Agenda packet — Santa Monica City Council, December 16, 2025 (part 4 of 7)

City Council Meeting: December 16, 2025 Santa Monica, California ORDINANCE NUMBER _________ (CCS)
(City Council Series)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA ADDING MUNICIPAL CODE SECTION 9.61.205 TO ESTABLISH A DIGITAL DISPLAY

DISTRICT TO PERMIT DIGITAL DISPLAYS TO BE APPROVED BY DEVELOPMENT

AGREEMENT IN SPECIFIED LOCATIONS ALONG THIRD STREET PROMENADE

AND SANTA MONICA PLACE
WHEREAS, the City of Santa Monica Municipal Code currently does not permit off-premises advertising via static or digital billboards in the City; and WHEREAS, in 1985, the City Council adopted Ordinance Number 1333 (CCS) adopting the City’s Sign Code, which, in part, prohibited off-premises advertising, including billboards, and signs were deemed meritorious or removed over a 15-year amortization period, and since that time, off-premises advertising has remained prohibited; and
WHEREAS, the ordinance proposes creation of a Digital Display District within Downtown Santa Monica, which is considered the pedestrian and economic heart of the City, and specifically at the Third Street Promenade and the adjacent Santa Monica Place shopping mall which anchors the south end of the Promenade; and WHEREAS, the Downtown Community Plan uniquely identifies the area for its lively mix of pedestrian-oriented uses with dynamic activity day and night, with land use regulations that support a diversity of entertainment and cultural options, in particular cultural amenities such as museums, theaters, and cinemas; and WHEREAS, the Third Street Promenade and adjacent Santa Monica Place shopping mall are an essential component of the City’s economic sustainability,

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generating 15% of sales tax revenue citywide, and are one of the top destinations for tourists, making it vital that the area remain attractive and exciting to residents and visitors alike; and
WHEREAS, recently, in the interest of economic development, the City has allowed digital advertising in the form of digital wayfinding kiosks on City right-of-way property (approved in January 2023), and on the Third Street Promenade for on-premises advertising, on facades facing the interior of the Promenade (approved in March 2025); and
WHEREAS, the installation of digital displays in the proposed Digital Display District is supported by numerous General Plan and Downtown Community Plan goals and policies, which recommend short- and medium-term policy and procedural changes to continue promoting the stabilization and economic vitality of the Promenade to make it a successful and economically sustainable retail environment; and WHEREAS, the ordinance implements various goals and policies of the City’s Local Coastal Program Land Use Plan including complementing and supporting the Downtown district’s retail and visitor-serving commercial uses consistent with LUP Policy 70 and enhancing the visual experience in the coastal zone including with public works of art consistent with LUP Policy 46; and
WHEREAS, the proposed ordinance will foster a lively pedestrian-oriented urban environment with unified aesthetic by setting standards for uniform digital displays, and providing well-planned placement of digital displays with consideration for surrounding uses, by carefully regulating the placement, design, and operation of the digital displays, and standardization of community benefits; and

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WHEREAS, other jurisdictions including the cities of West Hollywood, Los Angeles and San Jose have permitted digital displays on private and public properties in exchange for community benefits including financial benefits; and WHEREAS, the Promenade and Santa Monica Place shopping center is the City’s only pedestrian-only outdoor shopping esplanade and center, lined with a diverse mix of retail, restaurants, bars, businesses, cultural, and entertainment uses, and it is worldrenowned for its vibrancy and lively street entertainment; and WHEREAS, buildings located on the Promenade but with corner frontage along traffic-bearing cross-streets, and the exterior facades of Santa Monica Place facing Second Street, Fourth Street, Broadway, and Colorado Avenue act as a gateway to the pedestrian-only Promenade and mall, which contributes to its activation, and draws patrons arriving on foot as well as by car or transit; and WHEREAS, establishing uniform standards for the proposed Digital Display District would build on the success of this distinct activity area and would be complementary to the Promenade’s recent designation as an Entertainment Zone; and WHEREAS, the high visitation levels in the proposed Digital Display District create valuable and focused opportunities for the digital advertising market; and WHEREAS, in addition to the expanded animated sign regulations already approved for the Promenade, the further expansion of the City’s regulations to allow for off-premises digital displays in the proposed Digital Display District will continue to transform the area into a vibrant destination comprised of creative and innovative digital displays, world-class entertainment, historic buildings, and regional attractions, with a distinct demographic and aesthetic identity; and

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WHEREAS, the proposed ordinance will foster a lively urban environment with unified aesthetic by setting uniform standards with consideration for surrounding uses, and by carefully regulating the placement, design, and operation of the off-premises digital displays; and
WHEREAS, the nature of the District helps to achieve the City’s aesthetic and traffic safety goals by limiting off-premises digital displays to an area uniquely suited for them, and avoiding over-proliferation citywide; and
WHEREAS, the Third Street Promenade and Santa Monica Place continue to suffer from the economic downturn resulting from the COVID 19 pandemic, despite the City's intention for this unique area to be a vibrant, thriving, hub of economic activity including shopping, dining, and entertainment for residents and visitors to the City; and WHEREAS, permitting on and off-premises advertising via exterior digital displays in this area will promote economic activity and provide additional revenue to the owners and tenants of buildings located there and for the City, as well as community benefits for the City; and
WHEREAS, there are very limited residential uses on the upper floors of existing commercial buildings because the Promenade is predominantly commercial and has historically been developed for commercial uses, and as such, limiting large-format, offpremises digital displays to the proposed Digital Display District will minimize potential environmental effects on sensitive residential uses; and WHEREAS, it is necessary and appropriate to limit the location of digital displays to this unique area for many reasons, to initially test and obtain community feedback as to both positive effects and best practices of the displays before consideration of

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permitting these displays in other areas of the City; and WHEREAS, the Council desires to amend the Municipal Code to add section

9.61.205 to provide for approval of a Digital Display District to allow limited installation of large format, off-premises digital displays on the Third Street Promenade and Santa Monica Place shopping mall pursuant to Council approved Development Agreements; and
WHEREAS, the ordinance will protect adjacent residential uses as well as roadway safety, from potential adverse impacts by concentrating digital displays within this district, and setting standards for digital display numbers, size, illumination, and motion/animation, as well as coordinating the location, type, and display so as to enhance the pedestrian realm, minimize potential traffic hazards, protect public safety, and maintain compatibility with surrounding uses; and
WHEREAS, the Digital Display District Ordinance has been determined to be categorically exempt from the provisions of the California Environmental Quality Act, California Public Resources Code Section 21000 et seq. (CEQA), pursuant to Section 15301 (Existing Facilities), Section 15303 (Construction of Small Structures), Section 15311 (Accessory Structures), Section 15331 (Historical Resources), and Section 15332 (In-fill Projects) of the CEQA Guidelines; and
WHEREAS, none of the exceptions specified in Section 15300.2 of CEQA Guidelines would apply that would preclude the use of these CEQA exemptions.

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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. Section 9.61.205 of the Santa Monica Municipal Code is hereby added as follows:

Section 9.61.205 Digital Display District
The purpose of this Section is to identify the area of the Third Street Promenade and Santa Monica Place as an appropriate district for digital displays and provide regulations pertaining to digital displays to ensure digital displays do not create visual clutter or create other operational impacts on surrounding uses, or the public health, safety, or general welfare of the City.

A. Definitions: The following words or phrases as used in this Section shall have the following meanings:

1. “Annual Gross Revenues” means Gross Revenues received in a calendar year.

2. “City Manager” means the City Manager or his or her designee.

3. “Digital Advertising Services” means advertisement services on a Digital Display, including advertisements in the form of banner advertising, search engine advertising, interstitial advertising, and other comparable advertising services.

4. “Digital Display” means a display utilizing digital sign technology with a display face to broadcast a message containing static or animated (full motion) content, including on-premises and off- premises advertising; provided however, on Landmark Buildings, the City Manager may approve a double-sided Digital Display to ensure conformance with the requirements of Section 9.61.205(G)(7) so long as: (a) the

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cumulative total display area (sum of the area of both display faces) is consistent with Section 9.61.205.G.4.a; and (b) both display faces show the same content/advertisement at any given moment.

5. “Digital Display Commencement Date” means the date that a Certificate of Occupancy or final building permit signoff, as applicable, for the Digital Display is/has been issued.

6. “Digital Display District” or “District” means the area that collectively includes the Third Street Promenade and the Santa Monica Place shopping center. The Third Street Promenade area is bound by Wilshire Boulevard on the north, Broadway on the south, Third Court on the east, and Second Court on the west. The Santa Monica Place shopping center is bound by Broadway on the north, Colorado Avenue on the south, Fourth Street on the east, and Second Street on the west.

7. “Existing Building” means building to which the Digital Display is affixed.

8. “Gross Revenues” means income or revenue generated by the Digital Display from all sources, before any expenses (including lease or license payments to Owner) or taxes, computed according to generally accepted accounting principles.

9. “Landmark” has the same meaning as “Landmark” in Section 9.56.030.

10. “Operator” means the party responsible for operating the Digital Display.

11. “Owner” means the owner of the property upon which the Digital Display is mounted.

12. “Qualified Historic Preservation Professional” means an architectural historian and/or historic architect with at least seven (7) years of relevant experience who satisfies The Secretary of the Interior’s Professional Qualification Standards for History,

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Architectural History, and/or Architecture pursuant to 36 CFR part 61..

B. Digital displays may be allowed in the Digital Display District, subject to the conditions stated herein.

C. Digital displays in the District shall be subject to this Section 9.61.205 and a Development Agreement between the City and the Digital Display applicant, the procedure for which shall be governed by Chapter 9.60 of this Code. Nothing herein shall require the City to negotiate and/or approve a Development Agreement on terms that are unacceptable to the City, in its sole and absolute discretion.

D. No installation or construction of a new Digital Display shall occur until after the City Council approval of a Development Agreement authorizing such installation or construction.

E. Owner shall comply with all terms and conditions of this Section or cause Operator to comply with all terms and conditions of this Section, with the same force and effect as if performed by Owner. Operator’s failure to comply with the terms of this Section shall not be deemed to excuse Owner’s obligations to comply with this Section

9.61.205 and City shall have no obligation to seek any remedies against Operator for any violation of this Section.

F. The Development Agreement shall include and enumerate the obligations for the following:

1. Financial community benefits to be paid to the City, based upon the following components:
a. One-Time Community Benefit Contribution. Within thirty (30) Days of the Digital Display Commencement Date, as applicable, for each Digital

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Display, Owner shall pay a one-time community benefit contribution to the City in the amount of Five Hundred Thousand Dollars ($500,000) per Digital Display, which amount shall escalate by three percent (3%) annually commencing on June 30, 2027, and thereafter. For any Digital Display installed with a display area of less than 1,000 square feet, the one-time community benefit contribution to the City shall be reduced proportionately based on square footage up to a maximum of fifty percent (50%) reduction, which would apply after the three percent (3%) annual escalation (e.g. on June 30, 2026, for a 700 square foot Digital Display, the one-time community benefit contribution would be $350,000; on June 30, 2027, for a 700 square foot Digital Display, the one-time community benefit contribution would be $360,500, etc.).
b. Annual Community Benefit Contribution. Commencing on the Digital Display Commencement Date and continuing for each calendar year during the remainder of the term of the Development Agreement, Owner shall pay to the City an amount equal to the greater of:
i. Revenue Share Contribution. An amount equal to
twenty percent (20%) of the Annual Gross Revenues received for Digital Advertising Services (the “Revenue Share Contribution”), or ii. Minimum Annual Guaranteed Contribution. A minimum
annual guaranteed payment (“MAG Contribution”) to be paid in quarterly installments to the City as detailed in the Development Agreement for each Digital Display, as follows:

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(1) Five Hundred Thousand Dollars ($500,000) per
Digital Display, which amount shall escalate by three percent (3%) commencing on June 30, 2027 and annually by three
percent (3%) each June 30 thereafter. For any Digital Display with a display area less than 1,000 square feet, the MAG Contribution shall be reduced proportionately based on
square footage up to a maximum of fifty percent (50%)
reduction, which would apply after the three percent (3%) annual escalation (e.g., on June 30, 2026, for a 700 square foot Digital Display, the MAG Contribution would be $350,000; on June 30, 2027, for a 700 square foot Digital Display, the MAG Contribution would be $360,500, etc.)
(2) Upon the Digital Display Commencement Date
for the tenth (10th) Display in the Digital Display District, the MAG Contribution (after any escalation and pro rata
adjustments) shall be reduced by three percent (3%) per Digital Display more than nine (9) (e.g., 3% reduction at the Digital Display Commencement Date for the 10th digital
display, additional 3% reduction at the Digital Display Commencement Date for the 11th digital display, etc.). The Development Agreement for each Digital Display shall detail implementation specifics of how to account for the MAG
Contribution reduction so that in no event will the City be

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required to pay or refund any sum to Owner as a result of the MAG Contribution reduction. For the avoidance of doubt, any double-sided Digital Display approved by the City Manager on a Landmark Building shall count as one Digital Display for purposes of this Section.

Nothing in the Digital Display District Ordinance precludes the Development Agreement for any Digital Display from
providing for temporary reductions or increases in the MAG Contribution for any Digital Display based on specified events as set forth in the Development Agreement (e.g., abatement events, temporary removal of signs, failure to meet any occupancy thresholds, etc.).

2. A minimum allocation of twenty percent (20%) of the total annual operating display time for City and Art Content, which may include, but is not limited to, civic announcements, community interest content, public safety information, public art programming, public art, community events information, story telling on local history, and local business spotlights. City and Art Content shall be displayed in accordance with Subsection J.

3. Emergency programming, including emergency announcements, instructions, and broadcasts in the event of an emergency, or disaster, or as otherwise reasonably deemed necessary by the City to protect public safety.

4. Quality and maintenance standards, including standards to ensure normal building occupancy during the term of the Development Agreement.

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5. Content regulations.

6. Any such other terms that promote public health, safety, and welfare.

G. City and Art Content. Owner shall participate in a City-administered Digital Display City Content Program, which would serve as the framework for the curation and display of City and Art Content. The program will be implemented through established administrative guidelines that address technical requirements, selection, licensing, scheduling, and operations of City content and arts programing for Digital Display. Such guidelines may be amended periodically depending on factors such as the number of participating advertisers, cultural events, technological updates, City priorities, or Owner input.

1. Schedule. The display of City and Art Content shall occur for at least 12 minutes per hour in accordance with a scheduling framework (the “Scheduling Framework”) that will be developed by the City on an annual basis. The Scheduling Framework will include but is not limited to defining content rotation intervals such as weekly, daily, hourly, or by the minute. Modifications to the scheduling of City content may be requested in writing in advance and shall be mutually agreed upon between City and Owner. City shall make a reasonable good faith effort to provide Scheduling Framework one year in advance, and in any case shall provide such schedule to the Owner as soon as reasonably possible in advance of the applicable time period for the City Content Allocation, but in no case shall this be less than one (1) month in advance. With at least thirty (30) days prior written notice, the City has the unilateral right to elect to aggregate its City and Art Content Allocation into multiple blocks per hour to facilitate special promotional activities in the City.

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2. Delivery. Owner shall facilitate and coordinate with the City for the display of the City and Art Content. Owner must provide technical specifications that are necessary for the display of City and Art Content, including, but not limited to, an image of the display, physical dimensions, content area dimensions, pixel resolution, pixel pitch, color mode, aspect ratio, frame rate, motion file duration, motion file format, maximum file size allowed, and file data rate. The City shall provide proposed content no later than five (5) business days prior to the date the proposed content is to be displayed on the Digital Display. All such content must meet the specific screen specifications of the Digital Display. City-provided content may only be altered by the Owner to ensure that the content is in a compatible file-type or other formatting standard that is necessary for display.

H. General Standards

1. Display Type – Digital Displays shall be installed only on buildings and shall not be freestanding.

2. Location – Digital Displays are permitted only:
a. On corner buildings located on the Third Street Promenade with a maximum of one Digital Display at the corner of each building; provided, however, that on corner Landmark Buildings, the City Manager may approve placement other than wrapping the corner to ensure conformance with the requirements of Section 9.61.205(G)(7). b. On the exterior facades of the Santa Monica Place shopping center with a maximum of four Digital Displays.

3. Projections/Encroachment

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a. Except for Landmark properties, Digital Displays shall not be installed on any roof of a building and shall not project more than five feet above the roofline or five feet above the façade of the building to which it is mounted, whichever is higher. Architectural or structural elements associated with the Digital Display shall not be counted towards the height projection limit. b. Digital displays shall be placed at least 10 feet above the sidewalk and at least 14.5 feet above a vehicular roadway surface, and may not project more than 3 feet beyond the property line, unless otherwise approved by the City’s Public Works Department through the issuance of an encroachment permit. c. To obtain an encroachment permit, the applicant must demonstrate that the proposed encroachment will be designed to maintain adequate line of sight for vehicles, and will not constitute a hazard to public streets, infrastructure or property, private property, and/or persons lawfully using an adjacent sidewalk, alley, street or other right-of-way.
d. The encroachment permit shall require the permittee to procure and maintain in full force and effect insurance pursuant to the requirements of the City's Risk Manager.
e. The encroachment permit shall require the permittee to defend, indemnify and hold harmless the City, its agents, officers, officials, employees and volunteers from any and all: (1) damages, liabilities, injuries, losses, costs and expenses and from any and all claims, demands, lawsuits, writs and other actions or proceedings (“claims”) brought against the City or its agents, officers, officials, employees or volunteers to challenge, attack, seek to modify, set aside, void or

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annul the City’s approval of the permit; and (2) other claims, any kind or form, whether for personal injury, death or property damage, that arise from or in connection with the permittee’s or its agents’, directors’, officers’, employees’, contractors’, subcontractors’, licensees’, or customers' acts or omissions in connection with the permit; provided, however, the permittee shall not be required to defend, indemnify, or hold harmless the City, agents, officers, officials, employees and volunteers due to the active negligence, gross negligence, or willful misconduct of the City, agents, officers, officials, employees, and volunteers. In the event the City becomes aware of any claims, the City shall use best efforts to promptly notify the permittee and shall reasonably cooperate in the defense. The permittee expressly acknowledges and agrees that the City shall have the right to approve, which approval shall not be unreasonably withheld, the legal counsel providing the City’s defense, and the property owner and/or permittee (as applicable) shall promptly reimburse the City for any costs and expenses directly and necessarily incurred by the City in the course of the defense.

4. Maximum Display Area
a. Except for subparagraph (b), the total display area of a Digital Display on a building shall not exceed 1,000 square feet. b. For the Santa Monica Place shopping center, the total display area of a single Digital Display shall not exceed 1,000 square feet and the total combined display area of multiple Digital Displays shall not exceed 4,000 square feet.
c. Architectural features not utilized for display shall not be

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counted in the total display area.
d. The Digital Display(s) shall not count toward any sign area limits in any other section of this Chapter including Section 9.61.190.

5. Content - Off-premises advertising is permitted for Digital Displays. Content restrictions will be established, based upon guidelines adopted by the City Council and posted on the City’s website, from time to time.

6. Energy –Owner shall contract with an energy provider that will utilize 100% renewable energy resources for electrical service at all times if such service is offered as an option by the electric utility provider. To the extent that photovoltaic is available onsite, Digital Displays may also utilize solar power to satisfy a portion of its energy demand.

7. Landmark Buildings
a. For Development Agreement applications seeking solely to install a Digital Display on a Landmark Building, which is filed prior to December 16, 2025, a Digital Display may be permitted if, prior to Council’s approval of a Development Agreement that would allow the installation of a Digital Display, the City Manager certifies that:
i. The Digital Display is installed in a manner that is reversible as defined by the Secretary of the Interior Standards for the Treatment of Historic Properties;
ii. The Digital Display will not materially alter the Existing Building such that its significance would be materially impaired; and iii. All physical characteristics that convey the Existing Building’s significance will remain intact behind the Digital Display screen, as

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determined by a Qualified Historic Preservation Professional. b. For Development Agreement applications seeking solely to install a Digital Display on a Landmark Building, which is filed on or after December 16, 2025, a Digital Display may be permitted if, prior to Council’s approval of a Development Agreement that would allow the installation of a Digital Display, the City Manager certifies, after non-binding consultation with the Landmarks Commission at a duly noticed public hearing, that:
i. The Digital Display is installed in a manner that is reversible as defined by the Secretary of the Interior Standards for the Treatment of Historic Properties;
ii. The Digital Display will not materially alter the Existing Building such that its significance would be materially impaired; and iii. All physical characteristics that convey the Existing Building’s significance will remain intact behind the Digital Display screen, as determined by a Qualified Historic Preservation Professional. c. The installation of a Digital Display shall not require a Certificate of Appropriateness pursuant to the City’s Landmarks Ordinance, Chapter 9.56 and/or Section 9.61.050.

8. Hours of Operation – Hours of operation for Digital Display programming are limited to between sunrise to 1:00 a.m., seven days per week.

9. Emergency Use – The Digital Display shall be made immediately available to the City for emergency announcements, instructions, and broadcasts in the event of an emergency or disaster, or as otherwise reasonably deemed necessary by the City to

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protect public safety.

10. Maintenance – Digital Displays, including underside portions that project or encroach into the public right of way, shall be continually maintained in good, operable condition and free from graffiti, rust, or other blight conditions.

11. Audio – Audio, sounds effects, speakers, music, and spoken dialogue are prohibited to accompany operation of the Digital Display. Notwithstanding the foregoing, on-site sound may be allowed from time to time as part of a community event or community programming- if approved by the City and compliant with City regulations related to noise.

12. Utilities – All utilities in connection with the Digital Displays shall be installed and maintained at Owner’s cost and hidden or covered from public view and/or placed underground.

13. Malfunction – Each Digital Display shall be designed and operated with a control system and monitoring in place to either turn the display off or show full black screen in the event of a malfunction. An emergency shutoff switch shall be provided.

14. No Duty by City to Maintain Landscaping and/or Tree Removal – Unless otherwise expressly agreed to in writing pursuant to a Development Agreement, City shall have no duty to remove, cut, trim, prune, plant, injure, or interfere with any tree, shrub, or plant upon any street, sidewalk, parkway, alley or other public property for purposes of facilitating visibility of a Digital Display, at any time prior to or during the term of a Development Agreement. Any Owner seeking to remove, cut, trim, prune, plant, injure, or interfere with any tree, shrub, or plant upon any street, sidewalk, parkway, alley or other public property, must obtain permission from the City by obtaining a permit pursuant

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to Chapter 7.40.

15. Design Review – The design of a Digital Display shall be approved as part of the Development Agreement approval and no subsequent review pursuant to Chapter

9.55 or Section 9.61.050 shall be required unless required pursuant to the terms and conditions of the Development Agreement.

16. Required Findings. In addition to the findings required in Section 9.60.110, the City Council shall make the following findings to approve a Development Agreement for a Digital Display(s):
a. The Digital Display is consistent with the goals, objectives, purposes and provisions of the Santa Monica Land Use and Circulation Element and the Downtown Community Plan in effect at the time of City Council approval. b. The Digital Display complies with the regulations established herein. c. The Digital Display would not otherwise result in a threat to the general health, safety, and welfare of City residents, based on factors including but not limited to such factors as distracted driving, pedestrian and driver safety, light and glare, or aesthetics; and
d. The Digital Display provides substantial economic and public benefits that would not otherwise accrue to the public in the absence of its installation.

17. Good Neighbor Policy – No later than 60 days prior to installation of the Digital Display, the Owner shall provide the City with contact information for a single individual appointed to communicate with residents, businesses, and commuters with questions, comments, and/or concerns regarding the Digital Display.

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I. Illumination Standards:

1. Digital Displays must be light emitting diodes (LEDs), with a power supply efficiency of 80 percent or greater.

2. Digital Displays, including architectural lighting elements (if any), shall adhere to the following lighting standards:
a. Daytime: From sunrise until sunset, luminance shall not exceed 6,000 candelas per meter squared (cd/m2).
b. Evening: From sunset until 10:00 p.m., luminance shall not exceed 300 candelas per meter squared.
c. Nighttime: From 10:00 p.m. to 1:00 a.m., luminance shall not exceed 200 candelas per meter squared.
d. After Hours: From 1:00 a.m. until sunrise, Digital Display shall be powered off.
e. Maximum luminance shall transition smoothly over a period of no less than 45 minutes from 1) daytime maximum luminance to evening maximum luminance and from 2) nighttime maximum luminance to daytime maximum luminance.
f. Illuminance from any Digital Display or architectural lights of the display, shall not exceed 3.0-foot candles (fc) at any nearby residential uses to limit light trespass.

3. Digital Displays shall be dimmable and shall have a light sensing device that provides the ability to automatically reduce power by a minimum of 65 percent.

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4. Digital Displays shall have a photocontrol device that will automatically adjust the brightness to less than 300 cd/m2 when ambient sunlight conditions are less than 100 footcandles, in addition to an automatic time-switch control or an astronomical time-switch control.

5. Digital Displays shall be designed and operated with systems and monitoring in place to either turn the display off or show full black screen in the event of a malfunction.

6. Digital Displays shall not simulate or imitate any directional, warning, danger, or information sign, or any other display likely to be mistaken for any permitted sign intended or likely to be construed as giving warning or direction to traffic, for example using such words or phrases as “stop” or “slow down.”

7. Digital Displays shall not display any red, flashing, blinking, or intermittent lighting that may be mistaken for warning or danger signals nor shall the displays' illumination impair the vision of travelers on the adjacent roadways.

8. Each static image displayed on a Digital Display shall not be refreshed more often than once every twelve seconds.

9. Each static or animated image displayed on a Digital Display shall fade in from the previous image over no less than one second and shall fade out over no less than one (1) second to the image of the immediately succeeding content.

10. Digital Displays shall not use stroboscopic or flashing images, text, or lighting which rapidly change direction, oscillate, flash or reverse in contrast.

11. Digital Displays shall not use scrolling text, either vertically or horizontally.

12. Luminance must be less than 30 to 1 contrast ratios.

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13. Photometric Report and Illumination Testing Protocol – A Photometric Report prepared by a lighting professional shall be submitted to the Director upon installation prior to issuance of a certificate of occupancy or commercial operation of the display, and at two-year intervals thereafter to confirm conformance with the lighting requirements above. The report shall include:
a. Luminance measured in nits (candelas per square meter).

Measurements shall be conducted at the property line of the Digital Display site, or in the nearest adjacent public right of way, perpendicular to the Digital Display face.
b. Illuminance measured in foot candles. Measurements shall be conducted perpendicular to the Digital Display face, at the property line containing the Digital Display, and at adjoining residential use property or properties. The illuminance meter shall be aimed toward the display face from the measurement location.
c. All measurements shall include both luminance and illuminance for two conditions:
i. The display off.
ii. The display illuminated using an all white display , or the sign configuration demonstrating the maximum possible lighting intensity. d. Complaints about violations of lighting standards shall be reported to the City Manager for investigation and if determined necessary by the City Manager, an updated Lighting Monitoring Report shall be prepared by the Owner to confirm compliance.

10.A.d
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J. City and Art Content. The City Manager is authorized and may develop guidelines for City and Art Content, as required under subparagraph G, above, to be displayed on the Digital Displays as well as the transmittal process for such content to be delivered to the Digital Display Owner . If adopted by the City Manager, the guidelines shall be posted on the City’s website and updated, from time to time.

SECTION 2. Section 9.61.050 of the Santa Monica Municipal Code is hereby amended as follows:

9.61.050 Landmarks Commission Review.

Except as provided in Section 9.61.205, in the case of any new sign or sign program proposed to be placed, changed, altered or displayed on a City-Designated Historic Resource, the Review Body shall be the Landmarks Commission, or where administrative approval is authorized in accordance with Section 9.61.120 the Landmarks Commission Secretary, through submission of a certificate of appropriateness application. Such applications as they relate to a sign or sign program shall be subject to the same standards specified in this Chapter. All sign or sign program decisions by the Landmarks Commission may be appealed to the Planning Commission. Administrative approvals by the Landmarks Commission Secretary are not subject to appeal.

SECTION 3. Section 9.61.180 of the Santa Monica Municipal Code is hereby amended as follows:

Section 9.61.180 Prohibited Signs
A. Except as may be expressly authorized elsewhere in this Chapter, the following signs, and any sign not authorized by Section 9.61.150, 9.61.160, or 9.61.170, are prohibited:

10.A.d
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1. Animated Signs. Animated signs, except that:
i. The City may use animated signs to preserve roadway safety and traffic circulation; and
ii. Primary and secondary schools may use animated signs on school property for school purposes.

2. Balloon signs.

3. Emitting Signs. Emitting signs, except that devices for communicating with customers at drive-in restaurants, automated bank tellers, and drive-through banks may use sound communication.

4. Freestanding and pole signs.

5. Miscellaneous Signs and Posters. Miscellaneous signs and posters tacked, painted, posted or otherwise affixed on the walls of a building, or on a tree, pole, fence or other structure, and visible from a public way.

6. Off-premises signs.

7. Paper, Cloth, or Plastic Streamers and Bunting. Paper, cloth, or plastic streamers and bunting.

8. Portable signs, except signs authorized pursuant to Section 9.61.160 or

9.61.200.

9. Roof signs.

10. Upper level signs.

11. Vehicle signs, except that this Section does not apply to any vehicle that displays an advertisement or business identification of its owner, so long as such a vehicle is engaged in the usual business or regular work of the owner, and not used

10.A.d
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Page 25 ends

merely, mainly, or primarily to display advertisements.

12. High-rise signs.

SECTION 4. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, are hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance.

SECTION 5. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.

SECTION 6. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective 30 days from its adoption.

APPROVED AS TO FORM:
_________________________

HEIDI VON TONGELN
Interim City Attorney

10.A.d
Packet Pg. 665 Attachment: CDD-ORD-Digital Sign District 12.16.25 (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa 1 David Yakobson
From: Gaby Ghermezi <[email protected]>
Sent: Tuesday, December 16, 2025 3:50 PM
To: councilmtgitems; Rachel Kwok
Subject: District Ordinance, 301 Arizona Avenue, and 1202 Third Street Promenade (Items 10A, 12B, and 12C)
Attachments: Digital Display Development Agreements Support Dec2025.pdf

EXTERNAL
Good Afternoon,
The attached letter was submitted to Council on December 4th, in support of items 10A, 12B, and 12C, prior to the posting of the agenda items. Being that it was submitted prior to the cut off for written public comment, we kindly request that it be included in the relevant council files.

10.A.e
Packet Pg. 666 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica December 4, 2025
Councilmembers
Santa Monica City Council
1685 Main Street
Santa Monica, CA 90401
Re: Digital Display Development Agreements
Santa Monica Promenade
Dear Santa Monica City Councilmembers,
I am writing in support of the proposed large format digital display signs on the Third Street Promenade located at 301 Arizona Avenue and 1202 Third Street Promenade as well as the approval of the Digital Display District Ordinance scheduled for a hearing on December 16, 2025.

These are prominent corners of the Promenade chosen to help highlight the area that has languished over the past decades and to invite others to enter the Promenade from the north. The proposed digital signage program can help re-energize this and other blocks of the Santa Monica Promenade and the downtown business district.

The signage will benefit the City with advertising revenues as well as provide time set aside for City content.

The Promenade is an ideal place for these digital displays, and a very talented firm has been preparing these designs including reviews with interested groups. The signs are in keeping with the vibrant tone and active use that the City should want for this special shopping district and tourist attraction at the heart of downtown Santa Monica.

As a long time citizen that utilizes the businesses on the Promenade we strongly support this approach to digital signage for the Third Street Promenade that enhances a community resource and benefits all downtown businesses.

Thank you,
David Kaplan
2419 Pier Avenue
Santa Monica 90405
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 667 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 1 David Yakobson
From: David Rindlaub <[email protected]>
Sent: Tuesday, December 16, 2025 11:58 AM
To: councilmtgitems
Subject: comment
Attachments: 20251216 Santa Monica City Council Letter - Digital Billboards.pdf

EXTERNAL
Please find comment attached regarding city council meeting December 16 Agenda Item 10A.

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 668 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica Richard Bloom
[email protected]
December 16, 2025
Mayor Caroline Torosis, Mayor pro Tem Jesse Zwick and Councilmembers Santa Monica City Hall Council Chambers
1685 Main Street, Room 250
Santa Monica, CA 90401
Re: December 16, 2025 Santa Monica City Council Agenda Item 10A Recommended action: Defer action and direct Staff to return with recommendations for a process to update the Master Plan for Downtown/Third Street Promenade Dear Mayor, Mayor pro Tem and Councilmembers,
I write today to express my personal opinion regarding Agenda Item 10A as a nearly 45-year resident of our City. While I am one of your appointees to the Board of Downtown Santa Monica, Inc, this letter contains my personal perspective only. I note that the current proposal for digital signage was reviewed by the DTSM Board at a meeting I was unable to attend due to a previously scheduled absence. It is my understanding that at that meeting, the Board was not able to reach consensus on the proposed Ordinance.

I strongly recommend that the Council delay further action on this item unless and until the City considers and develops an updated short and long term Master Plan for Downtown. I also recommend that the City embark upon that process immediately and set a timeline for its completion.

Please note that I believe that inclusion of additional digital signage is likely worthy of support but such signage should be considered in the context of a fully thought out and updated master plan for the area.

I also note that several property owners have expressed serious concerns with the ordinance as proposed and it is unclear to me those concerns have been addressed. More to the point:
many of their concerns appear to me to be legitimate and should be the subject of careful consideration by the Council.

Our Downtown became a local, regional and international success several decades ago due to careful planning and placemaking exercises that were mandated by prior City Councils and, notably, preceded by the adoption and implementation of a master plan intended to revitalize a then-moribund Third Street Promenade. Significantly, the public process was led by placemaking professionals.

Today’s Downtown has issues that are well known to each of you. The purpose of this letter is not to set forth a laundry list of what is wrong. Rather, it is to encourage you to direct City Staff 1 Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 669 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica to step back and, engage in a process to update the short and long term master plan for Downtown.

The adoption of the Staff recommendation will forever change the face of Downtown: at each intersection, the signage, if fully realized, will have a dominating presence. The key question for the City Council is how those changes will integrate into the current Promenade and surrounding streets, and, more importantly, the Promenade that future generations of visitors and residents will experience. Without a plan, there is no way to even begin to answer that question.

At the same time, like many downtowns, the Promenade demands significant rethinking due to current economic, shopping and work trends as well as aging infrastructure. In the years leading up to this inflection moment, the promenade has added elements including, digital kiosks, an ice skating rink, various forms of street furniture and lighting and the recently adopted “Entertainment Zone”. Parking infrastructure has degraded significantly and there are issues with electrical systems, trash receptacles and even the iconic dinosaur art pieces.

A comprehensive process would consider these issues and concerns in the context of districtwide placemaking with the goal of creating a cohesive and unifying experience. That process should consider best planning practices and examples of success from around the world. As well, it should consider encouraging building structure modifications to meet today’s marketplace. No doubt, the City Council, DTSM, property owners and local advocates will add to the list of those items that a masterplanning process should consider. The Council would ultimately shape that discussion with its directions to Staff.

The process I am recommending should be time limited so that it concludes within a reasonable time. It is likewise important, given the many events that lay ahead that the masterplan consider both near term and long term implementation. I understand that both the process and any implementation will have a cost and this too must be taken into consideration.

In conclusion, it is my hope that the Council will table Staff’s recommendation to proceed with the digital display district ordinance and, instead, direct staff to return with discussion of a master planning process as described in this letter.

As the City celebrates its 150th year, the City Council can, by taking this step, help assure the decades that lay ahead are exciting, prosperous and successful ones for our City.

Respectfully yours,

RICHARD BLOOM
2 Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 670 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 2 David Yakobson
From: Richard Bloom <[email protected]>
Sent: Tuesday, December 16, 2025 1:51 PM
To: councilmtgitems
Cc: Oliver Chi; Nikima Newsome; Jing Yeo
Subject: December 16, 2025 Council Meeting (Digital Sign Ordinance) Add-to Item 10A Attachments: L2SMCityCouncil 12162025 final.pdf

EXTERNAL
Mayor, Mayor pro Tem and Councilmembers:

Please find attached my letter regarding the Digital Sign Ordinance proposal. -Richard Bloom
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 671 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 1 David Yakobson
From: Bradley Ewing <[email protected]>
Sent: Tuesday, December 16, 2025 11:44 AM
To: Lana Negrete; Jesse Zwick; Caroline Torosis; Ellis Raskin; Natalya Zernitskaya; Dan Hall; Barry Snell
Cc: councilmtgitems; Armine Chaparyan; Rachel Kwok; Santa Monica Forward; Carl Hansen Subject: Support for Items 10.A, 12.B, and 12.C

EXTERNAL
Dear Mayor Torosis and Council,
We support city staff's recommendation to adopt the proposed ordinance to establish a digital display district. Our support is based on the following factors:

1. Economic Recovery
The displays present an opportunity to revitalize 3rd St Promenade and support its economic recovery.

The displays can help draw new foot traffic and contribute to the perception that the Promenade has turned the corner.

2. Revenue Generation
The displays will create a durable, long-term revenue stream for the city. These revenues will be instrumental in helping the city balance the budget and support the Revitalization Plan.

3. Community Benefits
As proposed, 20% of the total content time has been set aside for non-commercial content. The displays will provide space for civic messaging, emergency alerts, art and can advertise local businesses.

Council may also wish to consider providing reduced rates to local businesses to spur their growth, and ensure that precautions are taken to limit light pollution and distracted driving around the signs.

We urge you to move the ordinance forward, thank you for reading.

Sincerely,
Brad Ewing and Carl Hansen
SMF Co-Chairs
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 672 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 2 David Yakobson
From: Gabrielle Ipale <[email protected]>
Sent: Tuesday, December 16, 2025 11:28 AM
To: councilmtgitems
Cc: Gina Gribow; Adam Englander
Subject: Agenda Item 10A - Santa Monica Council Hearing - Public Comment Attachments: PMI Letter to SM Council 12.16.25 (clean).pdf

EXTERNAL
Dear Members of the Santa Monica City Council,
Please find aƩached our public comment in reference to Agenda Item 10A, along with our lighƟng consultant’s comment. Thank you.

Gabrielle H. Ipalé, MRED
Director of Asset Management | PMI Properties
T: 310.476.1703
www.pmiproperty.com

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 673 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica December 16, 2025
Dear Honorable Members of the Santa Monica City Council, I am writing on behalf of PMI Properties, the owner of the office building located at 1460 4th Street, directly across from the proposed Display B at Santa Monica Place. Given our proximity to the proposed digital sign, our building and tenants will be directly impacted.

While we support the City’s digital signage program and recognize its role in promoting economic recovery and growth within the Downtown District, we have concerns regarding several key provisions of the ordinance.

Our primary concern relates to the proposed illumination standards for areas in front of and near commercial buildings. The illumination should be reduced to align with that developed by neighboring communities, such as West Hollywood, when facing other commercial properties. Although the Francis Krahe & Associates Study does not classify commercial buildings as “sensitive use” properties, tenants in surrounding commercial buildings—including our office building—will nonetheless experience adverse impacts. In the current economic climate, we are already facing leasing challenges, and excessive sign brightness could further undermine tenant retention efforts. Accordingly, we recommend that the City of Santa Monica reduce the allowable illumination levels for neighboring commercial buildings to a maximum of 0.74 footcandles, which is in line with the original Francis Krahe report. Our lighting consultant with The Lighting Design Alliance has advised that the City of West Hollywood and the City of Los Angeles are both currently modifying their lighting standards down to reduce brightness, among other changes being made to help mitigate impacts to neighboring commercial properties.

Additionally, we appreciate the City’s inclusion of a “Good Neighbor Policy,” but believe this policy should be strengthened. Specifically, we recommend requiring the owner of a digital display to bear responsibility for mitigating any significant impacts identified by affected neighbors. Such mitigation measures could include adjusting the display’s mounting angle, tilt, or orientation to redirect light away from impacted properties, and funding the installation of window treatments or screening where appropriate.

Finally, we encourage the City to consider expanding the boundaries of the Digital Signage District to include additional properties that are uniquely suited based on location, such as our building at 1460 4th Street. Situated on a prominent corner at 4th Street and Broadway, our building represents a natural extension of the existing district. It directly faces incoming traffic from the I-10 Freeway and visitors entering Downtown Santa Monica from the Metro Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 674 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica terminal. Importantly, any digital signage on our property would be oriented toward the Santa Monica Place parking structure, rather than residential buildings or other sensitive uses. This configuration would minimize community impacts while allowing the City to benefit from a well-located and well-regulated digital display.

Thank you for your time and consideration.

Sincerely,
Gabrielle Ipale
SM Promenade, LLC
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 675 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 10 November 2025
Santa Monica Place propose digital signage – Impacts to 1460 4th Street To whom it may concern:

Lighting Design Alliance (LDA) is an internationally known award-winning full-service architectural lighting design consultancy that has been in business since 1992. In addition to designing the lighting for some of the most iconic structures, LDA has also provided services such as peer reviews, environmental impact studies (including digital sign studies) and performing as expert witnesses in legal trials.

LDA has been contracted by the property owner of the building directly across the street from the proposed digital signage at the corner of 4th Street and Broadway (mounted to the Santa Monica Place Mall parking structure). LDA has been asked to evaluate the impacts of the sign relative to light trespass.

We have obtained and read the Lighting Study prepared by Francis Krahe & Associates for Macerich. We understand the report and the assumptions and standards referenced.

The property (on corner of 4th Street and Broadway) is primarily an office building, and is directly across the street from the proposed digital sign numbered “C2” in the Lighting Study. While we understand that the Study defines “sensitive use properties” as residential, and excludes commercial use properties, we have concerns about the C2 sign, and it’s affects on the building’s tenants. In the current environment, they cannot afford any adverse affects this sign may have on the retention of current tenants, and / or the desirability of the property to potential new tenants. For these reasons, we would certainly define the site a “sensitive use property”.

On behalf of the building’s owner, we would like to formally request the following:

1. A lighting calculation study be conducted for the vertical plane of the façade that faces the C2 sign, similar to the studies done for the other sensitive use properties in the Lighting Report.

2. If the calculation study results show that the illumination levels on the façade exceed the recommended maximum of

0.74 footcandles (with the sign at the proposed 400 cd/sm during nighttime hours), we would request this sign be dimmed further in order to meet the 0.74 footcandle threshold.

3. It is also requested (regardless of meeting the 0.74 footcandle limit) that after the sign is installed, should the building tenants complain about the brightness of the sign, that the sign can be dimmed down further to address this.

Different Cities have different requirements and limitations regarding digital signage. For example, West Hollywood has enacted a nighttime limit of 300 cd/sm brightness for digital signage. In another example, Los Angeles is in the process of reducing their allowable digital sign contribution to 0.3 footcandles at the nearest residential property line.

Given these examples, there is room for further reductions in sign brightness below the proposed sign brightness of 400 cd/sm, and proposed 0.74 footcandles of sign light contribution onto nearby property lines, and still yield an acceptable result for advertisers.

We appreciate your careful consideration of this request, and look forward to working with you to come up with reasonable and flexible limitations on this sign’s brightness to satisfy all involved with the final outcome.

Thank you.

Andrew A. Powell

VICE PRESIDENT

L I G H T I N G D E S I G N A L L I A N C E
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 676 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 3 David Yakobson
From: Jan Williamson <[email protected]>
Sent: Tuesday, December 16, 2025 11:09 AM
To: Lana Negrete; Jesse Zwick; Caroline Torosis; Ellis Raskin; Natalya Zernitskaya; Dan Hall; Barry Snell; councilmtgitems; Rachel Kwok
Subject: Support for Agenda Item 10.A - Digital Sign Ordinace

EXTERNAL
Dear Mayor and Council members,
I'm writing in full support of the new Digital Sign Ordinance.

Especially in support of allocating time for community organization announcements and new media art.

This is also an important opportunity to present internationally relevant new media art! Please allocate funding to Cultural Affairs to develop a program to commission world-class digital artists for the new signs. This kind of investment will help revive and enhance the City's profile as a cultural destination.

Thank you,
Jan Williamson
Executive Director
18th Street Arts Center
--
To schedule an appointment with me Click here
I work and send emails outside of normal hours. Please don’t feel pressured to respond outside of yours! To help protect your priv acy, Microsoft Office prevented automatic download of this picture from the Internet. Jan Williamson Executive Director
she/her

@18thstreetarts
18thstreet.org

SUPPORT
18TH STREET ARTS CENTER
To help protect your priv acy, Microsoft Office prevented automatic download of this picture from the Internet.

Join Borderless on Patreon
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 677 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 4 David Yakobson
From: KUREPINA Ekaterina <[email protected]> Sent: Tuesday, December 16, 2025 11:05 AM
To: councilmtgitems
Cc: FRICKER Simon
Subject: Support for Items 10-A, 12-D and 12-E on the City Council Agenda 12.16.25

EXTERNAL
Dear City Council Members,
I am writing on behalf of Simon Fricker, General Manager of the Fairmont Miramar Hotel & Bungalows, to express his support for the digital signage projects proposed by Big Outdoor at Santa Monica Place and the AMC building on 3rd Street.

At the Fairmont Miramar Hotel & Bungalows, we see firsthand how important it is to create memorable, dynamic experiences that draw visitors to both our hotel and the City of Santa Monica. Modern, high-quality digital signage at these prominent downtown locations will help position Santa Monica as a forward-thinking and vibrant destination. This type of infrastructure attracts tourists and business travelers who expect the energy and sophistication that digital displays bring to major urban centers.

Beyond tourism benefits, these installations will generate new revenue for the City while promoting local arts, culture, and community programming. The ability to showcase what’s happening in Santa Monica—from cultural events to local artists—will enhance the visitor experience and encourage people to explore more of what downtown has to offer.

We encourage you to approve these projects as recommended in the staff report.

Best regards,
Ekaterina Kurepina
VIP & Executive Services Manager
On Behalf of SIMON A FRICKER

GENERAL MANAGER
Fairmont Miramar Hotel & Bungalows
101 Wilshire Blvd
Santa Monica, CA 90401
[email protected]
fairmont-miramar.com

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 678 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 5 This e-mail, any attachments and the information contained therein ("this message") are confidential and intended solely for the use of the addressee(s). If you have received this message in error please send it back to the sender and delete it. Unauthorized publication, use, dissemination or disclosure of this message, either in whole or in part is strictly prohibited.

Ce message electronique ainsi que tous les fichiers joints et les informations contenus dans ce message (ci apres "le message"), sont confidentiels et destines exclusivement a l'usage de la personne a laquelle ils sont adresses. Si vous avez recu ce message par erreur, merci de le renvoyer a son emetteur et de le detruire. Toute diffusion, publication, totale ou partielle ou divulgation sous quelque forme que ce soit non expressement autorisees de ce message, sont interdites.

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 679 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 6 David Yakobson
From: Hunter Hall <[email protected]>
Sent: Tuesday, December 16, 2025 10:53 AM
To: Caroline Torosis; Dan Hall; Natalya Zernitskaya; Ellis Raskin; Barry Snell; Jesse Zwick; Lana Negrete
Cc: Oliver Chi; councilmtgitems
Subject: MAIN ST. SUPPORTS 10-A, 12-D, AND 12-E!
Attachments: MSBIA Letter of Support-BIG Outdoor CC.docx.pdf

EXTERNAL
Dear Members of the Santa Monica City Council,
We are writing to express our strong support for the proposed digital signage installations at Santa Monica Place and the AMC building at 1310 3rd Street.

As the Executive Director of Main Street, I’ve seen firsthand how similar signage has enhanced our district. When the digital kiosks were first introduced, there was understandable hesitation—but the results have been overwhelmingly positive. They’ve become a valuable part of the streetscape: informative, well-designed, and helpful to both visitors and businesses.

BIG Outdoor has been a great partner to our community for years—always responsive, collaborative, and sensitive to local context. They’ve consistently shown that these installations can be done thoughtfully and in ways that serve the broader public good.

It’s clear that the old ways of thinking about public space and revenue need to evolve. Santa Monica has to adapt to survive. We need to look at our public spaces differently and get creative about how they can be leveraged to our collective benefit—supporting the local economy, promoting arts and culture, and helping fund the very services that keep our city vibrant and safe.

These new projects strike that balance perfectly. They’ll enhance the pedestrian experience, generate new revenue for the City, and contribute to the continued revitalization of Downtown Santa Monica.

We urge you to approve these proposals and keep Santa Monica moving forward.

Sincerely,
Hunter G. Hall
Executive Director
Main Street Business Improvement Association
314.323.4663
[email protected]
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 680 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica Dec 15, 2025
To: Santa Monica City Council
RE: Support for Digital Signage Projects at Santa Monica Place and AMC Building Dear Members of the Santa Monica City Council,
We are writing to express our strong support for the proposed digital signage installations at Santa Monica Place and the AMC building at 1310 3rd Street.

I urge you to approve these proposals and keep Santa Monica moving forward.

Sincerely,
Executive Director
Main Street Business Improvement Association
[email protected]
314.323.4663
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 681 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 7 David Yakobson
From: David Homa <[email protected]>
Sent: Tuesday, December 16, 2025 10:19 AM
To: councilmtgitems
Subject: Support for Items 10-A, 12-D and 12-E on the City Council Agenda 12.16.25

EXTERNAL
Dear City Council Members,
I'm a resident of Santa Monica and want to share my support for the digital signage ordinance and projects proposed for the AMC building and Santa Monica Place (Items 10-A, 12-D and 12-E) What appeals to me most about these projects is how they'll enhance the downtown experience for residents and visitors alike. The signage will bring energy and visual interest to areas we walk through every day, while also providing a platform to celebrate local artists and community events. I believe our local businesses deserve all the support they can get - and I love that Santa Monica is finding ways to blend modern technology with our commitment to arts and culture.

These installations also bring practical benefits—new revenue for the city and increased economic activity downtown. Both are important as we continue recovering and growing.

I encourage you to approve these well-designed projects.

Sincerely,
David Homa
101 California Avenue, Unit 901, Santa Monica, CA 90403 Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 682 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 8 David Yakobson
From: Ruthann Lehrer <[email protected]>
Sent: Tuesday, December 16, 2025 10:19 AM
To: councilmtgitems
Subject: Item 10 Digital Display District

EXTERNAL
December 16, 2025
Item 10: Digital Display District Ordinance
Honorable Mayor Torosis and Councilmembers,
Santa Monica’s new Digital Display District will transform the visual appearance and character of our downtown, creating a new image and new branding for Santa Monica. While this is in theory a pilot program, with 30-year contracts and proposals for almost half of the allotted sites, it will have dramatic impact from the start and leave limited opportunity for future improvements and adjustments. This makes it critical that implementation of the sign designs be rigorous and not over-streamlined.

The Santa Monica Conservancy believes that designated landmark buildings, which comprise six of the sixteen sites in the new Digital Display District, should be reviewed by the Landmarks Commission through a Certificate of Appropriateness process. This is consistent with the review process for any other alteration to one of Santa Monica’s historic resources. Digital signs placed on historic facades will inevitably affect the physical and visual characteristics of historic buildings. Compatibility as well as reversibility must be carefully considered. The Landmarks Commission has the experience and expertise to guide applicants into making good design decisions that balance existing historic features with digital sign overlays. Relegating this process to a non-binding consultation makes historic resources subject to alterations that could permanently detract from their significance. The Commission’s targeted expertise allows it to work with applicants and arrive at a satisfactory outcome, relieving City Council of the need to parse the specialized considerations required in altering landmarks.

