying Variance No. 21-01), which established the sign's comprehensive design plan and valid building plan check.
Furthermore, pursuant to CMC Section 19.25.180(C)(2), the CMC provides a regulatory mechanism allowing for an increased overall height above standard limitations to account for significant visual obstructions, grade separations, and elevated freeway geometries. These precise environmental and structural factors—specifically the elevation and visibility constraints relative to the adjacent Interstate 5 (I-5) corridor—were evaluated and legally established as part of the original entitlements and variance approvals. The proposed Billboard Development Agreement (BDA No. 26-01) complies with all procedural requirements of CMC Chapter 19.25, ensuring the structure operates under rigorous municipal standards for illumination, safety, and design.
Zoning Compliance Matrix
Development Standard / Code Requirement
CMC / Entitlement Requirement
Proposed Project Design
Compliance Status
Zoning District
Area immediately adjacent to the I-5 and I-710 freeways that is zoned for commercial or industrial uses.
Located at 6300 Telegraph Road within the M-1 Zone, next to Interstate 5 (I-5) Compliant
Distance Between Residential Zone or Use
Minimum 200’
Approximately 1,700’
Compliant
Sign Classification
Off-Site Digital Billboard Sign (CMC Chapter 19.25, Division 4) Conversion of approved digital sign to a billboard sign via Development Agreement Compliant
Sign Height & Dimensions
75’ heigh, but can exceed 75’ due to obstructions and freeway elevation; maximum total sign area is 25’x60’, no more than 1,200 sq. ft. total Height: 100’
Sign Area: 20’ x 60’
Utilizes height and dimensions authorized under Variance No. 24-06 (preserving active building plan check rights) Compliant
Illumination & Brightness
Maximum 0.3 foot-candles over ambient light; automatic dimming controls Equipped with automatic light-sensing dimming technology adhering to max 0.3 foot-candles over ambient Shall be in Compliance
(Subject to Conditions of Approval)
Display Operation
Minimum 8-second hold time; smooth transitions without flashing or scrolling Complies with an 8-second minimum display hold and prohibited flashing/animation effects Shall be in Compliance
(Subject to Conditions of Approval)
GENERAL PLAN CONSISTENCY:
The City of Commerce General Plan establishes long-range goals and policies to guide land use, economic development, housing, environmental quality, and community safety. The proposed Project, involving Billboard Development Agreement No. BDA-26-01 for a billboard sign at 6300 Telegraph Road, directly implements and maintains internal consistency with the goals and policies of the Commerce General Plan in the following key areas:
Promoting Land Use Compatibility and Code Implementation: The Project supports Community Development Policy 1.1, which states that "The city of Commerce will continue to promote land use compatibility", and Community Development Policy 1.2, which directs that "The city of Commerce shall accelerate the implementation of the city's development code". The development agreement framework established pursuant to Chapter 19.25, Division 4 of the CMC ensures that off-site digital advertising operates under strict, enforceable site design, operational, and illumination standards. Converting the previously on-premise digital sign into a regulated billboard sign ensures compatibility with surrounding industrial uses in the M-1 zone while maintaining clear separation from residential planning areas.
Preserving Economic and Commercial Base: The Project advances Community Development Policy 2.4, which directs that "The city of Commerce will continue to preserve and promote the improvement of the existing commercial areas, including the Commerce Center, the Telegraph Road/Washington Boulevard area...", and Community Development Policy 3.1, which requires that "The city of Commerce will continue to promote the maintenance and preservation of industrial activities and business that contribute to the city's economic and employment base". The development agreement formalizes long-term public benefit contributions, revenue allocations, and public service opportunities for the City, maximizing the economic utility of the freeway-adjacent commercial corridor along the I-5 freeway.
Promoting Quality Urban Design and Site Maintenance: The Project advances Community Development Policy 6.2, which states that "The city of Commerce will strive to see that commercial properties are maintained...", and Community Development Policy 6.3, which requires new development to "employ architectural and site design techniques that will promote quality and efficient development". By integrating modern, high-efficiency digital sign faces and incorporating physical municipal signage attachments per City design criteria, the Project modernizes visually dominant infrastructure along the freeway corridor. Furthermore, the Development Agreement establishes ongoing operational and structural maintenance standards to ensure the property remains well-kept over the life of the Project.
