CITY OF SAN MATEO
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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 4 Section Name: STUDY SESSION Account Number: 10-1311 File ID: 26-10977 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: City Manager's Office
MEETING DATE: April 6, 2026
SUBJECT:
Electronic Billboard Policy — Direction
RECOMMENDATION:
Receive the staff report and provide direction regarding potential electronic billboard policy options.
BACKGROUND:
In December 2025, the City Council adopted the Three-Year Economic Development Work Plan (the ED Plan) for Fiscal Years 2026–2029. The ED Plan outlines several strategies geared at exploring potential revenue generation for the City, including a digital billboard policy as one option that could generate funds from private industry rather than from residents. In addition to revenue, billboards may also provide the community service of an efficient means of public information sharing.
Consistent with the ED Plan strategy, staff is returning to Council to seek policy guidance on whether to implement digital billboards in San Mateo.
This topic was previously explored at City Council study sessions in November 2020 and March 2021. At that time, while there was interest in potential revenue generation, both Council and community feedback raised concerns related to visual impacts, community character, and proximity to residential areas. Feedback generally indicated that, if considered, digital billboards should be limited to City-owned or City-controlled property along major transportation corridors and avoid impacts to nearby neighborhoods. Some comments also expressed conditional support for removing an existing, older, printed billboard in exchange for a new digital billboard in a more transit-oriented location with a public benefit. At the conclusion of those discussions, no action was directed by the Council and the City remains without a pathway to allow new billboards.
The City’s Sign Ordinance (Title 25) currently prohibits off-site signage and animated or flashing signs, including billboards and digital billboards. As a result, the current ordinance provides no permitting pathway for digital billboards. If desired, the Ordinance could be amended to allow billboards and establish a review and permitting process. Alternatively, the City could consider using a lease agreement as a mechanism to allow billboards; some cities use both approaches. To inform Council’s consideration of a billboard program, staff reviewed neighboring jurisdictions’ digital billboard programs and how they are functioning. The following section summarizes their approaches to help frame key policy considerations and the subsequent section provides information on zoning and permitting and considerations.
BILLBOARD PROGRAMS IN NEARBY JURISDICTIONS
CITY OF SAN CARLOS
The City of San Carlos currently has four billboard signs located along the U.S. Highway 101 corridor. They receive a minimum of approximately $200,000 annually from their digital billboard program, with additional revenue equal to 30% of advertising sales and a $100,000 one-time payment. Together, all four billboards’ revenues are projected to generate around $26.7 million over a 20-year term.
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San Carlos amended its municipal code to allow digital billboards only on property owned or controlled by the City, while continuing to prohibit billboards on private property. To allow Billboards on City-owned/controlled property, a land use permit is required, including design review and a Planning Commission hearing (San Carlos Municipal Code Section
12.28.085). A City Council hearing to evaluate the lease agreement follows. The program is implemented through lease agreements with the billboard operator. The operator is responsible for constructing and maintaining the billboards, while the City receives revenue under the lease.
CITY OF BELMONT
The City of Belmont currently has an agreement with a billboard operator. The City receives a minimum of $150,000 annually from a digital billboard located on freeway-facing, City-owned property, with additional revenue equal to 30% of gross advertising sales. The agreement includes a 3% annual escalation and is structured as a 30-year ground lease, with total revenue projected at approximately $7.2 million over the full term of the agreement.
Belmont’s ordinance prohibits billboards. However, the code includes a limited exception that allows the City to relocate or permit new billboards on city-owned property without a land use permit (Belmont Municipal Code Section 23A,1.1). To relocate or allow a new billboard on City-owned property, a City Council hearing to evaluate the lease agreement is required.
The existing billboard was implemented through a State-authorized relocation agreement, which allows cities to remove existing billboards in exchange for permitting a new billboard at an alternate site. In Belmont’s case, an outdoor advertising company partnered with the City to remove several older billboards and construct a modern electronic billboard on City- owned land.
The operator is responsible for construction, maintenance, and day-to-day operations, while the City acts as the landlord and receives lease revenue.
CITY OF MILLBRAE
The City of Millbrae receives approximately $200,000 annually from a digital billboard program where billboards may be located on City-owned or City-leased property, with periodic increases over the term. The agreement also includes a provision requiring additional payments if lease revenue falls below 35% of advertising revenue, with total revenue estimated at approximately $5 million over 20 years.
Millbrae amended its Sign Ordinance to allow digital billboards only on property owned or controlled by the City, while continuing to prohibit billboards on private property. Billboards are required to obtain a Sign and Land Use permit, subject to design review and Planning Commission hearing (Millbrae Municipal Code Section 10.10.350(B)). The lease is evaluated during a City Council hearing. This approach is similar to the City of San Carlos and ensures that billboard locations are limited and City controlled. The City has two City-controlled billboards; one located along Highway 101 and the second at their Water Pollution Control Plant.
The billboard operator is responsible for financing, constructing, and maintaining the structure, as well as managing advertising operations.
CITY OF REDWOOD CITY
The City of Redwood City is considering a digital billboard program that could generate approximately $200,000 annually, along with a potential one-time payment of $100,000, though final terms are still under negotiation. Currently, billboards are prohibited under the City’s Sign Ordinance. Redwood City is considering allowing a limited number of digital billboards along the U.S. Highway 101 corridor as a potential non-tax revenue source, potentially beginning with a pilot installation on City-owned property.