The proposed sign at 1202 Third Street Promenade (the Landmark J.C. Penney Building) was informally reviewed by members of the Santa Monica Conservancy as well as more than one historic preservation consultant. While these meetings were informal, the applicant opted to be very responsive to the input received resulting in perhaps the most successful sign design in your packet. Restoration of the historic blade sign on the J.C. Penney building returns a design element to the structure that enhances its significance even as a large digital billboard is being installed on its façade. The decision to do this and its implementation came from the applicant’s highly responsive approach to the comments it received. Please formalize this level of review in the Digital Display ordinance to ensure the five other landmarks that could receive a sign are handled as well as this one was.

Based on the successful model of 1202 Third Street Promenade, the Digital Display District project approval process would ideally include ARB review for the remaining ten sites in the district that are not historic resources because of the major impact these signs will have on the visitor experience in our most important commercial area. The considerable design expertise on the ARB is also critical to the visual success of this bold program. Let’s harness the talent of the Landmarks Commission and the ARB to ensure that this highly visual Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 683 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 9 experience we are adding to our Promenade reflects tasteful design that preserves the unique character of the Promenade and the many historic resources impacted by the program.

Thank you for your consideration.

Nina Fresco and Ruthann Lehrer

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 684 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 10 David Yakobson
From: Cris Gutierrez <[email protected]>
Sent: Tuesday, December 16, 2025 10:04 AM
To: Caroline Torosis; Jesse Zwick; Natalya Zernitskaya; Lana Negrete; Barry Snell; Dan Hall; Ellis Raskin
Cc: councilmtgitems; Rachel Kwok
Subject: Items 10.A- Ordinance, 12.B - 1202 Third Street Promenade, 12.C – 301 Arizona/1253 Third Street Promenade

EXTERNAL
Dear Mayor Torosis, Mayor Pro Tem Jesse Zwick and City Council Members:

I write to urge you to support Staff’s recommendations to adopt the Digital Display District sign ordinance and approve the applicants’ development agreements (DA). Staff’s efforts will benefit both applicants and ensure consistency across all the displays.

Staff’s vision for the displays – advancing the City’s vision of Downtown, driving economic recovery and revitalization, balancing innovation with responsibility, and expanding community benefits and cultural enrichment opportunities – are achievable if the stipulations in the draft Ordinance are adopted and implemented.

My comments on Orange Barrel Media’s (OBM) applications for 1202 Third Street and 301 Arizona follow my input on the project over the last several months. I attended the applicant’s initial outreach efforts and have supported the projects through Planning Commission and City Council. I’ve posed subsequent questions to OBM about environmental impacts and technology. They were addressed. After carefully considering their proposal, I have concluded that the OBM’s digital displays will benefit the community in important ways. My decades-long efforts to help the community, particularly youth, to understand the climate crisis and the world of sustainability, including shaping policies and community programs in Santa Monica, lead me now to focus my remarks on those aspects of the project proposal.

I am one of the Clean Power Alliance (CPA) Westside Advisors, so I posed a question to the applicant about how the displays will be powered. While the signs are engineered for low-energy demands, the applicant stated that they are committed to the use of CPA energy. It is key that the level of participation be at 100% green renewable power.

The question of light pollution/spillover has been a concern for some of us, and I raised it with the applicant team. They explained how light levels on both displays will be monitored constantly and adjusted automatically to respond to ambient light levels during day and nighttime hours. In addition, the applicant employs the use of louvers to control the direction and breadth of the light required to display the content effectively. Those measures are in effect in the many cities in which they operate. I trust that your discussions tonight and the approval that will follow will provide assurance to the site-adjacent neighbors and greater community that OBM’s technology addresses this issue.

Finally, the digital displays represent a unique opportunity to create meaningful and exciting intersections of civic and community-benefitting organizations’ content with the work of participating local artists to co-promote and educate the community throughout the year, including on special occasions, such as Earth Day, Pride, and Hispanic Awareness, to name a few. I do care about how that content in the 20% carve-out is chosen. Please consider the establishment of a community advisory team to give continual feedback on the operation and content of the digital displays.

As you consider the Ordinance and examine the display DAs this evening, please know that OBM, in my view, has been forthright in its community engagement and eager to be a part of a vibrant Santa Monica.

I trust you to balance the needs of the Santa Monica’s economic, social, environmental and character-of-community needs with an openness and sophistication for our future quality of life.

With respect,
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 685 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 11 Cris Gutierrez
Santa Monica Resident

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 686 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 12 David Yakobson
From: Gonen Y <[email protected]>
Sent: Tuesday, December 16, 2025 10:01 AM
To: councilmtgitems
Subject: Support for Items 10-A, 12-D and 12-E on the City Council Agenda 12.16.25

EXTERNAL
Dear City Council Members,
As a Santa Monica resident and artist, I want to express my strong support for the digital signage ordinance and projects proposed for Santa Monica Place and the AMC building.

What excites me most is the opportunity these installations create for promoting local arts and artists.

Having high-quality, prominent digital displays in the heart of downtown provides a platform to showcase our creative community, highlight cultural programming, and celebrate the arts in a highly visible way. This aligns perfectly with our city's commitment to supporting and elevating local culture.

These projects also enhance the vibrancy of our public spaces and contribute to economic recovery through new revenue sources. The combination of cultural promotion and economic benefit makes this an easy decision to support.

I urge you to approve all three items as recommended.

Best regards,
Gonen Yacov
511 Montana Avenue
--
To help protect your priv acy, Microsoft Office prevented automatic download of this picture from the Internet. Gonen Yacov Graphic Designer
My Portfolio
Linkedin Page
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 687 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 1 David Yakobson
From: Council Mailbox
Sent: Monday, December 15, 2025 6:00 PM
To: councilmtgitems
Subject: FW: City Council meeting 12/16/25 Item 10A Digital Display District From: jim gerstley <[email protected]>
Sent: Friday, December 12, 2025 3:05 AM
To: Caroline Torosis <[email protected]>; Lana Negrete <[email protected]>; Council Mailbox <[email protected]>; Clerk Mailbox <[email protected]>; Dan Hall <[email protected]>; Ellis Raskin <[email protected]>; Barry Snell <[email protected]>; Natalya Zernitskaya <[email protected]> Subject: City Council meeting 12/16/25 Item 10A Digital Display District

EXTERNAL
I realize the city needs sources of income
These signs are designed to distract drivers, and as such are not permitted per Santa Monica Advertising Guidelines item 6. [why else have the signs where drivers can see them?] I see these signs as lawsuits just waiting to happen. As such, there's a reasonable probability these will represent a negative cash flow to the city.
1] they are clearly designed to be read by anyone nearby: pedestrians, bicyclists, car drivers etc. 2] therefore any accident[s] within view of these signs could be blamed on distraction, whether or not true. As such, I see these as easily won lawsuits against the city. I don't see how the city could prove otherwise.
3] page 10 last paragraph would allow signs up to 1000 times brighter--sounds very distracting to me.

It is already difficult at night to see pedestrians with the poor lighting at many crosswalks, looking into headlights of oncoming traffic. Many pedestrians wear dark clothing and take the right-of-way, presuming drivers can see them. Lighting is even worse where pedestrians jaywalk. This bright a light will make it even more difficult to pick out pedestrians, resulting in accidents. At 3rd and Wilshire, roughly half the pedestrians don't even wait for the pedestrian signal, based on my experience. 4] the above is compounded by fog and rain.
5] why have signs on after 10pm? Drivers who have been drinking, drivers who are tired and just want to get home, and seniors are more likely to have an accident if distracted. 6] to minimize distractions, images on the signs should not change more than 2-3 times a minute, not the proposed 6 times a minute.
7] Why not try one sign at a busy corner for a minimum of one year to see the net impact. 8] What is the city's exit strategy if the sign[s] end up causing a negative cash flow? 9] Signs need to be placed where they don't form a background to traffic signals. 10] consider additional lighting and street markings to make pedestrians & cyclists more visible at night [provide more contrast against dark roadway pavements].

Thanks
Jim Gerstley
Santa Monica 90403
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 688 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 1 David Yakobson
From: Richard Orton <[email protected]>
Sent: Monday, December 15, 2025 10:28 PM
To: Richard Orton; councilmtgitems
Cc: Caroline Torosis; Dan Hall; Ellis Raskin; Barry Snell; Natalya Zernitskaya; Jesse Zwick Subject: Agenda items 10.A, 12.B and 12.C | Digital Signs

EXTERNAL
Dear Santa Monica City Council,
I think the proposed digital signs on the 3rd St Promenade are a good idea.  They bring an excitement to the entertainment/shopping district  They bring much needed revenue to the city
 They will provide a percentage of community information  They will offer reduced rates to local businesses for unsold space.

However, if you approve this, please incorporate my 2 concerns in the rules:
 Never be a sound component
 Never have obnoxious light entering homes of downtown district dwellers (maybe an 11pm curfew). Nobody wants to live next door to the Griswald's Christmas lights.

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 689 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 2 Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 690 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 3 Thanks,
Richard Orton
Ocean Park
[email protected]
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 691 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 1 David Yakobson
From: Clay Collett <[email protected]>
Sent: Monday, December 15, 2025 3:41 PM
To: Caroline Torosis; Lana Negrete; Jesse Zwick; Ellis Raskin; Natalya Zernitskaya; Dan Hall; Barry Snell
Cc: Gaby Ghermezi; councilmtgitems; Oliver Chi; Jing Yeo; Roxanne Tanemori; Rachel Kwok Subject: Support for Digital Display Ordinance and DAs - Items Attachments: OBM Support Letter - Council - 2025.12.15.pdf

EXTERNAL
Dear Mayor Torosis and Councilmembers,
Please see attached letter of support for the digital display ordinance and development agreement proposals at 1202 Third Street and 301 Arizona on tomorrow night’s council agenda, under items 10A, 12B and 12C, respectively.

We are eager to partner with Daniel Negari and the City on these projects, which will deliver vibrancy, public art, and city content to the Promenade, as well as revenue to the City. We look forward to your deliberation tomorrow, and if you have any questions, please do not hesitate to reach out.

Thank you all.

10.A.e
Packet Pg. 692 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica December 15, 2025

VIA E-MAIL
Santa Monica City Council
Re: Proposed Digital Displays/Signs at 301 Arizona Avenue and 1202 Third Street Promenade (24ENT-0233 and 25ENT-0021)
Agenda Items 10-A, 12-B and 12-C – Support
Dear Mayor Torosis and Councilmembers:

We are writing in full support of the digital display district ordinance being brought forward by staff under Item 10-A, as well as the two development agreement proposals for signage at 1202 3rd Street and 301 Arizona, which are covered by Items 12-B and 12-C, respectively. As the media company partnering with the property owner, UNITED XYZ, LLC/Daniel Negari, on the proposed digital signs, we believe that our signage proposals will be a compelling addition to the Promenade.

We at Orange Barrel Media (OBM) are a leading national media company with substantial experience designing, operating and maintaining signs of this type in many cities throughout the nation.

OBM’s portfolio includes unique displays in top urban markets across the nation, including New York, Los Angeles, Atlanta, Houston, Miami and West Hollywood. We work closely with property owners and local municipalities to permit and develop advertising properties that the public finds fun, attractive and exciting. In each city, we deliver high-end, high-value projects like the ones before you on December 16, and we have experience across the country working with cities in developing sign programs that offer unique designs, content and community benefit.

The sign district ordinance prepared by staff reflects a thoughtful approach that we believe will support a vibrant sign district on the Promenade, with reasonable safeguards that will prevent over proliferation of signs or lighting impacts to residents. Staff’s approach draws from best practices developed in nearby cities, including nearby West Hollywood, to deliver a signage program that has clear standards of operation, lighting, siting and content. We think the ordinance will achieve the City Council’s goal of introducing vibrant, revenue-generating signage in a careful way. We applaud city staff for their hard work.

We also respectfully request that the City Council authorize the two development agreements for signs at 1202 3rd Street and 301 Arizona (Items 12-B and 12-C), which we are bringing forward with our partner Daniel Negari/XYZ, who owns both properties. Daniel and XYZ are significant stakeholders on the Promenade and have a clear vision of investing in their properties and revitalizing the Promenade. We’re excited to partner with both XYZ and the City in helping support this goal through innovative signage.

Our signs will display a mix of commercial advertising, public art and City content. The City will also participate in the revenues generated by the sale of advertising. Taken together, the signs will enhance and enliven the economic environment of the Promenade and generate substantial general fund revenue to the City on an expedient basis. This revenue share with the City includes $1 million per OBM
9165 Sunset Blvd.

West Hollywood, CA 90069
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 693 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica sign guaranteed during the first of operation, and ongoing revenue sharing thereafter each year of the development agreement.

Each of our two signs has been uniquely designed to be in conversation with its respective building. To make sure the projects fit with context, over the last year we’ve engaged in discussions with preservation architect Robert Chattel, the Santa Monica Conservancy, city urban design staff, tenants at both properties and on the Promenade generally, and we held a public community meeting to review the sign designs and our proposed operational program. Over this period, we’ve had the opportunity to refine our designs, and we believe that the proposals before you capture the vibrant spirit of Santa Monica and the Promenade.

Again, we ask that the City Council authorize the digital display district ordinance and the development agreements for these two properties. Thank you for your time and consideration. We look forward to discussion at the hearing.

Best regards,

Clay Collett
Vice President, West Coast Development
Orange Barrel Media, LLC

cc: Oliver Chi
Jing Yeo
Roxanne Tanemori
Rachel Kwok
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 694 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 2 David Yakobson
From: Gina Garcia <[email protected]>
Sent: Monday, December 15, 2025 3:31 PM
To: councilmtgitems
Subject: Support for digital signage ordinance and projects (Items 10-A, 12-D and 12-E)

EXTERNAL
Dear City Council Members,
As a Santa Monica resident and employee at a local non-profit, I want to express my strong support for the digital signage ordinance and projects proposed for Santa Monica Place and the AMC building.

I am writing to support the digital signage ordinance and projects proposed for the AMC building and Santa Monica Place (Items 10-A, 12-D and 12-E)
As a resident, I care deeply about maintaining a vibrant, economically healthy downtown which our downtown is currently not. These thoughtfully designed digital installations will contribute to that goal by attracting attention, promoting local culture, and generating revenue that supports city services.

I also appreciate the pedestrian-friendly design approach. Downtown should be an engaging place to walk and spend time, and high-quality digital signage—when done right—adds visual interest without detracting from the streetscape.

Please approve these projects. They represent smart, forward-looking infrastructure for our community.

All the best,
Gina Garcia
Sustainable Works
Gina Garcia I Co-Executive Director
Director Community Programs | Buy Local SM Manager
Sustainable Works | 1744 Pearl St | Santa Monica, CA 90405 310.458.8716 | Office
http://www.sustainableworks.org/
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Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 695 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 3 David Yakobson
From: Daniel Negari <[email protected]>
Sent: Monday, December 15, 2025 3:14 PM
To: councilmtgitems; Lana Negrete; Jesse Zwick; Caroline Torosis; Ellis Raskin; Natalya Zernitskaya; Dan Hall; Barry Snell
Cc: Rachel Kwok
Subject: 301 Arizona and 1202 Third Street Promenade Digital Displays (Items 12-B and 12-C) and Digital Display Ordinance (Item 10-A) – Applicant Letter Attachments: from UNITED XYZ 2025.12.15.pdf

EXTERNAL
Please see my attached letter.

Looking forward to seeing our community shine bright into the future.

Daniel
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 696 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica

UNITED XYZ, LLC
2800 Olympic Boulevard, #1
Santa Monica, CA 90404
December 15, 2025

VIA EMAIL
Santa Monica City Council
Re: Proposed Digital Displays/Signs at 301 Arizona Avenue and 1202 Third Street Promenade (24ENT-0233 and 25ENT-0021)
Agenda Items 10-A, 12-B and 12-C – Support
Dear Mayor Torosis and Councilmembers:

My name is Daniel Negari, I am the founder and CEO of XYZ. I was born in Santa Monica and have been in the area for most of my life. Over the past several years, I’ve invested more than $100 million into revitalizing Downtown Santa Monica and the Third Street Promenade - a place I deeply care about and believe in. I’m proud to now be the largest property owner on the Promenade, with even more long-term investment planned.

As the owner of the properties located at 301 Arizona (northeast corner of Third Street Promenade and Arizona) and 1202 Third Street Promenade (southwest corner of Third Street Promenade and Wilshire), and the applicant for the digital displays proposed at these properties, I respectfully urge you to authorize the Digital Display District Ordinance and the development agreements for the proposed digital displays as recommended by City Staff and the Planning Commission.

As we all know, the Promenade - especially the 1200 block - is in urgent need of reinvention. The Council’s recent creation of the Entertainment Zone was a critical step forward. These digital displays are the next. They will generate much needed revenue the City in year one, with a long-term revenue platform to support public safety, enhance the Entertainment Zone, provide vital resources to DTSM, and improve City services.

Through another property owner that has digital displays on his property in West Hollywood, I was fortunate to connect with Orange Barrel Media (OBM) and learn about their custom digital displays. OBM creates value for property owners, municipalities, and the general public by designing and operating iconic out of home media displays that add to the quality and character of urban places. They pride themselves on incorporating ongoing advances in design and technology of these displays; and they continually generate a diverse and captivating programming mix of commercial messages, public art, and community content. I was particularly impressed with OBM’s focus on architecturally distinctive signs and prior experience with designing and installing digital displays on historic buildings. As an owner of over 10 landmarks in the city, this is one of the most important points for me as a preservation minded steward of these assets.

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 697 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica Santa Monica City Council
December 15, 2025

Page 2 ends

After learning more about the revenue generation potential of these signs and OBM’s public art program, I reviewed my real estate portfolio with OBM and we identified 301 Arizona (Foot Locker building) and 1202 Third Street Promenade (John Reed Fitness building, a City-designated landmark) as the top two locations for the digital displays.

OBM has embraced the opportunity to work in this marketplace and has designed creative entablature to frame these two digital displays. On the historic 1202 Third Street site, OBM’s design team has collaborated with preservation architect Robert Chattel. In addition to the digital display, the project includes activating the existing blank blade sign for the tenant John Reed Fitness and will also design and install a historic interpretative exhibit to be located at the ground level. And, on the 301 Arizona site, OBM intentionally designed and positioned the sign to avoid impacts on residential tenants living across Arizona Avenue.

For each sign, we are proposing revenue sharing with the City, starting with a minimum of $1,000,000 in year 1 of operations ($500,000 “go live” bonus and $500,000 minimum annual guarantee to the City). That means the City will receive at least $2,000,000 in the first year both signs are installed (assuming they are installed in the same year), and ongoing revenue sharing to the City thereafter.

The displays will also include other community benefits such as incorporation of public art, community announcements, and public service announcements and alerts that will be interspersed throughout the commercial advertisement loop.

I realize that the concept of off-premises advertising on private property, particularly in the digital format, is a new concept to Santa Monica. Our development agreements propose creative, captivating, thoughtful, rewarding and proven approaches to this opportunity.

We filed these development agreement applications for the digital displays in November 2024 (301 Arizona) and January 2025 (1202 Third Street Promenade) and seek your recommendation of approval to the City Council. Timely action is critical, as we’ve already missed the window to be live in time for the 2026 World Cup and further delays could cause us to miss alignment with major upcoming events such as the 2027 Super Bowl and 2028 Olympics – opportunities that will not return anytime soon.

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 698 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica Santa Monica City Council
December 15, 2025

Page 3 ends

I hope the City Council will agree that the time is ripe for the City to move forward with expeditiously approving these two development agreements.

Sincerely,
Daniel Negari
Property Owner and Founder & CEO

UNITED XYZ, LLC
cc: Oliver Chi
Jing Yeo
Roxanne Tanemori
Rachel Kwok
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 699 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 1 David Yakobson
From: Sam Shapiro-Kline <[email protected]>
Sent: Monday, December 15, 2025 3:12 PM
To: Caroline Torosis; Dan Hall; Barry Snell; Ellis Raskin; Natalya Zernitskaya; Jesse Zwick; Lana Negrete; councilmtgitems; Council Mailbox
Subject: Support Digital Display District

EXTERNAL
Hello Mayor Torosis and Council Members,
I am writing in support of item 10.A to establish a digital display district.

This measure will generate crucial revenue for the city, while also providing an opportunity to promote city events and public service announcements for free. The ordinance is well written to reduce potential risks associated with digital billboards.

Thanks,
Sam Shapiro-Kline
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 700 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 1 David Yakobson
From: C.J. Laffer <[email protected]>
Sent: Monday, December 15, 2025 1:07 PM
To: councilmtgitems; Lana Negrete; Jesse Zwick; Caroline Torosis; Natalya Zernitskaya; Barry Snell
Cc: Rachel Kwok; Oliver Chi; Roxanne Tanemori; Jing Yeo; Susan Cola; Paula Larmore Subject: Santa Monica City Council/December 16, 2025: Letter re Agenda Item Nos. 10.A and

12.E
Attachments: Letter to City Council Digital Signs.pdf

EXTERNAL
Honorable City Council Members: Please see the aƩached leƩer regarding agenda item nos. 10.A and 12.E on the December 16, 2025 City Council agenda.

Best,
C.J.

C.J. Laffer | Attorney at Law
1250 Sixth Street, Suite 200 | Santa Monica, CA 90401
O: (310) 656-4330 | [email protected]
NOTICE OF DISTRIBUTION: This e-mail message contains information that may be confidential and privileged. Unless you are the addressee (or authorized to receive messages for the addressee), you may not use, copy or disclose this message (or any information contained in it) to anyone. If you have received this message in error, please advise the sender by reply e-mail and delete this message. Nothing in this message should be interpreted as a digital or electronic signature that can be used to authenticate a contract or other legal document.

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 701 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 702 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 703 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 1 David Yakobson
From: Eli Mahl <[email protected]>
Sent: Monday, December 15, 2025 2:15 PM
To: councilmtgitems; Lana Negrete; Jesse Zwick; Caroline Torosis; Ellis Raskin; Natalya Zernitskaya; Dan Hall; Barry Snell
Cc: Rachel Kwok
Subject: Digital Display District Ordinance
Attachments: Outlook-Open - Lin; Outlook-h02vrjpa; Digital Display District Ordinance Letter -

12.15.25.pdf

EXTERNAL
This is Eli Mahl from The Festival Companies, the owners of the Keller Block Building (227 Broadway, Santa Monica, CA).

Please see the enclosed Digital Display District Ordinance letter.

Thank you for your consideration,
Eli Mahl
310.665.9665
Investment Director
[email protected]
DRE: 01125414
www.festivalcos.com
13274 Fiji Way Suite 200, Marina del Rey, CA 90292
Book a Virtual Meeting with Me
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 704 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica Santa Monica City Council
1685 Main Street, Room 102
Santa Monica, CA 90401
Re: Digital Display District Ordinance
Dear Members of the Santa Monica City Council,
On behalf of Keller Block, LLC and Keller Block II, LLC (227 Broadway, Santa Monica, CA), I am writing to express my support for the proposed digital display district ordinance for the Third Street Promenade.

This ordinance presents a timely and valuable opportunity to bring renewed energy to the Promenade, which is uniquely suited for this type of activation. The opportunity for the integration of the proposed displays will add vibrancy and visual interest while providing a dynamic platform for public art, cultural programming, and community-driven content that reflects Santa Monica’s creative identity.

Importantly, these displays will generate meaningful, ongoing revenue for the City. This new funding stream can support essential City services and programs, making the displays not only an aesthetic improvement but a significant public benefit.

Given that the Promenade is currently underutilized and in need of revitalization, the approval of this ordinance and the subsequent construction of these displays have the potential to attract foot traffic, enhance engagement, and contribute to placemaking efforts that will strengthen the Promenade’s role as a cultural, social, and commercial destination. By combining artistic expression, technological innovation, and economic value, the proposed district ordinance align fully with the City’s goals for revitalization.

Further, many of the Landlord’s will need to rely on the digital income in order to invest into their properties or avoid lender take-over, due to the difficulty of leasing on the Promenade.

Thank you for your time and consideration. Please feel free to contact me if additional information would be helpful.

Sincerely,
Eli Mahl
The Festival Companies
On behalf of Keller Block, LLC
and Keller Block II, LLC
13274 Fiji Way, Suite 200,
Marina del Rey, CA 90292
[email protected]
12/15/25
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 705 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 1 David Yakobson
From: Neil Carrey <[email protected]>
Sent: Monday, December 15, 2025 12:48 PM
To: councilmtgitems
Subject: Support for Items 10-A, 12-D and 12-E on the City Council Agenda 12.16.25

EXTERNAL
Dear City Council Members,
I am writing to support the digital signage ordinance and projects proposed for the AMC building and Santa Monica Place (Items 10-A, 12-D and 12-E)
These projects represent the kind of thoughtful, modern development that keeps Santa Monica competitive and attractive. The high-tech signage will activate these important downtown locations, improve the pedestrian experience, and create opportunities to highlight what makes our community special—our arts, culture, and local events.

I also value the economic benefits. New revenue for the city and increased vitality downtown are important goals, especially as we work to maintain the quality of life we enjoy here.

I hope you'll vote yes on all three items. As a longtime resident of Santa Monica who loves Santa Monica, I believe these projects will be very beneficial as we move forward.

Thanks for listening.

Regards,
Neil Carrey
43-year resident on 23rd Street
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 706 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 2 David Yakobson
From: Jackie Hinton <[email protected]>
Sent: Monday, December 15, 2025 2:57 PM
To: councilmtgitems
Subject: Support for Items 10-A, 12-D and 12-E on the City Council Agenda 12.16.25

EXTERNAL
Dear City Council Members,
As a long-time Santa Monica resident, small business owner (Good Body Pilates Studio), and Chair of the Pico Improvement Organization, I’m writing in strong support of the proposed digital signage ordinance and the projects at Santa Monica Place and the AMC building.

What resonates most with me is the opportunity these installations create to uplift local arts, artists, and cultural programming in a highly visible, intentional way. Thoughtfully designed digital signage in the heart of downtown can serve as a dynamic platform to showcase our creative community, promote local events, and reflect the diverse cultural life that makes Santa Monica special. That kind of visibility matters not just for artists, but for the identity of our city.

These projects also help activate public space, encourage foot traffic, and generate much-needed revenue during a time when our local economy is still recovering. Supporting culture and supporting economic vitality don’t have to be mutually exclusive, this proposal does both.

I believe this is a smart, forward-thinking investment in downtown Santa Monica and urge you to approve both items as recommended.

Thank you for your time and consideration.

Warmly,
Jackie Hinton
--
PIO Chair 2025-2026
www.picoblvdsm.com
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 707 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 1 David Yakobson
From: John Warfel <[email protected]>
Sent: Monday, December 15, 2025 11:30 AM
To: councilmtgitems
Subject: Agenda Item 10-s/Digital Signs
Attachments: Comments for City Council re Digital Signs 12.15.25.pdf

EXTERNAL
Please distribute.

Concerned Promenade Property Owners
210 Santa Monica Blvd.,
Santa Monica, CA
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 708 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica Dear Councilmembers:

We support digital signs in downtown, but we are concerned about the current proposed ordinance and the unintended consequences of the digital sign program as it is currently envisioned. The proposed ordinance is not well thought through and needs considerable work. We request that the City take a step back and begin an expedited review of digital signage in downtown with the goal of crafting a comprehensive signage plan for the area. Following are some of our thoughts:

Digital Signage & Foot Traffic - To date, staff has been unable to show that there is any evidence that digital signs increase foot traffic. In fact, they may have the opposite effect in pedestrian areas. This is why you usually see digital signage placed a good distance from pedestrian areas. The Grove, for example, keeps digital signage on their parking structures, away from their main walk street. The one sign that faces the street is on a side alley and starts 30-40 feet in the air. Signs follow people, people do not follow signs.

Digital Signs & Tenancy - On the Promenade, digital sign revenue may very well surpass the net revenue generated by traditional tenants. A sign requires no investment by the property owner and there are no re-leasing expenses or vacancies. Tenants, especially tenants with a strong brand image, will not be interested in a building with animated signage that is considerably larger than the tenant’s signage. Third party digital signs will dominate the building faced with competing advertising, significantly reducing the value of the ground floor, and very possibly making it impossible to lease the ground floor space.

Amount of Signage w/Competing Content - There are a total of 12 proposed locations for signs (2 at Wilshire, 4 at Arizona, 4 at SM Blvd., and 2 at Broadway) plus the 4 at SM Place. Note that each of the Promenade locations can split their total signage allowance into 2 signs (one on each street façade). This could result in 12 signs (24 if split), 25’ wide and 4-5 stories high (including the 10’ high open area above the sidewalk) on the taller buildings, and two stories high by 50’ long on the shorter ones. The signs would be controlled by different owners, would very likely be operated by different sign companies, and would have totally different graphics and messaging.

The visual chaos would be dramatic.

Placement of Signage - Signs can be mounted 3’ off the façade of a building by right, and can be as low as 10’ off the ground and as high as 5’ above the top of the parapet/roof line. The 3’ encroachment will have a significant visual impact at the Promenade intersections. The above standards are for vehicular, not pedestrian, streets. They do not “ensure digital displays do not create visual clutter” which is stated as one of the main goals of the ordinance in Section 1.

Additionally, signs would cover upper floor windows, making the upper floor premises difficult to lease.

Signage Maintenance - Maintenance standards in the ordinance are minimal and illdefined. Maintenance will be a continual problem, especially during periods when advertising revenue is less than the cost of running the signs, or when LED signs become obsolete (which they most certainly will). What happens when a sign is not “well maintained”? Will the city have the right to require removal? Who will pay for the removal and the repair of the building facades? No Continuous Operation – There are no requirements for continuous operation. We could have buildings with permanent, dead, ill-maintained signs, eyesores at best.

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 709 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica Effects on Neighbors - The maximum brightness standard for light at adjacent residential uses will be impossible to enforce. Residential uses will be severely impacted by light pollution from the signs. One sign consultant said they would pay for blackout shades for nearby residents. This is not a viable solution.

There are no brightness standards for adjacent office uses. Many of the sign locations are directly across from office and/or residential patios. These patios are a major amenity which will become useless with animated signage shining directly at them.

Enforcement – The City is relying on Development Agreements for enforcement of what standards are eventually agreed to. The only mechanism for enforcing DA’s is for the City to sue the building owner who, in turn, must sue the sign operator. This process will take years.

Historic Buildings – 6 of the 12 corner buildings on the Promenade are historic. The proposed ordinance specifically waives the requirement for review by the Landmarks Commission. The new signs will significantly change the historic nature of these buildings.

Separate Development Agreements Requirement – The City will be relying on individually negotiated Development Agreements for much of the operating parameters and requirements for the signs. While there are standards in the ordinance, such as maximum size, location, operating hours, brightness, etc., there is no language about a standard form development agreement. This leaves the City having to rely on the development agreement process to apply additional standards/regulations such as content regulations, standards to ensure occupancy, design parameters (including aesthetics), etc. These agreements will be negotiated at different times, with different parties, leading to a highly confusing regulatory environment. Additionally, the DA’s have 20 to 30 year time periods.

Digital signage will have a permanent transformational effect on the pedestrian environment in downtown. The City needs a comprehensive, well-conceived digital signage plan that will enhance the downtown environment, not tie the City’s hands well into the future. We are hopeful the council will see the harm a hastily conceived ordinance will cause, and the benefit that a well thought out digital sign program will bring to downtown Santa Monica.

Regards,
Concerned Promenade Property Owners
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 710 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 2 David Yakobson
From: Cynthia Rose <[email protected]>
Sent: Monday, December 15, 2025 11:51 AM
To: councilmtgitems; Council Mailbox; Caroline Torosis; Jesse Zwick; Ellis Raskin; Natalya Zernitskaya; Dan Hall; Barry Snell; Lana Negrete
Cc: Armine Chaparyan; Rachel Kwok
Subject: Support Agenda Items 10.A, 12.B, 12.C

EXTERNAL
Re: Support Agenda Items: 10.A- Ordinance, 12.B - 1202 Third Street Promenade, 12.C – 301 Arizona/1253 Third Street Promenade
Dear Mayor Torosis and Councilmembers,
I am writing to express my support for the “Ordinance to Establish a Digital Display District to Permit Digital Displays”, and, specifically, the large-format digital displays proposed by Orange Barrel Media for 301 Arizona Avenue and 1202 Third Street Promenade.

Though not a fan of digital banner advertising in general — which I believe can be a slippery slope — I acknowledge they have beneficial use case scenarios when implemented carefully and thoughtfully. The ordinance will make possible these custom-designed projects, which will directly benefit the city, enhance our visitor experience, and serve our resident and business community— not only through their thoughtful designs and integration into the urban environment, but by generating new, significant, and much needed ongoing revenue streams for the City. These funds will help support essential city services and programs, making the signs not just a visual enhancement, but a meaningful public asset. The setaside for civic and non-profit content and local art will remind residents and visitors that Santa Monica is a uniquely connected community.

Thank you for your thoughtful consideration. Please don't hesitate to reach out if additional information would be helpful.
--
Cynthia Rose

I acknowledge with respect and gratitude the Tongva, Kizh, and Chumash Peoples on whose traditional territory I live and work.

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 711 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 4 David Yakobson
From: Clerk Mailbox
Sent: Monday, December 15, 2025 9:12 AM
To: councilmtgitems
Subject: FW: City Council meeting 12/16/25 Item 10A Digital Display District Mitchell Kois
Staff Assistant III | City Clerk’s Office
(310) 458-8211 x5518
From: jim gerstley <[email protected]>
Sent: Friday, December 12, 2025 3:05 AM
To: Caroline Torosis <[email protected]>; Lana Negrete <[email protected]>; Council Mailbox <[email protected]>; Clerk Mailbox <[email protected]>; Dan Hall <[email protected]>; Ellis Raskin <[email protected]>; Barry Snell <[email protected]>; Natalya Zernitskaya <[email protected]> Subject: City Council meeting 12/16/25 Item 10A Digital Display District

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 712 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 5 Thanks
Jim Gerstley
Santa Monica 90403
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 713 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 6 David Yakobson
From: Naomi Okuyama
Sent: Monday, December 15, 2025 9:25 AM
To: Council Mailbox
Cc: councilmtgitems; Clerk Mailbox; Sofia Klatzker; Susan Jain; Julia Carnahan; Jade Rodriguez
Subject: Letter in support of item 10A, Digital Signage, for the 12/16/25 meeting Attachments: PAC Digital Signage Letter.pdf
Please see the attached letter from the Public Art Committee of the Santa Monica Arts Commission for the City Council meeting scheduled for Tuesday, December 16, 2025.

Thank you,
Cultural AƯairs Division
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 714 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica December 15, 2025
To the honorable Mayor and Councilmembers of the City of Santa Monica, In support of the City of Santa Monica’s realignment goals, and on behalf of the Arts Commission and Public Art Committee, we submit this letter to affirm our strong support for the introduction of large-format digital signage in Santa Monica.

These signs will provide an unprecedented channel for public engagement. Because a substantial portion of the display schedule is reserved for City messaging, Santa Monica will gain a powerful, ongoing platform to foster communication with residents and visitors.

This same platform may also showcase a diverse spectrum of world-class artwork, further advancing Santa Monica’s leadership in civic and cultural innovation. To fully realize these benefits, a reliable and sufficient funding mechanism must be established.

We recommend that City content be funded through a portion of the revenue generated by the signs. Specifically, Staff and the Commission propose that at least 5% of the City’s Minimum Annual Guaranteed payment (MAG) from each digital billboard be dedicated to the creation, production, and delivery of city messaging and cultural content.

Each billboard will have its own format, scale, and technical requirements. As additional signs are installed, this funding stream will grow commensurately, allowing production services and staffing to scale accordingly and advancing Santa Monica’s Realignment Goal #4: increasing organizational capacity.

Finally, consistent with Santa Monica’s long-standing and well-deserved leadership in creative innovation, a dedicated funding stream will ensure that City content remains aligned with the community’s high standards for artistic rigor and civic value.

We appreciate your thoughtful consideration,
Julia Carnahan, Committee Chair
Jessica Rich, Public Member
Public Art Committee of the Santa Monica Arts Commission Cc: Arts Commmissioners & Public Art Committee members
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 715 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 7 David Yakobson
From: Judy Abdo <[email protected]>
Sent: Saturday, December 13, 2025 3:35 PM
To: Lana Negrete; Jesse Zwick; Caroline Torosis; Ellis Raskin; Natalya Zernitskaya; Dan Hall; Barry Snell; councilmtgitems; Armine Chaparyan; Rachel Kwok; Oliver Chi Subject: Items 10.A, 12.B, and 12.C

EXTERNAL
Councilmembers,
I’m writing to express my support for the new sign ordinance and proposed digital displays at 301 Arizona and 1202 Wilshire, and to encourage you to move forward with Staff’s recommendations for adoption.

As a former Councilmember and Mayor, I appreciate the value the displays will bring to the community economically and culturally. The displays will create a meaningful and long-term revenue stream for the City, offer a platform to spotlight community programs, and serve as a virtual digital gallery for local artists. Altogether, they will add energy and creativity to the area, and help boost our ongoing economic recovery efforts.

Thank you,
Judy Abdo
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 716 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica 1 David Yakobson
From: Phyllis Hamilton <[email protected]>
Sent: Monday, December 15, 2025 11:47 AM
To: councilmtgitems; Lana Negrete; Jesse Zwick; Caroline Torosis; Ellis Raskin; Natalya Zernitskaya; Dan Hall; Barry Snell
Cc: Rachel Kwok
Subject: Digital Sign Display - 1202 Third Street Promenade (25ENT-0021) Attachments: John Reed SaMo - Digital Sign Display Support 12.15.25.pdf Follow Up Flag: Follow up
Flag Status: Completed

EXTERNAL
Hello,
Please see attached support for the revised digital display proposed for the exterior of our space. If you have any questions or if I may be of help, please feel free to reach out.

Thank you!

PHYLLIS HAMILTON

REAL ESTATE MANAGER
5420 LYNDON B JOHNSON FREEWAY
SUITE 300, DALLAS, TX 75240
C: 972-824-5180
Email: [email protected]
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 717 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica RSG Group | John Reed Fitness
5240 LBJ Frwy., Suite 300
Dallas TX 75240
December 15, 2025
Santa Monica City Council
1685 Main Street
Santa Monica, CA 90401
Re: Digital Display Development Agreements
Dear Members of the Santa Monica City Council,
On behalf of John Reed Fitness, I am writing to express our strong support for the proposed digital display at 1202 Third Street Promenade (25ENT-0021). As a tenant in this iconic building, we are deeply invested in the ongoing vitality of the 1200 block and the long-term success of our business within it.

The proposed digital display will not only enhance the energy and appeal of the area, it will also provide a canvas for us to promote our business. Like many businesses in the area, we face the challenge of maintaining foot traffic and visibility in a changing retail landscape, and signage is a useful tool to attract customers. This project offers a creative, impactful way to address that challenge.

By bringing in interest and engagement to the block, the digital display will not only help attract new customers to our gym, but the increased traffic will help other nearby businesses as well. Moreover, the signs will generate revenue for the City which can be reinvested back into the Promenade.

Thank you for your time and consideration. Please don’t hesitate to reach out if additional information is needed.

Sincerely,
Phyllis Hamilton
Real Estate Manager
John Reed Fitness – Santa Monica
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.e
Packet Pg. 718 Attachment: Written Comments [Revision 1] (7108 : Digital Display Signage District Ordinance for Third Street Promenade and Santa Monica Item 10A Digital Display
District Ordinance
City Council
December 16, 2025
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 719 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Revitalizing Downtown
Supports City’s Realignment Plan to reinvigorate
Downtown as economic, entertainment, and cultural
destination
• Investments in Clean and Safe Downtown & activations
on the Promenade
• Aligns with Third Street Promenade Entertainment Zone • Consistent with Zoning Ordinance changes to streamline process and create flexibility for land uses on the
Promenade
• Third Street Promenade and Santa Monica Place are considered the City’s economic and cultural center
• Generate 15% of sales tax revenue
• Promenade and its anchor, SMP, is City’s only fully pedestrian shopping area • The District is a unique commercial area with dynamic activity day and night, with a mix of entertainment and cultural uses
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 720 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Drive Economic Recovery and Revitalization
• Create new, on-going revenue streams
for the City and local businesses
• Reinvigorate storefronts and facades
with dynamic, visually engaging
content
• Draw new visitors and investments to
the Downtown
• Encourage advances in creative
signage blending technology, art, and
design
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 721 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Background Information
• Signage regulations
 Regulated under Chapter 9.61 of the Santa Monica Municipal Code  Billboards and off-premises digital advertising prohibited • City has received 4 DA Applications for Digital Signage  24ENT-0024, Santa Monica Place - 4 digital displays
 24ENT-0233, 301 Arizona Ave – 1 digital display
 25ENT-0021, 1202 Third Street Promenade – 1 digital display  25ENT-0086, 1310 3rd St Promenade – 1 digital display • Ordinance drafted in response to Council direction provided on June 10 Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 722 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Background Information
• September 13, 2022 - Council directed staff to explore establishing a largeformat digital signage pilot program at Santa Monica Place • January 10, 2023 – Adoption of Ordinance to award a franchise to BIG Outdoor for digital kiosk network
• March 25, 2025 - Emergency Ordinance to increase flexibility for signage in the Bayside Conservation District and Third Street Promenade. • May 13, 2025 - Council adopted an emergency ordinance to establish the Third Street Promenade Entertainment Zone
• June 10, 2025 – Council direction to staff for a new Digital Display District Ordinance for the Third Street Promenade and the Santa Monica Place shopping center. Additionally, Council authorized to begin DA negotiations for new digital displays
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 723 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Background
• Digital Display District Ordinance published for public review on October 20, 2025
 https://www.santamonica.gov/digital-display-district-for-the-third-streetpromenade-and-santa-monica-place • Comments received from the public and the Planning Commission have been incorporated into the Ordinance
• Additional edits since publication of Council Staff Report are proposed and indicated in Green of this presentation
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 724 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Digital Display District Ordinance
Ordinance serves as the regulatory framework to establish standards for digital displays and require development agreements for proposed displays
Ordinance is guided by four policy objectives

1. Advancing the City’s Vision of Downtown

2. Driving Economic Recovery and Revitalization

3. Balancing Innovation with Responsibility

4. Expanding Community Benefits and Cultural Enrichment Opportunities
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 725 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Ordinance Summary - Highlights
• Development Agreement • Hours of Operation
• Community Benefits • Design Authority
• Display Type • Landmark Buildings
• Permitted Locations • Energy
• Projections/Encroachments • Utilities
• Content • Maintenance
• Maximum Display Area • Illumination
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 726 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Digital Display District Ordinance
Digital displays restricted to the following locations:
• On corner buildings located on the Promenade with a maximum of 1,000 sf of display wrapping the corner of each building (must be single display face, except for Landmark buildings where doublefaced display permitted but same content on both faces) • On exterior facades of the Santa Monica Place shopping center with a maximum of 4 digital displays, each display not exceeding 1,000 sf These limited locations allow City to
• Minimize lighting impacts on residential uses outside of the district • Leverage the prime visibility of high traffic corners • Prevent oversaturation of digital displays
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 727 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Digital Display District Ordinance
District Ordinance
would permit up to 16
proposed digital signs
(inclusive of SMP)
• As of today, 7
proposed
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 728 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Digital Display District Ordinance - Occupancy
• Ordinance requires minimum building
occupancy thresholds, thus serving as a
placemaking tool
 Occupancy defined “leasable space
is physically occupied (not vacant)
and open for business”
 Specific thresholds to be established
by Development Agreement (to
account for variability of
sites/operations)
 Ensures that Downtown remains
activated, particularly at the ground
floor, with quarterly reporting of
vacancies
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 729 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Balancing Innovation with Responsibility
• Ordinance intended to balance technological innovation with standards that respect existing uses and are aligned with sustainability goals • Each Digital Display must be processed by Development Agreement  All digital displays must comply with Ordinance, and provide community benefits (financial, city content allocation, and occupancy standards)  DA establishes terms and contractual obligations of the digital display applicant, including City audit rights and Content standards  Per ordinance, no further design review approval upon Council approval of DA’s with digital display plans
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 730 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Balancing Innovation with Responsibility
Ordinance establishes standards relevant to:
 Type – only building mounted; no freestanding
 Size – Set at 1,000 sf per display (single face or double faced)  Hours of Operation – Hours are limited to 6:00 am (April to Sept) or 7:00 am (Oct to March) to 2:00 am. Aligns with EZ
 Content – Off-premise content permitted. Content restricted to one advertisement at any given time (i.e., no split screening)  Energy Use – Mandatory use of 100% renewable energy resources  Audio – Audio prohibited, except when approved for City programming events
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 731 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Balancing Innovation with Responsibility
Ordinance establishes standards relevant to:
 Maintenance – Digital displays must be maintained in good condition and free from graffiti, rust, or blight conditions, continuously operable, LED malfunction or damage must be repaired/replaced asap
 Malfunction – Must be equipped with control system and monitoring in place to either turn the display off or show full black screen in the event of a malfunction. An emergency shutoff switch required.
 Projections/Encroachment – Digital displays
 Cannot project more than 5 feet above roofline or facade of building  Must be placed at least 14.5 feet above roadway and sidewalk (Council may approve lesser height no less than 11.5 ft in DA)
 More than 3 feet beyond property line (unless encroachment permit) Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 732 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Balancing Innovation with Responsibility
Ordinance establishes standards relevant to:
 Landmark Buildings – Must do non-binding consultation with Landmarks Commission to make findings of 1) reversibility, 2) no impairment of significance of Landmark, and 3) all physical characteristics that convey significance remain intact
 Good Neighbor Policy – Provide contact information for a single individual appointed to communicate with the public regarding the Digital Display.

Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

10.A.f
Packet Pg. 733 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Balancing Innovation with Responsibility
Illumination Standards (developed based on Light Study analyzing District with all 16 signs)
 Daytime: From start time (6/7 am) until sunset, luminance shall not exceed 6,000 candelas per meter squared.
 Evening: From sunset until 10:00 p.m., luminance shall not exceed 300 candelas per meter squared.
 Nighttime: From 10:00 p.m. to 2:00 a.m., luminance shall not exceed 200 candelas per meter squared.
 After Hours: From 2:00 a.m. until (6/7 am), digital display shall be powered off.
 Illuminance from any digital display or architectural lights of the display shall not exceed 3.0-foot candles (fc) at any nearby residential uses to limit light trespass
 A Photometric Report upon installation prior to commercial operation of the display, and at two-year intervals
luminance
(candelas/nits)
illuminance
(footcandles)
light
source
Item 10-A
December 16, 2025
Item 10-A
December 16, 2025

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Packet Pg. 734 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Balancing Innovation with Responsibility
Driver Safety Standards
 Prohibit directional, warning, danger or other display that could be mistaken for traffic direction sign
 Prohibit red, flashing, blinking, or intermittent lighting that could be mistaken for warning or danger signals
 Static image transition at rate of no more than once
every 12 seconds (i.e., image must stay on screen for at least 12 seconds).
 Transition fade in from the previous image of no less than 1 second for static or animated image
 No strobe effects or flashing images or text; or lighting which rapidly change direction, oscillate, or flash; and no scrolling text in any direction
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Packet Pg. 735 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Economic Study and Market Analysis
Economic Study completed by Playfly LLC to analyze best in class advertising and determine potential revenue generation of all 16 signs  Reviewed vehicle
and pedestrian
counts
 Assumed 20% City
allocation
 80% advertising
occupancy
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Packet Pg. 736 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Economic Study and Market Analysis
 Market Sizing – Gross revenues for all 16 displays $19M-27M annually  Per Board Average - $1.2M to 1.7M, vary depending on location Playfly Economic Study Results
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Packet Pg. 737 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Community Benefits & Cultural Enrichment
• Each DA must include financial community benefits consisting of:
 One Time contribution $500,000 to be paid upon permit issuance of Digital Display (escalates 3% annually on June 30, 2027);
 Greater of either:
 20% Revenue share of gross annual revenues
 Minimum Annual Guarantee (MAG) of $500,000
(escalates 3% annually on June 30, 2027 with 3%
saturation discount at Display 10 and thereafter)
 Provides for proportionate reduction in one-time contribution and MAG if display size is less than 1,000 sf
$
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Packet Pg. 738 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Community Benefits & Cultural Enrichment
• Each Digital Display must allocate 20% of total annual operating time to City and Art Content, curated through City administered program
• City can combine allocation into blocks to create coordinated display times for special events
• Digital displays could expand community access to public art Allocated community content (e.g. civic news, PSA, emergency notifications, cultural arts)
 Dynamic media allowing rotation of local highlights, cultural event promotions, and seasonal showcases
 Visually activate Promenade storefronts
 Create an evolving outdoor public art museum in the
Downtown
• City administered program could be implemented similar to WeHo’s Moving Image Media Art (MIMA) program
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Packet Pg. 739 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Recommended Actions

1. Adopt findings of categorical exemptions pursuant to Sections 15301, 15303, 15311, 15331, and 15332 of the California Environmental Quality Act (CEQA) Guidelines

2. Introduce for First Reading an Ordinance to establish a digital display district to permit digital displays to be approved by Development Agreement in specified locations along the Third Street Promenade and Santa Monica Place.
• With amendments as indicated by Staff tonight
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Packet Pg. 740 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Changes to Ordinance

1. Adopt findings of categorical exemptions pursuant to Sections 15301, 15303, 15311, 15331, and 15332 of the California Environmental Quality Act (CEQA) Guidelines

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Packet Pg. 741 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance Recommended Action
Questions?
Thank you!
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Packet Pg. 742 Attachment: PowerPoint Presentation (7108 : Digital Display Signage District Ordinance City Council
Report
City Council Meeting: December 16, 2025
Agenda Item: 11.A
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To: Mayor and City Council
From: Oliver Chi, City Manager, City Manager's Office
Subject: Approval of Negotiations for Upcoming Major Events Recommended Action
Staff recommend that the City Council:

1. Make findings that approval of an exclusive negotiating agreement (ENA), letter of intent (LOI), or a term sheet for real estate negotiation purposes do not constitute an approval of a project requiring CEQA review because they do not commit the City to any specific terms of a project; and that the City’s actions contemplated in this report constitute planning and feasibility studies which are exempt from CEQA pursuant to CEQA Guidelines Section 15262.

2. Authorize the City Manager to execute a Letter of Intent (LOI) term sheet and negotiate and execute a license agreement subject to CEQA compliance, with the French National Olympic and Sport Committee to host a hospitality house activation at the Annenberg Community Beach House during the 2028 Summer Olympic Games.

3. Authorize the City Manager to execute a term sheet (Term Sheet) and negotiate the terms of a license agreement subject to CEQA compliance with LOIDL LLC dba Hochsitz to host a Nations Village to include International Olympic Committee (IOC) satellite broadcast center, National Olympic Committee hospitality house, and brand hospitality house activation at Crescent Bay Park and portions of Lot 4 South during the LA28 Summer Olympic Games.

4. Authorize the City Manager to execute an Exclusive Negotiation Agreement (ENA) and negotiate the terms of a license agreement subject to CEQA compliance with ESPN Productions Inc. to explore a multi-day fan festival experience and international broadcast studio in conjunction with a major sporting event at SoFi Stadium in winter 2027.

5. Award RFP#462 to Goldenvoice LLC, to assess the viability of developing a music festival event on Santa Monica Beach in the fall of 2026 and authorize the City Manager to enter into an Exclusive

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Negotiation Agreement and negotiate the terms of a license agreement subject to CEQA compliance.

6. Authorize the City Manager to execute an Exclusive Negotiation Agreement (ENA) and negotiate the terms of a license agreement subject to CEQA compliance with Anheuser-Busch to explore a World Cup fan festival experience at the Santa Monica Pier in June 2026.