Promoting Public Safety and Emergency Communication: The Project aligns with Safety Policy 1.5, which mandates that "The city of Commerce will ensure that all street signs shall be clearly marked and visible to all emergency personnel", and Safety Policy 5.3, which emphasizes providing continuous public safety and emergency information to the community. The Development Agreement secures dedicated public service messaging allocations on the digital display faces, providing the City and emergency response officials real-time operational capacity to broadcast critical public safety alerts, emergency notices, and civic messaging to the traveling public along Interstate 5.
Mitigating Environmental and Energy Impacts: The agreement directly fulfills Resource Management Policy 1.1, which mandates that "The city of Commerce will do its part in the conservation and protection of air, water, energy, and land in the Southern California region", and Resource Management Policy 3.4, which directs the City to "promote reduced energy consumption by existing land uses within Commerce". The Development Agreement establishes enforceable operational terms—including mandatory high-efficiency LED technology maintenance, automatic dimming controls to adjust brightness relative to ambient lighting, and strict adherence to municipal light and glare standards—to ensure the billboard sign operations minimizes energy consumption and light pollution.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
The proposed Project is exempt from the CEQA (CEQA; Public Resources Code § 21000 et seq.) pursuant to State CEQA Guidelines Section 15301 (Class 1 – Existing Facilities) and Section 15061(b)(3) (Common Sense Exemption). The Project involves minor physical alterations to convert a previously approved on-premise digital sign being converted into a billboard sign with no expansion of dimensions or height. It can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment. None of the exceptions to the exemptions under Section 15300.2 apply.
FISCAL IMPACT:
Approval of Development Agreement No. BDA-26-01 will result in direct, recurring financial benefits to the City of Commerce General Fund over the term of the agreement. The agreement establishes a combination of one-time revenue, guaranteed annul payments, escalating minimum payments, and additional revenue-sharing opportunities, as summarized below.
One-Time Revenue: The applicant has paid a one-time Development Agreement payment of $25,000 to the City to cover processing, staff time, and legal/consultant costs. Any remaining balance may be used for general City purposes as outlined in the agreement.
Guaranteed Annual Revenue (MAG Fee): An annual Minimum Annual Guarantee (“MAG Fee”) of $75,000 per year during the initial 10-year term, payable in quarterly installments.
Escalating Revenue Structure: The MAG fee increases over the life of the agreement during subsequent extension terms — increasing up to $90,000 during years 11–20 and $130,000 during years 21–30.
Revenue Sharing (Percentage Fee): In addition to the base MAG fee, the City is entitled to a 15% share of annual gross revenue that exceeds the MAG threshold, subject to established aggregate maximum caps ($110,000 per year for years 1–10; $134,000 per year for years 11–20; and $190,000 per year for years 21–30).
Ancillary Telecommunications Revenue: Should the applicant license the structure for third-party cellular or wireless data devices, the City will receive an annual fixed facility fee equal to 10% of the gross revenue collected from that activity.
These revenues are not anticipated to create any additional administrative burden or operational expenses for the City, as ongoing maintenance, utilities, and liability are the sole responsibility of the Applicant. Furthermore, the City retains annual financial audit rights to ensure accurate reporting and revenue disbursement.
ALTERNATIVES:
Approve recommendation
Reject recommendation
Provide staff with further direction
RELATIONSHIP TO STRATEGIC GOALS:
This item relates to the 2016 Strategic Action Plan’s goal of: Economic growth – Guiding Principles 1 to “Create and strengthen our identity, as a community that promotes opportunity and success for business that meets the strategic focus for economic growth, will have a positive impact on the quality of life and the City’s financial sustainability,” 3 “Support a long-range planning vision through the City’s General Plan, zoning ordinance, and related land use planning documents that incorporate community and stakeholder input and provide a compass for strategic economic growth, infrastructure investments and city fiscal planning,” and 4 “Focus on strategic economic development pursuits that will increase local jobs, generate additional revenue, and create demand for supporting businesses.” Prepared by: Braulio Madrid, Contract Planner
Reviewed by: Jessica Serrano, Director of Community Development Reviewed by: Alvaro Castellon, Director of Finance
Approved as to form: Noel Tapia, City Attorney
Respectfully submitted: Ernie Hernandez, City Manager ATTACHMENTS:
Ordinance No. 840 approving Billboard Development Agreement No. BDA-26-01, including Exhibit “A” - Development Agreement No. BDA-26-01 Letter of Intent (LOI) dated September 10, 2026