Under the proposed model, a billboard operator would finance, construct, and maintain the structure, and manage advertising operations in exchange for a long-term agreement with the City and a share of advertising revenue. The City would act as landlord and receive lease revenue, similar to other jurisdictions.
After the agreement is finalized, the City plans to amend its Sign Ordinance to allow a digital billboard at the selected location. Redwood City’s approach to approval will be a lease agreement with Council approval.
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CITY OF SOUTH SAN FRANCISCO
The City of South San Francisco has approved a digital billboard program projected to generate approximately $6 million in revenue over a 30-year term.
The City allows digital billboards through a Council-approved relocation agreement, which requires the removal of at least two existing billboard faces within the City for every new digital billboard face installed. Digital billboards are limited to non- residential districts adjacent to U.S. Highway 101. A land use permit is not required, although the City ordinance includes required design, location, and operational standards (South San Francisco Municipal Code Section 20.360.004(F)(7)). The relocation and lease evaluation is done at a City Council hearing.
If sufficient billboard faces are not available for removal, the City may instead enter into a development agreement requiring fees, contributions, or other public benefits. Projects must also be consistent with the City’s General.
LOCAL BILLBOARD SUMMARY
Approaches to billboard approval vary across jurisdictions but tend to focus on allowing billboards on City-owned/controlled property. The cities discussed above generally incorporate some kind of land use standards to ensure oversight of billboards locations, operation and design, whether or not an actual land use permit is required. At a minimum, most cities approve billboards through lease agreements approved by the City Council. Changes to allow billboards typically require updates to the Sign Code. Private operators generally handle construction and operations in exchange for ongoing lease revenue. Of the cities interviewed, none reported issues with operation or maintenance. South San Francisco is the only city that reported exchanging a development concession for a public benefit.
FEDERAL, STATE AND MUNICIPAL LAW CONTEXT
Billboards in California are regulated at the federal, state, and local levels, and, as described in the previous section, each city employs a different approach to their approval and regulation. Depending on the regulatory framework, a billboard program may require zoning approval and/or City Council authorization. These large structures will typically need a building permit and often require clearance and compliance with standards set forth by the California Department of Transportation (Caltrans) due to their proximity to motorists, illumination, and animation. In addition, billboards are subject to the California Environmental Quality Act and may require review by the Federal Aviation Administration depending on the location, height, and proximity to flight paths. Billboards may also be subject to the California Outdoor Advertising Act, which authorizes relocation agreements between billboard operators and local jurisdictions in cities where billboards are otherwise restricted or prohibited.
While billboards are not currently explicitly mentioned in the San Mateo Municipal Code (SMMC), they are effectively precluded on both public and private property through the Sign Ordinance - Title 25 (Signs) that prohibits off-site advertising and animated/flashing signs, restricts free-way oriented signs, and regulates the design, height and area of signs, and limit signs on public property and right-of-way to small temporary signs. In addition, Title 27 (Zoning) regulates land uses, the design of structures, and the permitting process, but does not currently include billboards.
SAN MATEO CONSIDERATIONS
San Mateo has one existing printed billboard on Amphlett Blvd which is allowed to continue its operation according to State law. Under the California Outdoor Advertising Act, cities may enter into relocation agreements that allow an existing billboard to be removed in exchange for permitting a new billboard at another approved location. Based on prior City Council discussions and community concerns, there is community interest in replacing the existing printed billboard with a digital sign, provided the signage does not face residential areas and delivers a clear community benefit to the City.
If this City Council elects to move forward with a new billboard policy, amending the SMMC could provide a clear local process and standards to allow billboards in a limited fashion that protects the public interest while providing a public benefit from advertising revenues and potentially from messaging displays as well. The amount of revenue would depend on the fee structure and number of billboards.
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With the above in mind, does the City Council wish to:
1. Allow billboards on public and/or private property in one of the following ways? a. Incorporate design, development, maintenance and operational standards to address issues such as location and distance from residential zones, illumination standards, structural maintenance, graffiti removal, and periodic inspection into the Municipal Code to allow billboards on City-owned or City-controlled property with Planning Commission or Zoning Administrator approval of a land use permit, along with a lease agreement? oIf so, do you prefer Planning Commission or Zoning Administrator?
b. Incorporate design, development, maintenance and operational standards to address issues such as location and distance from residential zones, illumination standards, structural maintenance, graffiti removal, and periodic inspection into the Municipal Code to allow billboards on City-owned or City-controlled property without Planning Commission or Zoning Administrator approval of a land use permit, and only a lease agreement?
2. Continue to prohibit billboards in San Mateo?
3. Do something else?
BUDGET IMPACT
There is no fiscal impact associated with this study session. Depending on Council direction regarding potential electronic billboard programs there could be fiscal implications in the future.
ENVIRONMENTAL DETERMINATION
This item is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).) If Council direct staff to allow for a digital billboard a CEQA review would be required for the approval and/or to proceed with changes to the sign ordinance and the placement of the billboard.
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENT
Att 1 – Map of Potential Billboard Locations
STAFF CONTACTS
Jennifer Chen, Economic Development Manager
[email protected]
(650) 522-7009
Sung Kwon, Deputy Director Community Development
[email protected]
(650) 522-7203
Joanna Winter, Planning Manager
[email protected]
(650) 522-7211
Elle Caro, Assistant Planner
[email protected]
(650) 650-522-7204