Executive Summary
Over the next several years, the Los Angeles region will become a global stage for some of the world’s most watched sporting and cultural events. These gatherings will draw millions of visitors, concentrate international media attention, and generate significant economic activity across Southern California. Against this backdrop, Santa Monica’s coastline, public spaces, public transit access, and established reputation as a world-class destination create a rare opportunity for the City to participate in and help shape this regional moment on the global stage.

The sequence of events begins with the FIFA World Cup in June and July 2026, when several match days will take place in the Los Angeles area. In Fall 2026, the City is exploring a collaboration to produce a new music and cultural festival series on Santa Monica beach. In February 2027, Super Bowl LXI will return to SoFi Stadium, accompanied by a week of fan-focused programming and broadcast activity. The momentum continues into summer 2028, when the Olympic and Paralympic Games will bring global audiences, cultural festivals, and hospitality activations to venues throughout the region.

In anticipation of this event cycle, the City Manager’s Office, Recreation and Arts, and an internal working group that includes all key departments have been preparing for the operational, logistical, and community benefits of large-scale activations along the coastline. Over the past year, staff have held exploratory and discussions with national delegations, production companies, cultural organizations, and commercial partners interested in hosting hospitality houses, broadcast studios, fan festivals, and arts programming in Santa Monica. This coordinated effort is guiding City planning for the 2028 Olympic and Paralympic Games as well as other major regional events, including the 2026 World Cup and the 2027 Super Bowl.

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This report presents five proposals that have advanced to the point where Council direction is required to move into Letters of Intent, term sheets, or Exclusive Negotiation Agreements:
• A FIFA World Cup fan festival at the Santa Monica Pier in June 2026 (Anheuser-Busch/Michelob ULTRA).
• A fall 2026 music festival along the coastline produced by Goldenvoice.
• An ESPN fan festival and broadcast presence on the Pier and beach in winter 2027.
• Club France, the official hospitality house of the French Olympic Committee at the Annenberg Community Beach House, for the Olympic Games.
• A Santa Monica Nations Village and IOC broadcast center concept led by Hochsitz at Crescent Bay Park and portions of Lot 4 South during LA28.

To manage these opportunities, staff have developed a unified pricing methodology and preliminary evaluation framework that emphasize fiscal responsibility, cost recovery, public benefit, operational feasibility, and alignment with community values. A single, allinclusive license fee structure is proposed for major coastal activations that combines land use, parking replacement, and City concierge services, including permitting, inspections, and public safety.

With this stewardship of care, these activations could strengthen the City’s global profile, support local businesses, generate new revenue for public assets, and create cultural and community-serving outcomes. To ensure responsible stewardship of public assets, none of the proposed activations involve any City subsidy. Each opportunity is

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structured to meet or exceed full cost recovery by incorporating the City’s event-pricing model. This approach ensures that Santa Monica can capture the benefits of global visibility and community programming while maintaining sound financial footing.

This report outlines the key proposals now ready for Council consideration, describes the City’s emerging methodology for evaluating event partnerships, and provides an overview of the operational framework required to manage large-scale activations along the coastline. Taken together, these efforts reflect a moment of exceptional possibility for Santa Monica as the City prepares to welcome the world over the next three years.

Event/Agreement Timeframe Action Recommended Location
FIFA World Cup Fan
Festival (AnheuserBusch/Michelob
ULTRA)
June 2026
(approx. June
7–30)
Authorize Exclusive
Negotiation Agreement
(ENA) with AnheuserBusch, subject to
compliance with CEQA.

Santa Monica Pier
Fall Music Festival
(Goldenvoice)
Fall 2026 Approve RFP award to
Goldenvoice and enter
into an Exclusive
Negotiation Agreement
(ENA), subject to
compliance with CEQA.

Coastline: The
Sandbox, Pier Parking
Deck, and portions of
Beach Parking Lots
Fan Festival &
Broadcast (ESPN)
Winter 2027
(leading up to
Feb 2027)
Authorize Exclusive
Negotiation Agreement
(ENA) with ESPN
Productions Inc., subject
to compliance with
CEQA.

Santa Monica Pier
and adjacent
beachfront
LA28 Olympic
Games: Club France
Hospitality House
(French National
Olympic and Sport
Committee)
Summer 2028
(approx. 35-
days)
Authorize Letter of
Intent (LOI) term sheet
and authorize the
execution of a License
Agreement with the
French National
Olympic and Sport
Committee, subject to
compliance with CEQA.

Annenberg
Community Beach
House
LA28 Olympic & Summer 2028 Authorize term sheet Crescent Bay Park

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Paralympic Games:
"Nations Village" &
IOC Broadcast
Center (Hochsitz)
(approx. 103-
days)
with LOIDL LLC dba
Hochsitz, subject to
compliance with CEQA.
and portions of Lot 4
South
Discussion
City Working Group
The City created an internal working group to guide planning and coordination for the 2028 Olympic and Paralympic Games. Led by the City Manager’s Office, this group brings together representatives from all departments including the Santa Monica Fire and Police Departments. Its role is to ensure that Santa Monica is fully prepared for the operational, logistical, and community benefits associated with large-scale activations along the coastline and throughout the City.

The working group’s responsibilities include reviewing proposals from interested nations, brands, and production entities, coordinating internal analysis across departments, and developing a unified approach to managing large temporary installations. This coordinated structure has been essential as staff evaluate event concepts, assess operational feasibility, and align recommendations with City policies, community expectations, and resource constraints.

The group also serves as the City’s primary forum for cross-departmental problem solving. Staff work collaboratively to evaluate public safety needs, mobility needs, CEQA and coastal considerations, infrastructure requirements, staging, and communications planning. The participation of Fire and Police staff ensures that emergency access, security planning, and crowd management considerations are integrated early into project development. Participation of the City’s Transportation and Mobility staff ensures that the City has a solid Transportation Demand Program. The working group is also preparing for regional coordination with neighboring jurisdictions, which will become increasingly important as the 2028 Games approach.

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The group anticipates bringing forward a number of changes to the Santa Monica Municipal Code to provide for exceptions to certain code provisions related to noise, light, signage, and potentially other provisions of the code necessary to ensure that such issues can be handled on a streamlined basis. The suggested Municipal Code changes will require the City to establish via license agreement appropriate regulations related to these events. In addition, the group will bring forward a resolution delegating authority to the City Manager to negotiate and enter into LOIs, ENAs, and License Agreements for future large-scale events, and any ancillary agreements that may be required related to the events.

A central focus of the group has been the development of an event pricing methodology that aligns with the City’s financial responsibilities. This has included analyzing the opportunity costs associated with allocating high-demand coastal real estate, estimating needs on parking and beach revenues, and identifying the full range of municipal services required to support major activations. The working group’s analysis has directly informed the pricing and evaluation framework described later in this report.

Through this collaborative structure, the City is establishing a consistent, disciplined, and transparent approach for engaging external partners and stewarding public spaces during an exceptionally active event period.

Event Activations: Pricing Methodology
As Santa Monica prepares for a series of major global events, the City faces a rare opportunity to activate its coastline for a worldwide audience. Staff have developed a unified pricing methodology that balances opportunity with fiscal responsibility and community benefit.

At a high level, the City distinguishes potential activations based on their public value.

Proposals that offer broad public access, cultural programming, or significant community benefits are treated as “high benefit” activations and may qualify for greater flexibility in scheduling, site allocation, or pricing structures. By contrast, private or exclusive programming is evaluated as closer to market-rate expectations. This

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structure allows the City to curate a portfolio of activations that elevates Santa Monica’s visibility while ensuring that public assets generate tangible benefits for residents.

Across all event types, the City maintains a core financial principle: Santa Monica will not incur a net loss. Because these events take place during the summer peak season, when parking and beach revenues are highest, pricing must account for both the direct and opportunity costs associated with allocating space to event partners. To ensure this balance, the City has established a clear cost-recovery floor and applies upward adjustments based on community value, legacy potential, and operational demands.

To simplify negotiations and provide clarity to partners, the City is offering a single, allinclusive, lump-sum fee for each activation. This fee incorporates the three major cost drivers that affect City operations during peak season:

1. Concierge City Services: This encompasses all City departmental services required to support major events, including permit processing, zoning review, inspections, fire and police staffing, transportation management, utilities, and dedicated event management support.

These services represent the essential municipal infrastructure that makes large activations safe, compliant, and well-coordinated.

2. Parking Revenue Displacement: Because event footprints often require the temporary closure of City parking assets, pricing includes reimbursement for projected parking revenue losses using a blended calculation that reflects both timed and untimed summer demand patterns.

3. Land Rental: The base value of using Santa Monica’s premier coastal real estate is incorporated into the lump sum. While priced below market to encourage activation, this component reflects the scarcity and desirability of beachfront property during peak season.

By combining these elements into single sum pricing, the City offers partners cost certainty while ensuring that Santa Monica recovers its full operational costs. This transparent, predictable pricing framework will be applied consistently across all major

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activations. It allows the City to evaluate proposals not solely on financial return, but also on public benefit, legacy potential, and alignment with Santa Monica’s values. As a result, the City is positioned to curate meaningful and well-managed high-profile special events to attract visitors, strengthen the local economy, and honor the needs and expectations of the Santa Monica community to revitalize the City’s stature.

Proposed Exclusive Negotiating Agreements, Term Sheets and Letters of Intent.

Staff has engaged with five (5) proposed special event hosts, as more specifically discussed below, to establish negotiating principles in the form of an Exclusive Negotiating Agreement (ENA), Letter of Intent (LOI), or term sheet. • The ENA: as a general proposition, an ENA is useful when the parties have not worked out essential terms as a basis for negotiation. An ENA defines a set period of exclusive negotiations with a deadline.

The ENA typically requires a cost recovery deposit to pay for the City’s third-party costs (e.g., hiring of specialized consultants) and often incorporates a schedule of performance/milestones for negotiations. • The LOI: an LOI is useful when the parties have agreed upon essential terms to establish a common understanding for future negotiations.

Usually in letter format with a table of essential terms. A deposit is not required and there is no commitment for exclusive negotiation. The LOI term is usually short.
• The Term Sheet: a term sheet may be used in conjunction with an ENA to memorialize the essential terms agreement upon as a basis for negotiation of a future agreement.

All three preliminary negotiating methods do not commit the City to any project and anticipate concurrent CEQA review prior to solidifying any terms of a future licensing agreement.

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California Coastal Commission Review
All the special events contemplated in this report will likely require review by the California Coastal Commission (CCC), although, due to the temporary nature of these events, some of these events may qualify for a waiver from obtaining a Coastal Development Permit. If these negotiations result in a license agreement for each event, the event hosts will be required to obtain whatever CCC approvals/waivers are required; however, because the City owns the land, the City will be likely be required to be a copermittee for any approvals/waivers granted. City staff will work cooperatively with the event hosts to obtain required approvals/waivers if Council gives directions to proceed with negotiations.

Future Ordinance Changes
Because these special events contemplate active uses of event space, including amplified sound, commercial sponsorships, and active branding to ensure the economic viability of these events, City staff anticipates that future changes to the City’s ordinance will be required to allow for deviations from the City’s existing codes.

For purpose of exceptions to the City’s existing codes, Council must determine that these events are of extraordinary scope and community benefit to deem them worthy of an exception to certain code provisions related to the production of the event, as more fully set forth in the City’s existing codes. Based upon the preliminary proposals provided by these special event hosts, City staff believes that these events will:
• Bring in significant revenue in the form of indirect economic and community benefits
• Attract a large number of people, both residents and visitors • Promote Santa Monica on a national or global scale
To facilitate the success of these special events, staff contemplates drafting amendments to the City’s codes in the following areas: light shed, sound, signage,

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parking, etc. Therefore, staff anticipates returning to Council in later January or early February with proposed code changes.

Parking and Transportation Demand Management, and Security Due to the potential for large crowds, the necessity for enhanced security, staff also contemplates that a comprehensive plan will be required and will necessitate community engagement and cooperative efforts with special event hosts, through enforceable provisions in any future license agreements. 2026 MICHELOB ULTRA “PITCHSIDE CLUB” – WORLD CUP 2026 ACTIVATION AT

THE SANTA MONICA PIER
Michelob ULTRA, the official beer sponsor of the 2026 FIFA World Cup, proposes to bring its “Pitchside Club” fan experience to the Santa Monica Pier during the June 2026 tournament. The Pitchside Club is a large-scale soccer environment designed to blend live match viewing with interactive games, cultural programming, merchandise offerings, and appearances by athletes and media figures. The concept was first introduced in New York City in 2025 and is now being adapted for an outdoor, oceanfront setting that highlights Santa Monica’s unique public spaces.

The activation would be open to the public for guests twenty-one and over. Attendance would be managed through controlled entry, with an estimated capacity of approximately one thousand to five thousand guests at any one time, subject to final design and coordination with the City. Over the course of the fifteen-day programming window, total attendance is projected between twenty-five thousand and seventy-five thousand visitors. The Pier’s location also provides a compelling backdrop for broadcast and digital media content, which is expected to increase the City’s visibility throughout the tournament.

The Pitchside Club would operate as a temporary installation that integrates with existing Pier circulation and operations. Michelob ULTRA and its partners will be

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required to work closely with City departments to ensure that safety, accessibility, mobility, noise management, and public space considerations are fully addressed.

As part of its operational plan, Michelob ULTRA anticipates securing a full buy-out of the Viceroy Hotel for a limited period during the tournament. The hotel would serve as a lodging and production support hub for talent, partners, and operational staff. This arrangement is expected to generate direct hotel revenue within Santa Monica and contribute to the local hospitality economy.

In parallel, staff are developing a new event entertainment zone on the Pier that would permit controlled open-container service during major activations, subject to approvals from public safety and regulatory authorities. Staff anticipate bringing the proposed Pier entertainment zone to Council for consideration in winter 2026.

Key Business Terms
• Location: Santa Monica Pier Deck and adjacent operational areas as approved by the City (Attachment A)
• Scope: Match-viewing experiences, brand activations, live broadcast segments, food and beverage service, and daily public fan engagement programming
• Term: Approximately 3 weeks, including load-in (June 7–10, 2026), activation period (June 11–27, 2026), and load-out (June 27–30, 2026) • Financial Structure: A single “all-in” license fee aligned with the City’s major event pricing model, inclusive of land use, parking replacement, City concierge services, and public safety costs
• City Responsibilities: Cross-departmental coordination, public safety integration, coastal compliance support, permit review and inspections, and facilitation of operational communication with partner agencies • Licensee Responsibilities: Full production funding, installation and removal of temporary structures, site security and guest management, environmental and regulatory compliance, and restoration of all City property following event demobilization

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Community Benefits and City Protections
The Michelob ULTRA Pitchside Club would deliver:
• A high-visibility fan experience aligned with FIFA World Cup programming
• Increased foot traffic and visitor activity at the Santa Monica Pier • Economic benefits for nearby hotels (including a full buy-out of the Viceroy Hotel), restaurants, and small businesses
• Integrated community-focused offerings, such as accessible fan zones and public programming
• Support for City events such as Promenade activations and Open Streets
• Compliance requirements including security coordination, ADA access, environmental protections, and managed event operations About the Producer
Michelob ULTRA (Anheuser-Busch) is one of the world’s best-known beverage brands and Anheuser-Busch is a long-standing FIFA World Cup sponsor with a deep history of producing major fan-experience activations across the country. The ULTRA team routinely develops large-scale, turnkey hospitality and entertainment environments for international sporting events, including live match-viewing destinations, branded fan villages, and immersive consumer experiences. Their activations draw significant regional audiences and create substantial marketing visibility for host communities through national advertising, digital content, and social media engagement.

Next Steps
Entering into an ENA will allow the City and Anheuser-Busch to negotiate the essential terms while CEQA review is completed before approval of a license agreement. 2026 FALL BEACH FESTIVAL: GOLDENVOICE
Goldenvoice, a division of AEG Presents and one of the nation’s leading producers of large-scale music events, is working with the City to explore a new music and cultural

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festival on Santa Monica’s coastline beginning in fall 2026. Under the proposed Exclusive Negotiation Agreement (ENA), Goldenvoice would evaluate the feasibility of producing an annual event tailored to the City’s coastal setting and urban environment.

The inaugural festival concept envisions an event with an estimated capacity of 30,000 to 35,000 attendees. Programming would include 12 to 15 musical artists, curated food and beverage offerings, festival and artist merchandise, art installations, partnership activations, and guest services such as restrooms, lockers, and water stations. The event footprint would utilize the Sandbox, the Pier Parking Deck, and portions of the beach parking lots identified in the City’s 2025 Request for Proposals.

Goldenvoice has indicated its intention to design a festival that aligns with the character of Santa Monica, encourages attendance by residents, and drives economic activity for local hotels, restaurants, and retail prior to and during the event. The company will work closely with staff to address public safety, mobility, sound mitigation, recycling and sustainability, and community engagement as the concept develops.

This potential activation aligns with the City’s broader strategy to curate high-quality cultural offerings during the region’s peak event cycle from 2026 to 2028, while ensuring strong community benefit, economic impact, and responsible stewardship of public spaces.

Key Business Terms
• Location: The Sandbox, the Santa Monica Pier Parking Deck, and portions of Beach Parking Lots 1 North, 4 South, and 5 South. • Scope: A multi-day outdoor music and cultural festival, including stages, public amenities, experiential programming, food and beverage activations, and community partnerships.
• Term: Approximately several weeks of site occupation for load-in, event days, and load-out, with final duration to be established in the License Agreement for Fall 2026.
• Financial Structure: A single “all-in” license fee aligned with the City’s pricing model for major coastal activations. No City subsidy is allowed.

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• City Responsibilities: Cross-departmental coordination, public safety integration, coastal regulatory compliance, and review of site design, mobility planning, and community considerations.
• Licensee Responsibilities: Full production funding; all temporary structures, equipment, and technology; environmental and accessibility compliance; site security; damage repair; coastal permitting; and facilitation of a community engagement process if required by the City.

Community Benefits and City Protections
The proposed festival is anticipated to generate regional interest and contribute to Santa Monica’s identity as a cultural and entertainment destination.

Key benefits include:
• Significant economic activity for local hotels, restaurants, and small businesses
• Visitor draw and media visibility associated with a major Goldenvoiceproduced event • Community engagement opportunities, including nonprofit partnerships or free/low-cost public programming
• Environmental and public-safety protections, including ADA access, coastal permitting, security integration, and post-event restoration Under the ENA, Goldenvoice must operate without City subsidy, obtain all necessary entitlements, and conduct community engagement at its own cost should the City determine it is necessary.

About the Producer
Goldenvoice is one of the most established live-event producers in the United States and a key subsidiary of AEG Presents. The company is known for producing major festivals including the Coachella Valley Music and Arts Festival, Stagecoach, Just Like Heaven, Camp Flog Gnaw Carnival, Desert Trip, and numerous destination events

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across California and beyond. Goldenvoice also operates a wide network of prominent music venues in Los Angeles and the Bay Area and promotes more than 2,000 concerts annually across North America.

AEG Presents, Goldenvoice’s parent company, is a global leader in live entertainment with festivals and large-scale productions on five continents. The company’s extensive operational experience, safety planning, and community engagement practices position Goldenvoice as a capable partner for evaluating whether a well-managed coastal festival can be delivered in Santa Monica beginning in 2026.

This expertise positions Goldenvoice as a capable partner to assess whether a highquality, well-managed festival can be delivered on Santa Monica’s coastline in 2026 and beyond.

Next Steps
Awarding RFP#462 to Goldenvoice LLC, to assess the viability of developing a music festival event on Santa Monica Beach in the fall of 2026 and authorizing the City Manager to enter into an Exclusive Negotiation Agreement and negotiate the terms of a license agreement subject to CEQA compliance.
2027 ESPN FAN FESTIVAL AND BROADCAST ACTIVATION WINTER
2027
ESPN proposes to create a broadcast and fan-engagement experience on the Santa Monica Pier and adjacent beachfront in February 2027. The activation would feature live national and international productions staged against Santa Monica’s coastline, along with curated community-focused programming, nonprofit engagement and partnerships with local vendors. The intent is to deliver a distinctive and unique weeklong presence that reflects the spirit of Santa Monica while generating visibility and economic benefit for the community.

Key Business Terms

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• Location: Occupation of the Pier deck and the beachfront area south of the Pier. (Attachment B)
• Scope: Temporary production structures, broadcast stages, support compounds and controlled public-access zones. A mix of live ESPN programming, community events and fan-experience activations. • Term: An estimated one-month period including load-in, technical build-out, full load-out, restoration and a week of programs and fan experiences that ultimately culminate with an event in Southern California in early 2027.
• Financial Structure: The proposal follows the City’s all-inclusive pricing model for major coastal activations. A single lump-sum license fee would cover land use, parking replacement, and City concierge services, including all permitting, interdepartmental reviews, inspections and public safety staffing.
• City Responsibilities: Coordinated review and facilitation across Public Works, Public Safety, Community Development and the City Manager’s Office. Coastal compliance, mobility planning and integration of public-safety resources. Consistent communication, scheduling and regulatory oversight.
• Licensee Responsibilities: Full funding of production, including all structures, staging and equipment. Event staffing, site security and crowd management. Compliance with all regulatory, coastal, safety and environmental requirements. Restoration of all public spaces to pre-event condition at the conclusion of the activation.

Community Benefits and City Protections
ESPN would deliver:
• Extensive international broadcast exposure
• Increased visitor activity near the beach and Pier during the off-peak season to drive increased economic benefit for local hotels, restaurants and small businesses.

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• Compliance requirements include security integration, ADA access, environmental review and controlled event operations.

About the Producer
ESPN is the global leader in live event and studio broadcasting, delivering premier live sports coverage, commentary and analysis across television, digital and streaming platforms to millions of viewers worldwide.

Next Steps
Authorizing the City Manager to execute an Exclusive Negotiation Agreement (ENA) and negotiate the terms of a license agreement subject to CEQA compliance with ESPN Productions Inc. will allow the City and ESPN to explore a multi-day fan festival experience and international broadcast studio in conjunction with a major sporting event at SoFi Stadium in winter 2027.
2028 OLYMPIC HOSPITALITY HOUSE OPPORTUNITIES
During the Olympic and Paralympic Games, hospitality houses hosted by nations and global brands become some of the most dynamic and talked-about elements of the cultural landscape. These venues serve as lively hubs of national pride and international exchange, blending food, art, music, athlete appearances, live broadcasts, and public programming into immersive experiences that captivate residents, visitors, and global media. Operated by National Olympic Committees, government ministries, event producers and major sponsors, hospitality houses routinely draw substantial foot traffic and generate wide visibility and economic activity for their host cities.

As the Los Angeles region prepares for the 2028 Summer Olympic and Paralympic Games, cities across Southern California are positioning themselves to participate in this extraordinary moment. Santa Monica’s beaches, iconic Pier, and vibrant public spaces make the City a particularly desirable setting for cultural, hospitality, and media activations tied to the Games.

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This report presents two hospitality house proposals that have advanced to the stage where Council direction is required to finalize negotiations. These include the official hospitality house of the French Olympic Committee at the Annenberg Community Beach House, and a “Nations Village” and broadcast center concept led by Hochsitz at Crescent Bay Park and Lot 4 South. Each offers a unique opportunity to welcome international delegations, animate key public spaces, and showcase Santa Monica’s character and creativity to audiences across the world.

Together, these proposals illustrate the extraordinary level of interest focused on Santa Monica and highlight the City’s opportunity to shape a distinctive and well-curated Olympic and Paralympic presence.

1. Club France Hospitality House (French Olympic Committee) The French National Olympic and Sport Committee (CNOSF) proposes to operate “Club France,” its official hospitality house, at the Annenberg Community Beach House. Club France is the primary gathering point for French athletes, officials, guests, fans, and media at every Olympic Games. The concept blends live event viewing, cultural programming, French culinary offerings, and athlete celebrations in an open, vibrant environment that promotes national pride and international engagement.

Key Business Terms
• Location: Annenberg Community Beach House and Marion Davies Guest House (Attachment C)
• Scope: Public fan zone, cultural programming, athlete celebration areas, media functions, corporate hospitality offerings • Term: Approximately 35-day occupation, including pre-event build, Games-time operations, post-event breakdown
• Financial Structure: A license fee consistent with the City’s Olympic high-benefit pricing model $1,550,000 (city services to be negotiated) in the License Agreement.
• City Responsibilities: Coordinated permitting, public safety integration, site access, coastal compliance

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• Licensee Responsibilities: Full funding of improvements, operations, security, and compliance obligations
Community Benefits and City Protections
Club France would deliver:
• Global visibility through media and cultural storytelling • Visitor spending across the local hospitality sector
• Opportunities to align with the Cultural Olympiad and City programming
• City protections include insurance, indemnity, safety plans, and coastal access safeguards
• Substantial social/community events at no or low cost to the public • Use of local businesses
• A legacy project
About the Organizer (CNOSF)
The CNOSF leads all Olympic and high-performance sport efforts for France. Club France is a long-standing and internationally recognized feature of the Games. Its Paris 2024 iteration attracted thousands of daily visitors and broad media coverage, with programming that emphasized accessibility, celebration, and cultural exchange.

Next Steps
Authorize the City Manager to execute a Letter of Intent (LOI) term sheet and negotiate and execute a license agreement subject to CEQA compliance, with the French National Olympic and Sport Committee to allow the Club France to host a hospitality house activation at the Annenberg Community Beach House during the 2028 Summer Olympic Games.

2. “Nations Village” and Broadcast Center (Hochsitz Production Team) LOIDL LLC (dba Hochsitz) proposes to develop a multi-faceted Santa Monica Nations Village and international broadcast hub at Crescent Bay Park and portions of Lot 4 South. The concept includes a temporary broadcast center serving official Olympic and

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Paralympic media partners, hospitality houses for participating nations, and premium brand activations. The design emphasizes public access, oceanfront visibility, and immersive content production that would bring global broadcast attention to Santa Monica.

Key Business Terms
• Location: Crescent Bay Park and designated areas of Lot 4 South (Attachment D)
• Scope: Broadcast studios, hospitality houses, brand activations, public engagement zones
• Term: Approximately 103-day occupation, including the Olympic and Paralympic periods
• Financial Structure: A unified “all-in” license fee consistent with the City’s Olympic high-benefit pricing model
• City Responsibilities: Cross-departmental coordination, public safety integration, and coastal compliance
• Licensee Responsibilities: Full production funding, installation and removal of temporary structures, site security, compliance with environmental and regulatory requirements
Community Benefits and City Protections
The Nations Village concept would deliver:
• Extensive international broadcast exposure
• Increased visitor activity near the beach and Pier
• Economic impacts for local hotels, restaurants, and small businesses • Compliance requirements include security integration, ADA access, environmental review, and controlled event operations
• Legacy project such as park enhancements
About the Organizer (Hochsitz)

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Hochsitz (Loidl LLC), founded in 2011, is an international production and engineering firm with extensive experience delivering temporary structures and event environments for major global sporting events. Since the 2014 Olympic Games in Sochi, the company has supported multiple Olympic partners, including sponsors such as Procter & Gamble and Omega, national Olympic committees including Team USA, Team Switzerland, and Team Sweden, and major international broadcasters such as NBC and the BBC.

Beyond the Olympic arena, Hochsitz has contributed to large-scale productions for the America’s Cup, Formula 1, and other international competitions requiring complex temporary infrastructure. The firm is known for its emphasis on efficiency, sustainability, and long-term partner relationships.

Hochsitz views the proposed Santa Monica project as an opportunity to apply its global experience to a high-profile coastal setting and to collaborate closely with the City in developing a well-executed and community-sensitive Olympic activation.

Next Steps
Authorize the City Manager to execute a term sheet (Term Sheet) and negotiate the terms of a license agreement subject to CEQA compliance with LOIDL LLC dba Hochsitz to host a Nations Village to include International Olympic Committee (IOC) satellite broadcast center, National Olympic Committee hospitality house, and brand hospitality house activation at Crescent Bay Park and portions of Lot 4 South during the LA28 Summer Olympic Games.

Conclusion
As staff refines these agreements, the City will ensure they provide meaningful community benefits such as free public programming, strong economic returns, local hiring, and the use of Santa Monica businesses. Final terms, including rent, design approvals, and defined community benefits, will return to Council for review of successfully negotiated license agreements and CEQA determinations except that that the Club France license agreement, if successfully negotiated, will be executed by the City Manager based upon the LOI approved by Council on December 16, 2025, after

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compliance with CEQA. These negotiations represent an important step toward shaping a global event cycle that highlights Santa Monica’s character, supports the local economy, and creates a positive and lasting impact for the community.

Environmental Review
Approval of an exclusive negotiating agreement, letter of intent, or a term sheet for real estate negotiation purposes do not constitute an approval of a project requiring CEQA review because they do not commit the City to any specific terms of a project. The City’s actions contemplated in this report constitute planning and feasibility studies which are exempt from CEQA pursuant to CEQA Guidelines Section 15262. If the abovementioned negotiations are approved by Council, environmental review under CEQA will be completed prior to approval of any of the license agreements.

Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary because of the recommended action. Deposits will be included where appropriate to cover the City's costs associated with evaluating proposals and negotiating license agreements.

Producers will reimburse the City for any costs via a Cost Recovery Deposit. The funds will be held in a deposit account and as expenses are incurred, the deposit will be reduced, and the revenue will be recognized and recorded in account 01200016.415490. Budget adjustments would be incorporated in future budget cycles, as needed.

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Prepared By: Peter James, Deputy City Manager
Approved Forwarded to Council
Attachments:

A. ULTRA Pitchside Club 2026 - Santa Monica Pier Proposal B. ESPN
C. Club France Rental Footprint
D. Nations Village Site map
E. Written Comments
F. PowerPoint Presentation

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Michelob ULTRA Pitchside Club – at Santa Monica Pier
The superior soccer social club that’s just as iconic as the location itself. The Pitchside Club will get fans, celebs, and influencers closer to soccer culture with watch parties, games, performances, media partnerships and more! Design WIP

11.A.a
Packet Pg. 766 Attachment: ULTRA Pitchside Club 2026 - Santa Monica Pier ATTACHMENT B – ESPN PROPOSED LAYOUT (Pier Deck and Sandbox, also includes rental of Lot 1s and Lot 3s)

11.A.b
Packet Pg. 767 Attachment: ESPN (7431 : Large Events)

CLUB FRANCE NATIONAL HOUSE

RENTAL FOOTPRINT

11.A.c
Packet Pg. 768 Attachment: Club France Rental Footprint (7431 : Large Events) Attachment D
“Nations Village” and Broadcast Center (Hochsitz Production Team) The Hochsitz Nations Village proposal includes
Crescent Bay park and portions of Lot 4S

11.A.d
Packet Pg. 769 Attachment: Nations Village Site map (7431 : Large Events) 1 David Yakobson
From: Cindy Pfeifer <[email protected]>
Sent: Tuesday, December 16, 2025 3:24 PM
To: councilmtgitems
Cc: [email protected]
Subject: SM Pier Lessees - Support for Item 11A

EXTERNAL
Greetings Honorable Councilmembers and Mayor Caroline Torrosis, I am writing to you on behalf of the Santa Monica Pier Lessees.

As we enter the Pier Bridge construction phase, we are all concerned about the impact on our businesses for some of the events being considered. We are especially concerned about the Pier deck event and the south of the Pier concert. The events proposed are both exciting and a bit scary to us as they can either bring in new business or bring in new competition for sales that we are already expecting to be impacted by the construction.

We hope that council will direct staƯ to incorporate the lessees into the events, especially for alcohol and food sales. Some of the proposed events could decimate the alcohol and food sales of your lessees if outside vendors are brought in. The Santa Monica Pier Lessees Association is committed to working with the city and event organizers in every way possible, and to make these new ventures a success for all.

Thank you for your consideration and thoughts.

Warm Regards,
Cindy Pfeifer
Co-executive Director SMPLA
Cell: 310.663.6019
Email: [email protected]

11.A.e
Packet Pg. 770 Attachment: Written Comments [Revision 1] (7431 : Large Events) 1 David Yakobson
From: Nathan Smithson <[email protected]>
Sent: Tuesday, December 16, 2025 1:24 PM
To: councilmtgitems
Cc: Jeff Klocke
Subject: Support for Item 11.A: Upcoming Major Events - December 16, 2026

EXTERNAL
Hello Honorable Councilmembers and Mayor Caroline Torrosis – I am writing you today on behalf of Pacific Park on the Santa Monica Pier. We enthusiastically support the city’s efforts to bring more large-scale events to Santa Monica. As the largest operator on the Santa Monica Pier, and custodian of the world-famous Pacific Wheel, we know that we will be featured prominently in the media coverage related to these upcoming, global events. We have already been in touch with the team at ESPN for their proposed event in 2027 and eagerly await outreach from the agencies and brands involved with the Fifa and Goldenvoice activations being planned for 2026.

As one of the 27 businesses that makeup the Santa Monica Pier experience, we strongly encourage you and city staff to require these event organizers to consider the businesses impacted by these activations when planning their events. I am confident that with your collective direction and the efforts of city staff, we will be able to accommodate all these events in a way that is a win for Santa Monica residents, businesses, and visitors alike.

Thank You,
Nathan Smithson
Sr. Director of Business Affairs
O: 310-260-8744 ext. 253
E: [email protected]
W: www.pacpark.com
@pacpark
Pacific Park on the Santa Monica Pier
380 Santa Monica Pier - Santa Monica, CA 90401
Event proposals and related communications are not binding on Pacific Park. Mutual execution of a written contract is required.

11.A.e
Packet Pg. 771 Attachment: Written Comments [Revision 1] (7431 : Large Events) 1 David Yakobson
From: Hunter Hall <[email protected]>
Sent: Tuesday, December 16, 2025 10:44 AM
To: Caroline Torosis; Jesse Zwick; Dan Hall; Barry Snell; Ellis Raskin; Lana Negrete; Natalya Zernitskaya; Oliver Chi; Clerk Mailbox; councilmtgitems Subject: MAIN ST. SUPPORTS 11A!
Attachments: Dec 15, 2025 Letter of support re_ 11A.pdf

EXTERNAL
Mayor Torosis, Mayor Pro Tem Zwick, Council Members, and Mr. Chi, On behalf of the Main Street Merchants Association, we support Item 11A and urge you to vote yes on the staff recommendation.

Main Street businesses see this proposal as a positive step for Santa Monica and our neighborhood in particular.

Specifically:
 Economic activity: Well-planned events will bring visitors to Ocean Park and Main Street, increasing foot traffic and supporting small, locally owned businesses.  Neighborhood activation: Street closures, outdoor dining, and an Entertainment Zone designation allow events to extend beyond a single site, creating a more vibrant and walkable experience.  Reinvestment opportunity: These events can help generate funding for long-overdue upgrades to nearby public spaces, including Crescent Bay Park and the surrounding bluff areas.  Public safety and access: Ocean Way and nearby streets need modernization to better accommodate pedestrians and visitors; event planning should be paired with improvements to circulation and safety.  Collaborative planning: Merchants want a seat at the table to ensure events are coordinated in a way that supports businesses and residents alike.

We recognize that infrastructure improvements require funding, and upcoming negotiations with event partners present a strong opportunity to secure private investment that benefits the community long term.

We appreciate your consideration and respectfully ask for your support of Item 11A.

Sincerely,
Hunter G. Hall
Executive Director
Main Street Business Improvement Association
314.323.4663
[email protected]
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.e
Packet Pg. 772 Attachment: Written Comments [Revision 1] (7431 : Large Events) December 15th, 2025
Mayor Torosis, Mayor Pro Tem Zwick, Council Members, and Mr. Chi, On behalf of the Main Street Merchants Association, we support Item 11A and urge you to vote yes on the staff recommendation.

Main Street businesses see this proposal as a positive step for Santa Monica and our neighborhood in particular. Specifically:
● Economic activity: Well-planned events will bring visitors to Ocean Park and Main Street, increasing foot traffic and supporting small, locally owned businesses. ● Neighborhood activation: Street closures, outdoor dining, and an Entertainment Zone designation allow events to extend beyond a single site, creating a more vibrant and walkable experience.
● Reinvestment opportunity: These events can help generate funding for long-overdue upgrades to nearby public spaces, including Crescent Bay Park and the surrounding bluff areas.
● Public safety and access: Ocean Way and nearby streets need modernization to better accommodate pedestrians and visitors; event planning should be paired with improvements to circulation and safety.
● Collaborative planning: Merchants want a seat at the table to ensure events are coordinated in a way that supports businesses and residents alike.

We appreciate your consideration and respectfully ask for your support of Item 11A.

Sincerely,
Hunter G. Hall
Executive Director
Main Street Merchants Association
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.e
Packet Pg. 773 Attachment: Written Comments [Revision 1] (7431 : Large Events) 1 David Yakobson
From: [email protected]
Sent: Saturday, December 13, 2025 10:42 AM
To: councilmtgitems
Subject: Do not Approve large SM beach events

EXTERNAL
I am a SM resident living on the beach in the proposed huge “entertainment proposals”area.

I have personally seen in the past how big entertainment events turn out into unwieldy chaotic crowds the police cannot control. The traffic comes to standstills on all the downtown area. With many of these “big” events losing money for the city.

The lights & loud music disrupts residents nearby. It may adversely affect sea life, birds etc.

This must be approved by the Costal Commission & public input.

Don’t let greed destroy more of the integrity of our City of Santa Monica.

Thank you , Ms Steiner
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.e
Packet Pg. 774 Attachment: Written Comments [Revision 1] (7431 : Large Events) 2 David Yakobson
From: Robert Vartan <[email protected]>
Sent: Saturday, December 13, 2025 11:18 AM
To: Council Mailbox; councilmtgitems
Subject: Fwd: Samo Sport & entertainment commission

EXTERNAL
Hello, forwarding the below message to council as well for awareness thank you ---------- Forwarded message ---------
From: Robert Vartan <[email protected]>
Date: Sat, Dec 13, 2025 at 11:08 AM
Subject: Samo Sport & entertainment commission
To: <[email protected]>
Dear Manager Chi,
I’m writing to express my great support of the recent news around various sports and entertainment opportunities that your team is a discuss discussion with.

For all the commonly known reasons, this could be incredible long-term windfall for the city, Beyond just economic.

Given our communities variety of professionals in the entertainment industry, I think it would be extremely wise for the city to request nominations for a commission or resident committee with experience in this industry.

These are massive opportunities with brands and promoters, and I do think it’s extremely wise to have a committee within the city who has experience on the other side of the table.

I am an example of such professional, who worked at AEG for a number of years on the business side. In addition to other sports teams and agencies negotiating business, friendly deals.

I’ll gladly volunteer my time and or nominate myself and others from the area that could help your efforts to ensure we are getting the best deals For our community and transient visitors.

Hope to hear back thank you
-Rob
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.e
Packet Pg. 775 Attachment: Written Comments [Revision 1] (7431 : Large Events) Santa Monica’s
Major Events &
Games Program
2026-2028
Fiscal responsibility, community benefits, and a curated experiences Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

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Packet Pg. 776 Attachment: PowerPoint Presentation (7431 : Large Events) Major Events Timeline 2026-2028
Summer 2026
World Cup
Ultra House
Fall 2026
Beach Concert
Goldenvoice
Winter 2027
ESPN Fan
Fest
Summer 2028
Olympics
Various
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 777 Attachment: PowerPoint Presentation (7431 : Large Events) Scale of Opportunity
THE SANTA MONICA EXPERIENCE ▪ Global Spotlight: An unprecedented opportunity to showcase our beach, pier, and
public spaces to the world.
▪ Peak Season: Many of these activations
occur during our peak summer revenue
season, requiring careful fiscal planning.
▪ The City must ensure safe, equitable, and
financially responsible events while curating
meaningful experiences that uplift residents,
strengthen businesses, and showcase Santa
Monica globally.

Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 778 Attachment: PowerPoint Presentation (7431 : Large Events) What’s Our Role?

STEWARDS OF THE CITY
Protect
Community
Interests
Require Full
Cost Recovery
Curate Quality
Experiences
Ensure Safety
and
Readiness
Boost Local
Economy
Promote
Public Access
Apply
Consistent
Framework
Uphold
Environmental
Standards
Strengthen
Global
Presence
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 779 Attachment: PowerPoint Presentation (7431 : Large Events) Special Event Pricing Methodology Review
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 780 Attachment: PowerPoint Presentation (7431 : Large Events) Facilitating Events + Cost Recovery
PRICING PHILOSOPHY: HIGH BENEFIT VS. LOW BENEFIT
Cost Recovery as Floor
We view Cost Recovery as the
minimum standard. Legacy
impacts and public value inform
upward adjustments, but we
never dip below covering our
tangible costs.

No Net Loss
The City ensures it does not lose
money across the activation
portfolio. While individual days
may vary, the aggregate
financial impact must be
neutral.

Public Benefit Flexibility
High Benefit: More flexible
terms and priority scheduling
for free, open-access events.

Low Benefit: Higher cost
recovery expectations and
market-rate pricing for exclusive
zones.

Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 781 Attachment: PowerPoint Presentation (7431 : Large Events) Financially Reponsible Pricing Event Model
“ALL INCLUSIVE FEE” FOR CLARITY AND PREDICTABILITY
Cost Recovery as Floor
We view Cost Recovery as the
minimum standard. Legacy
impacts and public value inform
upward adjustments, but we
never dip below covering our
tangible costs.

3. Concierge City Services
Covers the administrative and
operational backbone: permit
processing, safety reviews,
police & fire personnel, and
dedicated event management
support.

2. Parking Revenue
Displacement
Reimburses the City for the loss
of critical parking assets during
peak season, calculated using a
blended rate of timed and
untimed periods.

1. Land Rental
The base fee for the exclusive
use of prime Santa Monica real
estate, valued at below market
rates to encourage use.

Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 782 Attachment: PowerPoint Presentation (7431 : Large Events) Event Fees Outside City Control
Direct operational costs that must be
procured by the partner:
▪ Third-Party Insurance (City
endorsements required)
▪ Private Security Services
▪ Professional Event Staffing and Valet
▪ Waste Management and Sanitation
Permits required by non-City
regulatory bodies:
▪ Coastal Commission
▪ Dept. of ABC
▪ LA County Dept. of Public Health
▪ Film Santa Monica (if applicable)
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 783 Attachment: PowerPoint Presentation (7431 : Large Events) 2026 + 2027 Major Events – Sports & Music Activations
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 784 Attachment: PowerPoint Presentation (7431 : Large Events) FIFA Activation
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 785 Attachment: PowerPoint Presentation (7431 : Large Events) June 2026 — ULTRA House / FIFA (Pier Deck)
Location: Santa Monica Pier
Scope: Match-viewing
experiences, brand activations,
live broadcast segments, food
and beverage service, and daily
public fan engagement
programming
Term: June 11–25, 2026
Status: Moving to ENA
Michelob ULTRA Opens Premier Soccer Destination in New York City For The Final Week of The FIFA Club World Cup 2025 | Anheuser-Busch 21 + years old only
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 786 Attachment: PowerPoint Presentation (7431 : Large Events) Major Events: June 2026 — Ultra House / FIFA (Pier Deck) Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 787 Attachment: PowerPoint Presentation (7431 : Large Events) Music Festival
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 788 Attachment: PowerPoint Presentation (7431 : Large Events) Fall 2026 — Goldenvoice Concert
Location: Santa Monica Pier,
Sandbox
Scope: Annual outdoor
music and cultural festival
Term: Fall 2026 (exact dates
TBD)
Status: Moving to ENA
Goldenvoice: Stagecoach Festival
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 789 Attachment: PowerPoint Presentation (7431 : Large Events) Fall 2026 — Goldenvoice Festival
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 790 Attachment: PowerPoint Presentation (7431 : Large Events) ESPN
Fan Engagement
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 791 Attachment: PowerPoint Presentation (7431 : Large Events) Winter 2027 — ESPN Fan Engagement
Location: Santa Monica Pier,
Sandbox
Scope: Fan engagement
and international broadcast
experience, community
programming
Term: Feb. 7-14
Status: Moving to ENA
ESPN: Live Broadcasts and 1-week-long fan experiences
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 792 Attachment: PowerPoint Presentation (7431 : Large Events) Major Events: Winter 2027 — ESPN Super Bowl
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 793 Attachment: PowerPoint Presentation (7431 : Large Events) 2028 Olympic + Paralympic Games
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 794 Attachment: PowerPoint Presentation (7431 : Large Events) Hosting Games Partners in Santa Monica
Venues: Public (City) land and
facilities, private
Events and Partners:

Countries (National
Organizing Committees);
Brands; Cultural Experiences;
Event Producers
Deal Structure and Pricing:

Fiscal responsibility and
community benefits
Interest along the shoreline is very high.

Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 795 Attachment: PowerPoint Presentation (7431 : Large Events) Club France
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 796 Attachment: PowerPoint Presentation (7431 : Large Events) Advanced Discussions

CLUB FRANCE
Location: Annenberg Beach House
Scope: Official national house of France.

Provides public access with ticketed, low
cost and free events
Duration: Olympics only (35 days)
Value: $1,550,000; city services fee
pending
Status: Moving to Letter of Intent and
Licensing Agreement.

Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 797 Attachment: PowerPoint Presentation (7431 : Large Events) Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 798 Attachment: PowerPoint Presentation (7431 : Large Events) Nations Village
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 799 Attachment: PowerPoint Presentation (7431 : Large Events) Advanced Discussions

SANTA MONICA NATIONS VILLAGE
Location: Crescent Bay Park
Scope: Broadcast center, nations
house, Olympic partner brand
activations. 100% Open to public, food
and bev, programming.

Duration: Olympics and Paralympics
(103 days)
Value: $1,150,000 all inclusive fee
Status: Advancing term sheet and
Licensing Agreement. The Nations Village proposal includes Crescent Bay park and portions of Lot 4S
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 800 Attachment: PowerPoint Presentation (7431 : Large Events)

SANTA MONICA NATIONS VILLAGE

THE FOOTPRINT THE HOCHSITZ
B2C Nations House
B2B TOPPartner IOC
TV - Studio
TV - Studio
B2C Official Partner
Item 11-A
December 16, 2025
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December 16, 2025

11.A.f
Packet Pg. 801 Attachment: PowerPoint Presentation (7431 : Large Events) Additional Events / Activations In The Works!
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 802 Attachment: PowerPoint Presentation (7431 : Large Events) Open Street Events!
FIFA World Cup ▪ Downtown ▪ $250,000 Metro Grant ▪ Potential community benefit contributions from partners
2028 Olympics ▪ Main Street ▪ $500,000 Metro Grant ▪ Potential community benefit contributions from partners
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 803 Attachment: PowerPoint Presentation (7431 : Large Events) Promenade Activations
Regular Event Programming ▪ Coordination with potential games partners on Promenade activations
▪ Watch parties ▪ Family friendly events and activities Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 804 Attachment: PowerPoint Presentation (7431 : Large Events) Cultural Olympiad
Arts& Culture Programming
▪ Coordination with potential games
partners on Promenade activations
▪ Festivals ▪ Visual art installations ▪ Performing arts ▪ Signature events ▪ Community and participatory activities
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 805 Attachment: PowerPoint Presentation (7431 : Large Events) Additional Large Format Activations Planned
More activation events in the works
▪ Family oriented FIFA World Cup
events
▪ Additional Olympic hospitality house
deals being discussed with various
countries
▪ Major sporting and cultural events
being assessed
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 806 Attachment: PowerPoint Presentation (7431 : Large Events) Pulling it Together
MORE OF AN ART THAN A SCIENCE.

BUILDING CAPACITY TO ADDRESS 3-DIMENSIONAL ISSUES
Messaging and Communications
Opportunity for City Partners
Opportunity for Cultural Tie-In
How Can it Fit into SM Program
High/Low Public Benefit
Partner Inquiry
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 807 Attachment: PowerPoint Presentation (7431 : Large Events) Next Steps
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

11.A.f
Packet Pg. 808 Attachment: PowerPoint Presentation (7431 : Large Events) Additional Event Apporval Matters Coming Soon!
Future Council Actions and Approvals Required
▪ CEQA Review of Proposed Projects
▪ Coastal Commission Review
▪ Transportation and Parking Demand Management
▪ Security Management
▪ Future Ordinance Changes
▪ Noise/Sound
▪ Light shed
▪ Signage
▪ Parking
▪ Pier Entertainment Zone
Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

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Packet Pg. 809 Attachment: PowerPoint Presentation (7431 : Large Events) Staff Recommendations
• Make findings that approval of an exclusive negotiating agreement (ENA), letter of intent (LOI), or a term sheet for real estate negotiation purposes do not constitute an approval of a project requiring CEQA review because they do not commit the City to any specific terms of a project; and that the City’s actions contemplated in this report constitute planning and feasibility studies which are exempt from CEQA pursuant to CEQA Guidelines Section 15262.
• Subject to CEQA compliance, authorize the City Manager to negotiate and execute the following agreements:
• Execute a Letter of Intent (LOI) term sheet and negotiate and execute a license agreement with the French National Olympic and Sport Committee to host a hospitality house activation at the Annenberg Community Beach House during the 2028 Summer Olympic Games.
• Execute a term sheet and negotiate the terms of a license agreement with LOIDL LLC dba Hochsitz to host a Nations Village, including an International Olympic Committee (IOC) satellite broadcast center, National Olympic Committee hospitality house, and brand hospitality activations at Crescent Bay Park and portions of Lot 4 South during the LA28 Summer Olympic Games. • Execute an Exclusive Negotiation Agreement (ENA) and negotiate the terms of a license agreement with ESPN Productions Inc. to explore a multi-day fan festival experience and international broadcast studio in conjunction with a major sporting event at SoFi Stadium in winter 2027.
• Award RFP #462 to Goldenvoice LLC to assess the viability of developing a music festival event on Santa Monica Beach in fall 2026, and authorize the City Manager to enter into an Exclusive Negotiation Agreement and negotiate the terms of a license agreement.
• Execute an Exclusive Negotiation Agreement (ENA) and negotiate the terms of a license agreement with Anheuser-Busch to explore a World Cup fan festival experience at the Santa Monica Pier in June 2026.

Item 11-A
December 16, 2025
Item 11-A
December 16, 2025

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Packet Pg. 810 Attachment: PowerPoint Presentation (7431 : Large Events) City Council
Report
City Council Meeting: December 16, 2025
Agenda Item: 12.A
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To: Mayor and City Council
From: Jing Yeo, Director, Administration
Subject: Approval of Establishment of a Self-Certification Pilot Program and Introduction and First Reading of Ordinances to (1) Amend Santa Monica Municipal Code Chapter 8.108 to revise the Construction and Demolition Material Recycling Compliance Process and to transition from a depositbased system to a fine-based enforcement approach, and (2) Establish Interim Zoning Regulations Updating Applicability Thresholds and Standards for Resource and Recycling Room Dimensions; and Adopt a Resolution of Intention to Amend the Text Section 9.21.130 of the Zoning Ordinance Related to Resource Recovery and Recycling Standards
Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of Statutory Exemption from the California Environmental Quality Act (CEQA) pursuant to Government Code Section 15061(b)(3).

2. Introduce for First Reading an Ordinance amending Santa Monica Municipal Code Chapter 8.108, Subpart B, to amend the construction and demolition material recycling compliance process and to transition from a deposit-based system to a fine-based enforcement approach.

3. Introduce for First Reading an Interim Zoning Ordinance updating applicability thresholds and standards for resource and recycling room dimensions set forth in Santa Monica Municipal Code Section 9.21.130 in order to further economic recovery efforts by facilitating a self-certification building permit program.

4. Adopt a Resolution of Intention directing the Planning Commission to initiate amendments to the text of Section 9.21.130 of the City’s Zoning Ordinance to update applicability thresholds and resource and recycling room dimensions in order to further economic recovery efforts by facilitating a self-certification building permit program.

Summary
On February 11, 2025, City Council directed staff to create a self-certification pilot program allowing building permits for “non-structural commercial tenant improvements,

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single-family home improvements, and accessory dwelling units” to bypass the normal plan review process and receive approval within one to five business days.

Staff has studied programs from other jurisdictions and developed a program that is proposed to be piloted in three phases:
• Phase 1: Commercial Non-Structural Tenant Improvements that do not include:
(1) food and beverage uses, except as required by State law (AB 671), (2) childcare and education uses, or (3) a change of use which triggers higher degree of occupancy hazard requirements
• Phase 2: Detached Accessory Dwelling Units (ADUs)
• Phase 3: Single Unit Dwellings – new and additions
The self-certification program would fully remove plan check review for the identified project types ensuring that qualifying projects will be able to obtain a building permit within a few days of submitting a complete application. For Phase 1 implementation, commercial non-structural tenant improvements (“TIs”) make up approximately one-third of plan checks and may help alleviate some staff workload issues, addressing Council’s direction. The self-certification program would shift the responsibility for determining compliance with all codes to a licensed architect, along with a Certified Access Specialist (CASp), who would certify that the project complies with:
• Building Code requirements;
• Zoning Ordinance requirements;
• Public Works requirements including Resource Recovery and Recycling (RRR), Engineering, Office of Sustainability and the Environment (OSE), and Water Resources; and
• Fire requirements.

The licensed professionals would be required to sign an agreement assuming full risk and responsibility for the permitted plan and taking on full liability for compliance.

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This report provides an overview of staff’s recommended first phase of this pilot program. In addition, to help facilitate this program, staff proposes amendments to the construction and demolition material recycling compliance process and trash enclosure applicability and dimensions in Articles 8 and 9, respectively. These amendments will simplify the overall process, create objective standards, and provide greater transparency.

The self-certification program is one component of a modernized and streamlined development services experience that is being developed as part of the City’s Realignment Plan. The improved experience will be centered around process optimization and service commitments supported by an updated website portal and updated land management software augmented by AI tools. The main focus is on providing multiple pathways for applicants to obtain their building permits faster with self-certification being an option in addition to regular plan check and expanded project types qualifying for “over-the-counter” and “express permits.” Discussion
On February 11, 2025, City Council provided the following direction for staff to develop a voluntary self-certification pilot program (“Program”) in order to expedite the issuance of certain building permits:
“Request of Councilmember Zwick, Mayor Negrete, and Mayor Pro Tem Torosis that the City Council direct the City Manager and City Attorney to expedite the issuance of Building Permits in Santa Monica without reducing building integrity and still adhering to life and safety requirements through the development of a Voluntary Self-Certification Pilot Program for non-structural commercial tenant improvements, single-family home improvements, and accessory dwelling units.

The Self-Certification Program shall allow Licensed Professionals who agree to self-certify that building plans are compliant with all California codes and local ordinances to bypass the normal plan review process and get approval for permits in one to five business days, facilitating our city’s economic recovery and reducing the workload on plan check professionals, allowing them to focus on the more complex projects that require their attention. City staff shall return to City

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Council with recommendations for program design and implementation within six months.”
Subsequent to Council direction, an interdepartmental team from City Planning, Building and Safety, Fire, Inspections, Mobility, Resource Recovery & Recycling (RRR), Engineering, Water Resources, Office of Sustainability & the Environment (OSE), Rent Control, and City Attorney’s Office have worked on the development of a program removing all staff review, except for inspections, from the building permit process.

Through this coordination, a phased approach to implement this Program was decided upon to allow staff to analyze and amend the Program before expanding into more complex scopes of work. As non-structural commercial TIs already are not reviewed by all departments, there was less risk associated with using this permit type to pilot the first phase of this Program. Additionally, commercial TIs comprise approximately 36% of the building permits submitted to the City. Therefore, this first phase has the potential to have a significant impact on the City’s economic recovery efforts and reduce staff workload on relatively minor projects so that more staff time can be focused on complex projects that require more time and expertise, as is Council’s goal for this Program.

Below is an overview of the proposed Program, including recommended limitations and expansions and other mechanisms necessary for implementation, as well as a comparative analysis of other jurisdictions offering self-certification programs.

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Review of Other Self-Certification Programs
In the creation of this Program, staff have also reviewed other jurisdictions that offer self-certification. Key takeaways from this review include the following:
• All jurisdictions require some type of qualifying process. • The jurisdictions within the Los Angeles area limit the scope to single-unit dwellings impacted by the Eaton and Palisades fires.
• All jurisdictions only eliminate building code review.

Staff reviewed five jurisdictions, but the table below provides an overview of the four jurisdictions with the most information available online.

Jurisdiction
Scope of SelfCertification Code
Review
Eligible Projects for
Self-Certification
Program
Applicant PreQualification
Requirements
City of Los Angeles
Removal of only
Building Code
Review
Single-Unit Dwelling &
associated structures
impacted by Eaton or
Palisades Fire
ICC Exam

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Jurisdiction
Scope of SelfCertification Code
Review
Eligible Projects for
Self-Certification
Program
Applicant PreQualification
Requirements
County of Los
Angeles
Removal of only
Building Code
Review
Single-Unit Dwelling &
associated structures
impacted by Eaton or
Palisades Fire
3 permits
completed in
County
City of Chicago
Removal of only
Building Code
Review
Small- and mid-sized
residential &
commercial projects
City-conducted
training every 2
years
San Diego County
Removal of only
Building Code
Review
Commercial TIs,
minor grading
City-conducted
training
City of Bellflower
Removal of only
Building Code
Review
As determined by
Building Official
As determined by
Building Official
based on scope
City of Santa
Monica (Proposed)
Removal of ALL
city plan review
Phase 1: Nonstructural commercial
TIs
3 permits
completed in City
in last 15 years
Phase 1 Scope
Projects eligible for the first phase of this Program will include non-structural, commercial TIs. Non-structural commercial TIs include projects that are only proposing work entirely within existing buildings with no structural or exterior changes (i.e. façade remodels, window replacements, and changes to parking and loading operations).

These projects are generally for new tenants or existing businesses updating their tenant spaces.

In addition to non-structural, commercial TIs, staff proposes to include building permits for structures associated with special events and temporary use permits to be eligible in this phase. This expansion is aligned with prior Council direction as it will contribute to greater streamlining efforts for events and pop-up activations in the city.

However, in reviewing projects that would qualify under this first phase, staff proposes the following three project types be excluded from Program eligibility for the reasons provided below:

1. Projects Involving Food and Beverage Uses

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o Food and beverage uses include the following:
▪ Eating and Drinking Establishments – Businesses primarily engaged in selling and serving prepared food and/or beverages for consumption on or off the premises (SMMC Section

9.51.030(B)(8)):
• Bar/Night Club/Lounge
• Restaurants (Full-Service, Limited-Service, and Take-out) • Food Hall
▪ Food and Beverage Sales – Retail sales of food and beverages for off-site preparation and consumption (SMMC Section

9.51.030(B)(10)):
• Convenience Market
• General Market
• Liquor Store
o Reasons for exclusion:
▪ Requires County of Los Angeles Public Health review and approval ▪ Necessitates additional technical review and fee assessments from Building & Safety, Civil Engineering, Mobility, OSE, Fire, and RRR (even when changing from one type of restaurant to another) ▪ Typically requires upgrades to infrastructure, trash enclosures, and parking/loading operations (even when changing from one type of restaurant to another)
▪ Public health, sanitation, and safety impacts if facilities are improperly designed and constructed (e.g., improper disposal of solid waste and wastewater; industrial waste discharges require implementation of correctly sized pretreatment units prevent sewer system overflows and back-ups)
o By prohibiting food and beverage uses staff does not anticipate a significant impact on the number of eligible projects for this Program

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based on data as of June 30, 2025, as shown in the table below. Over the past five years, on average, less than 10% of building permits for commercial TIs with no change of use include food and beverage uses.

Number of Commercial TI Plan Checks with No Change of Use Calendar
Year
Number of Plan Checks
Excluding Food and
Beverage Uses
Number of Plan
Checks Including Food
and Beverage Uses
Total
2021 230 21 251
2022 265 22 287
2023 223 21 244
2024 282 21 303
2025 96 13 109
However, on October 9, 2025, the Governor signed into law Assembly Bill 671 (AB 671) that requires a local jurisdiction to establish a self-certification approval process for certain restaurants T.I.s. AB 671 defines a restaurant as, “a retail food establishment that prepares, serves, and vends food directly to the consumer and is not a fast food restaurant.” Minimum requirements are as follows:
o Licensed architect or engineer to certify the plans
▪ Must have at least five years of experience in commercial building design or plan review
▪ Must maintain at least $2 million professional liability insurance per occurrence.
o Only interior work of an existing building is permitted o Only applicable local and State building, health, and safety codes are self-certified
Therefore, if a restaurant proposes a scope of work that qualifies them for selfcertification under AB 671, they will be permitted to participate in this program.

2. Projects Involving Childcare and Education Uses
o Childcare and educational uses include the following:

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▪ Childcare and Early Education Facility (SMMC Section

9.51.030(A)(3))
▪ College and Trade School (SMMC Section 9.51.030(A)(4)) ▪ School (SMMC Section 9.51.030(A)(11))
o Reasons for exclusion:
▪ Childcare and education uses typically require a higher level of review regarding occupancy and life safety, that can include building upgrades regarding fire sprinkler systems, fire alarm and detection systems/changes, emergency signage and lighting upgrades, fire-resistive construction changes, occupancy separation requirement, and potentially exiting width/ number of exits
▪ Mobility-related impacts, such as pick up and drop off operational plan

3. Projects Proposing a Change of Use with a Higher Degree of Occupancy Hazard than the Existing Use
o Reasons for exclusion:
▪ Higher hazard occupancies often trigger certain building upgrades such as fire sprinkler systems, fire alarm and detection systems/changes, emergency signage and lighting upgrades, fireresistive construction changes, occupancy separation requirement, and potentially exiting width/ number of exits. These are excluded from this process because they require system calculations, hydraulic analysis, technical review and field inspection verification throughout the project.
▪ May trigger extensive accessibility and plumbing upgrades per the California Building Code based on the proposed new use.

However, to ensure that a change of use does not unnecessarily disqualify a project from utilizing this program, Building & Safety and Fire will offer a preliminary consultation meeting to discuss the new occupancy requirements and

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if the space could be suitable for self-certification. Through the consultation, if the applicant can demonstrate the existing space already is suitable for the higher occupancy, the proposed project could qualify for self-certification.

Staff considered additional exclusions for Landmark and Historic Resources Inventory (HRI) properties but did not find it necessary because commercial TIs only include interior work. Therefore, there will be no exterior impacts on Landmark and HRI properties. However, Landmarks and HRI properties may be considered as an exclusion for future phases of the Program when expanded to Single-Unit Dwellings.

Program & Eligibility Requirements
To participate in this Program, self-certification permits must be prepared and lead by specified licensed professionals that have been pre-qualified. The project lead will be required to take on all liability for the project and attest that it is code compliant. Below is an overview of the required professionals on the project team, which will vary based on the scope of work.
• All projects shall require:
o Licensed Architect to be project lead
o Certified Access Specialist (CASp – ADA certification) • Additional licensed professionals shall be required if the project includes any of the following work:
o Mechanical
o Electrical
o Plumbing
o Fire Sprinkler (C16 license)
o Fire Alarm (C10 license)
How a Project Lead Qualifies for the Program
For a licensed architect to be qualified to lead a project utilizing this Program, they must first apply to get on the City’s eligibility list. This will require the architect to provide proof that they have completed three projects of similar scope (for this phase, commercial

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TIs) within Santa Monica in the last 15 years. This timeframe provides a reasonable amount of time for a project lead to have completed three projects within Santa Monica.

Additionally, proof of past work will demonstrate that the project lead has Santa Monicaspecific experience and understanding of local requirements. In review of other jurisdictions that have self-certification programs, all require program participants to demonstrate their qualifications through past experience. Staff’s proposed process is similar to the County of Los Angeles’ self-certification program and will allow a quicker implementation of this Program.

Program Audit & Penalties
As this is a voluntary program, to ensure it operates safely and to hold participants accountable, staff proposes an audit process that could result in disqualification from the future use of this Program and removal from the eligibility list. This “three strikes” rule would be developed under the Building Official’s authority to develop regulations to implement the Building Code and would entail disqualifying a project lead if they are found to be in violation of this Program three times. Violations could include, but are not limited to, working outside of the Program’s scope or requirements in the following ways:
• Making modifications outside of the building’s interior, such as revising parking operations or remodeling the building façade.
• Expanding beyond the project’s scope without approval (even if all interior). • Not hiring the necessary licensed professionals for specialized work. • Not adhering to applicable building codes.
• Not following other City requirements, such as not recycling construction and demolition material or using an unauthorized hauler for construction and demolition material removal.

However, pursuant to Santa Monica Municipal Code Section 8.08.040, a project lead will have the opportunity to appeal the violation before the Building and Fire Life Safety Commission.

After three violations are confirmed, staff poses the following policy question to Council:

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Council Policy Question:

Would Council like to put a time limit on how long a project lead is removed from the qualified list after the “three strikes” policy?
Staff Recommendation: Option 1 – Disqualify project lead permanently from Program (recommended because this is a voluntary program that needs to have consequences to ensure accountability).

Option 2 – Disqualify project lead for a specified amount of time (Council to provide specified time).

Permit Process
The self-certification program will launch with the new Clariti land management system, which will go live by end of April 2026. Staff will be utilizing an “Over-the-Counter” (OTC) permit process as a framework for processing self-certification permits. While the proposed plans will not be routed or reviewed by any division, the process will still include one hour of administrative staff time to confirm project eligibility, submittal requirements, and to assess fees. The current inspections process will still be conducted to ensure construction adheres to the Building Code, including Fire requirements and construction and demolition material removal requirements.

Therefore, the fees below will still be collected for every self-certification permit.

Permit Fees Collected (FY 25-26)
Administrative Time
(1 hour)
$316.83
Building & Safety
Inspection
• Projects 10,000 SF or less: $193.46 + $0.56 per SF
• Projects greater than 10,000 SF: Above calculation +
$0.40 for every additional SF above 10,000 SF
Fire Department
Inspection
$525.66
C&D Inspection $702.21
RRR Inspection $589.72
In addition to the above fees, staff proposes revising the current upfront requirement of a construction and demolition (“C&D”) material waste management performance security deposit to instead be assessed as a fine before final inspection only if the project is deemed to not be compliant with C&D requirements. Similar to the current fee structure, this fine will be calculated as follows:

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SMMC Table 8.108.160.C: Range of Fines
Project Valuation Minimum Penalty Maximum Penalty
$10,000 $500 $500
$100,000 $500 $3,000
$1,000,000+ $3,000 $30,000
While staff are no longer conducting plan reviews, the existing inspection process will remain. If any issues with compliance are identified during the inspections process, they will need to be rectified. Additionally, a Building Inspector reserves the right to require full plan check review if construction does not match permitted plans or if permit revisions are needed that go beyond the scope of a commercial non-structural TI.

Amendments to the Municipal Code
To ensure the above process can be implemented, staff proposes the following changes to Articles 8 and 9 of the Santa Monica Municipal Code (SMMC) addressing the C&D waste management plans and thresholds for RRR review. While the proposed amendments are necessary to implement this Program, the amendments will also simplify and streamline the process to benefit all projects, beyond Self-Certification. ➢ SMMC Chapter 8.108, Subpart B – Construction and Demolition Material Waste Management Plans
Construction and Demolition waste includes materials such as concrete, asphalt, wood, metal, and drywall generated from building, renovation, and demolition projects. This waste accounts for 25-40% of the world’s total waste stream but is highly reusable and recyclable. The City’s C&D waste diversion program under SMMC Section 8.108 requires 70% of all C&D materials to be diverted from a landfill in accordance with the 2022 CalGreen Building Code requirements.

The current code applies to projects that meet review thresholds – $50,000.00 or 1,000 square feet for construction projects, all demolition projects, and all City sponsored projects – to pay a performance security deposit upfront and submit a waste management plan detailing how the contractor will divert a minimum of 70% of

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C&D waste materials from a landfill. Deposits are calculated as either $1.00 per square foot for demolition only permits or 3% of the total project valuation for all other projects, with a required minimum of $1,000 and a maximum of $30,000.

Deposits are held until project completion and only fully refunded if all landfill diversion requirements are met.

This deposit-based system creates large upfront costs that many small businesses and homeowners are not prepared for. There are also potential delays in this current permitting process due to calculating the deposit and providing all C&D program requirements during the first round of review. This system would also prohibit the implementation of a self-certification permit, as it would require staff review time during the building permit review process.

Therefore, staff proposes amendments to address the above issues and to implement the Program by transitioning from an upfront deposit-based system to a fine-based enforcement approach. Under the proposed system, the 70% diversion requirement will remain, but staff will now assess fines at the end of the project for non-compliance. Fines will mirror the existing penalty structure, calculated as 0.3% of the total project valuation (10% of 3% of the project valuation) with a maximum $30,000.00 fine. This change will ease the burden of upfront deposits while still holding contractors responsible for meeting City waste diversion requirements.

While some jurisdictions are still requiring deposits, many are enforcing compliance through fines or citations such as the City of West Hollywood, City of Los Angeles, and the County of Los Angeles. This will allow a regional alignment to help increase consistency for contractors who work across multiple municipalities.

This change will help streamline the process for all permits by reducing the first step of project review by requiring all projects to submit a waste management plan with their building permit application, removing the financial burden of a deposit, shifting accountability to the contractor instead of small businesses and homeowners, and avoiding unnecessary administrative steps by applying fines only if rules are broken.

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➢ SMMC Section 9.21.130 – Resource Recovery and Recycling (RRR) Standards
Recent changes in State law require mandatory organics recycling, resulting in the need to accommodate three waste streams. Many existing buildings either have undersized trash enclosures or potentially none at all, creating issues with compliance. Therefore, to comply with State law, buildings with undersized or no enclosures must permanently leave their waste containers in the public right-of-way. However, buildings that leave waste containers in the public right-of-way violate local standards, pursuant to SMMC Section 5.08.170, that require all buildings to keep waste containers on private property.

Additionally, it creates an array of public health and safety problems and undesirable behaviors including: dumpster fires, scavenging, tipping over waste containers in search of recyclables, clothing items, or edible foods, pest issues caused by exposed trash, and illegal dumping.

Staff proposes amendments to the RRR standards to simplify the thresholds for when trash enclosure upgrades and review are required and to revise resource and recycling room dimension standards. The amended trash enclosure standards prioritize public health and safety as well as State environmental laws and require that bins be fully contained within an enclosure on private property with sufficient space for storage and staging, when the new proposed thresholds are triggered. These amendments are described below:
• Applicability.
o Currently, one of the applicability thresholds for when projects must comply with current RRR standards is based on an outdated permit valuation threshold. This has consistently resulted in challenges for new and existing businesses in the permitting process, particularly if there is lack of space for required upgrades to existing buildings, and leads to difficulty when the project valuation changes later on in

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the building permit process. Therefore, staff proposes to eliminate the permit valuation applicability threshold.
o Staff propose a new applicability threshold related to food and beverage uses that would trigger compliance with RRR standards and requirements as these uses produce high volumes of waste that could result in public health issues.
• Dimensional Standards. Staff proposes to eliminate the standard pertaining to “Large Residential, Nonresidential and Mixed-Use Development” that gives discretionary approval to the Director of Public Works to determine trash room dimensions, as this is not an objective standard or process. As State law requires a city to review projects with objective standards, staff proposes to minimally change dimensional standards and remove the maximum threshold to address larger projects and to provide greater transparency and objectivity to RRR standards.

Additionally, minor changes to the dimensional standards for trash enclosures are proposed in order to better align with new State law requirements pertaining to the addition of mandatory organics recycling and to prioritize public health and safety by ensure bins can fully be contained within an enclosure.

These proposed Article 9 amendments are being brought before the Council as an Interim Zoning Ordinance (IZO) to implement these revisions immediately in connection with the launch of this Program. Staff are also bringing forward a Resolution of Intention (ROI) with this staff report, as it is required to initiate the process to codify these amendments into the Zoning Ordinance.

Next Steps and Timeline
Due to the procedural requirements necessary for ordinance amendments and work already underway to launch the new Clariti permitting software, the self-certification program will become available at the end of April 2026. Leading up to the launch of this

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Program, staff will continue to develop materials and processes to ensure transparency and success of this Program, which shall include, but is not limited to the following:
• Dedicated Self-Certification Program webpage
• Specialized application (i.e. liability waiver, affidavit attesting to compliance with the Municipal Code and Program requirements, standardized language and formatting, etc.)
• Communications and outreach announcing launch of the Program Given the increased complexity of the future expansion to other permit types, as provided in Council’s direction, staff will strive for the implementation timeframes listed below. This will also allow staff time to assess the Program and adjust as needed before expansion.
• Phase 2 – Accessory Dwelling Units (ADUs): October 2026 (6 months after implementation of Phase 1)
• Phase 3 – Single-Unit Dwellings (SUDs): April 2026 (6 months after implementation of Phase 2)
Environmental Analysis
The proposed amendments to Santa Monica Municipal Code Chapter 8.108 – Subpart B and Section 9.21.130 are exempt from the provision of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the CEQA Guidelines (common sense exemption), which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The amendments would not result in any adverse physical environmental effects as they encompass changes in procedures that are administrative in nature. Therefore, the amendments are exempt from CEQA and no further environmental review under CEQA is required.

Financial Impacts and Budget Actions
No immediate budget actions are necessary as a result of the creation of this Program.

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No financial impacts due to the loss of plan check fees are anticipated, as plan check fees are meant to be cost recovery-based to account for staff’s review time and staff will not be conducting review for self-certification permits. However, to facilitate this Program an administrative fee will still be collected for processing purposes and the normal inspection fees will still be assessed to recover staff time. While the City will be collecting fewer plan check fees as a result of potentially moving a volume of plan checks to self-certification building permits that have no plan check review, this Program will allow businesses to move into construction quickly and open sooner. This will contribute to the City’s economic recovery initiatives by being more business friendly and attracting more visitors to the city, all of which will help generate tax revenue.

Additionally, as staff will no longer be reviewing permits utilizing this Program, it will provide the opportunity for staff to focus on and expedite larger and more complex projects, which also has the potential of generating revenue growth for the City.

Additionally, while amendments to Article 8’s construction and demolition material waste management requirements will be moving from a fee to a fine, this will only change the timing of collection not the amount.

However, as this is only the first phase of a pilot program and staff cannot assess the number of permits that will opt-in to the self-certification process, staff will monitor the financial impacts of the program and return to Council with specific actions if necessary.

Prepared By: Ross Fehrman, Acting Planning Manager
Approved Forwarded to Council

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Attachments:

A. 2025.12.16 - RRR Article 8 Amendments_Self-Certification B. 2025.12.16 - ROI Self-Certification
C. 2025.12.16 - Self-Certification IZO
D. Written Comments
E. Written Comments
F. PowerPoint Presentation

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1 City Council Meeting: December 16, 2025 Santa Monica, California ORDINANCE NUMBER _________ (CCS)
(City Council Series)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA AMENDING SANTA MONICA MUNICIPAL CODE CHAPTER 8.108,

SUBPART B, TO REVISE THE CONSTRUCTION AND DEMOLITION PROCESS AND

ESTABLISH FINES FOR NON-COMPLIANCE
WHEREAS, on February 11, 2025, City Council directed staff to create a selfcertification pilot program allowing building permits for “non-structural commercial tenant improvements, single-family home improvements, and accessory dwelling units” to bypass the normal plan review process and receive approval within one to five business days; and
WHEREAS, the purpose of this direction was to facilitate the City’s economic recovery and reduce the workload on plan check professionals, allowing them to focus on the more complex projects in the City that require their attention; and WHEREAS, streamlining the review process for certain projects will facilitate business recovery and generate increased sales tax revenue for the City; and WHEREAS, the initial stages of the Self-Certification Program will focus on commercial tenant improvements, which comprise approximately 36% of the building permits submitted to the City; and
WHEREAS, Santa Monica Municipal Code (SMMC) Chapter 8.108, Subpart B regulates construction and demolition material waste management plans for covered projects, which include all construction, demolition, and deconstruction projects that require a building permit; and

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Packet Pg. 830 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 2 WHEREAS, Construction and Demolition (C&D) waste includes materials such as concrete, asphalt, wood, metal, and drywall generated from building, renovation, and demolition projects, which accounts for 25-40% of the world’s total waste stream but is highly reusable and recyclable; and
WHEREAS, the City’s C&D waste diversion program under SMMC Chapter 8.108, requires 70% of all C&D materials to be diverted from a landfill in accordance with CalGreen Building Code requirements; and
WHEREAS, the current code applies to projects that meet certain review thresholds – $50,000.00 or 1,000 square feet for construction projects, all demolition projects, and all City sponsored projects – and requires these project applicants pay a performance security deposit upfront and submit a waste management plan detailing how the contractor will divert a minimum of 70% of C&D waste materials from a landfill; and WHEREAS, deposits are calculated as either $1.00 per square foot for demolition only permits or 3% of the total project valuation for all other projects, with a required minimum of $1,000 and a maximum of $30,000; and
WHEREAS, deposits are held until project completion and are only fully refunded if all landfill diversion requirements are met; and
WHEREAS, this deposit-based system creates large upfront costs for small businesses and homeowners and causes delays in the permitting process as staff is required to calculate the individual required deposit amounts; and WHEREAS, this deposit-based system also prohibits the implementation of a selfcertification program, as it requires staff review during the building permit review process; and

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Packet Pg. 831 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 3 WHEREAS, this Ordinance amends the deposit-based requirements to transition from an upfront deposit-based system to a fine-based enforcement approach; and WHEREAS, under the updated system, the 70% diversion requirement will remain, but staff will now assess fines at the end of the project for non-compliance; and WHEREAS, fines will mirror the existing penalty structure, calculated as 0.3% of the total project valuation (10% of 3% of the project valuation) with a maximum $30,000.00 fine; and
WHEREAS, this change will ease the burden of upfront deposits, while still holding contractors responsible for meeting City waste diversion requirements; and WHEREAS, while some jurisdictions are still requiring deposits, many are enforcing compliance through fines or citations, including, but not limited to other local jurisdictions, such as the City of West Hollywood, City of Los Angeles, and the County of Los Angeles; and
WHEREAS, the amendments in this Ordinance will allow regional alignment to help increase consistency for contractors who work across multiple municipalities; and WHEREAS, this change will also help streamline the process for all permits by reducing the first step of project review by requiring all projects to submit a waste management plan with their building permit application, removing the financial burden of a deposit, shifting accountability to the contractor instead of small businesses and homeowners, and avoiding unnecessary administrative steps by applying fines only if that applicant fails to comply with the City’s requirements; and

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Packet Pg. 832 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 4 WHEREAS, the amendments will also support local business retention and promote new business opportunities within the City, addressing the needs of the business community by simplifying requirements and streamlining review processes; and WHEREAS, while the proposed amendments are necessary for the selfcertification program, the amendments will also address long-standing issues that will benefit all permittees, facilitate the City’s economic recovery, streamline the building permit process for a variety of projects, and provide more transparency with respect to permit requirements.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. Santa Monica Municipal Code Section is hereby amended to read as set forth in Exhibit A.

SECTION 2. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance.

SECTION 3. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.

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Packet Pg. 833 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 5 SECTION 4. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective 30 days from its adoption.

APPROVED AS TO FORM:
________________________________
Heidi von Tongeln, Interim City Attorney

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Packet Pg. 834 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 6 EXHIBIT A

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Packet Pg. 835 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 7 8.108.110. Definitions.

For the purposes of Subpart B of this Chapter, the following definitions shall apply:
(a) “Class III landfill” means a landfill that accepts non-hazardous resources such as household, commercial, and industrial waste, resulting from construction, remodeling, repair, and demolition operations. A Class III landfill must have a solid waste facilities permit from the State of California and be regulated by an Enforcement Agency. (b) “Construction and demolition material (C&D material)” means building materials and solid waste resulting from construction, remodeling, repair, cleanup, or demolition operations that are not hazardous as defined in California Code of Regulations, Title 22 Section 66261.3 et seq. This term includes, but is not limited to, asphalt, concrete, Portland cement concrete, brick, lumber, gypsum wallboard, cardboard, and other associated packaging, roofing material, ceramic tile, carpeting; plastic pipe and steel. The material may be commingled with rock, soil, tree stumps; and other vegetative matter resulting from land clearing and landscaping for construction or land development projects.
(b)(c) “C&D recycling center” means a facility that receives only C&D material that has been separated for reuse prior to receipt, in which the residual (disposed) amount of waste in the material is less than ten percent of the average weight of material separated for reuse received by the facility over a one-month period. (d) “City approved facility” means any facility that has been approved by the City to accept C&D material, inert material, metal recycling, universal waste, or any other materials that may be generated during a covered project.

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Packet Pg. 836 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 8 (e) “City approved hauler” means a company that possesses a valid approval letter from the City to collect and transport solid waste from individuals or businesses for the purpose of recycling or disposal.
(f) “Construction and demolition material (C&D material)” means building materials and solid waste resulting from construction, remodeling, repair, cleanup, demolition, or deconstruction operations that are not hazardous as defined in California Code of Regulations, Title 22 Section 66261.3 et seq. This term includes, but is not limited to, asphalt, concrete, Portland cement concrete, brick, lumber, gypsum wallboard, cardboard, and other associated packaging, roofing material, ceramic tile, carpeting, plastic pipe, and steel. C&D material may not be commingled with inert or organic materials resulting from land clearing and landscaping for construction or land development projects.
(g)(d) “City-sponsored project” means a project constructed by the City or a project receiving fifty percent or more of its financing from the City. (h)(e) “Conversion rate” means the rate set forth in the standardized conversion rate table approved by the City pursuant to this Chapter for use in estimating the volume or weight of materials identified in the waste management plan. (i)(f) “Covered project” shall have the meaning set forth in Section 8.108.120. (j) “Deconstruction” means the process of carefully dismantling a structure, piece-bypiece, prior to or instead of conventional demolition, to maximize the recovery of building materials for reuse.

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Packet Pg. 837 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 9 (k) “Demolition” means the decimating, razing, ruining, tearing down, or wrecking of any facility, structure, pavement, or building (wall, fence) whether in whole or in part, whether interior or exterior as further defined in Section 9.25.030. (l)(g) “Divert” means to use material for any purpose other than disposal in a landfill or transformation facility.
(m)(h) “Diversion requirement” means the diversion of at least seventy percent of the total construction and demolition material generated by a project via reuse or recycling, unless the applicant has been granted an exemption pursuant to Section 8.108.170, in which case the diversion requirement shall be the maximum feasible diversion rate established by the waste management plan Compliance Official in relation to the project. (n) “Inert materials” means only rock, concrete, brick, sand, soil, ceramics, and cured asphalt.
(o) “Organic material” means any vegetative material resulting from land clearing or landscaping for construction or land development projects. (p)(i) “Project” means any activity which requires an application for a building or demolition permit or any similar permit from the City.
(q)(j) “Recycling” means the process of collecting, sorting, cleansing, treating, and reconstituting materials for the purpose of using the altered form in the manufacture of a new product. Recycling does not include burning, incinerating, or thermally destroying solid waste.
(r)(k) “Reuse” means the use, in the same or similar form as it was produced, of a material which might otherwise be discarded.

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Packet Pg. 838 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 10 (s)(l) “Separated for reuse” means materials, including commingled recyclables, that have been separated or kept separate from the solid waste stream for the purpose of additional sorting or processing of those materials for reuse or recycling in order to return them to the economic mainstream in the form of raw material for new, reused,; or reconstituted products which meet the quality standards necessary to be used in the marketplace, and includes source separated materials.
(t)(m) “Solid waste” as per Public Resources Code Section 40191 means all putrescible and non- putrescible solid, semisolid, and liquid wastes, including garbage, trash, refuse,; paper, rubbish, ashes, industrial wastes, demolition and construction wastes, abandoned vehicles and parts thereof, discarded home and industrial appliances, dewatered, treated, or chemically fixed sewage sludge which is not hazardous waste, manure, vegetable or animal solid and semisolid wastes, and other discarded solid and semisolid wastes. "Solid waste" does not include any of the following wastes:
(1) Hazardous waste, as defined in PRC Section 40141;
(2) Radioactive waste regulated pursuant to the Radiation Control Law (Chapter 8 (commencing with Section 114960) of Part 9 of Division 104 of the Health and Safety Code);
(3) Medical waste regulated pursuant to the Medical Waste Management Act (Part 14 (commencing with Section 117600) of Division 104 of the Health and Safety Code).
(u)(n) “Source separated materials" means materials that are sorted at the site of generation by individual material type including commingled recyclable materials for the

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Packet Pg. 839 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 11 purpose of recycling; i.e., loads of concrete that are source-separated for delivery to a recycling facility.
(v) “Universal waste” means hazardous waste that is identified as universal waste in section 66273.9 of Title 22 of the California Code of Regulations and is not fully regulated as hazardous waste in accordance with chapter 6.5 of Division 20 of the California Health and Safety Code. Examples of universal waste include, but are not limited to, electronic devices, batteries, fluorescent lamps, mercury thermostats, and other mercury containing equipment.
(o) “Waste hauler” means a company that possesses a valid permit from the City of Santa Monica to collect and transport solid wastes from individuals or businesses for the purpose of recycling or disposal under the City of Santa Monica's name. (w)(p) “Waste management plan (WMP)” means a completed waste management plan form, approved by the City for the purpose of compliance with this Chapter, submitted by the applicant for any covered or non-covered project requiring a building permit. (x)(q) “Waste management plan compliance official” means the City staff tasked with enforcement of this Subpart.

8.108.120. Threshold for Ccovered projects.
(a) Private Projects. All construction, and demolition, and deconstruction projects requiring a building permit shall be considered covered projects. the total costs of which are, or are projected to be, fifty thousand dollars or greater, or are one thousand square feet or greater, and all demolition-only projects shall be considered covered projects.

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Packet Pg. 840 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 12 (b) City-Sponsored Projects. All City-sponsored construction, demolition and renovation projects shall be subject to this Chapter, and consequently, shall be considered covered projects.

8.108.130. Submission of a waste management plan.
(a) WMP Forms. Applicants for construction or demolition permits involving a covered project shall complete and submit a waste management plan (WMP), on a WMP form approved by the City for this purpose, as part of the application packet for the construction or demolition permit. The completed WMP shall indicate all of the following:
(1) The estimated volume or weight of the project C&D material, by material type, to be generated;
(2) The maximum volume or weight of such materials that can feasibly be diverted via reuse or recycling;
(3) The vendor or facility where the applicant proposes to use to collect or receive that material;
(4) The estimated volume or weight of C&D materials that will be landfilled in Class III landfills and inert disposal facilities; and
(5) A commitment that only City permitted waste haulers would be used. (b) Calculating Volume and Weight of Material. In estimating the volume or weight of materials identified in the WMP, the applicant shall use the conversion rates approved by the City for this purpose.

8.108.140. Performance security. [Reserved].

The project applicant shall submit a performance security with the WMP. For construction and demolition projects, the amount of the performance security shall be

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Packet Pg. 841 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 13 calculated as the lesser of three percent of total project cost or thirty thousand dollars.

For demolition-only projects, the amount of the performance security shall be calculated at the rate of one dollar per square foot with a one thousand dollar minimum and thirty thousand dollar maximum performance security required.
§ 8.108.150. Review Submission of a WMP.

Requirements Approval. Notwithstanding any other provisions of this Code, no building or demolition permit shall be issued for any covered project unless and until the WMP has been submitted and approved. Compliance Official has reviewed and approved the WMP.

Approval shall not be required, however, where an emergency demolition is required to protect public health or safety. The WMP must contain the following elements: Compliance Official shall only approve a WMP if he or she first determines that all of the following conditions have been met:
(1) The WMP provides aAll of the information set forth in Section 8.108.130. (2) The WMP indicates that Explanation of how at least seventy percent of all C&D material, one hundred percent of inert materials, one hundred percent of organic materials, and all universal waste generated by the project will be diverted through source separation or an exemption has been approved pursuant to Section 8.108.170. (3) The applicant has submitted an appropriate performance security in compliance with Section 8.108.140.

8.108.160. Compliance with WMP.
(a) Documentation. Within thirty days after the completion of any covered project Prior to applying for final inspection on the project, the applicant shall submit to the WMP Compliance Official the following documentation showing that it has met the diversion

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Packet Pg. 842 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 14 requirement for the project: The applicant shall provide a summary of efforts used to meet the diversion requirement and also provide the following documentation:
(1) Receipts Weight tickets from the City approved vendor or facility which collected or received each material showing the actual weight or volume of that material; (2) Weight slips/count of material salvaged or reused in current project; (3) A copy of the previously approved WMP for the project adding the actual volume or weight of each material diverted and landfilled; (4)(3) Any additional information the applicant believes is relevant to determining its efforts to comply in good faith with this Chapter.
(b) Weighing of Wastes. Applicants shall ensure that all C&D material diverted or landfilled are measured and recorded using the most accurate method of measurement available. To the extent practical, all C&D material shall be weighted by measurement on scales. Such scales shall be in compliance with all State and County regulatory requirements for accuracy and maintenance. For C&D material for which weighing is not practical due to small size or other considerations, a volumetric measurement shall be used. For conversion of volumetric measurements by weight, the applicant shall use the standardized conversion rates in a format approved by the City for this purpose. (c) Determination of Compliance and Penalties. Release of Performance Security. The WMP Compliance Official shall review the information submitted under subsection (a) of this Section to determine whether the applicant has complied with the diversion requirement as follows:
(1) Full Compliance. If the WMP Compliance Official determines that the applicant has fully complied with the seventy percent diversion and all other sections or

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Packet Pg. 843 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 15 provisions of this Chapter requirement applicable to the project, they he or she shall remove the hold on the building permit’s final inspection with no penalty.cause the full performance security to be released to the applicant.
(2) Failure to Comply. If the WMP Compliance Official determines that the seventy percent diversion requirement, and/or any other applicable provision of this Chapter, has not been met, a fine not exceeding three percent of the total project valuation, with a minimum of five hundred dollars, and a maximum of thirty thousand dollars, shall be assessed pursuant to subdivisions (A) and (B) below, and in accordance with Chapter 1.09.Once the fine has been paid in full, the hold on the building permit’s final inspection shall be removed. he or she shall return only that portion of the performance security equivalent to the portion of C&D material actually diverted compared to the portion that should have been diverted according to the WMP. Any portion of the performance security not released to the applicant shall be forfeited to the City, and shall be used to recover costs associated with sorting mixed C&D loads at the City recycling center. If the WMP Compliance Official determines that the applicant has fully failed to comply with the diversion requirement or if the applicant fails to submit the documentation required by subsection (a) of this Section within the required time period, then the entire performance security shall be forfeited to the City. All forfeited performance securities shall be used to recover costs associated with sorting mixed C&D loads at the City recycling center. (A). Fine Categories. Failure to comply with any of the following may result in a fine calculated as set forth in subdivision (B) of this section:
(i.) Any project completed without an approved WMP as defined in section 8.108.110

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Packet Pg. 844 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 16 (ii) The use of a non-City approved hauler as defined in section

8.108.110
(iii) The use of a non-City approved facility as defined in section

8.108.110
(iv) Weight tickets dated prior to the WMP approval date (v) Failure to meet the required diversion rate as defined in section 8.108.110
(vi) Altered or fraudulent weight tickets as determined by the WMP Compliance Official
(B). Fine Amounts.
(i) Fines in subdivision (A)(i), (A)(ii), (A)(iii), and (A)(iv) of this section shall be assessed as ten percent of the maximum fine or five hundred dollars, whichever is greater.
(ii) Failure to meet the required diversion rate as noted in subsection (A)(v) shall result in a prorated fine based on the amount of waste diverted and is calculated as follows: (3% of project valuation) – ((Achieved diversion rate/Required diversion rate) * (3% of project valuation)).
(iii) Any projects that are found to have altered or fraudulent weight tickets as noted in subsection (A)(vi) are subject to the maximum fine not exceeding three percent of the total project valuation with a maximum of thirty thousand dollars.

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Packet Pg. 845 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 17 Table 8.108.160: Range of Fines
Project Valuation Minimum penalty Maximum penalty
$10,000.00 $500.00 $500.00
$100,000.00 $500.00 $3,000.00
$1,000,000.00+ $3,000.00 $30,000.00

8.108.170. Exemption.
(a) Application. If an applicant believes it is infeasible to comply with the diversion requirements of this Chapter due to the circumstances delineated in this Section, the applicant may apply for an exemption at the time that they he or she submits the required WMP. Exemptions may be granted based on the following considerations:
(1) Lack of storage space on-site;
(2) Contamination by hazardous substances;
(3) Low recyclability of specific materials.

The applicant shall indicate on the WMP the maximum rate of diversion they he or she believes is feasible for each material and the specific circumstances that they he or she believes make it infeasible to comply with the diversion requirement. (b) Granting of Exemption. If the WMP Compliance Official determines that it is infeasible for the applicant to meet the diversion requirement due to unique circumstances, they he or she shall determine the maximum feasible diversion rate for each material and shall indicate this rate on the WMP submitted by the applicant. (c) Denial of Exemption. Upon a denial by the WMP Compliance Official, the applicant shall have thirty days to resubmit a WMP form in full compliance with Section

8.108.130. If the applicant fails to resubmit the WMP, or if the resubmitted WMP does not comply with Section 8.108.130, the WMP Compliance Official shall deny the WMP.

8.108.180. Appeal.

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Packet Pg. 846 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 18 The applicant or any interested person may appeal to a Hearing Officer Examiner from any ruling of the WMP Compliance Official made pursuant to this Chapter in accordance with Section 6.16.030. Notice of any appeal from the ruling of the WMP Compliance Official must be filed within ten days of the date that such ruling is made.

8.108.190. Enforcement.
(a) The City Attorney may enforce the provisions of this Subpart by means of a civil action.
(b) Any person who violates any provision of this Subpart shall be subject to administrative fines and administrative penalties pursuant to Chapters 1.09 and 1.10 of this Code.
(c) Nonexclusive Remedies and Penalties. The remedies provided in this Subpart are not exclusive, and nothing in this Subpart shall preclude any person from seeking any other remedies, penalties or procedures provided by law. (d) It shall not be a defense to the assessment of any penalty or to any other civil or administrative enforcement action provided for under this Section for a person to assert that any violation of this Subpart was caused by the actions of a person other than the person assessed except if the violation was caused by the criminal or negligent action of a person who was not an agent, servant, employee or family member of the person. (e) Any penalty collected hereunder shall be deposited in the Resource Recovery and Recycling Refuse Fund to be used as reimbursement for the Public Works Department's costs and expenses of administration and enforcement of this Chapter.

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Packet Pg. 847 Attachment: 2025.12.16 - RRR Article 8 Amendments_Self-Certification (7440 : Self-Certification Pilot Program) 1 City Council Meeting: December 16, 2025 Santa Monica, California

RESOLUTION NUMBER (CCS)
(City Council Series)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA

DIRECTING THE PLANNING COMMISSION TO INITIATE AN AMENDMENT TO THE

TEXT OF THE ZONING ORDINANCE TO UPDATE APPLICABILITY THRESHOLDS

AND STANDARDS FOR RESOURCE AND RECYCLING ROOM DIMENSIONS IN

ORDER TO FURTHER ECONOMIC RECOVERY EFFORTS BY FACILITATING A

SELF-CERTIFICATION BUILDING PERMIT PROGRAM
WHEREAS, on March 13, 2020, the City Manager, as the Director of Emergency Services (“Director of Emergency Services”), proclaimed the existence of a local emergency pursuant to Chapter 2.16 of the Santa Monica Municipal Code to ensure the availability of mutual aid and effectuate the City’s response to the novel coronavirus (“COVID-19”), and this local emergency was restated on March 14, 2020, through a revised declaration of local emergency to ensure compliance with all digital signature requirements (the “Executive Order”)’ and
WHEREAS, on March 16, 2020, the Director of Emergency Services issued a Third Supplement to the Executive Order, requiring the closure of a wide range of businesses including bars, nightclubs, on-premises restaurant service, movie theatres, live performance venues, gyms, fitness centers, spas, hair salons, nail salons, and massage parlors; and
WHEREAS, on March 19, 2020, California Governor Gavin Newsom issued Executive Order N-33-20 directing all residents of the State of California to heed directives issued by the State Health Officer on the same date instructing all Californians to stay

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Packet Pg. 848 Attachment: 2025.12.16 - ROI Self-Certification (7440 : Self-Certification Pilot Program) 2 home except as needed to maintain continuity of operations of the federal critical infrastructure sectors; and
WHEREAS, on March 19, 2020, the Los Angeles County Department of Public Health issued an enhanced Health Officer Order, the Safer at Home Order for Control of COVID-19, amending and superseding its earlier March 16, 2020 Order, closing all nonessential businesses, and limiting gatherings to 9 people or less; and WHERAS, after March 19, 2020, the Los Angeles Department of Public Health, on multiple occasions, amended and modified its Health Officer Order, recognizing the issues posed by community transmission of COVID-19 in Los Angeles County, and, in response, maintaining public health measures that have, at differing times, included strict limitations on public gatherings, required closures of certain businesses, and strict limitations and protocols for the operations of businesses permitted to remain open; and WHEREAS, as of March 31, 2023, the local, state, and federal COVID-19 emergency declarations have concluded; and
WHEREAS, although the emergency orders have been lifted, the economic impacts of the COVID-19 closures of, and limitations on, businesses have been and continue to be devastating to the local Santa Monica economy, and various locations are continuing to experience economic uncertainty; and
WHEREAS, as the commercial and economic landscape evolves, the City’s economic recovery and competitive advantage will depend on its ability to deliver on a diverse range of business uses; and

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Packet Pg. 849 Attachment: 2025.12.16 - ROI Self-Certification (7440 : Self-Certification Pilot Program) 3 WHEREAS, the City has an important governmental interest in maintaining a thriving business community and protecting the health, safety, and economic welfare of its citizens and businesses; and
WHEREAS, in connection with the City’s economic recovery efforts, on February 11, 2025, City Council directed staff to create a self-certification pilot program allowing building permits for “non-structural commercial tenant improvements, single-family home improvements, and accessory dwelling units” to bypass the normal plan review process and receive approval within one to five business days; and WHEREAS, the purpose of this direction is to facilitate the City’s economic recovery and reduce the workload on plan check professionals, allowing staff to focus on the more complex projects in the City that require their attention; and WHEREAS, the self-certification program will fully remove plan check review for certain identified project times and shift the responsibility for determining compliance with all codes to a pre-qualified licensed architect, who would certify that projects comply with requirements of the Building Code, Fire Code, Zoning Ordinance, and Public Works, including Resources, Recovery, and Recycling (RRR), Office of Sustainability and Environment, ad Water Resources; and
WHEREAS, streamlining the review process for certain projects will facilitate business recovery and generate increased sales tax revenue for the City; and WHEREAS, the initial stages of the Self-Certification Program will focus on commercial tenant improvements, which comprise approximately 36% of the building permits submitted to the City; and

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Packet Pg. 850 Attachment: 2025.12.16 - ROI Self-Certification (7440 : Self-Certification Pilot Program) 4 WHEREAS, Santa Monica Municipal Code Section 9.21.130 provides Resource Recovery and Recycling (RRR) Standards in connection with General Site Regulations; and
WHEREAS, the proposed amendments to the RRR standards simplify the thresholds for when trash enclosure updates and review are required and otherwise revise implementation of resources and recycling room dimensions; and WHEREAS, one of the current applicability thresholds is based on outdated permit valuation standards and cumulative alterations made over the course of a twelve-month period; and
WHEREAS, these thresholds have consistently presented constraints to new businesses and amendments to these requirements are required to facilitate an effective Self-Certification Program and allow for additional economic recovery; and WHEREAS, the amendments will also address long-standing issues that will benefit all permittees, facilitate the City’s economic recovery, streamline the building permit process for a variety of projects, and provide more transparency with respect to permit requirements; and
WHEREAS, the amendment will also eliminate the standard pertaining to “Large Residential, Nonresidential and Mixed-Use Development” that gives discretionary approval to the Director of Public Works to determine trash room dimensions, as this is not an objective standard or process; and
WHEREAS, removing this language provides greater transparency and objectivity to trash enclosure standards; and

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Packet Pg. 851 Attachment: 2025.12.16 - ROI Self-Certification (7440 : Self-Certification Pilot Program) 5 WHEREAS, additional amendments may be required to SMMC Section 9.21.130 in order to update other RRR standards and processes and to facilitate the City’s economic recovery, streamline the building permit process for a variety of projects, and provide more transparency with respect to permit requirements; and WHEREAS, City Council now wishes to direct the Planning Commission to initiate an amendment to the text of the City’s Zoning Ordinance related to RRR Standards.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AS FOLLOWS:

SECTION 1. Pursuant to Santa Monica Municipal Code Section 9.46.030(A), the City Council does hereby direct the Planning Commission to consider amending the text of the Zoning Ordinance to: (1) simplify the thresholds for when trash enclosure updates and review are required and revise implementation of resources and recycling room dimensions; (2) remove standards pertaining to “Large Residential, Nonresidential and Mixed-Use Development” that gives discretionary approval to the Director of Public Works to determine trash room dimensions; and (3) make other necessary updates to facilitate the City’s economic recovery, streamline the building permit process for a variety of projects, and provide more transparency with respect to permit requirements.

SECTION 2. The City Clerk shall certify to the adoption of this Resolution, and thenceforth and thereafter the same shall be in full force and effect.

APPROVED AS TO FORM:
_________________________
HEIDI VON TONGLEN, Interim City Attorney

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Packet Pg. 852 Attachment: 2025.12.16 - ROI Self-Certification (7440 : Self-Certification Pilot Program) 1 City Council Meeting: December 16, 2025 Santa Monica, California ORDINANCE NUMBER _________ (CCS)
(City Council Series)

AN INTERIM ZONING ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

SANTA MONICA UPDATING APPLICABILITY THRESHOLDS AND STANDARDS FOR

RESOURCE AND RECYCLING ROOM DIMENSIONS SET FORTH IN SANTA MONICA MUNICIPAL CODE SECTION 9.21.130 IN ORDER TO FURTHER

ECONOMIC RECOVERY EFFORTS BY FACILITATING A SELF-CERTIFICATION

BUILDING PERMIT PROGRAM
WHEREAS, on March 13, 2020, the City Manager, as the Director of Emergency Services (“Director of Emergency Services”), proclaimed the existence of a local emergency pursuant to Chapter 2.16 of the Santa Monica Municipal Code to ensure the availability of mutual aid and effectuate the City’s response to the novel coronavirus (“COVID-19”), and this local emergency was restated on March 14, 2020, through a revised declaration of local emergency to ensure compliance with all digital signature requirements (the “Executive Order”); and
WHEREAS, on March 16, 2020, the Director of Emergency Services issued a Third Supplement to the Executive Order, requiring the closure of a wide range of businesses including bars, nightclubs, on-premises restaurant service, movie theatres, live performance venues, gyms, fitness centers, spas, hair salons, nail salons, and massage parlors; and
WHEREAS, on March 19, 2020, California Governor Gavin Newsom issued Executive Order N-33-20 directing all residents of the State of California to heed directives issued by the State Health Officer on the same date instructing all Californians to stay home except as needed to maintain continuity of operations of the federal critical infrastructure sectors; and

12.A.c
Packet Pg. 853 Attachment: 2025.12.16 - Self-Certification IZO (7440 : Self-Certification Pilot Program) 2 WHEREAS, on March 19, 2020, the Los Angeles County Department of Public Health issued an enhanced Health Officer Order, the Safer at Home Order for Control of COVID-19, amending and superseding its earlier March 16, 2020 Order, closing all nonessential businesses, and limiting gatherings to 9 people or less; and WHERAS, after March 19, 2020, the Los Angeles Department of Public Health, on multiple occasions, amended and modified its Health Officer Order, recognizing the issues posed by community transmission of COVID-19 in Los Angeles County, and, in response, maintaining public health measures that have, at differing times, included strict limitations on public gatherings, required closures of certain businesses, and strict limitations and protocols for the operations of businesses permitted to remain open; and WHEREAS, as of March 31, 2023, the local, state, and federal COVID-19 emergency declarations have concluded; and
WHEREAS, although the emergency orders have been lifted, the economic impacts of the COVID-19 closures of, and limitations on, businesses have been and continue to be devastating to the local Santa Monica economy, and various locations are continuing to experience economic uncertainty; and
WHEREAS, as the commercial and economic landscape evolves, the City’s economic recovery and competitive advantage will depend on its ability to deliver on a diverse range of business uses; and
WHEREAS, the City has an important governmental interest in maintaining a thriving business community and protecting the health, safety, and economic welfare of its citizens and businesses; and

12.A.c
Packet Pg. 854 Attachment: 2025.12.16 - Self-Certification IZO (7440 : Self-Certification Pilot Program) 3 WHEREAS, in connection with the City’s economic recovery efforts, on February 11, 2025, City Council directed staff to create a self-certification pilot program allowing building permits for “non-structural commercial tenant improvements, single-family home improvements, and accessory dwelling units” to bypass the normal plan review process and receive approval within one to five business days; and WHEREAS, the purpose of this direction is to facilitate the City’s economic recovery and reduce the workload on plan check professionals, allowing staff to focus on the more complex projects in the City that require their attention; and WHEREAS, the self-certification program will fully remove plan check review for certain identified project times and shift the responsibility for determining compliance with all codes to a pre-qualified licensed architect, who would certify that projects comply with requirements of the Building Code, Fire Code, Zoning Ordinance, and Public Works, including Resource Recovery and Recycling (RRR), Office of Sustainability and Environment, and Water Resources; and
WHEREAS, streamlining the review process for certain projects will facilitate business recovery and generate increased sales tax revenue for the City; and WHEREAS, the initial stages of the self-certification program will focus on commercial tenant improvements, which comprise approximately 36% of the building permits submitted to the City; and
WHEREAS, Santa Monica Municipal Code Section 9.21.130 provides RRR Standards in connection with General Site Regulations; and

12.A.c
Packet Pg. 855 Attachment: 2025.12.16 - Self-Certification IZO (7440 : Self-Certification Pilot Program) 4 WHEREAS, the proposed amendments to the RRR standards simplify the thresholds for when trash enclosure updates and review are required and revise implementation of resources and recycling room dimensions; and WHEREAS, one of the current applicability thresholds is based on outdated permit valuation standards and cumulative alterations made over the course of a twelve-month period; and
WHEREAS, these thresholds have consistently presented constraints to new businesses, and amendments to these requirements are required to facilitate an effective self-certification program; and
WHEREAS, the amendments will also address long-standing issues that will benefit all permittees, facilitate the City’s economic recovery, streamline the building permit process for a variety of projects, and provide more transparency with respect to permit requirements; and
WHEREAS, the amendment will also eliminate the standard pertaining to “Large Residential, Nonresidential and Mixed-Use Development” that gives discretionary approval to the Director of Public Works to determine trash room dimensions, as this is not an objective standard or process; and
WHEREAS, removing this language provides greater transparency and objectivity to trash enclosure standards; and
WHEREAS, City Council finds and declares that there exists a current and immediate threat to public health, safety, and welfare continues to exist due to the devastating impact the COVID-19 mandated closures and limitations have had on the local business economy along with the City’s current usage of outdated permit valuation

12.A.c
Packet Pg. 856 Attachment: 2025.12.16 - Self-Certification IZO (7440 : Self-Certification Pilot Program) 5 thresholds for determining when trash enclosure dimensions review is required, such that requiring applicants to comply with these RRR requirements would result in a threat to public health, safety, and welfare.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. Santa Monica Municipal Code Section 9.21.130 is hereby amended as follows:

Section 9.21.130. Resource Recovery and Recycling Standards.

A. Applicability. All uses shall provide refuse and recycling storage and staging areas that comply with the standards of this Section. Refuse and recycling rooms meeting the standards of subsection (C) shall be provided in conjunction with:

1. New construction for which a building permit is required.

2. Improvements affecting refuse and recycling areas of publicly owned facilities.

3. Additions that Alterations of which the sum total of all improvements within a twelve month period either adds 30% or more to the existing floor area or the aggregate permit valuation as determined by CPI.

4. Eating and Drinking Establishments, as defined in Section 9.51.030(B)(8), and Food and Beverage Sales, as defined in Section 9.51.030(B)(10).

B. General Requirements. Each parcel containing a building or structure shall provide and maintain one or more refuse containers and recycling containers on the premises.

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Packet Pg. 857 Attachment: 2025.12.16 - Self-Certification IZO (7440 : Self-Certification Pilot Program) 6 1. Containers shall be of sufficient capacity and number to accommodate the refuse and recyclable materials generated by the uses on the parcel, in compliance with guidelines established by the Public Works Department. An adequate number of bins or containers to allow for the collection and loading of refuse and recyclable materials shall be located within the refuse and recycling rooms or outdoor enclosures.

2. All outdoor storage of refuse, recyclable materials, and other items or material intended to be discarded or collected shall be screened from public view. On parcels where refuse and recyclable materials are both stored and collected adjacent to an alley or other public right-of-way, the refuse and recyclable materials shall be screened from public view on at least 3 sides by a solid opaque impact-resistant wall not less than 5 feet or more than 8 feet in height, and on the fourth side by a solid opaque impactresistant gate not less than 5 feet or more than 8 feet in height, or of other such material or design approved by the Architectural Review Board. The gate shall be maintained in working order and shall remain closed except during such times as refuse, recyclable materials and other such items are being discarded, placed for collection, or collected.

3. All refuse and recyclable materials which are stored and collected from the same location out of doors shall be stored not more than 10 feet from the parcel line which is closest to the refuse collection point. If the collection area is more than 20 feet from the collection point, a staging area within 10 feet of the collection point is necessary.

4. Refuse and recycling rooms or outdoor enclosures shall be secured to prevent the theft of recyclable materials by unauthorized persons, while allowing authorized persons access for disposal of materials, and must provide protection against

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Packet Pg. 858 Attachment: 2025.12.16 - Self-Certification IZO (7440 : Self-Certification Pilot Program) 7 adverse environmental conditions which may render the collected materials unmarketable.

C. Refuse and Recycling Rooms. A refuse and recycling room or outdoor enclosure shall comply with all the requirements of the Zoning District in which it is located as well as the following minimum design standards:

1. Single Unit and Duplex Residences. Single Unit Residences and Duplexes shall include a designated area to store refuse, recycling, and organic materials screened from public view or a designated area in a garage or accessory structure.

2. Residential Multiple-Unit Development. Developments consisting of 3 or more dwelling units shall include a refuse and recycling room meeting the minimum dimensions stated in Table 9.21.130.A below, or shall provide an equivalent space within an outdoor enclosure that conforms to the same dimensions stated in the table.

TABLE 9.21.130.A: MINIMUM RESOURCE AND RECYCLING ROOM DIMENSIONS – RESIDENTIAL MULTI-UNIT DEVELOPMENT
Number of
Residential Units
Minimum Room Dimensions
Width (ft.) Length (ft.) Height (ft.)
3 – 10 units 2122 ft. 7.510 ft. 10 ft. (1)
11 – 20 units 2122 ft. 14 ft. 10 ft. (1)
21 40 units or
greater
28 ft. 20 ft. 10 ft. (1)
(1) An outdoor enclosure must have walls at least 6 ft. in height and an opening at least 8 ft. wide.

3. Nonresidential and Mixed-Use Development.

12.A.c
Packet Pg. 859 Attachment: 2025.12.16 - Self-Certification IZO (7440 : Self-Certification Pilot Program) 8 a. Nonresidential and mixed-use developments shall include a refuse and recycling room meeting the minimum dimensions stated in Table 9.21.130.B below, or shall provide an equivalent space available in a centralized area or an outdoor enclosure with the same width and length dimensions, and a minimum height of 6 feet, and an opening at least 8 feet wide.
b. Refuse and recycling rooms or outdoor enclosures shall be at the same grade as and adjacent to an existing alley, if the site is adjacent to an alley. c. The 3 interior walls of refuse and recycling indoor and outdoor enclosures shall include a 2 inch by 16 inch wall guard covering the length of all interior walls in existing properties, or a curb 6 inches in depth by 8 inches tall for remodels and new construction.
d. Nonresidential buildings and buildings that prepare process and/or sell any and all food products must have a fully-enclosed refuse, and recycling and food waste area with lighting, ventilation, and sanitary drains. Size and dimensions shall conform to the required design standards outlined in this Chapter.

TABLE 9.21.130.B: MINIMUM RESOURCE AND RECYCLING ROOM DIMENSIONS – NONRESIDENTIAL DEVELOPMENT AND MIXED-USE
Aggregate Floor
Area
Minimum Room Dimensions
Width (ft.) Length (ft.) Height (ft.)
Less than 5,000 sq.
ft.
2122 ft. 7.510 ft. 10 ft.
5,001 – 20,000 sq.
ft.
2122 ft. 14 ft. 10 ft.

12.A.c
Packet Pg. 860 Attachment: 2025.12.16 - Self-Certification IZO (7440 : Self-Certification Pilot Program) 9 20,001 sq. ft. -
40,000 sq. or
greater
28 ft. 20 ft. 10 t.

4. Large Residential, Nonresidential and Mixed-Use Development. Any development, whether residential, nonresidential, or mixed-use with more than 40 residential units, or with more than 40,000 square feet of floor area shall be reviewed by the Director of Public Works, who shall require the design and placement of a refuse and recycling room or outdoor enclosure consistent with the purpose of this Section to provide adequate and accessible areas for the storage and collection of refuse and recyclable materials.

5.4. Subterranean Storage. Buildings or structures in which refuse and recyclable materials are stored in otherwise locked and secured subterranean garages may be permitted to designate a fenced area for the storage of refuse and recyclable materials in compliance with specifications as to location and materials established by the Director of Public Works.

D. Modifications. The Director of Public Works, in consultation with the Director of Planning, shall have the authority to modify the requirements, as listed below, subject to the design standards of this Section when, upon a written application for a modification, the Director of Public Works determines that the applicant has demonstrated that imposition of the design standards is technically infeasible or creates an unreasonable hardship. Such authority shall be limited to the following:

12.A.c
Packet Pg. 861 Attachment: 2025.12.16 - Self-Certification IZO (7440 : Self-Certification Pilot Program) 10 1. Modify the dimensions of refuse and recycling rooms or outdoor enclosures, provided that the frequency of refuse collection is modified to adequately serve the uses on the parcel and protect the public health, safety and general welfare.

2. Permit more than one recycling room or outdoor enclosure, provided the aggregate area is in substantial compliance with the design standards of this Section as determined by the Director of Public Works, and provided that each room or outdoor enclosure furnishes convenient access for disposal and collection of both refuse and recyclable materials. Refuse containers located adjacent to alleys should remain open to the alley. Refuse enclosures in subterranean parking areas should have a door of equal size with door-stops attached or a follow-up door and provide adequate lighting, ventilation and sanitary drains. If the refuse enclosure is located in a subterranean parking area or remote locations, a City-approved staging area on private property at the alley or street level must be provided. In the event that the location of the refuse and recyclable room or outdoor enclosure is not convenient for collection, the Director of Public Works shall be authorized to require payment of a fee, established by resolution of the City Council, for collection of the refuse and recyclable materials. In no event shall a fee be authorized in lieu of providing a refuse and recycling room or outdoor enclosure.

SECTION 3. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any

12.A.c
Packet Pg. 862 Attachment: 2025.12.16 - Self-Certification IZO (7440 : Self-Certification Pilot Program) 11 court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.

SECTION 4. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective immediately upon adoption.

SECTION 5. This Ordinance shall be of no further force and effect sixty days from its effective date, unless it is otherwise extended pursuant to Santa Monica Municipal Code Section 9.46.090(C).

APPROVED AS TO FORM:
________________________________
Heidi von Tongeln, Interim City Attorney

12.A.c
Packet Pg. 863 Attachment: 2025.12.16 - Self-Certification IZO (7440 : Self-Certification Pilot Program) 1 David Yakobson
From: Alan Cook <[email protected]>
Sent: Tuesday, September 9, 2025 9:37 AM
To: councilmtgitems
Subject: Self Certification
Follow Up Flag: Follow up
Flag Status: Flagged

EXTERNAL
Good Evening City Council and Constituents of Santa Monica, I would like to open with the statement that there is a place for self certification of specific projects within jurisdictions. It can be properly inspected for code compliance, it can be time saving for all parties, and provide cost saving benefits.

Unfortunately, it can create more time consuming and expensive problems during the actual construction process and it could result in litigation. There are future risks with insurance acquisition and future liability litigation possibilities on the horizon.

Currently the development and construction industry does not have the proper foundation to support self certification processes(insurance vehicles for Engineering, Architecture, Construction,etc). It does not have proper training for Building Officials and inspectors. To few jurisdictions have attempted implementation of the process so there is little solid data that is trustworthy. But it does have a place in our current development environment.

I do not know the how and why Santa Monica City Council it’s considering self certification. I do not know how they are defining and implementing it within the city departments. I do not know enough about the city, its constituents, or its development goals to provide specific helpful insight. I can only state that I oversee a successful self certification program and have modified it to meet the jurisdiction’s needs.

I can only assume the City Council and Staff has done all the homework and turned over every stone before implementing a self certification program. If not, I recommend this item be tabled to continue investigating.

Thank you for your time,
Alan Cook, CBO
Get Outlook for iOS
Item 11-B
September 9, 2025
Item 11-B
September 9, 2025

12.A.d
Packet Pg. 864 Attachment: Written Comments (7440 : Self-Certification Pilot Program) 1 David Yakobson
From: Santa Monica Forward <[email protected]> Sent: Saturday, December 13, 2025 2:09 PM
To: Caroline Torosis; Dan Hall; Barry Snell; councilmtgitems; Ellis Raskin; Jesse Zwick; Lana Negrete; Natalya Zernitskaya; Oliver Chi; Council Mailbox Subject: Support 12.A with Amendments for Flexibility

EXTERNAL
Dear Mayor Torosis and Councilmembers,
On behalf of Santa Monica Forward, we write to express our strong support for the proposed SelfCertification Pilot Program and to offer recommendations that we believe will strengthen the program’s effectiveness.

Self-Certification presents an important opportunity to streamline straightforward building permits, support new businesses and new housing, and reduce staff workload so that staff can focus on complex reviews. We encourage the Council to advance and expand self-certification as a way to make Santa Monica a better place to do business and live.

To ensure the program reaches its full potential, we recommend the following adjustments so that qualified projects and licensed professionals are not unnecessarily excluded:

1. Reduce Applicant Pre-Qualification Requirements
Santa Monica is a small city, and many qualified architects and contractors primarily practice in Los Angeles while working occasionally in Santa Monica. Requiring three previously issued Santa Monica permits may disqualify capable professionals who are fully familiar with code requirements. We recommend reducing the threshold to one prior Santa Monica permit, which will expand participation.

2. Allow Non-Structural Exterior Tenant Improvements
The draft program limits commercial tenant improvements to interior, non-structural work. While we agree that the program should be limited to non-structural changes, it should also allow non-structural exterior improvements, such as façade updates or window replacements, which are often straightforward and do not present additional safety risks.

3. Narrow the Restaurant and Bar Exclusion
While we understand the risks cited in the staff report, the exclusion for restaurants and bars could be refined. Self-certification could safely apply to limited types of reconfigurations, such as projects that do not increase the number of seats or expand the scope of food service operations.

4. Expedite the Phase 2 & 3 Timeline: Council should direct staff to take steps to minimize the delay in rolling out phases 2 and 3 of the self-certification program (ADUs and single-unit dwellings). In particular, the city should consider self-certification for ADUs and SUDs as a single phase, so long as that does not cause delay in rollout. To manage risk, the city could consider alternative thresholds such as ADUs and SUD improvements <2,000 square feet, rather than separating ADU and SUD into phases.

Santa Monica has the opportunity to be a regional leader in smart, efficient permitting. These refinements will broaden access, reduce processing times, and support our shared goals of economic vitality and housing production.

Thank you,
Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.e
Packet Pg. 865 Attachment: Written Comments (7440 : Self-Certification Pilot Program) 2 Brad Ewing and Carl Hansen
Co-Chairs, Santa Monica Forward
--
We are working for a diverse, progressive, sustainable and equitable Santa Monica.

SantaMonicaForward.org
Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.e
Packet Pg. 866 Attachment: Written Comments (7440 : Self-Certification Pilot Program) Self-Certification
Pilot Program
December 16, 2025
Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 867 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Purpose & Overview
• Establish a voluntary self-certification pilot program pursuant to Council direction given on February 11, 2025 to:

1. Help facilitate Santa Monica’s economic recovery by getting businesses open faster

2. Reduce staff workload to allow more focus on larger, more complex projects • Self-certification means eliminating all staff review from the plan review process and shifting that responsibility to a Licensed Architect • Municipal Code Amendments to support new process
o Construction & demolition deposit process
o Resource Recovery & Recycling requirements
Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 868 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) What is Self-Certification?
Self-certification means eliminating all staff review from the plan review process and shifting that responsibility to a Licensed Project Lead.

Projects Must Still Comply with:
• Building Code requirements
• Zoning Ordinance requirements
• Public Works requirements (RRR, Civil Engineering, OSE, Water Resources) • Fire requirements
Inspections:

City staff will still conduct inspections to ensure construction is occurring in accordance with plans certified by Licensed Project Lead. • Any issues with compliance during inspections will need to be rectified • Building Inspectorreserves right to require plan check if construction is outside of project scope
Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 869 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Research of Other Cities
Jurisdiction Scope of Self-Certification
Code Review
Eligible Projects for Self-Certification
Program
Applicant Pre-Qualification
Requirements
City of Los Angeles Removal of only Building
Code review
Single-Unit Dwelling & associated
structures impacted by Eaton or
Palisades Fire
ICC Exam
County of Los Angeles Removal of only Building
Code review
Single-Unit Dwelling & associated
structures impacted by Eaton or
Palisades Fire
3 permits completed in County
City of Chicago Removal of only Building
Code review
Small- and mid-sized residential &
commercial projects
City-conducted training every 2
years
San Diego County Removal of only Building
Code review
Commercial TIs, minor grading City-conducted training
City of Bellflower Removal of only Building
Code review
As determined by Building Official As determined by Building Official based on scope
City of Santa Monica
(Proposed Program)
Removal of ALL city plan
review
Phase 1: Non-structural commercial TIs 3 permits completed in City in last 15 years
Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 870 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Research – Key Takeaways
• All jurisdictions require some type of qualification criteria for licensed professionals to participate in the program
• The jurisdictions within the Los Angeles area generally limit the scope to single-unit dwellings impacted by the Eaton and Palisades fires • All jurisdictions only eliminate building code review Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 871 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Program Development
Interdepartmental Working Group: • City Planning • Building and Safety • Fire • Inspections • Mobility • Resource Recovery & Recycling (RRR) • Engineering • Water Resources • Office of Sustainability & the Environment (OSE) • Rent Control • City Attorney’s Office Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 872 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Program Development
Phased Approach:

Phase 1 – Commercial Non-Structural Tenant Improvements (no food and beverage uses except as required by AB 671, no childcare and education uses, no change of use that triggers higher degree of occupancy hazard requirements) Phase 2 – Detached Accessory Dwelling Units (ADUs)
Phase 3 – Single-Unit Dwellings (new and additions)
Why start with commercial tenant improvements (TIs) for Phase 1? • Commercial TIs are already not reviewed by all departments • Less complex scopes of work
• Less risk associated with using this permit type to pilot the first phase of this Program • Comprise approx. 1/3 of all building permits issued
Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 873 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program)

PROPOSED PILOT

PROGRAM
Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 874 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Phase 1 – Program Scope
Commercial Non-Structural TIs
• Projects that only propose work entirely within existing buildings with no structural or exterior changes (i.e.: façade remodels, window replacements, and changes to parking and loading operations)
• Generally for new or existing businesses updating their tenant spaces Structures Associated with Special Events & Temporary Uses • Intended to help simplify permitting for special events Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 875 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Phase 1 – Program Scope
Recommended Exclusions for Commercial Non-Structural TIs:

1. Food and Beverage Uses, except as required by State law (AB 671) • Eating and Drinking Establishments: Bar/Night Club/Lounge, Restaurants (Full-Service, Limited-Service, and Take-Out), and Food Hall uses
• Food and Beverage Sales: Convenience Market, General Market, and Liquor Store uses • Will not have significant impact on number of eligible projects for this Program (make up less than 10% of plan checks on average)

2. Childcare and Education Uses
• Childcare and Early Education Facility use
• College and Trade School and School uses

3. Change of Use with a Higher Degree of Occupancy Hazard than the Existing Use • B&S and Fire will instead offer a preliminary consultation to discuss new occupancy requirements and if the space is suitable for self-certification Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 876 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Phase 1 – Program Scope
Why is staff proposing to exclude these project types?

1. Food and Beverage Uses, except as required by State law (AB 671) Reasons for Exclusion:
• Requires County of Los Angeles Public Health review and approval • Necessitates additional technical review and fee assessments from Building & Safety, Civil Engineering, Mobility, OSE, Fire, and RRR (even when changing from one type of restaurant to another) • Typically requires upgrades to infrastructure, trash enclosures, and parking/loading operations (even when changing from one type of restaurant to another)
• Public health, sanitation, and safety impacts if facilities are improperly designed and constructed (e.g. improper disposal of waste and wastewater; sewer system overflows and back-ups) AB 671
Self-certification approval
process for restaurant TIs
(defined as preparing, serving,
and vending food directly to
consumer and is not a fast food
restaurant).

Minimum requirements:
• Licensed architect or
engineer with at least 5
years experience in
commercial building design
or plan review and $2M in
professional liability
insurance per occurrence
• Only for interior work
• Only applicable for local
and State building, health,
and safety codes
Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 877 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Phase 1 – Program Scope
Why is staff proposing to exclude these project types?

2. Childcare and Education Uses
Reasons for Exclusion:
• Typically require a higher level of review regarding occupancy and life safety, that can include building upgrades regarding fore sprinkler systems, fire alarm and detection systems/changes, emergency signage and lighting upgrades, fireresistive construction changes, occupancy separation requirement, and potentially exiting width/number of exits that require system calculations, hydraulic analysis, technical review, and field inspection verification throughout project
• Mobility-related impacts such as pick up and drop off operational plan Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 878 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Phase 1 – Program Scope
Why is staff proposing to exclude these project types?

2. Change of Use With a Higher Degree of Occupancy Hazard than the Existing Use Reasons for Exclusion:
• Typically require a higher level of review regarding occupancy and life safety, that can include building upgrades regarding fore sprinkler systems, fire alarm and detection systems/changes, emergency signage and lighting upgrades, fireresistive construction changes, occupancy separation requirement, and potentially exiting width/number of exits that require system calculations, hydraulic analysis, technical review, and field inspection verification throughout project
• May trigger extensive accessibility and plumbing upgrades per the California Building Code based on the proposed new use
Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 879 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Eligibility, Requirements, & Penalties
All Projects Shall Require:
• Licensed Architect to be project lead (will take on all liability for the project and attest that it is code compliant)
• Certified Access Specialist (CASp – ADA certification) Additional Licensed Professionals (as needed):
• Mechanical
• Electrical
• Plumbing
• Fire Sprinkler (C16 license)
• Fire Alarm (C10 license)
Qualification Criteria for Licensed Project Lead
• Completed 3 projects of similar scope within the City in the last 15 years • List of qualified project leads will be posted online Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 880 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Eligibility, Requirements, & Penalties
Audit & Penalties
• Create accountability through a random audit process
• Disqualification from future use of this Program and removal from eligibility list if 3 violations occur
• Violations appealable to the Building and Fire Life Safety Commission Examples of Violations
• Modifications outside of the building’s interior (e.g. parking, building façade) • Expanding beyond project scope without approval
• Not hiring the necessary licensed professionals for specialized work • Not adhering to applicable building codes
• Not following other City requirements (not recycling C&D material or using an unauthorized hauler)
Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 881 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Policy Question
Council Policy Question:

Would Council like to put a time limit on how long a project lead is removed from the qualified list after the “three strikes” policy?
Option 1 – Disqualify project lead permanently from Program.

Option 2 – Disqualify project lead for a specified amount of time (Council to provide specified time).

Staff’s Recommendation – as this is a
voluntary program that needs to have
consequences to ensure accountability
Item 12-A
December 16, 2025
Item 12-A
December 16, 2025

12.A.f
Packet Pg. 882 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Permit Process
Utilize “Over-the-Counter” (OTC) permit process as a framework No immediate budget actions are necessary, but the City will potentially collect less plan check fees as they are based on cost recovery of staff time.

Permit Fees Collected (FY 25-26)
Administrative Time (1 hour) $316.83
Building & Safety Inspection Projects 10,000 SF or less: $193.46 + $0.56 per SF Projects greater than 10,000 SF: Above calculation + $0.40 for every additional SF above 10,000 SF
Fire Department Inspection $525.66
Construction & Demolition (C&D) Inspection $702.21
RRR Inspection $589.72
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Packet Pg. 883 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Permit Process – Existing vs Proposed
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Packet Pg. 884 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program)

IMPLEMENTATION
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Packet Pg. 885 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Code Amendments – Article 8
• Changes to Articles 8 of the Santa Monica Municipal Code (SMMC) addressing Construction and Demolition Material Waste Management Plans and thresholds for RRR review necessary to facilitate pilot program
• Amendments will simplify and streamline the process to benefit ALL project types • SMMC Chapter 8.108, Subpart B – Construction and Demolition Material Waste Management Plans
o Removes requirement for large deposit at beginning of plan check process and changes to fine only to be paid before final inspection if not compliant with waste diversion requirements (70% of C&D materials must be diverted from a landfill with authorized haulers)
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Packet Pg. 886 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Code Amendments – Article 9
• SMMC Section 9.21.130 – Resource Recovery and Recycling (RRR) Standards o Applicability (when must an enclosure meet current standards?):
o Eliminate applicability threshold based on outdated permit valuation o Add applicability threshold related to food and beverage uses as these uses produce high volumes of waste that could result in public health issues o Dimensional Standards:
o Eliminate standard pertaining to “Large Residential, Nonresidential and Mixed-Use Development” that gives discretionary approval to the Director of Public Works to determine trash room dimensions to an objective standard (required per State law) o Remove max thresholds to address larger projects and minimally changing dimensional standards for all
Article 9 amendments are being brought before Council as an IZO to implement revisions immediately with launch of this Program and with an ROI to initiate the process for codification Item 12-A
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Packet Pg. 887 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program)

NEXT STEPS &

TIMELINE
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Packet Pg. 888 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Next Steps & Timeline
• Phase 1 – Non-structural commercial TIs: April 2026 (to align with launch of new Clariti permitting software)
• Phase 2 – Accessory Dwelling Units: October 2026 (6 months after implementation of Phase 1) • Phase 3 – Single-Unit Dwellings: April 2027 (6 months after implementation of Phase 2) Additional materials to be developed before Program launch:
• Dedicated Self-Certification Program webpage
• Specialized application with all requirements and forms (i.e. liability waiver, compliance affidavit, standardized language and formatting, etc.)
• Communications and outreach announcing launch
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Packet Pg. 889 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Recommendation

1. Adopt a finding of Statutory Exemption from the California Environmental Quality Act (CEQA) pursuant to Government Code Section 15061(b)(3).

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Packet Pg. 890 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) Degree of Occupancy Hazard
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Packet Pg. 891 Attachment: PowerPoint Presentation (7440 : Self-Certification Pilot Program) City Council
Report
City Council Meeting: December 16, 2025
Agenda Item: 12.B
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To: Mayor and City Council
From: Jing Yeo, Director, City Planning
Subject: Introduction and First Reading of an Ordinance to Approve a Development Agreement for a Digital Display Located at 1202 Third Street Promenade Recommended Action
Staff recommends that the City Council:

1. Adopt findings of categorical exemptions pursuant to Sections 15301, 15303, 15311, 15331, and 15332 of the California Environmental Quality Act (CEQA) Guidelines;

2. Introduce an ordinance for first reading to approve Development Agreement 25ENT-0021 for a Digital Display at 1202 3rd Street Promenade.

Summary
Signage in the City of Santa Monica (“City”) is currently regulated under Chapter 9.61 of the Santa Monica Municipal Code. The Sign Code currently prohibits free-standing signs such as billboards and also prohibits off-premise signage. In recent years, the City’s signage regulations have been amended to accommodate advances in advertising technology, to allow for flexibility and creativity in on-premise signage on the Third Street Promenade and the Santa Monica Place shopping center, and to support revenue opportunities for wayfinding signs in the public right-of-way, subject to a license agreement with the City.

The Applicant, United XYZ, submitted Development Agreement (DA) application 25ENT-0021 on January 30, 2025 for installation and operation of a new full motion, digital display at 1202 3rd Street Promenade (“the project”), located at the southwest corner of Third Street Promenade and Wilshire Boulevard. Since the City’s Municipal

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Code does not permit such large format, digital billboards that display off-premise advertising, a development agreement application was submitted for the installation of this Digital Display.

On June 10, 2025, City Council directed staff to proceed with establishing a new digital signage district for the Third Street Promenade and Santa Monica Place shopping center. Additionally, Council authorized City staff to initiate DA negotiations with the applicant of the new digital displays located at 301 Arizona Avenue and 1202 Third Street Promenade. The new digital signage district will be implemented through an ordinance (the “Digital Display District Ordinance”) that contemplates the installation of signs at strategically placed locations within the district boundaries to (1) create a visually stimulating and informative experience; (2) promote the City and the arts, and attract visitors and patrons to the City’s Downtown; (3) complement the City’s Entertainment District; as well as (4) generate a new source of revenue for the City.

The Digital Display District Ordinance, which is posted on the City’s website and was discussed by the Planning Commission on October 29, 2025, contemplates that digital displays will be approved by development agreement consistent with the ordinance’s provisions, so that all participating digital billboard operators and building owners are treated fairly and equitably, and to ensure that the full build-out scenario of all the digital displays allowed within the district can be analyzed for environmental impacts in accordance with state law.

To this end, staff has drafted a DA based on a template that is intended to apply universally to all development agreement applicants, with some minor anticipated deviations due to the unique circumstances of certain individual locations, to (1) eliminate uncertainty in planning for the digital displays and facilitate the orderly development of the digital displays in accordance with the Digital Display District Ordinance, (2) preserve substantial City discretion in reviewing the design of digital displays, (3) secure for the City improvements that benefit the public, (4) ensure the provision of community benefits as envisioned in the City’s Land Use and Circulation Element (LUCE), the Downtown Community Plan (DCP), and the Digital Display District

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Ordinance, and (5) otherwise achieve the goals and purposes for which the Development Agreement Statutes were enacted.

Key Issues for Consideration
The City Council should consider the following key issues in its decision to approve the DA for the project:
• Consider how well the project and negotiated community benefits advances with the City’s vision of Downtown as a thriving economic and cultural center, consistent with the City’s Land Use and Circulation Element and Downtown Community Plan
• The degree to which the project features and negotiated community benefits drives economic recovery and revitalization of the Third Street Promenade and the Downtown district as a whole
• Whether the project design concept is appropriate to the existing Landmark building and surrounding context
• Whether the project provides innovation with civic responsibility • Whether the project and its community benefits supports the City’s public objectives for increasing economic investment, City revenue generation, cultural enrichment opportunities, and activation of public spaces to support community services and needs in Santa Monica.

Discussion
On September 13, 2022, Council directed staff to explore establishing a large-format digital signage pilot program at Santa Monica Place that supports placemaking and stimulates economic recovery efforts in the Downtown. Council further directed that the pilot program include a public art component, community messaging, and promotion of Santa Monica, and be supported by a revenue-sharing content opportunity to support community programs and services.

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On June 10, 2025, Council gave direction to staff to establish a Digital Display District in the Downtown, specifically encompassing the Third Street Promenade and Santa Monica Place shopping center (the District). The City Council directed that the following standards and requirements be established for new digital displays in the District:
• Community benefits, including revenue sharing or financial contributions to support Downtown and Citywide reinvestment and enhance City programs and services
• 20% display time allocation for community content, such as civic announcements, community-interest information, public safety and emergency alerts, public art programming, and local events
• Occupancy standards to ensure 100% ground floor occupancy and 50% total building occupancy for the existing building
• Illumination standards, including requiring that the displays be dimmed at night • Operational hours, generally consistent with the operational hours of the Promenade Entertainment Zone
• Maintenance standards
Digital Display District Ordinance
Pursuant to Council direction on June 10, 2025, staff prepared a Digital Display District Ordinance (Ordinance) that would establish a Digital Display District for the Third Street Promenade and Santa Monica Place shopping center. The Ordinance was published for public review on October 20, 2025 on the City’s website at https://www.santamonica.gov/digital-display-district-for-the-third-street-promenade-andsanta-monica-place. Revisions have been made to the Ordinance in response to public comments received.

The Ordinance provides an updated, innovative vision for the Promenade and Santa Monica Place shopping center and establishes a new regulatory framework to enable large-format digital displays. The Ordinance establishes standards that would be applicable to all new digital displays, including but not limited to:
• Community Benefits • Design Authority

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• Permitted Location • Requirements for Landmark Buildings • Display Type • Energy
• Projections/Encroachments • Hours of Operation
• Maximum Display Area • Maintenance
• Content • Illumination
• Audio
The Ordinance restricts digital displays to a focused geographic area – the Third Street Promenade and the Santa Monica Place shopping center – where such displays would complement the existing entertainment, retail, dining, and visitor activities. Specifically, digital displays would only be permitted at the following locations:
• On corner buildings located on the Promenade with a maximum of one 1,000 sf display wrapping the corner of each building
• On the exterior facades of the Santa Monica Place shopping center with a maximum of four digital displays, each display not exceeding 1,000 sf By concentrating the displays to these locations, the City can minimize lighting impacts on residential uses and leverage the prime visibility of these high traffic corners to attract activity and investment. Based on these limited locations, up to sixteen (16) digital displays could be potentially installed in the District.

Each new digital display in the District is required to be processed through a development agreement and adhere to the requirements of the Ordinance. The proposed DA for the Digital Display at 1202 3rd Street Promenade is being processed pursuant to the Ordinance and is required to provide meaningful community benefits, which are enumerated below.

Project Description
The DA application (25ENT-0021) is for a new full motion, digital display (“Digital Display”) proposed to be installed on the upper-level façade of the existing commercial Landmark building (John Reed Fitness) at 1202 3rd Street Promenade, at the southwest corner of Third Street Promenade and Wilshire Boulevard. This Digital Display would

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have a single display face that would comprise approximately 1,000 sf of area, wrapping the corner of the building above the storefront. The Digital Display would be full motion, with LED and would provide for paid on-premise and/or off-premise advertising, curated art, and City community content including civic announcements, local event information, and emergency announcements.

The proposed Digital Display would employ a simple, minimalist design in keeping with the Late Streamline Moderne style of the Landmark building. The design was developed in consultation with an historic preservation architect and is presented deliberately to ensure that the top portion of the building’s circular fluted tower remains visible and as prominent as possible. Additionally, in keeping with the building’s historical condition, the applicant proposes to reactivate an existing blade sign that originally existed on the eastern façade of the building.

Address 1202 3rd Street Promenade
Parcel Size: 14,990 sf
Zoning District: Downtown – Bayside Conservation (BC)

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Existing On-Site
Improvements:
44,949 sf commercial building (City-designated Landmark) Display Type Building mount, corner wrap (northeast)
Dimensions Approximately 49’2” width x 18’6” height
Figure 1: Daytime Rendering of Digital Display at 1202 3rd Street Promenade

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Figure 2: Nighttime Rendering of Digital Display at 1202 3rd Street Proposed Reactivation of Blade Sign
Figure 3: Blade Sign at 1202 3rd Street
The distance from grade to top of sign is approximately 36 feet. The Digital Display will be seen by those driving eastbound on Wilshire Boulevard and by pedestrians walking along the Third Street Promenade. The Digital Display extends approximately five feet

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into the existing public right-of-way of the Promenade, and therefore, an encroachment permit from the City’s Public Works Department would be required. This projection would be subject to Section 9.21.180 of the Santa Monica Municipal Code (SMMC) to ensure that it does not constitute a hazardous visual obstruction.

Development Agreement Overview
Development agreements are negotiated contracts between the City and an applicant that specify the design parameters, development standards, and requirements of a project. Development agreements provide some flexibility from local land use regulations in return for some level of public benefit. While a development agreement is an alternative to the standard development approval process; in practice, it is similar to other public review processes where Council makes the final decision. The City has more discretion in imposing conditions and requirements on the proposed project and since development agreements are negotiated contracts, both parties must agree to all terms. A development agreement is adopted by ordinance. Pursuant to a development agreement, the City can negotiate community benefits within the bounds of its police power and statutory authority.

The DA for the project is being processed in accordance with the Ordinance.

Terms of the Development Agreement
The applicant of the proposed Digital Display will be required to provide community benefits pursuant to the DA throughout the 30-year term of the agreement. Section 2.5 of the DA enumerates the negotiated community benefits for the project, which are established in the Digital Display District Ordinance and are largely guided by Council direction given on June 10, 2025. The applicant has proposed meaningful community benefits that include financial contributions and allocated display time for community content. The following discussion presents a summary of each community benefit that has been negotiated in good faith between the City and applicant.

Financial Contribution

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The installation of large format, digital displays on the Promenade provides a valuable opportunity to generate financial revenue for the City and to stimulate commercial activity in the City’s Downtown District. Other cities such as West Hollywood, the City of Los Angeles, and the City of San Jose have recently permitted digital displays within public rights-of-way and on private properties in exchange for financial benefits to the jurisdiction.

Consistent with Council direction given on June 10, 2025 and the Ordinance, the DA for the project includes a revenue-sharing model along with a minimum annual guarantee (MAG) that will be paid to the City. The required revenue-sharing model and MAG guarantees a steady stream of proceeds that could be used for public improvements, citywide services, public arts programming, and City programming.

A market value and economic study has been completed, which estimated the future revenue generation potential of all 16 potential digital displays in the District and the appropriate percentage of revenue-share for this proposed Digital Display. Information contained in this market study was used to negotiate the financial community benefits of this DA. Below is a general outline of the financial terms for this DA:
• One time community benefit payment of $500,000 to be paid within 30 days of issuance of a Certificate of Occupancy or final building permit signoff of the Digital Display. If this one-time payment is not made on or before June 30, 2027, then the amount will escalate by three percent (3%) on June 30, 2027 and annually by three percent (3%) each June 30 thereafter until it is made. • Annual community benefit payment in an amount equal to the greater of:
o The Revenue Share Contribution, which will be based on 20 percent of the annual gross revenues received for advertising on the display. This revenue share contribution shall be paid annually.
o Minimum annual guarantee or MAG of $500,000 which shall be paid quarterly, with a 3% annual escalation starting on June 30, 2027 over the 30-year term of the agreement. This escalation rate reflects an average annual rate of inflation. Additionally, to account for market saturation as

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more digital displays become operational in the District, the MAG would de-escalate by 3% when the 10th digital display in the District “go live”, and by an additional 3% for every display thereafter (e.g., 3% reduction for the 10th digital display, additional 3% reduction for the 11th digital display, etc.).
• City maintains the right to audit twice per year for records relevant to the determination of gross revenues
City and Art Content
One community benefit in the negotiated DA that does not provide direct monetary compensation to the City is allocated display time for curated City and Art content.

Consistent with the Ordinance, the Applicant is required to allocate 20% of the total annual display time for community content such as civic news, public service announcements, emergency notifications, Amber Alerts, community event updates, and/or cultural arts. Based on the permitted operational hours as established in the Ordinance, up to 12 minutes of City and Art content would be displayed per hour for the Digital Display. The City also has the reserved right to consolidate its allocated time into multiple blocks per hour to facilitate special promotional activities in the City.

As required in the Ordinance, the operator of the Digital Display would be required to participate in a City-administered Digital Display City Content Program that will highlight civic information, cultural programming, and local art. The program would ensure that City and Art content is displayed and managed in a coordinated manner through the City. This ensures that the Digital Display not only serves commercial purposes but also acts as public communication and cultural platforms, reflecting Santa Monica’s values of creativity, innovation, and civic pride.

Unlike traditional physical art installations, the proposed Digital Display offers the flexibility to continually refresh and rotate art content, creating opportunities for seasonal showcases, artist residencies, or themed collaborations. The required City and Art Content allocation (estimated to be 12 minutes per hour) under the Ordinance ensures that the display regularly features community and art programming—such as short

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video art, digital sculpture, animation, or civic storytelling—bringing art to thousands of daily visitors on the Promenade and at Santa Monica Place.

Building Occupancy
The proposed Digital Display would also implement the City’s strategic economic development and placemaking goals, consistent with the objective of the Ordinance. As an additional community benefit, the Digital Display operator is required to adhere to minimum building occupancy standards. As specified in Section 2.5.4(a) in the DA, (i) no more than fifty percent (50%) of the rentable floor area within the existing building or (ii) the entire ground floor level of the existing building is permitted to remain unoccupied for more than 12 months. If this occupancy threshold is not met, then the DA requires the MAG Contribution to be increased by 25% (non-compounded) on a daily pro-rata basis. Additionally, the DA provides the City the right to shut off the display if the occupancy threshold is not met within four (4) years and the right to terminate the DA if threshold is not met within five (5) years.

Key Issues
Historic –The existing Landmark (JC Penney) building is defined by its strong horizontal emphasis and the streamlined design of its northeast corner, featuring the storefront, canopy, and prominent fluted tower. As analyzed in the Historic Resource Technical Report prepared for the project (see Attachment C), the proposed Digital Display would obscure views of the fluted tower from distant points on Wilshire Blvd and Third Street Promenade. However, the upper portion of the tower will remain visible on closer view behind the digital display screen, which will be offset from the building’s façades; and the building’s other features will remain fully visible, including its scored plaster walls, ribbon windows, blade sign, canopy, storefronts and display windows. Additionally, the digital display is designed to be reversible, incorporates a curved form and horizontal orientation consistent with the building’s character, and is positioned to maintain a partial view of the tower, allowing it to remain legible as a distinct architectural feature.

Therefore, the installation of the Digital Display would not alter the existing Landmark such that its significance would be materially impaired.

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Additionally, as an added benefit, the applicant has also proposed the restoration of the blade sign to honor the building’s historic appearance and installation of a Permanent Historic Commemorative Installation on the property that portrays one or more aspects of the past history and significance of the site. The commemorative installation may include, but is not limited to, a plaque photograph(s), postcard(s), illustration(s), map(s), etching, display board, video screen, narrative or electronic content to be developed with guidance from a Qualified Historic Preservation Professional.

Lighting – There are no existing residential uses in the immediate vicinity of the proposed Digital Display; however, there are residential uses in the multifamily residential (R2) zoning districts further to the north across Wilshire Boulevard. Light trespass on these sensitive residential uses would be minimized and less than 3.0 footcandles through compliance with the illumination standards established in the Digital Display District Ordinance. These standards were developed based on a Lighting Study conducted for the Digital Display District. The Lighting Study conservatively analyzed all 16 potential digital displays that could be installed under the Ordinance, including the proposed Digital Display at 1202 3rd Street Promenade.

Consistent with the Ordinance, the Digital Display would adhere to strict brightness limits that vary by time of day:
• Daytime: From sunrise until sunset, luminance shall not exceed 6,000 candelas per meter squared.
• Evening: From sunset until 10:00 p.m., luminance shall not exceed 300 candelas per meter squared.
• Nighttime: From 10:00 p.m. to 1:00 a.m., luminance shall not exceed 200 candelas per meter squared.
• After Hours: From 1:00 a.m. until sunrise, Digital Display shall be powered off.

These standards would ensure that the Digital Display remains visible without producing excessive glare or light spill onto nearby residential uses. In addition, the display would incorporate automatic dimming and photocontrol devices that continuously adjust

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brightness in response to changing ambient light conditions, reducing illumination by at least 65% when appropriate. Further, the Ordinance limits illuminance at nearby residential uses to no more than 3.0 foot-candles (measured at the residential property line), protecting nearby residential uses from intrusive light trespass. To ensure compliance with the illumination standards, the operator of the Digital Display would be required to submit a Photometric Report and illumination testing prior to issuance of a certificate of occupancy or commercial operation of the display.

Driver Distraction – Another common concern associated with the proposed Digital Display is the potential for driver distraction impacts, since drivers traveling eastbound on Wilshire Boulevard would have full view of the display. Driver distraction impacts, however, would be minimized as the Digital Display operator would be required to comply with the Ordinance’s prohibition of flashing, strobing, or scrolling text.

Additionally, controlled transition speeds (a minimum one-second fade between static images) would provide a visually comfortable and consistent viewer experience. Taken together, the technical standards in the Ordinance would ensure the proposed Digital Display context-sensitive, safe environment that avoids driver distraction, protects public safety, and creates visual comfort.

Community Outreach
The applicant held an on-line community meeting for the project on April 3, 2025, via Zoom. The meeting was also noticed, including the meeting Zoom link, on the on-site signage, as well as on the home page of the website for the project. There were 12 attendees outside of the development team. Comments from attendees included questions on pedestrian safety, energy usage of the digital signage, advertising rates, and operational standards.

Hearing notices for the Council’s discussion were mailed 14 days prior to the hearing date to all residents and property owners within 750 feet of the subject property and mailed to community members who have previously attended meetings or requested to be placed on the project mailing list. A notice was also published in the Santa Monica Daily Press 14 days in advance of this Council meeting.

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Planning Commission Review
The project was presented to Planning Commission review and approval on October 29, 2025. The Commission was generally in support of the project and appreciated the design of the digital display, given the challenges of the Landmark building.

Commissioners recommended the inclusion of an interpretative historic display at the ground floor and suggested that an image of the fluted tower be shown on the display at every hour. The Commission voted to recommend approval of the DA to City Council.

Development Agreement Findings
In order to approve the DA, the City must find that it meets the findings of Santa Monica Municipal Code (SMMC) Section 9.60.110 Development Agreements, and Section

9.61.205 (F)(16) of the Digital Display District Ordinance.

SMMC Section 9.60.110

1. The Development Agreement is consistent with the objectives, policies, general land uses and programs specified in the general plan and any applicable specific plan. The 1202 3rd Street Promenade site is located in the LUCE’s Downtown District and has a Downtown Core General Plan Land Use Designation. Goals and policies in this District are geared primarily toward reinforcing the Downtown as the focus of the City, encouraging a broad mix of uses and new investment in the District that creates dynamic daytime and evening activity, and reinforces the Downtown as the place with the greatest concentration of activity in the City. The proposed Development Agreement supports the City’s goals to encourage economic vitality, enhance placemaking, and promote creative, high-quality design within the Downtown. Goal LU2 establishes Downtown as a thriving creative and cultural center with a unique concentration of innovative businesses, performance spaces, museums and programmed events. The Development Agreement is consistent with Goal LU3, which imagines Santa Monica’s Downtown continues to be the economic center for the City, providing a diverse and flexible mix of uses that can meet future resident, business and visitor demand and also consistent with Goal CCP2 which calls for Downtown to be a thriving and diverse economic force that supports the city’s vitality, fiscal stability and high levels of community services. The Development Agreement is also

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aligned with Goal CCP5: The Third Street Promenade continues to anchor the Downtown’s retail and public space experience with updated features and activities.

2. The Development Agreement is compatible with the uses authorized in the district in which the real property is located, in that the project site is located within the Downtown – Bayside Conservation (BC) District, which permits a variety of active commercial and entertainment-oriented uses. The proposed Digital Display would complement the existing entertainment, retail, dining, and visitor activities. It will enhance the visual and economic activity of the Promenade while complying with operational and design standards established in the Digital Display District Ordinance, including limits on brightness, operating hours, and maintenance. These measures ensure the display complements the district’s entertainment character without negatively affecting nearby lightsensitive residential uses. The Development Agreement is also consistent with Policy CCP5.1 that states new public art should be encouraged and located to enhance the pedestrian experience and create an immersive arts experience and Policy PPS4.3 calling for the Third Street Promenade to be regularly updated to remain consistent with the surrounding areas in terms of infrastructure, landscaping, signage and aesthetic upgrades.

3. The Development Agreement is in conformity with the public necessity, public convenience, general welfare, and good land use practices by establishing clear parameters for the Digital Display design, operation, and maintenance, while providing substantial community benefits. These include revenue-sharing with the City, a minimum annual financial guarantee, and a 20% allocation of display time for civic and cultural content such as public safety messages, community event information, and local art. Consistent with the Digital Display District Ordinance, the Development Agreement also advances good land use practices by concentrating digital displays within a focused geographic area and ensuring high-quality design standards that reinforce the City’s goals for a safe, engaging, and economically vibrant urban environment.

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dimming technology and is required to power off between 1:00 a.m. and sunrise.

The Digital Display will not show flashing or scrolling text and other visual effects that could compromise driver safety. Collectively, these measures ensure the display operates safely and responsibly without detrimental impacts to the public or surrounding community.

5. The Development Agreement will not adversely affect the orderly development of the property in that the Digital Display will be installed on an existing commercial building, designed to integrate architecturally with the structure. The Development Agreement includes building occupancy standards to promote active ground-floor use, thereby supporting economic activity and maintaining the vitality of the Promenade.

6. The Development Agreement will have a positive fiscal impact on the City.

Through a negotiated revenue-sharing structure and minimum annual guarantee, the Development Agreement will provide an ongoing source of funding to support City programs, services, and public art initiatives. The Development Agreement will also include a one-time payment contribution to the City upon completion of the Digital Display In addition, by activating a key Promenade intersection and attracting visitors, the project will contribute to increased economic activity, benefiting nearby businesses and generating additional tax revenues for the City.

SMMC Section 9.61.205(F)(16)

1. The Digital Display is consistent with the goals, objectives, purposes and provisions of the Santa Monica LUCE and the Downtown Community Plan. The project supports the City’s goals to encourage economic vitality, enhance placemaking, and promote creative, high-quality design within the Downtown consistent with the LUCE and Downtown Community Plan. As indicated above, the proposed Digital Display aligns with the City’s efforts to reinvigorate the Third Street Promenade and surrounding areas as a vibrant, pedestrian-oriented entertainment district.

2. The Digital Display complies with the regulations established in the Digital Display District Ordinance. The proposed Digital Display complies with all applicable standards and requirements established in the Digital Display District Ordinance for the Third Street Promenade and Santa Monica Place Shopping

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Center. The project adheres to regulations governing display size, design review, energy use, illumination, hours of operation, and content.

3. The Digital Display would not otherwise result in a threat to the general health, safety, and welfare of City residents, based on factors including but not limited to such factors as distracted driving, pedestrian and driver safety, light and glare, or aesthetics. The Digital Display would implement multiple safeguards developed through the City’s Digital Display District Ordinance and supporting Lighting Study, which evaluated potential light and glare impacts for all anticipated display locations within the District. The display is designed and regulated to minimize driver distraction and visual clutter through controlled transition speeds, fade effects, and the prohibition of flashing, scrolling, or strobing imagery. Light levels are limited to prevent excessive brightness and protect nearby residences from glare or light trespass. Automatic dimming and shutoff systems will continuously adjust luminance based on ambient lighting conditions, and the display will remain off between 1:00 a.m. and sunrise. These requirements ensure the display operates in a manner consistent with pedestrian and driver safety, visual comfort, and the City’s aesthetic and environmental goals.

4. The Digital Display provides substantial economic and public benefits that would not otherwise accrue to the public in the absence of its installation. The DA includes a revenue-sharing model and a minimum annual guarantee that will generate consistent, long-term funding to support City programs, public improvements, and community services. The display will also allocate 20% of total annual operating time for City and Art content, such as public safety messages, community events, and public art, enhancing the City’s public communication and cultural programming. The DA contributes to Downtown revitalization efforts by activating a highly visible corner on the Third Street Promenade, supporting local businesses, and strengthening the area’s identity as a premier entertainment and cultural destination.

Environmental Review
As further detailed in the CEQA analysis, the proposed Digital Display is categorically exempt from CEQA pursuant to Section 15301 (Class 1 – Existing Facilities), Section 15303 (Class 3 - New Construction or Conversion of Small Structures), and Section 15311 (Class 11 - Accessory Structures), Section 15331 (Class 31 - Historic Resource

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Rehabilitation/Restoration), and Section 15332 (Class 32 – Infill Projects) of the CEQA Guidelines.
• Section 15301 of the CEQA Guidelines exempts the operation, repair, maintenance, permitting, or minor alteration of existing public or private structures, facilities, mechanical equipment or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. Projects that fall into this class of exemption include interior or exterior alterations and new copy on existing on and off-premise signs and additions to existing structures provided that the addition will not result in an increase of more than: (1) 50 percent of the floor area of the structures before the addition, or 2,500 square feet, whichever is less; or (2) 10,000 square feet. The Digital Display that would be affixed to the existing building and the reactivation of the blade sign would result in a minor alteration of the existing building. No expansion of the land uses or existing structure is proposed. Therefore, the project is exempt under Section 15301.
• Section 15303 of the CEQA Guidelines exempts the construction and location of limited numbers of new small facilities or structures; installation of small new equipment and facilities in small structures; and the conversion of existing small structures from one use to another where only minor modifications are made in the exterior of the structure. Projects that fall into this class of exemption include accessory (appurtenant) structures including garages, carports, patios, swimming pools, and fences. The Digital Display would be an accessory structure to the existing building and therefore, is exempt under Section 15303. • Section 15311 of the CEQA Guidelines exempts the construction, or placement of minor structures accessory to (appurtenant to) existing commercial, industrial, or institutional facilities. Projects that fall into this class of exemption include construction, or placement of minor structures accessory to (appurtenant to) existing commercial, industrial, or institutional facilities, including but not limited to: (a) On-premise signs. The Digital Display would be an accessory structure to existing building, and therefore, is exempt under Section 15311. • Section 15331 of the CEQA Guidelines exempts projects limited to maintenance, repair, stabilization, rehabilitation, restoration, preservation, conservation or reconstruction of historical resources in a manner consistent with the Secretary of the Interior’s Standards for the Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring, and Reconstructing Historic

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Buildings (“the Standards”). As analyzed in the Historic Resources Assessment report, the project conforms with all the Standards, except Standards 2 and 9. As noted in the Secretary of the Interior’s Guidelines, “the Secretary of the Interior’s Standards for Treatment of Historic Properties are only regulatory for projects receiving federal grant-in-aid funds otherwise, the Standards and Guidelines are intended only as general guidance for work on any historic building.). Therefore, as discussed in detail in the attached CEQA analysis, since the digital display is designed to be reversible and is generally consistent with all but two of the Standards, the project is exempt pursuant to Section 15331. • Section 15332 of the CEQA Guidelines exempts projects characterized as in-fill development meeting the conditions below.
o The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations.
o The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses. o The project site has no value, as habitat for endangered, rare or threatened species.
o Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality.
o The site can be adequately served by all required utilities and public services.

The project meets the qualifications of the in-fill exemption as it would be generally consistent with the general plan, would be installed on a site of no more than 5 acres in an urban area that has no value for endangered, rare, or threatened species. Additionally, the installation of the Digital Display would not result in significant effects related to traffic, noise, air quality or water quality, and the displays can be adequately served by all required utilities and public service.

Therefore, the project is exempt under Section 15332.

In addition, none of the exceptions specified in Section 15300.2 of CEQA Guidelines would apply that would preclude the use of these CEQA exemptions as indicated in the CEQA analysis. Therefore, the project is categorically exempt pursuant to Sections 15301, 15303, 15311, 15331, and 15332 of the CEQA Guidelines.

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Past Council Actions
Meeting Date Description
September 13, 2022 Council directed staff to explore establishing a large-format digital signage pilot program at Santa Monica Place that supports placemaking and stimulates economic recovery
efforts in the Downtown.

January 10, 2023 Council adopted an Ordinance to award a franchise to BIG Outdoor for the installation, operation, and maintenance of a digital wayfinding and out-of-home advertising kiosk network in the public right-of-way.

March 25, 2025 Council adopted an Interim Zoning Ordinance (IZO) amending Santa Monica Municipal Code Chapter 9.61 to
increase flexibility for signage in the Bayside Conservation District and Third Street Promenade to promote economic recovery.

May 13, 2025 Council adopted an emergency ordinance to establish the Third Street Promenade Entertainment Zone Pilot program.

June 10, 2025 Council directed staff to proceed with establishing a new digital signage district for the Third Street Promenade and the Santa Monica Place shopping center, and to begin
negotiations with the applicants of new digital displays.

Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of recommended action. Staff will return to Council if specific budget actions are required in the future.

Approval of the DA is expected to generate revenue to the City’s General Fund of approximately $500,000 in the first year after the Digital Display is completed and operational, based on the MAG established in the DA. Additionally, as an added community benefit that is required in the Ordinance, the City will receive a one-time contribution payment of $500,000 per display (which will escalate by 3% starting on June 30, 2027 and annually thereafter).

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Prepared By: Rachel Kwok, Environmental Planner
Approved Forwarded to Council
Attachments:

A. 1202 3rd St Digital Display Plans_Renderings
B. 1202 3rd St DA final
C. ORD-ord-First Reading 1202 DA
D. CEQA Analysis 1202 3rd St
E. HRG_Report_1202 3rd St_Dec 2025
F. Written Comments
G. PowerPoint Presentation

12.B
Packet Pg. 913
© 2025 Orange Barrel Media, LLC. All Rights Reserved

DAY VANTAGE

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Packet Pg. 914 Attachment: 1202 3rd St Digital Display Plans_Renderings (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third © 2025 Orange Barrel Media, LLC. All Rights Reserved

DAY VANTAGE

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Packet Pg. 915 Attachment: 1202 3rd St Digital Display Plans_Renderings (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third © 2025 Orange Barrel Media, LLC. All Rights Reserved

NIGHT VANTAGE

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Packet Pg. 916 Attachment: 1202 3rd St Digital Display Plans_Renderings (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third © 2025 Orange Barrel Media, LLC. All Rights Reserved

WILSHIRE EASTBOUND

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Packet Pg. 917 Attachment: 1202 3rd St Digital Display Plans_Renderings (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third © 2025 Orange Barrel Media, LLC. All Rights Reserved
5 PEDESTRIAN VANTAGES
GROUND PERSPECTIVE - CONER OF WILSHIRE BLVD & 3RD STREET WILSHIRE BLVD CROSSWALK

12.B.a
Packet Pg. 918 Attachment: 1202 3rd St Digital Display Plans_Renderings (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third

PROPERTY LINE

PROPERTY LINE
18’-6” 17’-6” 7’-0”

NEW MEDIA OPERATOR IDENTIFICATION SIGNAGE,
INTERNALLY ILLUMINATED LETTERS 7” H x 10’-0” W
NEW 1000 SF TOTAL LED SIGNAGE,

WRAPS AROUND TO WILSHIRE ELEVATION

EXISTING FLUTED TOWER

NEW ARCHITECTURAL TRIM

REACTIVATE EXISTING BLADE SIGN,
SEE ELEVATION 47”
17” 13 5/8”
233”
1/8” THICK ALUMINUM CUTOUT

PAINTED BLACK AND FLUSH MO

TO EXISTING BLADE, BOTH SID

BLADE SIGN ELEVATION EAST ELEVATION
3RD STREET PROMENADE
© 2025 Orange Barrel Media, LLC. All Rights Reserved

ELEVATIONS
36'-0"

GRADE TO TOP OF SIGN

NEW ARCHITECTURAL TRIM, PAINTED

FINISH TO MATCH BRUSHED ALUMINUM

ADJUSTABLE WALL WASH FIXTURES

MOUNTED TO REAR OF SIGN FRAME

ILLUMINATE THE FLUTED TOWER ABOVE

AND BELOW THE SIGN
5'-0"
2'-3"

12.B.a
Packet Pg. 919 Attachment: 1202 3rd St Digital Display Plans_Renderings (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third

PROPERTY LINE

PROPERTY LINE
18’-6” 17’-6” 7’-0”
NEW 1000 SF TOTAL LED SIGNAGE,
WRAPS AROUND TO 3RD ST ELEVATION

EXISTING FLUTED TOWER

NEW ARCHITECTURAL TRIM

EXISTING FLUTED TOWER

NORTH ELEVATION
WILSHIRE BOULEVARD 36'-0" GRADE TO TOP OF SIGN
© 2025 Orange Barrel Media, LLC. All Rights Reserved

ELEVATIONS

ADJUSTABLE WALL WASH FIXTURES

MOUNTED TO REAR OF SIGN FRAME

ILLUMINATE THE FLUTED TOWER ABOVE

AND BELOW THE SIGN

NEW ARCHITECTURAL TRIM, PAINTED

FINISH TO MATCH BRUSHED ALUMINUM
1'-6" 18'-8"
1'-6"
3'-0"

12.B.a
Packet Pg. 920 Attachment: 1202 3rd St Digital Display Plans_Renderings (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third

PROPERTY LINE
10’-0” 7’-8”
54’-10” LENGTH LED SCREEN
31’-6” 10’-0”
R = 10’-0”

NEW ARCHITECTURAL TRIM

EXISTING
AWNING
© 2025 Orange Barrel Media, LLC. All Rights Reserved

PLOT PLAN
5'- 0"
5'-0"
1'-10"

NEW ARCHITECTURAL TRIM ON BOTH

ENDS OF SIGN FACE

EXISTING TRIM PIECES TO REMAIN

EXISTING LIGHT WASH TO BE

REACTIVATED

LED MODULES &

SUB-FRAME

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Packet Pg. 921 Attachment: 1202 3rd St Digital Display Plans_Renderings (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third 18’-6” 17’-6” 7’-0”
3’-11”
17” 13 5/8”
19’-5”
1/8” THICK ALUMINUM CUTOUT LETTERS

PAINTED BLACK AND FLUSH MOUNTED

TO EXISTING BLADE, BOTH SIDES

BLADE SIGN ELEVATION
© 2025 Orange Barrel Media, LLC. All Rights Reserved

BLADE SIGN REACTIVATION

12.B.a
Packet Pg. 922 Attachment: 1202 3rd St Digital Display Plans_Renderings (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Recording Requested By:

City of Santa Monica
When Recorded Mail To:

City of Santa Monica
Santa Monica City Attorney's Office
1685 Main Street, Third Floor
Santa Monica, CA 90401
Attention: City Attorney
_______________________________________________________________________ Space Above Line For Recorder's Use
No Recording Fee Required
California Government Code Section 27383

DEVELOPMENT AGREEMENT

BETWEEN

CITY OF SANTA MONICA,
AND

UNITED XYZ LLC

FOR A DIGITAL DISPLAY
AT 1202 THIRD STREET PROMENADE
__________________, 2026

12.B.b
Packet Pg. 923 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) i

TABLE OF CONTENTS
RECITALS ..................................................................................................................................1 ARTICLE 1 DEFINITIONS ............................................................................................................5 ARTICLE 2 DESCRIPTION OF THE DIGITAL DISPLAY .........................................................8

2.1 General Description ..........................................................................................................8

2.2 Principal Components of the Digital Display ...................................................................8

2.3 No Obligation to Develop .................................................................................................8

2.4 Vested Rights ....................................................................................................................9

2.5 Project and Community Benefits ....................................................................................10

2.6 Maintenance and Upgrades .............................................................................................19

2.7 Removal of Digital Display ............................................................................................19

2.8 Projection, Design, and Operation Standards .................................................................19

2.9 Coastal Commission Review ..........................................................................................20 ARTICLE 3 CONSTRUCTION ....................................................................................................20

3.1 [Reserved.] ......................................................................................................................20

3.2 Construction Hours .........................................................................................................20

3.3 Outside Building Permit Issuance Date ..........................................................................20

3.4 Construction Period ........................................................................................................21

3.5 Extended Vested Rights ..................................................................................................21

3.6 Existing Building Repairs, Remodeling, Reconstruction or Redevelopment and/or Digital Display Damage .............................................................................................................22

3.7 City Termination Option .................................................................................................22 ARTICLE 4 FEES, EXACTIONS, AND CONDITIONS .............................................................23

4.1 Fees, Exactions, and Conditions .....................................................................................23

4.2 Conditions on Modifications...........................................................................................23

4.3 Implementation of Conditions of Approval ....................................................................23 ARTICLE 5 EFFECT OF AGREEMENT ON CITY LAWS AND REGULATIONS ................23

5.1 Development Standards for the Digital Display; Existing Regulations ..........................23

5.2 Permitted Subsequent Code Changes .............................................................................24

5.3 Common Set of Existing Regulations .............................................................................26

5.4 Conflicting Enactments ...................................................................................................26

5.5 Timing of Development ..................................................................................................26

12.B.b
Packet Pg. 924 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) ii
ARTICLE 6 DESIGN APPROVAL ..............................................................................................26 ARTICLE 7 CITY TECHNICAL PERMITS ................................................................................26

7.1 Definitions.......................................................................................................................26

7.2 Diligent Action by City ...................................................................................................27

7.3 Conditions for Diligent Action by the City .....................................................................27

7.4 Duration of Technical City Permits ................................................................................28 ARTICLE 8 AMENDMENT AND MODIFICATION .................................................................29

8.1 Amendment and Modification of Development Agreement ..........................................29 ARTICLE 9 TERM ........................................................................................................................29

9.1 Effective Date .................................................................................................................29

9.2 Term ................................................................................................................................29 ARTICLE 10 PERIODIC REVIEW OF COMPLIANCE .............................................................30

10.1 City Review ....................................................................................................................30

10.2 Evidence of Reasonable Good Faith Compliance ..........................................................30

10.3 Information to be Provided to Owner .............................................................................30

10.4 Notice of Breach; Cure Rights ........................................................................................31

10.5 Failure of Periodic Review .............................................................................................31

10.6 Termination of Development Agreement .......................................................................31

10.7 City Cost Recovery .........................................................................................................31 ARTICLE 11 DEFAULT...............................................................................................................31

11.1 Notice and Cure ..............................................................................................................31

11.2 Remedies for Monetary Default ......................................................................................32

11.3 Remedies for Non-Monetary Default .............................................................................32

11.4 Modification or Termination of Agreement by City .......................................................34

11.5 Cessation of Rights and Obligations ...............................................................................35

11.6 Completion of Improvements .........................................................................................35 ARTICLE 12 MORTGAGEES .....................................................................................................35

12.1 Encumbrances on the Property .......................................................................................35 ARTICLE 13 TRANSFERS AND ASSIGNMENTS ..................................................................37

13.1 Transfers and Assignments. ............................................................................................37

13.2 Release Upon Transfer ....................................................................................................38 ARTICLE 14 INDEMNITY TO CITY .........................................................................................38

14.1 Indemnity ........................................................................................................................38

14.2 City’s Right to Defense ...................................................................................................38

12.B.b
Packet Pg. 925 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) iii
ARTICLE 15 GENERAL PROVISIONS......................................................................................39

15.1 Notices ............................................................................................................................39

15.2 Entire Agreement; Conflicts ...........................................................................................39

15.3 Binding Effect .................................................................................................................40

15.4 Agreement Not for Benefit of Third Parties ...................................................................40

15.5 No Partnership or Joint Venture .....................................................................................40

15.6 Estoppel Certificates .......................................................................................................40

15.7 Time ................................................................................................................................41

15.8 Excusable Delays ............................................................................................................41

15.9 Governing Law ...............................................................................................................42

15.10 Cooperation in Event of Legal Challenge to Agreement ................................................42

15.11 Attorneys’ Fees ...............................................................................................................42

15.12 Recordation .....................................................................................................................42

15.13 No Waiver .......................................................................................................................42

15.14 Construction of this Agreement ......................................................................................42

15.15 Other Governmental Approvals ......................................................................................43

15.16 Jurisdiction and Venue. ...................................................................................................44

15.17 Exhibits ...........................................................................................................................44

15.18 Counterpart Signatures ....................................................................................................44

15.19 Certificate of Performance ..............................................................................................44

15.20 Interests of Owner ...........................................................................................................44

15.21 Operating Memoranda ....................................................................................................45

15.22 Acknowledgments, Agreements and Assurance on the Part of Owner ..........................45

15.23 Waiver of Protest ............................................................................................................45

15.24 Not a Public Dedication ..................................................................................................46

15.25 Other Agreements ...........................................................................................................46

15.26 Severability and Termination ..........................................................................................46 Exhibit “A” Legal Description of Property
Exhibit “B” Digital Display Plans
Exhibit “C” SMMC Article 9 (Planning and Zoning)
Exhibit “D” Conditions of Approval
Exhibit “E” Permitted Fees and Exactions
Exhibit “F” Form of Assignment and Assumption Agreement Exhibit “G” Digital Display District Ordinance

12.B.b
Packet Pg. 926 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 1 DEVELOPMENT AGREEMENT
This Development Agreement (“Agreement”), dated ____________, 2026, is entered into by and between UNITED XYZ LLC, a California limited liability company (the “Owner”) and the CITY OF SANTA MONICA, a municipal corporation organized and existing pursuant to the laws of the State of California and the Charter of the City of Santa Monica (the “City”), with reference to the following facts:

RECITALS
A. Pursuant to California Government Code Section 65864 et seq. and Chapter 9.60 of the Santa Monica Municipal Code (collectively, the “Development Agreement Statutes”), the City is authorized to enter into binding development agreements with persons or entities having a legal or equitable interest in real property for the development of such real property.

B. Owner is the owner of approximately 14,990 square feet of land located in the City of Santa Monica, State of California, commonly known as 1202 Third Street Promenade, as more particularly described in Exhibit “A” attached hereto and incorporated herein by this reference (the “Property”).

C. The Property is developed with an existing approximately 44,949 square foot commercial building that is occupied with commercial (fitness/gym) uses (the “Existing Building”).

D. The City has included the Property within the Downtown Core land use designation under the City’s 2010 Land Use and Circulation Element of its General Plan (the “LUCE”). The Property is in the Bayside Conservation “BC” (Promenade) District under the Downtown Community Plan (“DCP”) and is located within the Bayside Conservation “BC” (Third Street Promenade Area) designation under the City’s Zoning Ordinance, and is located within the boundaries of the Digital Display District. The Property is also located in the California Coastal Zone.

E. On May 12, 2008, the Santa Monica Landmarks Commission designated the Existing Building as a City Landmark and the Property as a Landmark Parcel. (08-LM-005.) F. The City and Owner desire to allow Owner to install, operate, maintain, and repair a high-quality LED digital display and associated sign structure (the “Digital Display”) on the Existing Building for displaying paid static or full motion on-premises and/or off-premises advertising, artistic creations, civic announcements of public interest or importance and content promoting the City and/or its rich history, including Downtown Santa Monica and the Third Street Promenade. The operation of the Digital Display will generate revenues for the City through the Community Benefit Payment set forth in this Agreement.

G. Owner has advised the City of Owner’s intent to allow a third party billboard operator to operate and own, lease, or license the Digital Display from Owner during the term of this Agreement.

12.B.b
Packet Pg. 927 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 2 H. On January 30, 2025, Owner filed an application for a Development Agreement (25ENT-0021), pursuant to Santa Monica Municipal Code (“SMMC”) Section 9.60.020 (the “Development Application”). The Development Application proposes an approximately one thousand (1,000) square foot full motion, animated Digital Display to be installed under guidance by a Qualified Historic Preservation Professional to wrap around the corner of the east and north facades of the Existing Building above the first floor. In addition, consistent with one of the building’s character defining features the Development Application includes reactivation of the Existing Building’s unused blade sign to once again identify the commercial tenant operating within the Existing Building.

I. The design of the Digital Display and reactivated blade sign is more particularly depicted on the Digital Display Plans dated November 18, 2025 and attached hereto as Exhibit “B” (the “Digital Display Plans”).

J. Prior to filing the Development Application, a Qualified Historic Preservation Professional (as defined in Article 1 of this Agreement) was retained by the applicant team to advise it with respect to the location/positioning and design of the Digital Display. Subsequent to filing the Development Application, City also retained a Qualified Historic Preservation Professional to advise it with respect to the location/positioning and design of the Digital Display.

K. Prior and subsequent to filing the Development Application, Owner held a virtual community meeting and also held meetings with community members and stakeholders, including various preservation advocates, regarding the Digital Display.

L. Owner has paid all necessary costs and fees associated with the City’s processing of the Development Application and this Agreement.

M. The primary purpose is to allow for a Digital Display on the Property to (1) create a visually stimulating and informative experience at the corner of Wilshire Boulevard and the 1200 block of the Promenade; (2) promote the City, including the Third Street Promenade, and the arts, attract visitors and patrons to the Promenade; (3) complement the City’s Entertainment District; as well as (4) generate a new source of revenue for the City, while at the same time respecting and embracing the prominence of the Existing Building, a City-designated Landmark, including its fluted tower that was originally capped with JCP signage. The Parties desire to enter into this Agreement in conformance with the Development Agreement Statutes in order to achieve the development of the Digital Display on the Property.

N. The Digital Display is also consistent with and implements numerous LUCE, DCP, and Historic Preservation Element goals and policies including:
 LUCE Goal D1 - “Maintain Downtown’s competitive advantage as a premier local and regional shopping, dining, and entertainment destination, and support its evolution in order to respond to changing market conditions.”

12.B.b
Packet Pg. 928 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 3  LUCE Goal E1 - “Create an economic base that satisfies the commercial service needs of the City’s residents while providing employment opportunities and a strong fiscal infrastructure for the City.”
 LUCE Goal E4 - “Support the retail sector in order to provide for the needs of local residents and visitors and augment sales tax revenues.”  LUCE Policy E1.1 – “Make land use decisions that respond to changing market conditions and meet the needs of City residents and visitors.”  LUCE Goal HP 1 - “Preserve and protect historic resources in Santa Monica through the land use decision-making process.”
 LUCE Policy HP 1.3 - “Ensure that new development, alterations or remodeling on, or adjacent to, historic properties are sensitive to historic resources and are compatible with the surrounding historic context.”
 LUCE Goal HP 2 - “Preserve and protect historic resources through the development of economic incentives and neighborhood conservation approaches.”  LUCE Policy E4.6 - “Support Downtown as Santa Monica’s primary destination for comparison retail, including a mix of local, national and international shops and restaurants that serve residents, visitors and area employees.”  DCP Goal CCP2 - “Downtown continues to be a thriving and diverse economic force that supports the city’s vitality, fiscal stability and high levels of community services.”
 Goal CCP5: The Third Street Promenade continues to anchor the Downtown’s retail and public space experience with updated features and activities.  Policy CCP5.1 New public art should be encouraged and located to enhance the pedestrian experience and create an immersive arts experience.  Action CCP5.1A Install Pathway Art, Banners and Urban Design Features to support the walking experience and to promote awareness of Downtown’s cultural offerings.
 Policy CCP5.2 Consider opportunity for negotiated development agreement art contributions to be aggregated in order to facilitate the acquisition of significant public art pieces.
 DCP Goal LU3 - “Santa Monica’s Downtown continues to be the economic center for the City, providing a diverse and flexible mix of uses that can meet future resident, business and visitor demand.”

12.B.b
Packet Pg. 929 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 4  “The Bayside Conservation district is considered the pedestrian and economic heart of the City. Anchored by the Third Street Promenade, it is a vibrant urban atmosphere supported by a broad mix of building types, office space, entertainment, retail, restaurants, cafes, salons and exercise studios. The DCP supports the continued expansion of the central retail district by increasing the energy and pedestrian traffic on streets around the Promenade.” (DCP p. 22-23.)  Historic Preservation Element Goal 3 – “Increase public awareness of the history of Santa Monica and historic preservation in the City.”
 Historic Preservation Element Objective 3.2 – “Promote the benefits of owning historic property.”
 Historic Preservation Element Objective 3.8 – “Encourage the installation of plaques and/or public art related to historic buildings and sites in the City.”  Historic Preservation Element Policy 3.8.3 – “Investigate the possibility of coordinating historic preservation and public art programming.”  Historic Preservation Element Policy 4.1.3 – “Allow for appropriate additions to and adaptive reuse of historic resources.”
 Historic Preservation Element Goal 5 – “Promote the preservation of historic and cultural resources through incentives and technical assistance.”  Historic Preservation Element Objective 5.2 – “Promote and award incentives.” O. The City Council has determined that a development agreement is appropriate for the proposed development of the Digital Display on the Property. This Agreement will (1) eliminate uncertainty in planning for the Digital Display and result in the orderly development of the Digital Display in accordance with the Digital Display District Ordinance, (2) assure installation of necessary improvements on the Property, (3) provide for public infrastructure and services appropriate to development of the Digital Display, (4) secure for the City improvements that benefit the public, (5) ensure the provision of community benefits as envisioned in the LUCE, DCP, and the Digital Display District Ordinance, and (6) otherwise achieve the goals and purposes for which the Development Agreement Statutes were enacted.

P. This Agreement is consistent with the public health, safety, and welfare needs of the residents of the City and the surrounding region. The City has specifically considered and approved the impacts and benefits of the development of the Digital Display on the Property in accordance with this Agreement. The Digital Display will provide a number of significant project and community benefits as set forth in Section 2.5 of this Agreement.

12.B.b
Packet Pg. 930 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 5 Q. The City Council has found that the provisions of this Agreement are consistent with the relevant provisions of the City’s General Plan, including the LUCE, the DCP, the Digital Display District Ordinance, and the 1992 LUP.

R. On October 29, 2025, the City's Planning Commission held a duly noticed public hearing on the Development Application and this Agreement, and at such hearing, the Planning Commission recommended that the City Council approve the Digital Display including this Agreement.

S. On December 16, 2025, the City Council held a duly noticed public hearing on the updated Development Application and this Agreement, and at such hearing the City determined the Digital Display is exempt from the California Environmental Quality Act (“CEQA”) pursuant to a Class 1 exemption (existing facilities) per CEQA Guidelines Section 15301, a Class 3 exemption (new construction or conversion of small structures) per CEQA Guidelines Section 15303, a Class 11 exemption (accessory structures) per CEQA Guidelines Section 15311, a Class 31 exemption (historical resource restoration/rehabilitation), and a Class 32 categorial exemption (in-fill development) per CEQA Guidelines Section 15332 and introduced for first reading Ordinance No. _______________ approving this Agreement.

T. On ___________, 2026 the City Council adopted Ordinance No. _______________ approving this Agreement.

NOW THEREFORE, in consideration for the covenants and conditions hereinafter set forth, the Parties hereto do hereby agree as follows:

ARTICLE 1

DEFINITIONS
Capitalized terms not defined below shall have the meanings set forth in the City’s Zoning Ordinance. The terms defined below, whether capitalized or not, have the meanings in this Agreement as set forth below unless the Agreement expressly requires otherwise:

1.1 “1992 LUP” means the Coastal Land Use Plan in effect as of the Effective Date unless otherwise indicated in this Agreement.

1.2 “Agreement” means this Development Agreement.

1.3 “Annual Gross Revenues” means Gross Revenues received in a calendar year.

1.4 “Building Permit” means any permit required by SMMC Section 8.08.050(a) and any successors thereto.

1.5 “Business Day” means a business working day for City Employees.

1.6 “Calendar Quarter” means the periods between and including (a) January 1st and March 31st, (b) April 1st and June 30th, (c) July 1st and September 30th, and (d) October 1st and December 31st of any calendar year.

12.B.b
Packet Pg. 931 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 6 1.7 “City Council” means the City Council of the City of Santa Monica, or its designee.

1.8 “City Manager” means the City Manager or his or her designee.

1.9 “Community Development Director” means the Community Development Department Director of the City of Santa Monica, or his or her designee.

1.10 “Days” means calendar days.

1.11 “DCP” has the meaning set forth in Recital “D”.

1.12 “Digital” means of, relating to, or utilizing devices constructed or working by the methods or principles of electronics. “Digital” also means composed of data in the form of especially binary digits.

1.13 “Digital Display” means a display utilizing digital technology with a display face to broadcast a message containing static or animated content, for on and off-premises advertising, including without limitation the Digital Display referenced in Recital “F”.

1.14 “Digital Advertising Services” means advertisement services on the Digital Display, including advertisements in the form of banner advertising, search engine advertising, interstitial advertising, and other comparable advertising services.

1.15 “Digital Display District Ordinance” means Ordinance No. ___________, adopted by the City Council on _________, 2026 and included in Exhibit “G”.

1.16 “Digital Display District” means the Digital Display District identified in the Digital Billboard District Ordinance.

1.17 “Digital Display Commencement Date” means the date a Certificate of Occupancy or final building permit signoff, as applicable, for the Digital Display is/has been issued.

1.18 “Digital Display Plans” mean the plans for the Digital Display that are attached to this Agreement as Exhibit “B”.

1.19 “Discretionary Approvals” are actions which require the exercise of judgment or a discretionary decision, and which contemplate and authorize the imposition of revisions or additional conditions, by the City, including any board, commission, or department of the City and any officer or employee of the City. Discretionary Approvals do not include Ministerial Approvals.

1.20 “Effective Date” has the meaning set forth in Section 9.1 below.

1.21 “General Plan” or “City General Plan” means the General Plan of the City of Santa Monica, and all elements thereof including the LUCE, as of the Effective Date, unless otherwise indicated in this Agreement.

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Packet Pg. 932 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 7 1.22 “Gross Revenues” means income or revenue generated by the Digital Display from all sources, before any expenses (including lease or license payments to Owner) or taxes, computed according to generally accepted accounting principles.

1.23 “Including” means “including but not limited to.”

1.24 “Legal Action” means any action in law or equity.

1.25 “Ministerial Approvals” mean any action which merely requires the City (including any board, commission, or department of the City and any officer or employee of the City), in the process of approving or disapproving a permit or other entitlement, to determine whether there has been compliance with applicable statutes, ordinances, regulations, or conditions of approval. Without limiting the generality of the foregoing, the exercise of duties and/or professional judgment by any City official referenced in SMMC Article 7 (Public Works) and Article 8 (Building Regulations), as amended from time to time, shall be considered a Ministerial Approval.

1.26 “Operator” means the party responsible for operating the Digital Display.

1.27 “Owner” means UNITED XYZ LLC, a California limited liability company or any successor in interest to the Property.

1.28 “Parties” mean both the City and Owner, and “Party” means either the City or Owner, as applicable.

1.29 “Permitted Digital Display Area” means no more than one thousand (1,000) square feet.

1.30 “Person” means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company, or other entity, domestic or foreign.

1.31 “Qualified Historic Preservation Professional” means an architectural historian and/or historic architect with at least seven (7) years of relevant experience who satisfies The Secretary of the Interior’s Professional Qualification Standards for History, Architectural History, and/or Architecture pursuant to 36 CFR part 61.

1.32 “SMMC” means the Santa Monica Municipal Code, including the Zoning Ordinance, in effect on the Effective Date unless specifically stated to refer to the Santa Monica Municipal Code as it may be in effect at some other time.

1.33 “Transfer” means the transfer of title to property by the execution of the deed or other instrument.

1.34 “Zoning Ordinance” means the City of Santa Monica Comprehensive Land Use and Zoning Ordinance (Chapters 9.01 to 9.68 of the SMMC) in effect on the Effective Date, set forth in its entirety as part of Exhibit “C” (Planning and Zoning).

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Packet Pg. 933 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 8 ARTICLE 2

DESCRIPTION OF THE DIGITAL DISPLAY

2.1 General Description. The Digital Display includes the proposed improvement of the Property as more particularly described in this Agreement and on the Digital Display Plans, which present the Digital Display in concept. If there is a conflict or inconsistency between the text of this Agreement and the Digital Display Plans, the Digital Display Plans will prevail; provided, however, that omissions from the Digital Display Plans shall not constitute a conflict or inconsistency with the text of this Agreement. Detailed plans and specifications for the construction of the Digital Display (collectively, the “Construction Plans and Specifications”), including, without limitation, structural plans and working drawings, shall be prepared by Owner subsequent to the Effective Date based upon the Digital Display Plans, and nothing herein shall be interpreted by the Owner as a pre-approval of the Construction Plans and Specifications by the City Building Official or City Engineer.

2.2 Principal Components of the Digital Display. The Digital Display consists of the following principal components, as well as the other components delineated in the Digital Display Plans, all of which are hereby approved by the City subject to the other provisions of this Agreement: an approximately one thousand (1,000) square foot full motion, LED digital/animated display/billboard to be anchored to the roof and suspended over the façade of the Existing Building as shown on the Digital Display Plans. The Digital Display may display static or full motion animated illuminated/digital content seven Days per week including paid onpremises and/or off-premises advertising, public service content, artwork, civic announcements, charitable content and, as detailed in Section 2.5, content promoting the City and/or its rich history, including Downtown Santa Monica (such as the walking tours provided by the Santa Monica Conservancy) and the Third Street Promenade, and other City content. The Digital Display may display such illuminated/digital content during the hours specified in the Digital Display District Ordinance.

2.3 No Obligation to Develop.

2.3.1 Except as specifically provided herein:
(a) Nothing in this Agreement shall be construed to require Owner to proceed with the construction of the Digital Display.
(b) The decision to proceed or to forbear or delay in proceeding with construction of the Digital Display shall be in Owner’s sole discretion. (c) Except as provided in this Agreement, the decision to proceed or to forbear or delay in proceeding with construction of the Digital Display shall be in Owner’s sole discretion.

2.3.2 Failure to Proceed. Failure by Owner to proceed with construction of the Digital Display shall not result in any loss or diminution of development rights for the Digital Display, except upon expiration of Owner’s Vested Rights pursuant to this Agreement, or the termination of this Agreement.

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Packet Pg. 934 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 9 2.3.3 Conditions of Approval. Notwithstanding any provision of this Section 2.3 to the contrary, Owner shall be required to implement all conditions of approval required under this Agreement in accordance with and at the time specified in Exhibit “D” and may be subject to all remedies specified in this Agreement for the failure to implement these conditions of approval as and when so required.

2.4 Vested Rights.

2.4.1 Approval of Digital Display Plans. The City hereby approves the Digital Display Plans as the conceptual scope of the Digital Display. The City shall maintain a complete copy of the Digital Display Plans, stamped “Approved” by the City, in the Office of the City Clerk, and Owner shall maintain a complete copy of the Digital Display Plans, stamped “Approved” by the City, in its offices or at the Property. The Digital Display Plans to be maintained by the City and Owner shall be in a half-size set.

2.4.2 Minor Modifications to Digital Display. Owner, with the approval of the Community Development Director, may make minor changes to the Digital Display or Digital Display Plans (“Minor Modifications”) without amending this Agreement; provided that the Community Development Director makes the following specific findings that the Minor Modifications: (i) are generally consistent with the Digital Display’s overall qualities and characteristics as approved by the City Council; (ii) are consistent with the provisions, purposes and goals of this Agreement; (iii) are not detrimental to the public health, safety, convenience or general welfare; (iv) are consistent with the LUCE, DCP, and Digital Display District Ordinance; and (v) will not significantly and adversely affect the project and community benefits (Section

2.5) associated with the Digital Display, unless expressly authorized in Section 2.5. For the avoidance of doubt, any Minor Modification approving an increase or decrease in the square footage in a Digital Display shall document the proportionate increased or decreased One-Time Community Benefit and MAG Contribution in compliance with the Digital Display District Ordinance then in effect. The Community Development Director shall notify the Planning Commission and City Council in writing of any Minor Modifications approved pursuant to this Section 2.4.2. Any proposed change which the Community Development Director denies as not qualifying for a Minor Modification based on the above findings will only be processed as a Major Modification.

2.4.3 Modifications Requiring Amendment to this Agreement. Owner shall not make any “Major Modifications” (defined below) to the Digital Display without first amending this Agreement to permit such Major Modifications. A “Major Modification” means the following:
(a) Any increase in the square footage above the maximum display area allowed by the Digital Display District Ordinance, as it may be amended from time to time; (b) Any material variation in the design or location of the Digital Display (except as permitted as a Minor Modification pursuant to Section 2.4.2) that renders such aspects out of substantial compliance with the Digital Display Plans after Coastal Commission approval;

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Packet Pg. 935 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 10 (c) Any deviation from the Digital Display District Ordinance, as it may be amended from time to time;
(d) Any other change that would reduce or materially alter the project and community benefits as set forth in Section 2.5, unless expressly authorized in Section 2.5; and
(e) Any extension of the Term beyond the extensions provided for in Section 9.2.5.

If a proposed modification does not exceed the Major Modification thresholds established above, then the proposed modification may be reviewed as a Minor Modification in accordance with Section 2.4.2.

2.4.4 City Consent to Modification. The City may impose customary fees, exactions, and conditions, in connection with its approval of a Minor or Major Modification, subject to any applicable law. Notwithstanding anything to the contrary herein or in the Existing Regulations, if the Community Development Director approves a Minor Modification or if the City approves a Major Modification (and the corresponding amendment to this Agreement for such Major Modification), as the case may be, Owner shall not be required to obtain any other Discretionary Approvals for such modification in the case of certain Major Modifications.

2.4.5 Right to Develop. Subject to the provisions of Section 3.3 below, during the Term (as defined in Section 9.2 below) of this Agreement, Owner shall have the vested rights (the “Vested Rights”) to (a) develop and construct the Digital Display in accordance with the following: (i) the Digital Display Plans (as the same may be modified from time to time in accordance with this Agreement); (ii) any Minor Modifications approved in accordance with Section 2.4.2; (iii) any Major Modifications which are approved pursuant to Section 2.4.3; and (iv) the requirements and obligations of Owner related to the improvements which are specifically set forth in this Agreement, and (b) operate the Digital Display pursuant to the terms of this Agreement and through the Term of this Agreement. The City shall have no further discretion over the elements of the Digital Display which have been delineated in the Digital Display Plans (as the same may be modified from time to time in accordance with this Agreement).

2.5 Project and Community Benefits. Set forth below in this Section 2.5 are the project and community benefits that will be provided by the Digital Display.

2.5.1 One-Time Community Benefit Contribution. Within thirty (30) Days of issuance of the Digital Display Commencement Date, Owner shall pay a one-time community benefits contribution to the City in the amount of Five Hundred Thousand Dollars ($500,000) (the “One-Time Community Benefit Payment”). If the One-Time Community Benefit Payment is not made on or before June 30, 2027, then it shall escalate by three percent (3%) on June 30, 2027, and annually by three percent (3%) each June 30 thereafter until it is made.

2.5.2 Ongoing Community Benefit Contribution. Commencing on the Digital Display Commencement Date and continuing for each calendar year during the remainder of the Term, Owner shall pay to the City an amount (the “Ongoing Community Benefit

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Packet Pg. 936 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 11 Contribution”) equal to the greater of: (a) the Revenue Share Contribution (as set forth in subsection (a) below), and (b) the applicable MAG Contribution (as set forth in subsection (b) below).
(a) Revenue Share Contribution. Owner shall pay to the City (“Revenue Share Contribution”) an amount equal to twenty percent (20%) of the Annual Gross Revenues received for Digital Advertising Services. Such Revenue Share Contribution shall be paid annually to the City in accordance with Section 2.5.2(d) below.
(b) Minimum Annual Guaranteed Contribution. Beginning on the Digital Display Commencement Date and in accordance with the timing specified in Section 2.5.2(c) below, Owner shall pay to the City a minimum annual guaranteed payment (the “MAG
Contribution”) equal to Five Hundred Thousand Dollars
($500,000), which amount shall escalate by three percent (3%) commencing on June 30, 2027, and annually by three percent (3%) each June 30 thereafter.

Notwithstanding the foregoing, if the City approves more than nine (9) digital displays in the Digital Display District, as it may be amended from time to time, then commencing with the first quarterly MAG Contribution after such additional digital display’s Digital Display Commencement Date, the MAG Contribution otherwise due under this Agreement shall be reduced by three percent (3%) per digital display exceeding nine (9) (e.g., 3% reduction at the Digital Display Commencement Date for the 10th digital display, additional 3% reduction at the Digital Display Commencement Date for the 11th digital display, etc.).

Notwithstanding anything to the contrary herein, in no event will the City be required to pay or refund any sum to Owner as a result of the MAG Contribution reduction.
(c) Timing of MAG Contribution. Commencing with the Digital Display Commencement Date, the MAG Contribution shall be paid quarterly in arrears to City on or before the thirtieth (30th) day following the expiration of each Calendar Quarter during the Term and shall be prorated for any partial Calendar Quarter based on the number of Days within such time period. Concurrent with payment of the MAG Contribution, Owner shall submit confirmation in writing of the amount of the MAG Contribution paid and
documenting any increases/decreases in the MAG Contribution compared with the prior quarterly MAG Contribution payment including citations to the relevant section of this Agreement supporting any such increase/decrease (e.g. 2.5.2(g) late payment,

2.5.4 failure to meet occupancy threshold, 2.5.2(b) saturation,

12.B.b
Packet Pg. 937 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 12 2.5.2(h) abatement credit, 3.6 temporary removal) and any relevant documentation.
(d) Revenue Share Contribution Timing. The Revenue Share Contribution shall be paid annually in arrears no later than fortyfive (45) Days following the end of the year to which the Revenue Share is attributable (the “Reconciliation Payment Date”). No later than the Reconciliation Payment Date, Owner shall submit to the City a statement of the Revenue Share Contribution calculation for the immediately preceding year (January 1-December 31) along with a reconciliation statement (collectively, the “Reconciliation Statement”), reflecting the calculation of the Revenue Share Contribution due and owing for such calendar year (the “Annual Reconciliation”). If the amount of Revenue Share Contribution payable by Owner set forth in the Reconciliation Statement is more than the amount of MAG Contribution actually paid by Owner for such year (including any Supplemental MAG, if applicable), Owner shall pay the difference between the Revenue Share Contribution and the MAG Contribution (including any
Supplemental MAG, if applicable) paid to the City concurrently with the submission of the Reconciliation Statement for that year. (e) Statements of Annual Gross Receipts; Reconciliation Statement.

The Reconciliation Statement shall be accompanied by the signed certificate of the designated representative of the Owner, certifying specifically that (i) such report presents fairly and accurately reflects the Annual Gross Revenues of the calendar year, and (ii) the said Annual Gross Revenues conform with and are computed in
compliance with the definition of Annual Gross Revenues. (f) Records. For the purpose of permitting verification by City of any amount due to City as Revenue Share Contribution, Owner shall keep and preserve, or cause to be kept and preserved by Operator, for at least three (3) years after each calendar year as to such calendar year, and during the Term shall keep at the Property or at Operator’s premises at a designated location in Los Angeles County, a general ledger, required receipts and disbursement journals, and such sales records and other supporting
documentation together with original or duplicate books and records which shall disclose in detail all information required to permit City to verify Gross Revenues and which shall conform to and be in accordance with generally accepted accounting principles consistently applied. Not more than two (2) times per calendar year, after five (5) Business Days advance written notice to Owner or Operator, City or its employees, agents and/or accountants, shall have the right during business hours to make an examination or audit and copy of such books and records relevant to the determination of Gross Revenues (which examination may be

12.B.b
Packet Pg. 938 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 13 conducted physically at the Property or Operator’s premises in Los Angeles County or by Owner or Operator making available such books and records by electronic means). If such audit discloses that, in any calendar year, the Revenue Share Contribution owed to City is greater than the Revenue Share Contribution paid to City for such period, Owner shall pay to City, within ten (10) Days of notice thereof accompanied by reasonable documentary evidence thereof, such liability. In addition, if such audit shall disclose that Owner has underpaid by four percent (4%) or more any Revenue Share Contribution payable by Owner, then in such event, within ten (10) Days following written notice by City of the costs of such audit and amount due of the Revenue Share Contribution plus interest accompanied by reasonable documentary evidence thereof, Owner shall pay the cost of such audit, all Revenue Share Contribution then payable, plus interest as set forth in subparagraph (g), below, on such the amount of Revenue Share Contribution owed, calculated from the date such additional Revenue Share Contribution was originally due and payable. In the event Owner fails to pay the costs of audit, Revenue Share Contribution due and interest thereon, within the ten (10) calendar day period specified herein, then such failure shall constitute a Default, as that term is defined in Article 11.
(g) Late Payment. If any installment of the MAG Contribution (including any Supplemental MAG, if applicable) and/or Revenue Share Contribution is not received by City within five (5) Business Days after Owner’s receipt of written notice of such delinquency, then Owner shall pay to City a late charge equal to five percent (5%) of the overdue amount, plus interest on the unpaid amount at five percent (5%) per annum pro rated daily for the delinquency period until paid.
(h) Impairment of Use.
(1) Abatement Event. Subject to the provisions herein, Owner may receive a pro rated daily abatement credit (for the period described in Section 2.5.2(h)(5) below) against the MAG Contribution due to (i) any improvements, landscaping,
vegetation, signage or structures installed or placed by City in the public sidewalks or public right of way after the Effective Date of this Agreement, (ii) utility services necessary to operate the Digital Display being interrupted for a period exceeding two (2) Business Days and such interruption is not caused by the acts or omissions of Owner or any tenant on the Property, which utility services may include, but are not limited to, electric, data, and/or internet service, (iii) commencement of an eminent domain proceeding by City or

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Packet Pg. 939 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 14 (iv) the use of the Digital Display or the visibility of the Digital Display are materially impaired as a result of (x) the City’s failure to perform any of its obligations under this Agreement (y) any act, event or condition listed under Section 15.8.1 below, or (z) the acts or omissions of any third party but not those of Owner, Operator, or any other tenant on the Property (each individually or collectively constituting an “Abatement Event”).
(2) Abatement Harm. If an Abatement Event occurs, then
abatement shall only apply if the visibility of the Digital Display has been substantially and materially impaired, which results in material adverse impact on Owner’s or Operator’s ability to sell advertisements on the Digital Display or collect revenues from sold advertisements (“Abatement Harm”), as evidenced by any advertiser (whether subject to an advertising contract with Owner or a potential future advertiser or any Operator), rejecting the Owner or Operator’s proof of
performance in the form of photos, canceling such advertising contract or declining to renew or extend advertising time on the Digital Display, or an advertiser declining to purchase advertising time on the Digital Display in each case, directly as a result of the Abatement Event.
(3) Notice of Abatement Event. In the event of any claim by Owner for abatement due to an Abatement Event, Owner shall provide written notice to the City no later than ten (10) Days upon learning of the alleged commencement of the Abatement Event. Owner and City shall meet and confer within five (5) Business Days of City’s receipt of the notice from Owner. (4) Documentation of Abatement Event and Abatement Harm.

Prior to meeting and conferring with the City and as a precondition to receiving any abatement, Owner shall provide a certified claim statement (“Certified Claim”), signed by the designated representative of the Owner, certifying (i) the detailed nature of the claimed Abatement Event and Abatement Harm, (ii) that such claimed impairment will have a material and substantial impact on the revenue generation of the Digital Display and (iii) providing documentation of the Abatement Event and the Abatement Harm, including but not limited to photos and any advertiser communications evidencing a
rejection of the proof of performance, exercising a right of cancellation or refusal to renew, or an advertiser declining to purchase advertising time on the Digital Display due to the Abatement Event (“Claim Documentation”).

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Packet Pg. 940 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 15 (5) Abatement Period. The abatement of the MAG Contribution as permitted by this Section shall commence upon the date Owner provides notice to the City as required by Section 2.5.2(h)(4) and continue so long as the Abatement Harm continues due to the Abatement Event (“Abatement Period”).
(6) Abatement Credit Timing. Owner understands, acknowledges and agrees that Owner has no right to withhold the MAG
Contribution until and unless the meet and confer period has been completed, and the Owner has provided the Certified Claim and Claim Documentation to City, after which point the City reserves all rights to protest and/or dispute the Certified Claim, or any portion thereof, and exercise its rights under and in accordance with Article 11. The daily abatement credit in this Section 2.5.2(h) shall be applied to the next MAG
Contribution for the Abatement Period. For the avoidance of doubt, (i) the abatement of the MAG Contribution during the Abatement Period shall in no way reduce or abrogate Owner’s obligation to pay City the Revenue Share Contribution in accordance with Section 2.5.2, and (ii) the Abatement Credit shall be deducted from the applicable MAG Contribution and the Owner shall pay City an amount equal to the greater of the Revenue Share Contribution and the MAG Contribution as
adjusted.
(7) Parties’ Collaboration on Abatement Cure. During the meet and confer period provided in subparagraph (h)(3), the Parties shall discuss how to best mitigate and cure the Abatement Event to minimize scope and duration of the Abatement Harm and, if the Abatement Event is attributable to the City under subparagraphs (h)(1)(i), (h)(1)(iii), and (h)(1)(iv)(x), City shall use reasonable good faith efforts to assist with curing such Abatement Event.
(8) No Right to Abatement Attributable to Owner’s Actions.

Notwithstanding any provisions to the contrary, Owner shall have no right to abatement for impairment of use under
subparagraph (h) that are attributable to Owner, Operator, or any other tenant on the Property, including, without limitation, in the event of Owner’s Existing Building repairs, remodeling, reconstruction or redevelopment which is separately governed by Section 3.6.
(9) No City Obligation to Undertake Landscaping Above and Beyond Customary Level of Services. Notwithstanding
anything to the contrary in this Agreement, City has no obligation to provide any public services above and beyond the customary level of services provided by City in the vicinity of

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Packet Pg. 941 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 16 the Digital Display as of the Effective Date, including, without limitation, tree trimming.
(i) Breach or Default. Without limiting the generality of Article 11, events of Breach or Default shall include: (i) Owner’s failure to pay any amounts owed to City within fourteen (14) Days of when due; (ii) Owner’s failure to provide a Reconciliation Statement within fourteen (14) Days of when due; (iii) an audit by City disclosing an underpayment to City of more than four percent (4%); and (iv) City’s inability to perform an audit in accordance with generally accepted auditing standards because Owner has failed to maintain records and/or provide access in accordance with this Agreement. Nothing in this Section modifies the notice and cure provisions in Article 11 applicable to events of Breach or Default.
(j) Public Records Act Request. As the Reconciliation Statement and/or other information provided by Owner to the City pursuant to this Agreement may contain confidential and/or propriety financial information and/or trade secrets, City agrees it shall notify Owner upon receipt of a Public Records Act (Gov’t Code Sections 7920, et seq.) request pertaining to any Reconciliation or other financial documents provided by Owner pursuant to this Agreement and shall not provide access to any such documents to the requesting party or any members of the public unless and until the City has notified Owner in writing of the request and provided Owner with at least ten (10) Days to object to disclosure of such documents on the basis such information is exempt from disclosure under the Public Records Act. If Owner notifies the City in writing of such an objection within the ten (10) day period, then City shall not provide such documents to the requesting party or any other member of the public except in the event of a court order and provided Owner fully indemnifies and defends the City in any litigation related to the withholding of such documents. Nothing in this Agreement shall constitute a waiver or diminishment of any of the exemptions to disclosure provided in the California Public Records Act or other law.

2.5.3 City and Art Content Allocation. Owner shall provide for the display of “City Content Allocation” in accordance with Digital Display District Ordinance. (a) Flexible Use. Any of the City Content Allocation not used by the City may, in the City’s sole discretion, be relinquished back to Owner at no cost so that Owner may, at its sole discretion, either (1) make it available for paid advertising or (2) display non-City art and civic and/or charitable programming. If used for paid advertising, revenue generated shall be considered as part of the Annual Gross Revenues.

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Packet Pg. 942 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 17 (b) Reporting and Recordkeeping. On an annual basis prior to or concurrent with delivery of the Reconciliation Statement, the Owner shall provide the City Manager with a report demonstrating compliance with the City Content Allocation as specified in this Section 2.5.3 for the prior calendar year. The annual City Content Allocation report will include playback logs sourced from the content management system used to operate the Digital Display. The playback logs will indicate times and durations of all the various paid advertising and all other non-commercial content that has been displayed over the past year, as well as a cumulative summary of all commercial and non-commercial content displayed over that timeframe. The playback logs shall be retained by Owner or its third-party advertising Operator for a minimum of three (3) years following the conclusion of the calendar year to which such records pertain.

2.5.4 Commemorative Installation. Owner shall install a permanent commemorative installation on the Property in an area accessible or visible to the public that portrays one or more aspects of the history and significance of the site as reflected in the Findings and Determinations of the Landmarks Commission (08-LM-005). The commemorative installation may include, but is not limited to, a plaque, photograph(s), postcard(s), illustration(s), map(s), etching, display board, video screen, narrative or electronic content in a creative medium. The commemorative installation shall be developed with guidance from a Qualified Historic Preservation Professional and will be reviewed by the Landmarks Commission in a public hearing but will not require a Certificate of Appropriateness. If the Landmarks Commission does not hold such public hearing within 60 Days of Owner’s written request, then the exhibits shall be reviewed by the City’s Landmarks Commission Liaison or other staff as designated by the Community Developer Director’s designee. In the process of designing such commemorative installation, the design team shall also consult with and consider suggestions or refinements that might be offered by representatives from the Santa Monica Conservancy. If the commemorative installation is not installed within two (2) years of issuance of Certificate of Occupancy or final permit sign-off, as applicable, for the Digital Display, then City may, subject to the notice and cure provisions of Article 11, obligate Owner to shut off the Digital Display until such time as the commemorative installation is installed.

2.5.5 Blade Sign. The Existing Building includes an architectural element that was originally designed for and used as a blade sign for JC Penney. That architectural element does not currently serve any purpose. As shown on the plans attached hereto as Exhibit B, Owner shall reactivate the use of the blade sign to identify the commercial tenant that occupies the Existing Building, consistent with the historical purpose of that architectural element of the building.

2.5.6 Existing Building Occupancy.
(a) Occupancy Threshold. Beginning on the Digital Display Commencement Date, if either (i) more than fifty percent (50%) of the rentable floor area within the Existing Building or (ii) the entire ground floor level of the Existing Building ("Occupancy Threshold") remains unoccupied for more than twelve (12) consecutive months during the Term, then for the period commencing on the first (1st) day following such twelve (12) month period and ending on the first (1st) day thereafter that the occupancy level of the Existing Building satisfies the Occupancy Threshold (“Occupancy Threshold Period”), the MAG Contribution shall be increased by twenty-five percent (25%) (non-compounded) on a daily

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Packet Pg. 943 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 18 prorated basis during the Occupancy Threshold Period (“Supplemental MAG Contribution”).

Any late payments of the Supplemental MAG Contribution shall be subject to Section 2.5.2(g). (b) Payment of Supplemental MAG Contribution. The Supplemental MAG Contribution shall be applied to the next MAG Contribution following the commencement of the Occupancy Threshold Period. For the avoidance of doubt, the payment of the Supplemental MAG Contribution shall in no way reduce or abrogate Owner’s obligation to pay City the Revenue Share Contribution in accordance with Section 2.5.2. (c) Deferment of Commencement of Occupancy Threshold Period. In the event that the occupancy level of the Existing Building is beneath the Occupancy Threshold and the Owner is using reasonable good faith efforts to cause the occupancy level of the Existing Building to satisfy the Occupancy Threshold (and has provided City with reasonable supporting documentation of such commercially reasonable efforts), then the City Manager may provide up to two twelve (12) month extensions before the Supplemental MAG Contribution is owed to City. Moreover, rentable floor area in the Existing Building shall not be deemed unoccupied for the purposes of this paragraph if (A) such floor area is leased to a tenant under a lease that existed as of the Effective Date, (B) such lease prevents the tenant from being held in default solely for ceasing operations, provided other lease terms (e.g., rent payments) are fulfilled, and (C) such non-continuous operation provision (or similar) is the primary reason that Owner has not terminated such lease in order to place a new tenant into such floor area. (d) Major Repair, Remodeling or Reconstruction. During any period that any major repair, remodeling or reconstruction is being undertaken with respect to the Existing Building, which prevents occupancy of the building by one or more commercial tenants during the period of such major repair, remodeling or reconstruction, the occupancy level of the Existing Building shall be deemed to satisfy the Occupancy Threshold, regardless of the actual occupancy level of the Existing Building during such period, provided that the repair, remodeling or reconstruction is proceeding with due diligence under an active Building Permit and in no event for longer than a period of twenty four (24) months, which time can be extended by the City Manager based on substantial evidence that the failure to achieve the Occupancy Threshold is based on any of the events occurring under Section 15.8.1. The twenty four (24) month period shall begin to run from the date that the Owner obtains an active and valid building permit that has been issued by the City to undergo the applicable repair, remodeling or reconstruction. The occupancy level of the Existing Building shall also be deemed to satisfy the Occupancy Threshold, regardless of the actual occupancy level of the Existing Building during such period that Owner has active and valid permits that have been issued by the City for the Existing Building to undergo mandatory seismic strengthening required under the City’s Seismic Retrofit Ordinance, or other work necessary to comply with any applicable laws or regulations implemented following the Effective Date, provided that the work is being diligently pursued, as determined by the City Manager or designee.
(e) The Supplemental MAG Contribution is the City's sole and exclusive remedy for the failure to meet the Occupancy Threshold and failure to satisfy the Occupancy Threshold shall not constitute a Default by Owner so long as Owner is paying the increased MAG Contribution required by subsection (a). Notwithstanding the foregoing remedy, (i) if the occupancy level of the Existing Building is beneath the Occupancy Threshold for more than four (4) consecutive years during the Term, City may as an alternative sole and exclusive

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Packet Pg. 944 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 19 remedy, subject to the notice and cure provisions of Article 11, obligate Owner to shut off the Digital Display until such time as the Occupancy Threshold is met and (ii) if the occupancy level of the Existing Building is beneath the Occupancy Threshold for more than five (5) consecutive years during the Term and the Owner does not demonstrate good faith efforts to lease rentable floor area or entire ground floor area of the Existing Building, City may, subject to the notice and cure provisions of Article 11, terminate this Agreement. (f) On an annual basis concurrent with delivery of the Reconciliation Statement, Owner shall notify the City in writing whether the Occupancy Threshold is satisfied, and if it is not satisfied, the date the Existing Building first failed to satisfy the Occupancy Threshold.

2.6 Maintenance and Upgrades. After the Building Official’s final approval or signoff, as applicable, for the Digital Display and for as long as the Digital Display is in place, Owner shall maintain the Digital Display (including its support structure) in safe, attractive and good condition, clean and free of graffiti. In the event the Digital Display malfunctions or becomes damaged or otherwise requires repair, Owner shall complete the needed repair as soon as practicable and in any event respond within one (1) Business Day after receiving notice from the City of the need for maintenance. Provided that any such repair work is limited to the Digital Display itself or its entablature, no City approvals will be required. In addition, Owner may replace, update, or upgrade all or any portion of the Digital Display provided that (a) the size and orientation of the Digital Display are not altered and (b) the Digital Display complies with the Digital Display District Ordinance. Any modifications proposed as part of the replacement, update or upgrade of the Digital Display shall be reviewed under Sections 2.4.2-2.4.4 and/or Article 6, as applicable.

2.7 Removal of Digital Display. At the end of the Term of this Agreement (or if this Agreement is terminated earlier pursuant to this Agreement), Owner shall remove the Digital Display and patch/repair the façades of the Existing Building. Provided the patch/repair of the facades of the Existing Building is done in consultation with a Qualified Historic Preservation Professional retained by Owner and in a manner consistent with the Secretary of the Interior’s Standards, the patch/repair work shall be reviewed and approved by the City’s Landmarks Commission Liaison as an administratively-issued Certificate of Appropriateness.

Notwithstanding the foregoing, Owner shall not be required to remove the Digital Display if Owner and City have entered into an extension of this Agreement or a new agreement regarding the continued operation of the Digital Display on the Property. Further, Owner shall not be required to remove the Digital Display for up to six (6) months following such expiration or termination if Owner and the City are in reasonable good faith negotiations to enter into a new agreement regarding the operation of the Digital Display and the City Manager has approved such non-removal.

2.8 Projections, Design, and Operation Standards.
(a) Projections from the Existing Building, design, and operation of the Digital Display shall conform to the Digital Display District Ordinance. (b) Exemption From City Sign Code. For avoidance of doubt, the Digital Display shall be exempt from the City’s Sign Code (SMMC Chapter 9.61).

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Packet Pg. 945 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 20 2.9 Coastal Commission Review. After the Effective Date of the Development Agreement, the Community Development Director, or his or her designee, shall provide Owner with a fully completed and executed Section 2 of the Local Agency Review Form (Appendix B of the Coastal Development Permit Application) and shall stamp and return to Owner two sets of Digital Display Plans within 15 Days after receiving such a written request and the associated processing fee from Owner.

2.10 Owner Solely Responsible for Compliance with The Terms and Conditions of this Agreement. Owner shall comply with any act or obligation to be performed by or on the part of Owner under the terms of this Agreement or cause Operator to comply with any act or obligation to be performed by or on the part of Owner under the terms of this Agreement, with the same force and effect as if performed by Owner. Operator’s failure to comply with the terms of this Agreement shall not be deemed to excuse Owner’s obligations under this Agreement and City shall have no obligation to seek any remedies against Operator for Operator’s violation of this Agreement, it being understood, acknowledged and agreed to by Owner that Owner is solely responsible for the obligations attributed to Owner under this Agreement.

2.11 Operator Not a Third-Party Beneficiary to this Agreement. Owner understands, acknowledges and agrees that Operator is not a third party beneficiary to this Agreement. As a condition precedent to the Effectiveness of this Agreement, Operator shall acknowledge and consent, on behalf of itself and its successors and assigns, that Operator has no right to claim third party beneficiary status under this Agreement.

2.12 Relationship to Owner/Operator Agreements. Nothing in this Agreement modifies any agreements between Owner and Operator as between themselves, separate and apart from the obligations to the City.

ARTICLE 3

CONSTRUCTION

3.1 [Reserved.]

3.2 Construction Hours. Owner shall be permitted to perform construction related to the Digital Display between the hours of 8:00 a.m. to 6:00 p.m. Monday through Friday, and 9:00 a.m. to 5:00 p.m. Saturday; provided that interior construction work which does not generate noise of more than thirty (30) decibels beyond the Property’s property lines may also be performed between the hours of 7:00 a.m. to 8:00 a.m. and 6:00 p.m. to 7:00 p.m. Monday through Friday, and 8:00 a.m. to 9:00 a.m. and 5:00 p.m. to 6:00 p.m. Saturday. Notwithstanding the foregoing, pursuant to SMMC Section 4.12.110(e), Owner has the right to seek a permit from the City authorizing construction activity during the times otherwise prohibited by this Section.

3.3 Outside Building Permit Issuance Date.
i. Subject to Section 3.5, if Owner has not been issued a building permit for

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Packet Pg. 946 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 21 the Digital Display by the “Outside Building Permit Issuance Date” (defined below), then on the day after the Outside Building Permit Issuance Date, without any further action by either Party, this Agreement shall automatically terminate and be of no further force or effect. For purposes of clarity, if Owner has not been issued a building permit for the Digital Display by the Outside Building Permit Issuance Date, the City shall not be required to pursue its remedies under Section 11.4 of this Agreement, and this Agreement shall, instead, automatically terminate. “Outside Building Permit Issuance Date” means the date that is two (2) years after the Effective Date; provided that the Outside Building Permit Issuance Date shall automatically be extended by applicable Excusable Delays and otherwise in accordance with the remainder of this Article 3.
ii. If the approval by the California Coastal Commission of the Digital Display does not occur within six (6) months of the submittal by Owner to the Coastal Commission, then the Outside Building Permit Issuance Date shall automatically be extended one month for each additional month or partial month greater than six (6) that the Coastal Commission approval is delayed. If issuance of the building permit for the Digital Display does not occur within four (4) months of Owner’s submittal of a complete plan check application for the Digital Display and Owner is diligently processing such plan check application, including, without limitation, responding in a timely and responsive manner to City building official comments, then the Outside Building Permit Issuance Date shall automatically be extended one month for each additional month or partial month greater than four (4) that the building permit issuance is delayed.
iii. At any time after the Effective Date but before the Outside Building Permit Issuance Date, Owner may deliver written notice to the Community Development Director, requesting an extension of the Outside Building Permit Issuance Date for an additional twelve (12) months. The Community Development Director shall grant such extension if Owner can demonstrate substantial progress has been made towards obtaining a building permit and show reasonable cause why Owner will not be able to obtain the building permit for the Digital Display by the Outside Building Permit Issuance Date and can demonstrate that: (a) the condition of the Property will not adversely affect public health or safety and (b) the continued delay will not create any unreasonable visual or physical detriment to the neighborhood.

3.4 Construction Period. Construction of the Digital Display shall be completed no later than eighteen (18) months from issuance of the building permit. If a building permit for all or part of the Digital Display expires (e.g., is not timely exercised) or lapses and the Outside Building Permit Issuance Date has not expired, Owner may file for renewal of such building permit or a new/replacement building permit prior to the Outside Building Permit Issuance Date, as it may be extended pursuant to Section 3.3 above.

3.5 Extended Vested Rights. Notwithstanding any other provision of this Agreement, if prior to the Outside Building Permit Issuance Date (as it may be extended) and/or end of the construction period in Section 3.4, Owner pays to the City twenty-five percent (25%) of the MAG Contribution specified in Section 2.5.2(b) prorated on a daily basis (“Partial MAG Payment”), then the Outside Building Permit Issuance Date and/or the construction period specified in Section 3.4, as applicable, shall automatically be extended so long as such Partial MAG Payment continues quarterly up to a maximum of five (5) years from the Effective Date;

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Packet Pg. 947 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 22 provided, however, that City shall have, as its exclusive remedy, the right to terminate this Agreement, subject to the notice and cure provisions under Article 11 if the Outside Building Permit Issuance Date extends beyond five (5) years from the Effective Date and/or the construction period specified in Section 3.4 extends beyond three (3) years.

3.6 Existing Building Repairs, Remodeling, Reconstruction or Redevelopment and/or Digital Display Damage. In the event that (a) the Existing Building undergoes a major repair, remodeling, reconstruction or redevelopment that results in or requires removal of the Digital Display or (b) the Digital Display is damaged or destroyed so as to be inoperable during the Term of this Agreement due to actions or events that are outside the reasonable control of the Owner, Operator, or any other tenant on the Property:
i. Owner shall be entitled to reinstall and/or reconstruct the Digital Display in accordance with this Agreement if: (a) the major repair, remodeling, reconstruction or redevelopment that results in or requires removal of any of the Digital Displays is proceeding with due diligence and (b) the Owner is not in Breach of this Agreement. ii. The Term of this Agreement shall toll during the period the Digital Display is removed and shall resume on the date of issuance of a certificate of occupancy (or final building permit signoff, as applicable) for the reconstructed Digital Display by the applicable City building authorities (the “Temporary Removal Period”). For the avoidance of doubt, the MAG Contribution shall continue to escalate in accordance with Section 2.5.2(b) during any Temporary Removal Period.
iii. The MAG Contribution in Section 2.5 shall abate on a day-for-day basis during any Temporary Removal Period. Notwithstanding the foregoing, if at Owner’s election, in its sole discretion, and with City approval, Owner installs temporary scaffolding to allow a temporary substitute for the Digital Display to be installed on the Property during any Temporary Removal Period, Owner shall pay the City ten percent (10%) of Gross Revenues from the temporary substitute display no later than sixty (60) Days from the end of the Temporary Removal Period.

3.7 City Termination Option. Notwithstanding anything in the foregoing to the contrary, in the event the Temporary Removal Period (x) exceeds three (3) years under the circumstances described in Section 3.6(a) (the Existing Building undergoes a major repair, remodeling, reconstruction or redevelopment that requires removal of the Digital Display) and such circumstances are not caused by any act, event or condition listed under Section 15.8.1(a); (y) exceeds six (6) years under the circumstances described in Section 3.6(a) (the Existing Building undergoes a major repair, remodeling, reconstruction or redevelopment that requires removal of the Digital Display) and such circumstances are caused by any act, event or condition listed under Section 15.8.1; or (z) exceeds eighteen (18) months under the circumstances described in Section 3.6(b) (the Digital Display is damaged or destroyed during the Term of this Agreement), then the City may exercise, as its exclusive remedy, the right to terminate this Agreement, subject to the notice and cure provisions under Article 11. Alternatively, if the City does not exercise its right to terminate this Agreement, the Partial MAG Payment shall continue for so long as the City does not exercise the right to terminate.

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Packet Pg. 948 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 23 ARTICLE 4

FEES, EXACTIONS, AND CONDITIONS

4.1 Fees, Exactions, and Conditions. Except as expressly set forth in Section 2.5 (relating to Community Benefits), Section 4.2 (relating to modifications), and Section 5.2 (relating to Subsequent Code Changes) below, the City shall charge and impose only those fees, exactions, conditions, and standards of construction set forth in this Agreement, including Exhibits “D” and “E”, respectively, attached hereto, and no others. If any of the conditions set forth on Exhibit “D” is satisfied by others, Owner shall be deemed to have satisfied such conditions. Notwithstanding the foregoing, except to the extent specifically provided otherwise, this Agreement does not require Owner to pay any exactions nor implement any conditions of approval if Owner does not obtain a building permit for the Digital Display prior to expiration of the Outside Building Permit Issuance Date including any extensions thereof or any tolling thereof in accordance with Section 3.3.

4.2 Conditions on Modifications. The City may impose fees, exactions, and conditions in connection with its approval of Minor or Major Modifications, provided that all fees, exactions, and conditions shall be in accordance with any applicable law.

4.3 Implementation of Conditions of Approval. Owner shall be responsible to adhere to the conditions of approval set forth in Exhibit “D” in accordance with the timelines established in Exhibit "D".

ARTICLE 5

EFFECT OF AGREEMENT ON CITY LAWS AND REGULATIONS

5.1 Development Standards for the Digital Display; Existing Regulations. The following development standards and restrictions set forth in this Section 5.1 govern the use and development of the Digital Display and shall constitute the Existing Regulations, except as otherwise expressly required by this Agreement. Nothing herein shall be deemed to apply to the Existing Building, excluding the Digital Display.

5.1.1 Defined Terms. The following terms shall have the meanings set forth below:
(a) “Existing Regulations” collectively means all of the following which are in force and effect as of the Effective Date: (i) the General Plan (including, without limitation, the LUCE); (ii) the DCP, (iii) the Zoning Ordinance except as modified herein; (iv) the Digital Display District Ordinance; (v) any and all ordinances, rules, regulations, standards, specifications and official policies of the City governing, regulating or affecting the design, development, building, construction, occupancy or use of buildings, signs/billboards, and improvements or any exactions therefore, except as amended by this Agreement; (v) the City’s 1992 LUP; and (vi) the development standards and procedures in Article 2 of this Agreement.

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Packet Pg. 949 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 24 (b) “Subsequent Code Changes” collectively means all of the following which are adopted or approved subsequent to the Effective Date, whether such adoption or approval is by the City Council, any department, division, office, board, commission or other agency of the City, by the people of the City through charter amendment, referendum, initiative or other ballot measure, or by any other method or procedure: (i) any amendments, revisions, additions or deletions to the Existing Regulations; or (ii) new codes, ordinances, rules, regulations, standards, specifications and official policies of the City governing or affecting the design, development, construction, occupancy or use of building, signs/billboards, or improvements or any exactions therefor. “Subsequent Code Changes” includes, without limitation, any amendments, revisions or additions to the Existing Regulations imposing or requiring the payment of any fee, special assessment or tax.

5.1.2 Existing Regulations Govern the Digital Display. Except as provided in Section 5.2, development of the improvements that will comprise the Digital Display, including without limitation, the development standards for the design, development, construction, or use of such Digital Display, and any exactions therefore, shall be governed by the Existing Regulations. The City agrees that this Agreement is consistent with the Digital Display District Ordinance, General Plan, including the LUCE and the DCP, and the 1992 LUP. Any provisions of the Existing Regulations inconsistent with the provisions of this Agreement, to the extent of such inconsistencies and not further, are hereby deemed modified to that extent necessary to effectuate the provisions of this Agreement. The Digital Display shall be exempt from: (a) all Discretionary Approvals or review by the City or any agency or body thereof, other than review of modifications to the Digital Display as expressly set forth in Sections 2.4.2 and 2.4.3; (b) the application of any subsequent local sign, billboard, and/or digital display moratoria, sign, billboard, and/or digital display rationing systems or other restrictions on sign, billboard, and/or digital displays which would adversely affect the rate, timing, or phasing of construction of the Digital Display, and (c) Subsequent Code Changes which are inconsistent with this Agreement.

5.2 Permitted Subsequent Code Changes.
(a) Applicable Subsequent Code Changes. Notwithstanding the terms of Section 5.1, this Agreement shall not prevent the City from applying to the Digital Display the following Subsequent Code Changes set forth below in this Section 5.2(a). Processing fees and charges imposed by the City to cover the estimated actual costs to City of processing applications for development approvals including: (i) all application, permit, and processing fees incurred for the processing of this Agreement, any administrative approval of a Minor Modification, or any amendment of this Agreement in connection with a Major Modification; (ii) all building plan check and building inspection fees for work on the Digital Display in effect at the time an application for a grading permit or building permit is applied for; (iii) the public works plan check fee and public works inspection fee for public improvements constructed and installed by Owner; (iv) fees for monitoring compliance with any development approvals; (v) and utility charges.
(b) General or special taxes, including, but not limited to, property taxes, sales taxes, parcel taxes, transient occupancy taxes, business taxes, which may be applied to the Property or to businesses occupying the Property; provided that (i) the tax is of general applicability City-wide and does not burden the Property disproportionately to other similar

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Packet Pg. 950 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 25 developments within the City; and (ii) the tax is not a levy, assessment, fee or tax imposed for the purpose of funding public or private improvements on other property located within the Downtown Community Plan area as of the Effective Date.
(c) Procedural regulations relating to hearing bodies, petitions, applications, notices, documentation of findings, records, manner in which hearings are conducted, reports, recommendations, initiation of appeals, and any other matters of procedure; provided such regulations are uniformly imposed by the City on all matters, do not result in any unreasonable decision-making delays and do not affect the substantive findings by the City in approving this Agreement or as otherwise established in this Agreement. (d) Regulations governing construction standards and specifications which are of general application that establish standards for the construction and installation of structures and associated improvements, including, without limitation, the City’s Building Code, Plumbing Code, Mechanical Code, Electrical Code and Fire Code; provided that such construction standards and specifications are applied on a City-wide basis and do not otherwise limit or impair the Digital Display approvals granted in this Agreement unless adopted to meet (i) health and safety concerns or (ii) in the event of replacement of the Digital Display during the Term, City-wide green building or energy standards clearly applicable to electronic digital displays.
(e) Any City regulations to which Owner has consented in writing, which consent may be withheld by Owner in its sole discretion. (f) Collection of such fees or exactions as are imposed and set by governmental entities not controlled by City but which are required to be collected by City. (g) Wastewater/water connection fees, including capital facility and construction fees, which are adopted by the City Council from time to time and apply generally throughout the City.
(h) Regulations which do not impair the rights and approvals granted to Owner under this Agreement. For the purposes of this Section 5.2.1(h), regulations which impair Owner’s rights or approvals include, but are not limited to, regulations which (i) materially increase the cost of the Digital Display (except as provided in Section 5.2.1(a), (b), and (d) above), (ii) materially delay development of the Digital Display or would cause a material change in the uses of the Digital Display as provided in this Agreement, or (iii) materially impair the development, operation or use of the Digital Display. (i) Generally applicable codes or actions necessary to comply with a declaration of a Water Shortage Emergency pursuant to the California Water Code.

5.2.2 New Rules and Regulations. This Agreement shall not be construed to prevent the City from applying new rules, regulations and policies in those circumstances specified in Government Code Section 65866.

5.2.3 State or Federal Laws. In the event that state or federal laws or regulations, enacted after the Effective Date, prevent or preclude compliance with one or more of

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Packet Pg. 951 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 26 the provisions of this Agreement, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such state or federal laws or regulations; provided that this Agreement shall remain in full force and effect to the extent it is not inconsistent with such laws or regulations and to the extent such laws or regulations do not render such remaining provisions impractical to enforce.

5.3 Common Set of Existing Regulations. Prior to the Effective Date, the City and Owner shall use reasonable efforts to identify, assemble and copy three identical sets of the Existing Regulations, to be retained by the City and Owner, so that if it becomes necessary in the future to refer to any of the Existing Regulations, there will be a common set of the Existing Regulations available to all Parties.

5.4 Conflicting Enactments. Except as provided in Section 5.2 above, any Subsequent Code Change which would conflict in any way with or be more restrictive than the Existing Regulations shall not be applied by the City to any portion of the Digital Display.

Owner may, in its sole discretion, give the City written notice of its election to have any Subsequent Code Change applied to any portion of the Digital Display as it may have an interest in, in which case such Subsequent Code Change shall be deemed to be an Existing Regulation insofar as that portion of the Digital Display is concerned. If there is any conflict or inconsistency between the terms and conditions of this Agreement and the Existing Regulations, the terms and conditions of this Agreement shall control.

5.5 Timing of Development. The California Supreme Court held in Pardee Construction Co. v. City of Camarillo, 37 Cal.3d 465 (1984), that failure of the parties in that case to provide for the timing of development resulted in a later adopted initiative restricting the timing of development to prevail over the parties’ agreement. It is the intent of Owner and the City to cure that deficiency by expressly acknowledging and providing that any Subsequent Code Change that purports to limit the installation and/or operation of the Digital Display shall not prevail over this Agreement.

ARTICLE 6

DESIGN APPROVAL
Notwithstanding any provision of the SMMC or any interim zoning ordinance to the contrary, the Digital Display District Ordinance shall set forth the design approval required, if any, for the Digital Display’s design, colors, and/or materials.

ARTICLE 7

CITY TECHNICAL PERMITS

7.1 Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below:

7.1.1 “Technical City Permits” means any Ministerial Approvals, consents or permits from the City or any office, board, commission, department, division or agency of the

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Packet Pg. 952 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 27 City, which are necessary for the actual construction of the Digital Display or any portion thereof in accordance with the Digital Display Plans and this Agreement. Technical City Permits include, without limitation (a) building permits, (b) related mechanical, electrical, plumbing and other technical permits, (c) demolition, excavation and grading permits, (d) encroachment permits, (e) off-site improvement permits, and (f) temporary and final certificates of occupancy.

7.1.2 “Technical Permit Applications” means any applications required to be filed by Owner for any Technical City Permits.

7.2 Diligent Action by City.

7.2.1 Upon satisfaction of the conditions set forth in Section 7.3, the City shall accept the Technical Permit Applications filed by Owner with the City and shall diligently proceed to process such Technical Permit Applications to completion.

7.2.2 Upon satisfaction of the conditions set forth in Section 7.3, the City shall diligently issue the Technical City Permits which are the subject of the Technical Permit Applications.

7.3 Conditions for Diligent Action by the City.

7.3.1 Acceptance and Processing of Technical Permit Applications. The obligation of the City to accept and diligently process the Technical Permit Applications which are filed by Owner for the Digital Display, and then issue the Technical City Permits for the Digital Display, is subject to the satisfaction of the following conditions:
(a) Owner shall have completed and filed all Technical Permit Applications which are required under the administrative procedures and policies of the City which are in effect on the date when the Technical Permit Application is filed; provided that such procedures and policies are uniformly in force and effect throughout the City; and (b) Owner shall have paid all processing and permit fees established by the City in connection with the filing and processing of any Technical Permit Application which are in effect on the date when the Technical Permit Application is filed; provided that such fees are uniformly in force and effect throughout the City.

7.3.2 Issuance of a Technical City Permit. The obligation of the City to issue a Technical City Permit for the Digital Display which is the subject of a Technical Permit Application filed by Owner is subject to the satisfaction of the following conditions (and only such conditions and no others):
(a) Owner shall have complied with all of its obligations under this Agreement, including those in Exhibit “D”, which are required to be performed prior to or concurrent with the issuance of the Technical City Permits for the proposed Digital Display; (b) Owner shall have received any permits or approvals from other governmental agencies which are required by law to be issued prior to or concurrent with the

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Packet Pg. 953 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 28 issuance of the Technical City Permits for the proposed Digital Display or offsite improvements, as applicable;
(c) The proposed Digital Display conforms to the development standards for such Digital Display established in this Agreement. In the event that a proposed Digital Display is not in conformance with the development standards, Owner shall have the right to seek any relief from such standards under the procedures then available in the City; and (d) The proposed Digital Display or offsite improvements, as applicable, conforms to the Administrative and Technical Construction Codes of the City (Article VIII of the SMMC) (the “Technical Codes”) in effect on the date that the Technical Permit Application is filed.

7.3.3 New Technical Requirements. From time to time, the City’s Technical Codes may be amended to meet new technical requirements related to techniques of building and construction/installation of digital displays. If the sole means of achieving compliance for the Digital Display with such revisions to the Technical Codes made after the Effective Date (“New Technical Requirements”) would require an increase from the allowable Projections from Buildings into Minimum Setbacks or Height Projections established in this Agreement for the Digital Display, then the Community Development Director is hereby authorized to grant Owner limited relief from the allowable Projections from Buildings into Minimum Setbacks or Height Projections without amending this Agreement if the requested relief is in compliance with the City’s General Plan. Any such approval shall be granted only after the Community Development Director’s receipt of a written request for such relief from Owner. Owner is required to supply the Community Development Director with written documentation of the fact that compliance with the New Technical Requirements cannot be achieved by some other method. Any such relief shall only be granted to the extent necessary in the Community Development Director’s determination for Owner to comply with the New Technical Requirements.

7.4 Duration of Technical City Permits. The duration of Technical City Permits issued by the City for the Digital Display, and any extensions of the time period during which such Technical City Permits remain valid, shall be established in accordance with the Technical Codes in effect at the time that the Technical City Permits are issued. Subject to Section 3.4, the lapse or expiration of a Technical City Permit shall not preclude or impair Owner from subsequently filing another Technical Permit Application for the same matter during the Term of this Agreement, which shall be processed by the City in accordance with the provisions of this Article 7. Notwithstanding anything to the contrary in this Agreement, if Owner obtains building permits for the Digital Display and, at any time after the Outside Building Permit Issuance Date, such building permits expire or are revoked pursuant to the applicable terms of the SMMC (as the same may be amended from time to time), then Owner may not subsequently apply for new building permits for the Digital Display without first obtaining the prior written consent of the Community Development Director, which may be granted or withheld in the Community Development Director’s sole discretion.

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Packet Pg. 954 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 29 ARTICLE 8

AMENDMENT AND MODIFICATION

8.1 Amendment and Modification of Development Agreement. Except as provided in Section 2.4.2, subject to the notice and hearing requirements of the applicable Development Agreement Statutes, this Agreement may be modified or amended from time to time only with the written consent of Owner and the City or their successors and assigns in accordance with the provisions of the SMMC and Section 65868 of the California Government Code.

ARTICLE 9
TERM

9.1 Effective Date. This Agreement shall be dated, and the obligations of the Parties hereunder shall be effective as of the date upon which both (i) the Digital Display District Ordinance and (ii) the ordinance approving this Agreement becomes effective (the “Effective Date”). The Parties shall execute this Agreement within ten (10) Business Days of the Effective Date.

9.2 Term.

9.2.1 Term of Agreement. The term of this Agreement shall commence on the Effective Date and shall continue for thirty (30) years thereafter (the “Term”), unless the Term is otherwise terminated pursuant to Section 11.4, after the satisfaction of all applicable public hearing and related procedural requirements, or pursuant to Section 3.3 or Section 9.2.2.

Notwithstanding the foregoing, if the approval by the California Coastal Commission of the Digital Display does not occur within six (6) months of the submittal by Owner of the Digital Display to the Coastal Commission, then the Term shall automatically be extended one month for each additional month or partial month greater than six (6) months that the Coastal Commission approval is delayed; provided, however, that Owner is diligently pursuing Coastal Commission approval. Nothing in this Section 9.2.1 modifies any tolling of the Term provided for in other sections of this Agreement, including Section 3.6(ii).

9.2.2 Early Removal and Termination. At or after three (3) years after the Digital Display Commencement Date, Owner may, at its sole discretion, remove the Digital Display. Prior to removal of the Digital Display, Owner shall provide the City with at least one hundred twenty (120) Days notice of its election to remove the Digital Display and terminate this Agreement. Such notice shall specify the date Owner intends to remove the Digital Display (the “Early Termination Date”). Upon Owner’s removal of the Digital Display in accordance with Section 2.7 and payment of any outstanding Ongoing Community Benefit Contribution accrued through the Early Termination Date plus an early termination fee in the amount of Two Hundred and Fifty Thousand Dollars ($250,000) (the “Early Termination Fee”), this Agreement shall automatically terminate.

12.B.b
Packet Pg. 955 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 30 9.2.3 Termination Certificate. Upon termination of this Agreement, the Parties hereto shall execute an appropriate certificate of termination in recordable form (a “Termination Certificate”), which shall be recorded in the official records of Los Angeles County.

9.2.4 Effect of Termination. Except as expressly provided herein, none of the Parties' respective rights and obligations under this Agreement shall survive the Term.

9.2.5 Extensions Available. Prior to its expiration, the Term of this Agreement may be extended for up to two (2) – ten (10) year extensions without the necessity of filing and processing an application to amend this Agreement; provided, however, that (i) each such extension shall be subject to the mutual agreement the Owner and City Manager, each acting in their sole discretion, and shall, upon mutual agreement, be memorialized in the form of an amendment to this Agreement; and (ii) Owner provides documentation of a current leasing or licensing contract between Owner and a billboard operator to evidence continuing use of the Digital Display beyond the original Term, as extended by any authorized extension. Owner understands, acknowledges, and agrees that such amendment to be negotiated may include revisions to this Agreement, including, without limitation, Section 2.5.

ARTICLE 10

PERIODIC REVIEW OF COMPLIANCE

10.1 City Review. The City shall review compliance with this Agreement once each year, on or before March 31st (each, a “Periodic Review”), in accordance with this Article 10 in order to determine whether or not Owner is out-of-compliance with any specific term or provision of this Agreement.

10.2 Evidence of Reasonable Good Faith Compliance. On or before October 1st of each year, Owner shall deliver to the City a written report demonstrating that Owner has been in reasonable good faith compliance with this Agreement during the twelve (12) month period prior to the anniversary of the Effective Date. The written report shall be provided in the form established by the City at the time of the first annual report, if any, which form shall not change materially thereafter without Owner’s consent. For purposes of this Agreement, the phrase “reasonable good faith compliance” shall mean the following: (a) compliance by Owner with the requirements of the Existing Regulations, except as otherwise modified by this Agreement; and (b) compliance by Owner with the terms and conditions of this Agreement, subject to the existence of any specified Excusable Delays (as defined in Section 15.8 below) which prevented or delayed the timely performance by Owner of any of its obligations under this Agreement.

Without limiting the generality of the foregoing, demonstration of reasonable good faith compliance shall mean Owner’s satisfaction of requirements under Section 2.5.2 at the time that the report is submitted.

10.3 Information to be Provided to Owner. Prior to any public hearing concerning the Periodic Review of this Agreement, the City shall deliver to Owner a copy of all staff reports prepared in connection with a Periodic Review, written comments from the public and, to the

12.B.b
Packet Pg. 956 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 31 extent practical, all related exhibits concerning such Periodic Review. If the City delivers to Owner a Notice of Breach pursuant to Section 11.1 below, the City shall concurrently deliver to Owner a copy of all staff reports prepared in connection with such Notice of Breach, all written comments from the public, and all related exhibits concerning such Notice of Breach.

10.4 Notice of Breach; Cure Rights. If during any Periodic Review, the City reasonably concludes on the basis of substantial evidence that Owner has not demonstrated that it is in reasonable good faith compliance with this Agreement, then the City may issue and deliver to Owner a written Notice of Breach pursuant to Section 11.1 below, and Owner shall have the opportunity to cure the default identified in the Notice of Breach during the cure periods and in the manner provided by Section 11.2 and Section 11.3, as applicable.

10.5 Failure of Periodic Review. The City’s failure to review at least annually compliance by Owner with the terms and conditions of this Agreement shall not constitute or be asserted by any Party as a breach by any other Party of this Agreement.

10.6 Termination of Development Agreement. If Owner fails to timely cure any material item(s) of non-compliance set forth in a Notice of Breach, then the City shall have the right but not the obligation to initiate proceedings for the purpose of terminating this Agreement pursuant to Section 11.4 below.

10.7 City Cost Recovery. Following completion of each Periodic Review, Owner shall reimburse the City for its actual and reasonable costs incurred in connection with such review after provision of a reasonably detailed invoice by the City.

ARTICLE 11

DEFAULT

11.1 Notice and Cure.

11.1.1 Breach. If either Party fails to substantially perform any term, covenant or condition of this Agreement which is required on its part to be performed (a “Breach” or “Default”), the non-defaulting Party shall have those rights and remedies provided in this Agreement; provided that such non-defaulting Party has first sent a written notice of Breach (a “Notice of Breach”), in the manner required by Section 15.1, specifying the precise nature of the alleged Breach (including references to pertinent Sections of this Agreement and the Existing Regulations or Subsequent Code Changes alleged to have been breached), and the manner in which the alleged Breach may satisfactorily be cured. If the City alleges a Breach by Owner, the City shall also deliver a copy of the Notice of Breach to any Secured Lender of Owner which has delivered a Request for Notice to the City in accordance with Article 12.

11.1.2 Monetary Breach. In the case of a monetary Breach by Owner, Owner shall promptly commence to cure the identified Breach and shall complete the cure of such Breach within sixty (60) Days after receipt by Owner of the Notice of Breach; provided that if such monetary Breach is the result of an Excusable Delay or the cure of the same is delayed as a

12.B.b
Packet Pg. 957 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 32 result of an Excusable Delay, Owner shall deliver to the City reasonable evidence of the Excusable Delay.

11.1.3 Non-Monetary Breach. In the case of a non-monetary Breach by either Party, the alleged defaulting Party shall promptly commence to cure the identified Breach and shall diligently prosecute such cure to completion; provided that the defaulting Party shall complete such cure within thirty (30) Days after receipt of the Notice of Breach or provide evidence of Excusable Delay that prevents or delays the completion of such cure. The thirty (30) day cure period for a non-monetary Breach shall be extended as is reasonably necessary to remedy such Breach; provided that the alleged defaulting Party commences such cure promptly after receiving the Notice of Breach and continuously and diligently pursues such remedy at all times until such Breach is cured.

11.1.4 Excusable Delay. Notwithstanding anything to the contrary contained in this Agreement, the City’s exercise of any of its rights or remedies under this Article 11 shall be subject to the provisions regarding Excusable Delay in Section 15.8 below.

11.2 Remedies for Monetary Default. If there is a Breach by Owner in the performance of any of its monetary obligations under this Agreement which remains uncured (a) sixty (60) Days after receipt by Owner of a Notice of Breach from the City and (b) after expiration of Secured Lender’s Cure Period under Section 12.1 (if a Secured Lender of Owner has delivered a Request for Notice to the City in accordance with Section 12.1), then an “Event of Monetary Default” shall have occurred by Owner and the City shall have available any right or remedy provided in this Agreement, at law or in equity. All of said remedies shall be cumulative and not exclusive of one another, and the exercise of any one or more of said remedies shall not constitute a waiver or election in respect to any other available remedy.

11.3 Remedies for Non-Monetary Default.

11.3.1 Remedies of Parties. If any Party receives a Notice of Breach from the other Party regarding a non-monetary Breach, and the non-monetary Breach remains uncured:
(a) after expiration of all applicable notice and cure periods, and (b) in the case of a Breach by Owner, after the expiration of Secured Lender’s Cure Period under Section 12.1 (if a Secured Lender of Owner has delivered a Request for Notice to the City in accordance with Section

12.1), then an “Event of Non-Monetary Default” shall have occurred and the non-defaulting Party shall have available any right or remedy provided in this Agreement, or provided at law or in equity except as prohibited by this Agreement. All of said remedies shall be cumulative and not exclusive of one another, and the exercise of any one or more of said remedies shall not constitute a waiver or election in respect to any other available remedy.

11.3.2 Specific Performance. The City and Owner acknowledge that monetary damages and remedies at law generally are inadequate and that specific performance is an appropriate remedy for the enforcement of this Agreement. Therefore, unless otherwise expressly provided herein, the remedy of specific performance shall be available to the nondefaulting party if the other Party causes an Event of Non-Monetary Default to occur.

12.B.b
Packet Pg. 958 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 33 11.3.3 Writ of Mandate. The City and Owner hereby stipulate that Owner shall be entitled to obtain relief in the form of a writ of mandate in accordance with Code of Civil Procedure Section 1085 or Section 1094.5, as appropriate, to remedy any Event of NonMonetary Default by the City of its obligations and duties under this Agreement. Nothing in this Section 11.3.3, however, is intended to alter the evidentiary standard or the standard of review applicable to any action of, or approval by, the City pursuant to this Agreement or with respect to the Digital Display.

11.3.4 No Damages Relief Against City. It is acknowledged by Owner that the City would not have entered into this Agreement if the City were to be liable in damages under or with respect to this Agreement or the application thereof. Consequently, and except for the payment of attorneys’ fees and court costs, the City shall not be liable in damages to Owner, and Owner covenants on behalf of itself and its successors in interest not to sue for or claim any damages:
(a) for any default under this Agreement;
(b) for the regulatory taking, impairment or restriction of any right or interest conveyed or provided hereunder or pursuant hereto; or (c) arising out of or connected with any dispute, controversy or issue regarding the application or interpretation or effect of the provisions of this Agreement.

The City and Owner agree that the provisions of this Section 11.3.4 do not apply for damages which:
(a) do not arise under this Agreement;
(b) are not with respect to any right or interest conveyed or provided under this Agreement or pursuant to this Agreement; or
(c) do not arise out of or which are not connected to any dispute, controversy, or issue regarding the application, interpretation, or effect of the provisions of this Agreement or the application of any City rules, regulations, or official policies.

11.3.5 Enforcement by the City. The City, at its discretion, shall be entitled to apply the remedies set forth in Chapters 1.09 and 1.10 of the SMMC as the same may be amended from time to time and shall follow the notice procedures of Chapter 1.09 and 1.10 respectively in lieu of Section 11.1 of this Agreement if these remedies are applied.

11.3.6 No Damages Against Owner. It is acknowledged by the City that Owner would not have entered into this Agreement if Owner were to be liable in damages in connection with any non-monetary default hereunder. Consequently, and except for the payment of attorneys’ fees and court costs, Owner shall not be liable in damages to the City for any nonmonetary default, and the City covenants on behalf of itself not to sue for or claim any damages:
(a) for any non-monetary default hereunder or;

12.B.b
Packet Pg. 959 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 34 (b) arising out of or connected with any dispute, controversy or issue regarding the application or interpretation or effect of the provisions of this Agreement.

The City and Owner agree that the provisions of this Section 11.3.6 do not apply for damages which:
(a) are for a monetary default; or
(b) do not arise out of or which are not connected with any dispute, controversy or issue regarding the application, interpretation, or effect of the provisions of this Agreement to or the application of any City rules, regulations, or official policies; or (c) constitute Damages which arise under Section 14.1.

11.3.7 No Damages Against City. It is acknowledged by the Owner that City would not have entered into this Agreement if City were to be liable for damages in connection with any non-monetary default hereunder. Consequently, and except for the payment of attorneys’ fees and court costs, City shall not be liable in damages to the Owner for any nonmonetary default, and the Owner covenants on behalf of itself not to sue for or claim any damages.

11.3.8 No Other Limitations. Except as expressly set forth in this Section 11.3, the provisions of this Section 11.3 shall not otherwise limit any other rights, remedies, or causes of action that either the City or Owner may have at law or equity after the occurrence of any Event of Non-Monetary Default.

11.4 Modification or Termination of Agreement by City.

11.4.1 Default by Owner. If Owner causes either an Event of Monetary Default or an Event of Non-Monetary Default, then the City may commence proceedings to modify or terminate this Agreement pursuant to this Section 11.4.

11.4.2 Procedure for Modification or Termination. The procedures for modification or termination of this Agreement by the City for the grounds set forth in Section

11.4.1 are as follows:
(a) The City shall provide a written notice to Owner (and to any Secured Lender of Owner which has delivered a Request for Notice to the City in accordance with Section 12.1) of its intention to modify or terminate this Agreement unless Owner (or the Secured Lender) cures or corrects the acts or omissions that constitute the basis of such determinations by the City (a “Hearing Notice”). The Hearing Notice shall be delivered by the City to Owner in accordance with Section 15.1 and shall contain the time and place of a public hearing to be held by the City Council on the determination of the City to proceed with modification or termination of this Agreement. The public hearing shall not be held earlier than:
(i) thirty-one (31) Days after delivery of the Hearing Notice to Owner or (ii) if a Secured Lender has delivered a Request for Notice in accordance with Section 12.1, the day following the expiration of the “Secured Lender Cure Period” (as defined in Section 12.1).

12.B.b
Packet Pg. 960 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 35 (b) If, following the conclusion of the public hearing, the City Council: (i) determines that an Event of Non-Monetary Default has occurred or the Owner has not been in reasonable good faith compliance with this Agreement pursuant to Section 10.1, and (ii) further determines that Owner (or the Secured Lender, if applicable) has not cured (within the applicable cure periods) the acts or omissions that constitute the basis of the determination under clause (i) above or if those acts or omissions could not be reasonably remedied prior to the public hearing that Owner (or the Secured Lender) has not in reasonable good faith commenced to cure or correct such acts or omissions prior to the public hearing or is not diligently and continuously proceeding therewith to completion, then upon making such conclusions, the City Council may modify or terminate this Agreement. The City cannot unilaterally modify the provisions of this Agreement pursuant to this Section 11.4. Any such modification requires the written consent of Owner. If the City Council does not terminate this Agreement, but proposes a modification to this Agreement as a result of the public hearing and Owner does not (within five (5) Business Days of receipt) execute and deliver to the City the form of modification of this Agreement submitted to Owner by the City, then the City Council may elect to terminate this Agreement at any time after the sixth day after Owner’s receipt of such proposed modification.

11.5 Cessation of Rights and Obligations. If this Agreement is terminated by the City pursuant to and in accordance with Section 11.4, the rights, duties and obligations of the Parties under this Agreement shall cease as of the date of such termination, except only for those rights and obligations that expressly survive the termination of this Agreement. In such event, any and all benefits, including money received by the City prior to the date of termination, shall be retained by the City.

11.6 Completion of Improvements. Notwithstanding the provisions of Sections 11.2,

11.3, 11.4, and 11.5, if prior to termination of this Agreement, Owner has performed substantial work and incurred substantial liabilities in reasonable good faith reliance upon a building permit issued by the City, then Owner shall have acquired a vested right to (a) complete construction of the Digital Display in accordance with the terms of the building permit and this Agreement, subject to its continuing obligations with respect to all outstanding project and community benefits (Section 2.5) and, (b) use and maintain such Digital Display upon completion for the purposes provided in this Agreement. Any Digital Display completed pursuant to this Section

11.6 shall be considered legal non-conforming subject to all City ordinances standards and policies as they then exist governing legal non-conforming signs/digital displays and associated structures unless the Digital Display otherwise complies with the development standards for signs/digital displays the district in which it is located and the signs/digital display is otherwise permitted or conditionally permitted in the district.

ARTICLE 12

MORTGAGEES

12.1 Encumbrances on the Property. This Agreement shall not prevent or limit Owner (in its sole discretion), from encumbering the Property (in any manner) or any portion thereof or any improvement thereon by any mortgage, deed of trust, assignment of rents or other security device securing financing with respect to the Property (a “Mortgage”). Each mortgagee of a mortgage or a beneficiary of a deed of trust (each, a “Secured Lender”) on the Property shall be

12.B.b
Packet Pg. 961 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 36 entitled to the rights and privileges set forth in this Article 12. Any Secured Lender may require from the City certain interpretations of this Agreement. The City shall from time to time, upon request made by Owner, meet with Owner and representatives of each of its Secured Lenders to negotiate in reasonable good faith any Secured Lender’s request for interpretation of any part of this Agreement. The City will not unreasonably withhold, condition or delay the delivery to a Secured Lender of the City’s written response to any such requested interpretation.

12.1.1 Mortgage Not Rendered Invalid. Except as provided in Section 12.1.2, neither entering into this Agreement nor a Breach of this Agreement, nor any Event of Monetary Default nor any Event of Non-Monetary Default shall defeat, render invalid, diminish, or impair the lien of any Mortgage made in reasonable good faith and for value.

12.1.2 Priority of Agreement. This Agreement shall be superior and senior to the lien of any Mortgage. Any acquisition or acceptance of title or any right or interest in or with respect to the Property or any portion thereof by a Secured Lender or its successor in interest (whether pursuant to foreclosure, trustee’s sale, deed in lieu of foreclosure, lease termination or otherwise) shall be subject to all of the terms and conditions of this Agreement, including any monetary payments owed to City under this Agreement.

12.1.3 Right of Secured Lender to Cure Default.
(a) A Secured Lender may give notice to the City, specifying the name and address of such Secured Lender and attaching thereto a true and complete copy of the Mortgage held by such Secured Lender, specifying the portion of the Property that is encumbered by the Secured Lender’s lien (a “Request for Notice”). If the Request for Notice has been given, at the same time the City sends to Owner any Notice of Breach or Hearing Notice under this Agreement, then if such Notice of Breach or Hearing Notice affects the portion of the Property encumbered by the Secured Lender’s lien, the City shall send to such Secured Lender a copy of each such Notice of Breach and each such Hearing Notice from the City to Owner. The copy of the Notice of Breach or the Hearing Notice sent to the Secured Lender pursuant to this Section 12.1.3(a) shall be addressed to such Secured Lender at its address last furnished to the City. The period within which a Secured Lender may cure a particular Event of Monetary Default or Event of Non-Monetary Default shall not commence until three Business Days after the City has sent to the Secured Lender such copy of the applicable Notice of Breach or Hearing Notice.
(b) After a Secured Lender has received a copy of such Notice of Breach or Hearing Notice, such Secured Lender shall thereafter have a period of time (in addition to any notice and/or cure period afforded to Owner under this Agreement) equal to: (a) twenty (20) Days in the case of any Event of Monetary Default and (b) thirty (30) Days in the case of any Event of Non-Monetary Default, during which period the Secured Lender may provide a remedy or cure of the applicable Event of Monetary Default or may provide a remedy or cure of the applicable Event of Non-Monetary Default; provided that if the cure of the Event of Non-Monetary Default cannot reasonably be completed within thirty Days, Secured Lender may, within such 30-day period, commence to cure the same and thereafter diligently prosecute such cure to completion (a “Secured Lender’s Cure Period”). If Owner has caused an Event of Monetary Default or an Event of Non-Monetary Default, then each Secured Lender shall have

12.B.b
Packet Pg. 962 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 37 the right to remedy such Event of Monetary Default or an Event of Non-Monetary Default, as applicable, or to cause the same to be remedied prior to the conclusion of the Secured Lender’s Cure Period and otherwise as herein provided. The City shall accept performance by any Secured Lender of any covenant, condition, or agreement on Owner’s part to be performed hereunder with the same force and effect as though performed by Owner. (c) The period of time given to the Secured Lender to cure any Event of Monetary Default or an Event of Non-Monetary Default by Owner which reasonably requires that said Secured Lender be in possession of the Property to do so, shall be deemed extended to include the period of time reasonably required by said Secured Lender to obtain such possession (by foreclosure, the appointment of a receiver or otherwise) promptly and with due diligence; provided that during such period all other obligations of Owner under this Agreement, including, without limitation, payment of all amounts due, are being duly and promptly performed.

12.1.4 Secured Lender Not Obligated Under this Agreement. (a) No Secured Lender shall have any obligation or duty under this Agreement to perform the obligations of Owner’s or the affirmative covenants of Owner’s hereunder or to guarantee such performance unless and until such time as a Secured Lender takes possession or becomes the owner of the estate covered by its Mortgage. If the Secured Lender takes possession or becomes the owner of any portion of the Property, then from and after that date, the Secured Lender shall be obligated to comply with all provisions of this Agreement, including payment of any outstanding monetary obligations of Owner owed to City prior to the date the Secured Lender became the fee owner of the Property. (b) Nothing in Section 12.1.4(a) is intended, nor should be construed or applied, to limit or restrict in any way the City’s authority to terminate this Agreement, as against any Secured Lender as well as against Owner if any curable Event of Monetary Default or an Event of Non-Monetary Default is not completely cured within the Secured Lender’s Cure Period.

ARTICLE 13

TRANSFERS AND ASSIGNMENTS

13.1 Transfers and Assignments.

13.1.1 Not Severable from Ownership Interest in Property. This Agreement shall not be severable from Owner’s interest in the Property and any transfer of the Property or any portion thereof, shall automatically operate to transfer the benefits and burdens of this Agreement with respect to the transferred Property or transferred portions, as applicable.

13.1.2 Transfer Rights. Owner may freely sell, ground lease, transfer, exchange, hypothecate, encumber or otherwise dispose of its interest in the Property (collectively referenced herein as “Transfer”), without the consent of the City. Owner shall, however, give written notice to the City, in accordance with Section 15.1, of any transfer of the Property,

12.B.b
Packet Pg. 963 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 38 disclosing in such notice (a) the identity of the transferee of the Property (the “Property Transferee”) and (b) the address of the Property Transferee as applicable.

13.2 Release Upon Transfer. Upon Transfer of the rights and interests of Owner to the Property, Owner shall be released from its obligations under this Agreement to the extent of Transfer with respect to the Property if: (a) Owner has provided written notice of such Transfer to City; and (b) the Property Transferee executes and delivers to City a written agreement in which the Property Transferee expressly and unconditionally assumes all of the obligations of Owner under this Agreement with respect to the Property in the form of Exhibit “F” attached hereto (the “Assumption Agreement”). Upon such Transfer of the Property and the express assumption of Owner’s obligations under this Agreement by the Property Transferee, the City agrees to look solely to the Property Transferee for compliance with the provisions of this Agreement. Any such Property Transferee shall be entitled to the benefits of this Agreement as “Owner” hereunder and shall be subject to the obligations of this Agreement. Failure to deliver a written Assumption Agreement hereunder shall not affect the transfer of the benefits and burdens as provided in Section 13.1, provided that the transferor shall not be released from its obligations hereunder unless and until the executed Assumption Agreement is delivered to the City.

ARTICLE 14

INDEMNITY TO CITY

14.1 Indemnity. Owner agrees to and shall defend, indemnify and hold harmless the City, its City Council, boards and commissions, officers, agents, employees, volunteers and other representatives (collectively referred to as “City Indemnified Parties”) from and against any and all loss, liability, damages, cost, expense, claims, demands, suits, attorney’s fees and judgments (collectively referred to as “Damages”), including but not limited to claims for damage for personal injury (including death) and claims for property damage arising directly or indirectly from the following: (1) for any act or omission of Owner or of its officers, board members, agents, employees, volunteers, contractors, subcontractors or other persons acting on its behalf, including Owner’s tenants and/or Operator (collectively referred to as the “Owner Parties”) which occurs during the Term and relates to this Agreement; and (2) for any act or omission related to the operations of Owner Parties. Owner’s obligation to defend, indemnify and hold harmless applies to all actions and omissions of Owner Parties as described above caused or alleged to have been caused in connection with the Digital Display or this Agreement, except to the extent any Damages are caused by the negligence or willful misconduct of any City Indemnified Parties or any content provided by the City for display on the Digital Display. This Section 14.1 applies to all Damages suffered or alleged to have been suffered by the City Indemnified Parties regardless of whether or not the City prepared, supplied or approved plans or specifications or both for the Digital Display. The provisions of this Section shall survive the termination of the Agreement.

14.2 City’s Right to Defense. The City shall have the right to approve legal counsel retained by Owner to defend any claim, action or proceeding which Owner is obligated to defend pursuant to Section 14.1, which approval shall not be unreasonably withheld, conditioned or delayed. If any conflict of interest results during the mutual representation of the City and Owner in defense of any such action, or if the City is reasonably dissatisfied with legal counsel

12.B.b
Packet Pg. 964 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 39 retained by Owner, the City shall have the right, at Owner’s cost and expense, (a) to have the City Attorney undertake and continue the City’s defense, or (b) with Owner’s approval, which shall not be reasonably withheld or delayed, to select separate outside legal counsel to undertake and continue the City’s defense.

ARTICLE 15

GENERAL PROVISIONS

15.1 Notices. Formal notices, demands and communications between the Parties shall be deemed sufficiently given if delivered to the principal offices of the City or Owner, as applicable, by (i) personal service, or (ii) express mail, Federal Express, or other similar overnight mail or courier service, regularly providing proof of delivery, or (iii) certified mail, postage prepaid, return receipt requested. Such notice shall be addressed as follows:

To City:

City of Santa Monica
1685 Main Street, Room 204
Santa Monica, CA 90401
Attention: City Manager
With a copy to:

City of Santa Monica
1685 Main Street, Mail Stop 28
Santa Monica, CA 90401
Attn: Community Development Department Director
To Owner:

UNITED XYZ LLC
c/o XYZ.Rent – 1202 Third
2800 Olympic Blvd, Floor 1
Santa Monica, CA 90404
With a copy to:

Grant Carpenter
2800 Olympic Blvd, Floor 1
Santa Monica, CA 90404
Notice given in any other manner shall be effective when received by the addressee. Any Party may change the addresses for delivery of notices to such Party by delivering notice to the other Party in accordance with this provision.

15.2 Entire Agreement; Conflicts. This Agreement represents the entire agreement of the Parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties or their predecessors in interest with respect to all or any part of the subject matter hereof. Should any or all of the provisions of this Agreement be found to be in conflict with any other provision

12.B.b
Packet Pg. 965 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 40 or provisions found in the Existing Regulations, then the provisions of this Agreement shall prevail.

15.3 Binding Effect. The Parties intend that the provisions of this Agreement shall constitute covenants which shall run with the land comprising the Property during the Term for the benefit thereof and that the burdens and benefits thereof shall bind and inure to the benefit of all successors-in-interest to the Parties hereto in accordance with Article 13. Every Party who now or hereafter owns or acquires any right, title, or interest in or to any portion of the Digital Display during the Term is and shall be conclusively deemed to have consented and agreed to every provision contained herein, to the extent relevant to said right, title or interest, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Digital Display.

15.4 Agreement Not for Benefit of Third Parties. This Agreement is made and entered into for the sole protection and benefit of Owner and the City and their respective successors and assigns. No other person shall have any right of action based upon any provision of this Agreement.

15.5 No Partnership or Joint Venture. Nothing in this Agreement shall be deemed to create a partnership or joint venture between the City and Owner or to render either Party liable in any manner for the debts or obligations of the other.

15.6 Estoppel Certificates. Either Party and any Secured Lender may, at any time, and from time to time, deliver written notice to the other Party requesting such Party to certify in writing (each, an “Estoppel Certificate”): (a) that this Agreement is in full force and effect, (b) that this Agreement has not been amended or modified either orally or in writing, or if so amended, identifying the amendments, (c) whether or not, to the knowledge of the responding Party, the requesting Party is in Breach or claimed Breach in the performance of its obligations under this Agreement, and, if so, describing the nature and amount of any such Breach or claimed Breach, and (d) whether or not, to the knowledge of the responding Party, any event has occurred or failed to occur which, with the passage of time or the giving of notice, or both, would constitute an Event of Monetary Default or an Event of Non-Monetary Default and, if so, specifying each such event. A Party receiving a request for an Estoppel Certificate shall execute and return such Certificate within thirty (30) Days following the receipt of the request therefor.

If the party receiving the request hereunder does not execute and return the certificate in such 30- day period and if circumstances are such that the Party requesting the notice requires such notice as a matter of reasonable business necessity, the Party requesting the notice may seek a second request which conspicuously states “FAILURE TO EXECUTE THE REQUESTED ESTOPPEL CERTIFICATE WITHIN FIFTEEN (15) DAYS SHALL BE DEEMED WAIVER PURSUANT TO SECTIONS 15.6 AND 15.13 OF THE DEVELOPMENT AGREEMENT” and which sets forth the business necessity for a timely response to the estoppel request. If the Party receiving the second request fails to execute the Estoppel Certificate within such 15-day period, it shall be conclusively deemed that the Agreement is in full force and effect and has not been amended or modified orally or in writing, and that there are no uncured defaults under this Agreement or any events which, with passage of time of giving of notice, of both, would constitute a default under the Agreement. The City Manager shall have the right to execute any Estoppel Certificate requested by Owner under this Agreement. The City acknowledges that an Estoppel Certificate

12.B.b
Packet Pg. 966 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 41 may be relied upon by any Property Transferee, Secured Lender or other party. The Estoppel Certificate shall be provided in lieu of zoning compliance letters authorized pursuant to SMMC Section 9.38.020(E), or any successor thereto.

15.7 Time. Time is of the essence for each provision of this Agreement of which time is an element.

15.8 Excusable Delays.

15.8.1 In addition to any specific provisions of this Agreement, nonperformance by Owner of its obligations under this Agreement shall be excused when it has been prevented or delayed in such performance by reason of any act, event or condition beyond the reasonable control of Owner (collectively, “Excusable Delays”) for any of the following reasons:
(a) War, insurrection, walk-outs, riots, acts of terrorism, floods, pandemic, earthquakes, fires, casualties, acts of God, or similar grounds for excused performances;
(b) Governmental restrictions or moratoria imposed by the City or by other governmental entities or the enactment of conflicting State or Federal laws or regulations; (c) The imposition of injunctive relief, restraining orders, restrictions or moratoria by judicial decisions or by litigation, contesting the validity, or seeking the enforcement or clarification of, this Agreement, whether instituted by Owner, the City or any other person or entity, or the filing of a lawsuit by any Party arising out of this Agreement or any permit or approval Owner deems necessary or desirable for the implementation of the Digital Display;
(d) The institution of a referendum pursuant to Government Code Section 65867.5 or a similar public action seeking to in any way invalidate, alter, modify or amend the ordinance adopted by the City Council approving and implementing this Agreement; (e) Inability to secure necessary labor, materials or tools, due to strikes, lockouts, or similar labor disputes or due to a global pandemic; and/or (f) Failure of the City to timely perform its obligations hereunder, including its obligations under Section 7.2 above.

15.8.2 Under no circumstances shall the inability of Owner to secure financing be an Excusable Delay to the obligations of Owner except to the extent the inability to secure financing is directly associated with war, insurrection, walk-outs, riots, acts of terrorism, floods, pandemic, earthquakes, fires, casualties, acts of God or similar grounds beyond the control of Owner.

15.8.3 In order for an extension of time to be granted for any Excusable Delay, Owner must deliver to the City written notice of the commencement of the Excusable Delay within sixty (60) Days after the date on which Owner becomes aware of the existence of the

12.B.b
Packet Pg. 967 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 42 Excusable Delay. The extension of time for an Excusable Delay shall be for the actual period of the delay.

15.8.4 Nothing contained in this Section 15.8 is intended to modify the terms of either Section 5.1.2 or Section 5.5 of this Agreement.

15.9 Governing Law. This Agreement shall be governed exclusively by the provisions hereof and by the laws of the State of California, without regard to any choice of law provisions thereof.

15.10 Cooperation in Event of Legal Challenge to Agreement. If there is any court action or other proceeding initiated by a third-party that includes any challenge to the validity, enforceability or any term or provision of this Agreement, the City’s CEQA determination for the Digital Display, and/or any other City approvals contemplated by this Agreement, then Owner shall indemnify, hold harmless, pay all costs actually incurred, and provide defense in said action or proceeding, with counsel reasonably satisfactory to both the City and Owner. The City shall cooperate with Owner in any such defense as Owner may reasonably request.

15.11 Attorneys’ Fees. If any Party commences any action for the interpretation, enforcement, termination, cancellation or rescission of this Agreement or for specific performance for the Breach of this Agreement, the prevailing Party shall be entitled to its reasonable attorneys’ fees, litigation expenses and costs. Attorneys’ fees shall include attorneys’ fees on any appeal as well as any attorneys’ fees incurred in any post-judgment proceedings to collect or enforce the judgment. Such attorneys’ fees shall be paid whether or not such action is prosecuted to judgment. In any case where this Agreement provides that the City or Owner is entitled to recover attorneys’ fees from the other, the Party so entitled to recover shall be entitled to an amount equal to the fair market value of services provided by attorneys employed by it as well as any attorneys’ fees actually paid by it to third Parties. The fair market value of the legal services for public attorneys shall be determined by utilizing the prevailing billing rates of comparable private attorneys.

15.12 Recordation. Parties shall cause this Agreement to be recorded against title to the Property in the Official Records of the County of Los Angeles in accordance with California Government Code Section 65868.5. The cost, if any, of recording this Agreement shall be borne by Owner.

15.13 No Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought and referring expressly to this Section 15.13. No delay or omission by either Party in exercising any right or power accruing upon non-compliance or failure to perform by the other Party under any of the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof, except as expressly provided herein. No waiver by either Party of any of the covenants or conditions to be performed by the other Party shall be construed or deemed a waiver of any succeeding breach or nonperformance of the same or other covenants and conditions hereof of this Agreement.

15.14 Construction of this Agreement. The Parties agree that each Party and its legal

12.B.b
Packet Pg. 968 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 43 counsel have reviewed and revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not apply in the interpretation of this Agreement or any amendments or exhibits thereto.

15.15 Other Governmental Approvals. Owner may apply for such other permits and approvals as may be required for development of the Digital Display in accordance with this Agreement from other governmental or quasi-governmental agencies having jurisdiction over the Property including, without limitation, applying for approval by the California Coastal Commission. The City shall reasonably cooperate with Owner in its endeavors to obtain such permits and approvals.

15.15.1 Further Assurances; Covenant to Sign Documents. Each Party shall take all actions and do all things, and execute, with acknowledgment or affidavit, if required, any and all documents and writings, which may be necessary or proper to achieve the purposes and objectives of this Agreement.

15.15.2 Processing. Upon satisfactory completion by Owner of all required preliminary actions and payments of appropriate processing fees, if any, the City shall, subject to all legal requirements, promptly initiate, diligently process, and complete at the earliest possible time all required steps, and expeditiously act upon any approvals and permits necessary for the development by Owner of the Digital Display in accordance with this Agreement, including, but not limited to, the following:
(a) the processing of applications for and issuing of all Discretionary Approvals requiring the exercise of judgment and deliberation by City; (b) the holding of any required public hearings; and
(c) the processing of applications for and issuing of all City Technical Permits requiring the determination of conformance with the Existing Regulations.

15.15.3 No Revocation. The City shall not revoke or subsequently disapprove any approval or future approval for the Digital Display once issued by the City provided that the Digital Display is in accordance with such approval. Any revocation or subsequent disapproval by the City shall state in writing the reasons why the development of the Digital Display is not deemed to be in accordance with such approval and the suggested actions to be taken in order for approval to be granted.

15.15.4 Processing During Third Party Litigation. If any third party lawsuit is filed against the City or Owner relating to this Agreement, the City shall not delay or stop the development, processing or construction of the Digital Display, or issuance of the City Technical Permits, unless the third party obtains a court order preventing the activity. The City shall not stipulate to or fail to oppose the issuance of any such order. Notwithstanding the foregoing and without prejudice to the provisions of Section 15.8.1(c), after service on the City or Owner of the initial petition or complaint challenging this Agreement or the Digital Display, the Owner may apply to the Community Development Director for a tolling of the applicable deadlines for Owner to otherwise comply with this Agreement. The Community Development Director shall approve such tolling, consistent with the standard in Section 15.27, for up to five years during

12.B.b
Packet Pg. 969 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 44 the pendency of the litigation and shall provide Owner with notice of his or her decision on the tolling request within forty (40) Days of receiving Owner’s request.

15.15.5 State, Federal or Case Law. Where any state, federal or case law allows the City to exercise any discretion or take any act with respect to that law, the City shall, in an expeditious and timely manner, at the earliest possible time, (i) exercise its discretion in such a way as to be consistent with, and carry out the terms of, this Agreement and (ii) take such other actions as may be necessary to carry out in reasonable good faith the terms of this Agreement.

15.16 Jurisdiction and Venue. Any legal action or proceeding among the Parties arising out of this Agreement shall be instituted in the Superior Court of the County of Los Angeles, State of California, in any other appropriate court in that County, or in the Federal District Court in the Central District of California. The parties agree that venue exists in either court, and each party expressly waives any right to transfer to another venue. The parties further agree that either court will have personal jurisdiction over the parties to this Agreement.

15.17 Exhibits. The following exhibits which are part of this Agreement are attached hereto and each of which is incorporated herein by this reference as though set forth in full:

Exhibit “A” Legal Description of the Property
Exhibit “B” Digital Display Plans
Exhibit “C” SMMC Article 9 (Planning and Zoning)
Exhibit “D” Conditions of Approval
Exhibit “E” Permitted Fees and Exactions
Exhibit “F” Form of Assignment and Assumption Agreement Exhibit “G” Digital Display District Ordinance
Except as to the Digital Display Plans, which shall be treated in accordance with Section

2.1 above, the text of this Agreement shall prevail in the event that any inconsistencies exist between the Exhibits and the text of this Agreement.

15.18 Counterpart Signatures. The Parties may execute this Agreement on separate signature pages which, when attached hereto, shall constitute one complete Agreement.

15.19 Certificate of Performance. Upon the completion of the Digital Display or upon performance of this Agreement or its earlier revocation and termination, the City shall provide Owner, upon Owner’s request, with a statement (“Certificate of Performance”) evidencing said completion, termination or revocation and the release of Owner from further obligations hereunder, except for any further obligations which survive such completion, termination or revocation. The Certificate of Performance shall be signed by the appropriate agents of Owner and the City and shall be recorded against title to the Property in the official records of Los Angeles County, California. Such Certificate of Performance is not a notice of completion as referred to in California Civil Code Section 3093.

15.20 Interests of Owner. Owner represents to the City that, as of the Effective Date, it is the owner of the entire Property, subject to encumbrances, easements, covenants, conditions,

12.B.b
Packet Pg. 970 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 45 restrictions, and other matters of record.

15.21 Operating Memoranda. The provisions of this Agreement require a close degree of cooperation between the City and Owner. During the Term of this Agreement, clarifications to this Agreement and the Existing Regulations may be appropriate with respect to the details of performance of the City and Owner. If and when, from time to time, during the term of this Agreement, the City and Owner agree that such clarifications are necessary or appropriate, they shall effectuate such clarification through operating memoranda approved in writing by the City and Owner, which, after execution, shall be attached hereto and become part of this Agreement and the same may be further clarified from time to time as necessary with future written approval by the City and Owner. Operating memoranda are not intended to and cannot constitute an amendment to this Agreement but mere ministerial clarifications, therefore public notices and hearings shall not be required for any operating memorandum. The City Attorney shall be authorized, upon consultation with, and approval of, Owner, to determine whether a requested clarification may be effectuated pursuant to the execution and delivery of an operating memorandum or whether the requested clarification is of such character to constitute an amendment of this Agreement which requires compliance with the provisions of Section 8.1 above. The authority to enter into such operating memoranda is hereby delegated to the City Manager and the City Manager is hereby authorized to execute any operating memoranda hereunder without further action by the City Council.

15.22 Acknowledgments, Agreements and Assurance on the Part of Owner.

15.22.1 Owner’s Faithful Performance. The Parties acknowledge and agree that Owner’s faithful performance in developing the Digital Display on the Property and in constructing and installing certain public improvements pursuant to this Agreement and complying with the Existing Regulations will fulfill substantial public needs. The City acknowledges and agrees that there is good and valuable consideration to the City resulting from Owner’s assurances and faithful performance thereof and that same is in balance with the benefits conferred by the City on the Digital Display. The Parties further acknowledge and agree that the exchanged consideration hereunder is fair, just and reasonable. Owner acknowledges that the consideration is reasonably related to the type and extent of the impacts of the Digital Display on the community and the Property, and further acknowledges that the consideration is necessary to mitigate the direct and indirect impacts caused by Owner on the Property.

15.22.2 Obligations to be Non-Recourse. As a material element of this Agreement, and in partial consideration for Owner’s execution of this Agreement, the Parties each understand and agree that the City’s remedies for breach of the obligations of Owner under this Agreement shall be limited as described in Sections 11.2 through 11.4 above.

15.23 Waiver of Protest. Owner acknowledges and agrees that by executing this Agreement, Owner waives any and all claims and rights, if any, under Government Code Section 66020 to protest fees, dedications, reservations, or exactions required by this Agreement (hereinafter “exactions”), including the City’s right to request and receive the exaction pursuant to this Agreement, the total exaction amount if specified by the Agreement, and the formula for subsequently calculating exactions if the formula is established by the Existing Regulations.

Notwithstanding the above, if the amount of any exaction is not expressly set forth in this

12.B.b
Packet Pg. 971 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 46 Agreement, Owner reserves the right to protest the subsequent calculation of this amount.

15.24 Not a Public Dedication. Nothing in this Agreement shall be deemed to be a gift or dedication of the Property, or of the Digital Display, or any portion thereof, to the general public, for the general public, or for any public use or purpose whatsoever, it being the intention and understanding of the Parties that this Agreement be strictly limited to and for the purposes herein expressed for the installation, maintenance, and operation of the Digital Display as private property. Owner shall have the right to prevent or prohibit the use of the Property, or the Digital Display, or any portion thereof, including common areas and building and improvements located thereon, by any person for any purpose inimical to the development of the Digital Display, including without limitation to prevent any person or entity from obtaining or accruing any prescriptive or other right to use the Property or the Digital Display.

15.25 Other Agreements. The City acknowledges that certain additional agreements may be necessary to effectuate the intent of this Agreement and facilitate development of the Digital Display. The City Manager is hereby authorized to prepare, execute, and record those additional agreements.

15.26 Severability and Termination. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, or if any provision of this Agreement is superseded or rendered unenforceable according to any law which becomes effective after the Effective Date, the remainder of this Agreement shall be effective to the extent the remaining provisions are not rendered impractical to perform, taking into consideration the purposes of this Agreement.

15.27 Community Development Director Approval. Whenever this Agreement requires Community Development Director review and approval, such review and approval shall be undertaken in reasonable good faith and with due diligence and shall not be unreasonably withheld, conditioned or delayed.

15.28 City Manager Approval. Whenever this Agreement requires City Manager review and approval, such review and approval shall not preclude the City Manager from consulting with the City Council before rendering an approval.

This Agreement is executed by the Parties on the date first set forth above and is made effective on and as of the Effective Date.

OWNER:

UNITED XYZ LLC,
a California limited liability company
By: ________DRAFT_______________
Name: __________________________
Title: ___________________________

12.B.b
Packet Pg. 972 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 47 CITY:

CITY OF SANTA MONICA,
a municipal corporation
By: ________DRAFT_______________
Name: ___________________________
Title: _____________________________
ATTEST:

By: ________DRAFT_______________
Name: ______________________________
City Clerk
APPROVED AS TO FORM:

By: ________DRAFT_______________
Name: ______________________________
City Attorney

ACKNOWLEDGEMENT AND CONSENT BY OPERATOR
As of the Effective Date of this Agreement, Orange Barrel Media, LLC, a Delaware limited liability company is the Operator as defined in Section 1.26 of this Agreement. Operator confirms its understanding of this Agreement, including but not limited to, Section 2.5 (Project and Community Benefits) and 2.11 (Operator Not a Third-Party Beneficiary to this Agreement).

OPERATOR:

ORANGE BARREL MEDIA, LLC,
a Delaware limited liability company
By: ________DRAFT_______________

12.B.b
Packet Pg. 973 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 48 Name: __________________________

Title: ___________________________

12.B.b
Packet Pg. 974 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) Exhibit “A”
EXHIBIT “A”

LEGAL DESCRIPTION OF PROPERTY

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SANTA

MONICA, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

LOTS “A”, “B” AND “Y”, IN BLOCK 122 OF SANTA MONICA, IN THE CITY OF SANTA

MONICA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 3, PAGES 80 AND 81, AND IN BOOK 39, PAGES 45 THROUGH 51,

INCLUSIVE, BOTH OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN: 4291-002-001

12.B.b
Packet Pg. 975 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) Exhibit “B”
EXHIBIT “B”

DIGITAL DISPLAY PLANS
[Behind this Page.]

12.B.b
Packet Pg. 976 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA)

PROPERTY LINE

PROPERTY LINE
18’-6” 17’-6” 7’-0”

NEW MEDIA OPERATOR IDENTIFICATION SIGNAGE,
INTERNALLY ILLUMINATED LETTERS 7” H x 10’-0” W
NEW 1000 SF TOTAL LED SIGNAGE,

WRAPS AROUND TO WILSHIRE ELEVATION

EXISTING FLUTED TOWER

NEW ARCHITECTURAL TRIM

REACTIVATE EXISTING BLADE SIGN,
SEE ELEVATION 47”
17” 13 5/8”
233”
1/8” THICK ALUMINUM CUTOUT

PAINTED BLACK AND FLUSH MO

TO EXISTING BLADE, BOTH SID

BLADE SIGN ELEVATION EAST ELEVATION
3RD STREET PROMENADE

ELEVATIONS
36'-0"

GRADE TO TOP OF SIGN

NEW ARCHITECTURAL TRIM, PAINTED

FINISH TO MATCH BRUSHED ALUMINUM

ADJUSTABLE WALL WASH FIXTURES

MOUNTED TO REAR OF SIGN FRAME

ILLUMINATE THE FLUTED TOWER ABOVE

12.B.b
Packet Pg. 977 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA)

PROPERTY LINE

PROPERTY LINE
18’-6” 17’-6” 7’-0”
NEW 1000 SF TOTAL LED SIGNAGE,
WRAPS AROUND TO 3RD ST ELEVATION

EXISTING FLUTED TOWER

NEW ARCHITECTURAL TRIM

EXISTING FLUTED TOWER

NORTH ELEVATION
WILSHIRE BOULEVARD 36'-0" GRADE TO TOP OF SIGN

ELEVATIONS

ADJUSTABLE WALL WASH FIXTURES

MOUNTED TO REAR OF SIGN FRAME

ILLUMINATE THE FLUTED TOWER ABOVE

AND BELOW THE SIGN

NEW ARCHITECTURAL TRIM, PAINTED

12.B.b
Packet Pg. 978 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA)

PROPERTY LINE
10’-0” 7’-8”
54’-10” LENGTH LED SCREEN
31’-6” 10’-0”
R = 10’-0”

NEW ARCHITECTURAL TRIM

EXISTING
AWNING

PLOT PLAN
5'- 0"
5'-0"
1'-10"

NEW ARCHITECTURAL TRIM ON BOTH

ENDS OF SIGN FACE

EXISTING TRIM PIECES TO REMAIN

EXISTING LIGHT WASH TO BE

REACTIVATED

LED MODULES &

12.B.b
Packet Pg. 979 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 18’-6” 17’-6” 7’-0”
3’-11”
17” 13 5/8”
19’-5”
1/8” THICK ALUMINUM CUTOUT LETTERS

PAINTED BLACK AND FLUSH MOUNTED

TO EXISTING BLADE, BOTH SIDES

BLADE SIGN ELEVATION

12.B.b
Packet Pg. 980 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) Exhibit “C”
EXHIBIT “C”
SMMC ARTICLE 9 (PLANNING AND ZONING)
[To be inserted.]

12.B.b
Packet Pg. 981 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) Exhibit “D”
EXHIBIT “D”

CONDITIONS OF APPROVAL
Project Specific Conditions

1. The Digital Display shall provide the project and community benefits as established in Section 2.5 of this Agreement.

12.B.b
Packet Pg. 982 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) Exhibit “E”
EXHIBIT “E”

PERMITTED FEES AND EXACTIONS

1. Owner shall pay the following fees and charges that are within the City’s jurisdiction and at the rate in effect at the time payments are made:
(a) Upon submittal for plan check, Owner shall pay City plan check fees; (b) Prior to issuance of construction permits, Owner shall pay the following City fees and all other standard fees imposed on similar development projects, which may include:
 Building, Plumbing, Mechanical, Electrical, Grading, Seismic Mapping, Landscape, Excavation and Shoring Permit fees (collected by Building & Safety)
 Construction and Demolition (C&D) Waste Management performance security fee (SMMC Chapter 8.108) (collected by the Public Works Department)
(c) Upon inspection of the project during the course of construction, City inspection fees.

These fees shall be reimbursed to Owner in accordance with the City's standard practice should Owner not proceed with development of the project.

2. Prior to issuance of permits for any construction work in the public right-of-way, or use of public property, Owner shall pay the following City fees:
 Use of Public Property Permit fees (SMMC 7.04.670) (Public Works Department)
 Utility Excavation Permit fee (SMMC 7.06.070) (Public Works Department)  Street Permit fee (SMMC 7.04.790) (Public Works Department)

3. Owner shall reimburse the City for its ongoing actual costs to monitor the project’s compliance with this Development Agreement. The City shall bill Owner for staff time and any material used pursuant to the hourly fees in effect at the time monitoring is performed. Owner shall submit payment to the City within 30 days after receipt of an invoice for same from the City.

12.B.b
Packet Pg. 983 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) Exhibit “F”, Page 1
EXHIBIT “F”

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Recording Requested By and
When Recorded Mail To:

UNITED XYZ LLC
c/o XYZ.Rent – 1202 Third
2800 Olympic Blvd, Floor 1
Santa Monica, CA 90404
________________________________________________________________________

ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (“Agreement”) is made and entered into by and between ___________________________, a _____________________________ (“Assignor”), and ________________________, a __________________ (“Assignee”).

R E C I T A L S
[NOTE TO DRAFTER: This form Assignment and Assumption Agreement is drafted for a purchase and sale of the full Project Site. If the transfer is other than a purchase and sale and/or less than the entire Project Site is being transferred, this form needs to be revised. Notably, if less than the entire Project Site is being transferred and/or the Project Site or any portion therefore is being transferred to more than one owner, this form needs to be revised to add joint and several liability for all owners of the Project Site.] A. The City of Santa Monica (“City”) and Assignor entered into that certain Development Agreement dated _______________, ____ (the “Development Agreement”), with respect to the real property located in the City of Santa Monica, State of California more particularly described in Exhibit “A” attached hereto (the “Project Site”).

B. Assignor has obtained from the City certain development approvals and permits with respect to the development of the Project Site, including without limitation, approval of the Development Agreement for the Project Site (collectively, the “Digital Display Approvals”).

C. Assignor intends to sell, and Assignee intends to purchase, the Project Site.

D. In connection with such purchase and sale, Assignor desires to transfer all of the Assignor’s right, title, and interest in and to the Development Agreement and the Digital Display Approvals with respect to the Project Site. Assignee desires to accept such assignment from Assignor and assume the obligations of Assignor under the Development Agreement and the Digital Display Approvals with respect to the Project Site.

THEREFORE, the parties agree as follows:

12.B.b
Packet Pg. 984 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) Exhibit “F”, Page 2

1. Assignment. Assignor hereby assigns and transfers to Assignee all of Assignor’s right, title, and interest in and to the Development Agreement and the Digital Display Approvals with respect to the Project Site. Assignee hereby accepts such assignment from Assignor.

2. Assumption. Assignee expressly assumes and agrees to keep, perform, and fulfill all the terms, conditions, covenants, and obligations required to be kept, performed, and fulfilled by Assignor under the Development Agreement and the Digital Display Approvals with respect to the Project Site.

3. Effective Date. The execution by City of the attached receipt for this Agreement shall be considered as conclusive proof of (a) delivery of this Agreement (b) the assignment and assumption contained herein, and (c) the release of Assignor in accordance with Section 13.2 of the Development Agreement. This Agreement shall be effective upon its recordation in the Official Records of Los Angeles County, California, provided that Assignee has closed the purchase and sale transaction and acquired legal title to the Project Site.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates set forth next to their signatures below.
“ASSIGNOR”
_________________________________
“ASSIGNEE”
_____________________________

12.B.b
Packet Pg. 985 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) Exhibit “F”, Page 3

RECEIPT BY CITY
The attached ASSIGNMENT AND ASSUMPTION AGREEMENT is received by the City of Santa Monica on this ___ day of ________________, ________.

CITY OF SANTA MONICA
___________________________________
By: _______________________________
Community Development Director

12.B.b
Packet Pg. 986 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) Exhibit “G”
EXHIBIT “G”
Digital Display Ordinance
[To be inserted.]

12.B.b
Packet Pg. 987 Attachment: 1202 3rd St DA final (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Promenade DA) 1 of 16
City Council Meeting: December 16, 2025 Santa Monica, California ORDINANCE NUMBER __________ (CCS)
(City Council Series)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

SANTA MONICA APPROVING THE DEVELOPMENT AGREEMENT

BETWEEN THE CITY OF SANTA MONICA, A MUNICIPAL CORPORATION, AND UNITED XYZ LLC, A CALIFORNIA LIMITED LIABILITY COMPANY (“OWNER”) TO ALLOW A DIGITAL BILLBOARD DISPLAY AT 1202 THIRD STREET

PROMENADE
WHEREAS, pursuant to California Government Code Section 65864 et seq. and Chapter 9.60 of the Santa Monica Municipal Code (collectively, the “Development Agreement Statutes”), the City is authorized to enter into binding development agreements with persons or entities having a legal or equitable interest in real property for the development of such real property; and
WHEREAS, Owner is the owner of approximately 14,990 square feet of land located in the City of Santa Monica, State of California, commonly known as 1202 Third Street Promenade, as more particularly described in Exhibit “A” attached to the Development Agreement (the “Property”); and
WHEREAS, the Property is developed with an existing approximately 44,949 square foot commercial building that is occupied with commercial (fitness/gym) uses (the “Existing Building”); and

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WHEREAS, the City has included the Property within the Downtown Core land use designation under the City’s 2010 Land Use and Circulation Element of its General Plan (the “LUCE”). The Property is in the Bayside Conservation “BC” (Promenade) District under the Downtown Community Plan (“DCP”) and is located within the Bayside Conservation “BC” (Third Street Promenade Area) designation under the City’s Zoning Ordinance and is located within the boundaries of the Digital Display District. The Property is also located in the California Coastal Zone; and WHEREAS, on May 12, 2008, the Santa Monica Landmarks Commission designated the Existing Building as a City Landmark and the Property as a Landmark Parcel. (08-LM-005.); and
WHEREAS, the City and Owner desire to allow Owner to install, operate, maintain, and repair a high-quality LED digital display and associated sign structure (the “Digital Display”) on the Existing Building for displaying paid static or full motion onpremises and/or off-premises advertising, artistic creations, civic announcements of public interest or importance and content promoting the City and/or its rich history, including Downtown Santa Monica and the Third Street Promenade. The operation of the Digital Display will generate revenues for the City through the Community Benefit Payment set forth in the Development Agreement; and
WHEREAS, Owner has advised the City of Owner’s intent to allow a third-party billboard operator to operate and own, lease, or license the Digital Display from Owner during the term of the Development Agreement; and

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WHEREAS, on January 30, 2025, Owner filed an application for a Development Agreement (25ENT-0021), pursuant to Santa Monica Municipal Code (“SMMC”) Section

9.60.020 (the “Development Application”). The Development Application proposes an approximately one thousand (1,000) square foot full motion, animated Digital Display to be installed under guidance by a Qualified Historic Preservation Professional to wrap around the corner of the east and north facades of the Existing Building above the first floor. In addition, consistent with one of the building’s character defining features, the Development Application includes reactivation of the Existing Building’s unused blade sign to once again identify the commercial tenant operating within the Existing Building; and
WHEREAS, the design of the Digital Display and reactivated blade sign is more particularly depicted on the Digital Display Plans dated November 18, 2025 (the “Digital Display Plans”) attached as Exhibit “B” to the Development Agreement; and WHEREAS, prior to filing the Development Application, a Qualified Historic Preservation Professional (as defined in Article 1 of Development Agreement) was retained by the applicant team to advise it with respect to the location/positioning and design of the Digital Display. Subsequent to filing the Development Application, City also retained a Qualified Historic Preservation Professional to advise it with respect to the location/positioning and design of the Digital Display; and WHEREAS, prior and subsequent to filing the Development Application, Owner held a virtual community meeting and also held meetings with community members and

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stakeholders, including various preservation advocates, regarding the Digital Display; and
WHEREAS, Owner has paid all necessary costs and fees associated with the City’s processing of the Development Application and Development Agreement; and WHEREAS, the primary purpose is to allow for a Digital Display on the Property to (1) create a visually stimulating and informative experience at the corner of Wilshire Boulevard and the 1200 block of the Promenade; (2) promote the City, including the Third Street Promenade, and the arts, attract visitors and patrons to the Promenade; (3) complement the City’s Entertainment District; as well as (4) generate a new source of revenue for the City, while at the same time respecting and embracing the prominence of the Existing Building, a City-designated Landmark, including its fluted tower that was originally capped with JCP signage. The Parties desire to enter into the Development Agreement in conformance with the Development Agreement Statutes in order to achieve the development of the Digital Display on the Property; and WHEREAS, the Digital Display is also consistent with and implements numerous LUCE, DCP, and Historic Preservation Element goals and policies including:
• LUCE Goal D1 - “Maintain Downtown’s competitive advantage as a premier local and regional shopping, dining, and entertainment destination, and support its evolution in order to respond to changing market conditions.”

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• LUCE Goal E1 - “Create an economic base that satisfies the commercial service needs of the City’s residents while providing employment opportunities and a strong fiscal infrastructure for the City.” • LUCE Goal E4 - “Support the retail sector in order to provide for the needs of local residents and visitors and augment sales tax revenues.” • LUCE Policy E1.1 – “Make land use decisions that respond to changing market conditions and meet the needs of City residents and visitors.” • LUCE Goal HP 1 - “Preserve and protect historic resources in Santa Monica through the land use decision-making process.”
• LUCE Policy HP 1.3 - “Ensure that new development, alterations or remodeling on, or adjacent to, historic properties are sensitive to historic resources and are compatible with the surrounding historic context.” • LUCE Goal HP 2 - “Preserve and protect historic resources through the development of economic incentives and neighborhood conservation approaches.”
• LUCE Policy E4.6 - “Support Downtown as Santa Monica’s primary destination for comparison retail, including a mix of local, national and

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international shops and restaurants that serve residents, visitors and area employees.”
• DCP Goal CCP2 - “Downtown continues to be a thriving and diverse economic force that supports the city’s vitality, fiscal stability and high levels of community services.”
• Goal CCP5: The Third Street Promenade continues to anchor the Downtown’s retail and public space experience with updated features and activities.
• Policy CCP5.1 New public art should be encouraged and located to enhance the pedestrian experience and create an immersive arts experience.
• Action CCP5.1A Install Pathway Art, Banners and Urban Design Features to support the walking experience and to promote awareness of Downtown’s cultural offerings.
• Policy CCP5.2 Consider opportunity for negotiated development agreement art contributions to be aggregated in order to facilitate the acquisition of significant public art pieces.

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• DCP Goal LU3 - “Santa Monica’s Downtown continues to be the economic center for the City, providing a diverse and flexible mix of uses that can meet future resident, business and visitor demand.”
• “The Bayside Conservation district is considered the pedestrian and economic heart of the City. Anchored by the Third Street Promenade, it is a vibrant urban atmosphere supported by a broad mix of building types, office space, entertainment, retail, restaurants, cafes, salons and exercise studios.

The DCP supports the continued expansion of the central retail district by increasing the energy and pedestrian traffic on streets around the Promenade.” (DCP p. 22-23.)
• Historic Preservation Element Goal 3 – “Increase public awareness of the history of Santa Monica and historic preservation in the City.” • Historic Preservation Element Objective 3.2 – “Promote the benefits of owning historic property.”
• Historic Preservation Element Objective 3.8 – “Encourage the installation of plaques and/or public art related to historic buildings and sites in the City.” • Historic Preservation Element Policy 3.8.3 – “Investigate the possibility of coordinating historic preservation and public art programming.”

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• Historic Preservation Element Policy 4.1.3 – “Allow for appropriate additions to and adaptive reuse of historic resources.”
• Historic Preservation Element Goal 5 – “Promote the preservation of historic and cultural resources through incentives and technical assistance.” • Historic Preservation Element Objective 5.2 – “Promote and award incentives.”
WHEREAS, the City Council has determined that a development agreement is appropriate for the proposed development of the Digital Display on the Property.

Development Agreement will (1) eliminate uncertainty in planning for the Digital Display and result in the orderly development of the Digital Display in accordance with the Digital Display District Ordinance, (2) assure installation of necessary improvements on the Property, (3) provide for public infrastructure and services appropriate to development of the Digital Display, (4) secure for the City improvements that benefit the public, (5) ensure the provision of community benefits as envisioned in the LUCE, DCP, and the Digital Display District Ordinance, and (6) otherwise achieve the goals and purposes for which the Development Agreement Statutes were enacted; and WHEREAS, the Development Agreement is consistent with the public health, safety, and welfare needs of the residents of the City and the surrounding region. The City has specifically considered and approved the impacts and benefits of the

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development of the Digital Display on the Property in accordance with the Development Agreement. The Digital Display will provide a number of significant project and community benefits as set forth in Section 2.5 of Development Agreement; and WHEREAS, the City Council has found that the provisions of Development Agreement are consistent with the relevant provisions of the City’s General Plan, including the LUCE, the DCP, the Digital Display District Ordinance, and the 1992 LUP; and
WHEREAS, on October 29, 2025, the City's Planning Commission held a duly noticed public hearing on the Development Application and Development Agreement, and at such hearing, the Planning Commission recommended that the City Council approve the Digital Display including the Development Agreement; and WHEREAS, on December 16, 2025, the City Council held a duly noticed public hearing on the updated Development Application and Development Agreement, and at such hearing the City determined the Digital Display is exempt from the California Environmental Quality Act (“CEQA”) pursuant to a Class 1 exemption (existing facilities) per CEQA Guidelines Section 15301, a Class 3 exemption (new construction or conversion of small structures) per CEQA Guidelines Section 15303, a Class 11 exemption (accessory structures) per CEQA Guidelines Section 15311, a Class 31 exemption (historical resource restoration/rehabilitation), and a Class 32 categorial exemption (in-fill development) per CEQA Guidelines Section 15332.

WHEREAS, the proposed Development Agreement, which is attached hereto as Exhibit “A” to this ordinance, conforms to the requirements of Government Code

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sections 65450 et seq. as well as the requirement of Chapter 9.60 of the Santa Monica Municipal Code (Development Agreements); and
WHEREAS, the City Council, after consideration of all oral and written testimony presented at the duly noticed meeting of the City Council on December 16, 2025, , made the following findings (collectively, “the Findings”):

Development Agreement Findings

1. The Development Agreement is consistent with the objectives, policies, general land uses and programs specified in the general plan and any applicable specific plan. The 1202 3rd Street Promenade site is located in the LUCE’s Downtown District and has a Downtown Core General Plan Land Use Designation. Goals and policies in this District are geared primarily toward reinforcing the Downtown as the focus of the City, encouraging a broad mix of uses and new investment in the District that creates dynamic daytime and evening activity, and reinforces the Downtown as the place with the greatest concentration of activity in the City. The Development Agreement supports the City’s goals to encourage economic vitality, enhance placemaking, and promote creative, high-quality design within the Downtown. Goal LU2 establishes Downtown as a thriving creative and cultural center with a unique concentration of innovative businesses, performance spaces, museums and programmed events. The Development Agreement is consistent with Goal LU3, which imagines Santa Monica’s Downtown continues to be the economic center for the City, providing a diverse and flexible mix of uses that can meet future resident, business and visitor

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demand and also consistent with Goal CCP2 which calls for Downtown to be a thriving and diverse economic force that supports the city’s vitality, fiscal stability and high levels of community services. The Development Agreement is also aligned with Goal CCP5: The Third Street Promenade continues to anchor the Downtown’s retail and public space experience with updated features and activities.

These measures ensure the display complements the district’s entertainment character without negatively affecting nearby light-sensitive residential uses. The Development Agreement is also consistent with Policy CCP5.1 that states new public art should be encouraged and located to enhance the pedestrian experience and create an immersive arts experience and Policy PPS4.3 calling for the Third Street Promenade to be regularly updated to remain consistent with the surrounding areas in terms of infrastructure, landscaping, signage and aesthetic upgrades.

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3. The Development Agreement is in conformity with the public necessity, public convenience, general welfare, and good land use practices by establishing clear parameters for the Digital Display design, operation, and maintenance, while providing substantial community benefits. These include revenue-sharing with the City, a minimum annual financial guarantee, and a 20% allocation of display time for civic and cultural content such as public safety messages, community event information, and local art. Consistent with the Digital Display District Ordinance, the Development Agreement also advances good land use practices by concentrating digital displays within a focused geographic area and ensuring highquality design standards that reinforce the City’s goals for a safe, engaging, and economically vibrant urban environment.

4. The Development Agreement will not be detrimental to the health, safety and general welfare. The Development Agreement includes multiple safeguards to protect public health and safety. Illumination levels, transition speeds, and display operations are regulated to minimize glare, driver distraction, and light spillover onto nearby residences. The display incorporates automatic dimming technology, and is required to power off between 1:00 a.m. and sunrise. The Digital Display will not show flashing or scrolling text and other visual effects that could compromise driver safety. Collectively, these measures ensure the display operates safely and responsibly without detrimental impacts to the public or surrounding community.

5. The Development Agreement will not adversely affect the orderly development of the property in that the Digital Display will be installed on an existing commercial

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building, designed to integrate architecturally with the structure. The Development Agreement includes building occupancy standards to promote active ground-floor use, thereby supporting economic activity and maintaining the vitality of the Promenade.

6. The Development Agreement will have a positive fiscal impact on the City. Through a negotiated revenue-sharing structure and minimum annual guarantee, the Development Agreement will provide an ongoing source of funding to support City programs, services, and public art initiatives. The Development Agreement will also include a one-time payment contribution to the City upon completion of the Digital Display In addition, by activating a key Promenade intersection and attracting visitors, the project will contribute to increased economic activity, benefiting nearby businesses and generating additional tax revenues for the City.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. The above recitals are true and correct, and incorporated herein by this reference.

SECTION 2. The City Council hereby adopts the Findings, and recommends approval of the Development Agreement, attached hereto as Exhibit “A” and incorporated herein by this reference.

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SECTION 3. Based upon Findings 1-6, the Development Agreement is hereby approved.

SECTION 4. Each and every term and condition of the Development Agreement shall be and is made a part of the Santa Monica Municipal Code and any appendices thereto. The City Council of the City of Santa Monica finds that public necessity, public convenience, and general welfare require that any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of the Development Agreement, to the extent of such inconsistencies and no further, be repealed or modified to that extent necessary to make fully effective the provisions of the Development Agreement.

SECTION 5. Any provision of the Santa Monica Municipal Code or appendices thereto, inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, are hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance.

SECTION 6. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of any competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional.

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SECTION 7. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall be effective 30 days from its adoption.

APPROVED AS TO FORM:
______________________________

HEIDI VON TONGELN
Interim City Attorney

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16 EXHIBITA

DEVELOPMENT AGREEMENT
[behind this page]

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Packet Pg. 1003 Attachment: ORD-ord-First Reading 1202 DA (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Reasons Why the 1202 3rd Street Promenade Digital Display Project is Exempt from CEQA
The Digital Display at 1202 3rd Street Promenade (the Project) is categorically exempt from CEQA pursuant to Section 15301 (Class 1 – Existing Facilities), Section 15303 (Class 3 - New Construction or Conversion of Small Structures), Section 15311 (Class 11 - Accessory Structures), Section 15331 (Class 31 – Historical Resource Restoration/Rehabilitation), and Section 15332 (Class 32 – Infill Developments) of the CEQA Guidelines.
• Section 15301 of CEQA Guidelines exempts the operation, repair, maintenance, permitting, or minor alteration of existing public or private structures, facilities, mechanical equipment or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. Projects that fall into this class of exemption include interior or exterior alterations and new copy on existing on-premise and off-premise signs and additions to existing structures provided that the addition will not result in an increase of more than: (1) 50 percent of the floor area of the structures before the addition, or 2,500 square feet, whichever is less; or (2) 10,000 square feet. The Digital Display would be affixed to the existing retail building at 1202 3rd Street and is considered an alteration to an existing building.

No expansion of the land uses or existing structure is proposed. Therefore, the Project is exempt under Section 15301.
• Section 15303 of CEQA Guidelines exempts the construction and location of limited numbers of new small facilities or structures; installation of small new equipment and facilities in small structures; and the conversion of existing small structures from one use to another where only minor modifications are made in the exterior of the structure.

Projects that fall into this class of exemption include accessory (appurtenant) structures including garages, carports, patios, swimming pools, and fences. The Digital Display would be an accessory structure to the existing retail building.

Therefore, the Project is exempt under Section 15303.
• Section 15311 of CEQA Guidelines exempts the construction, or placement of minor structures accessory to (appurtenant to) existing commercial, industrial, or institutional facilities. Projects that fall into this class of exemption include construction, or placement of minor structures accessory to (appurtenant to) existing commercial, industrial, or institutional facilities, including but not limited to: (a) On-premise signs.

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Packet Pg. 1004 Attachment: CEQA Analysis 1202 3rd St [Revision 1] (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street The Digital Display would be installed as an accessory structure to the existing retail building. Therefore, the Project is exempt under Section 15311. • Section 15331 of CEQA Guidelines exempts projects limited to maintenance, repair, stabilization, rehabilitation, restoration, preservation, conservation or reconstruction of historical resources in a manner consistent with the Secretary of the Interior’s Standards for the Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring, and Reconstructing Historic Buildings (“the Standards”).

The Project Site is occupied by a two-story commercial building originally constructed in 1949 as a J.C. Penney Co. department store. The property was designated a Santa Monica Landmark in 2008 under Criteria 1 and 6. The former J. C. Penney Co. department store building is listed as a City Landmark under Criterion 1 as an example of the economic prosperity of Santa Monica in the early post-World War II years and the expansion of commercial activity along 3rd Street at that time; and as an example of a particular and short-lived stylistic phase in the architectural history of the City, the Late Moderne. The property is listed under Criterion 6 as a local icon and defining feature of Santa Monica’s downtown. A period of significance is not identified in the Landmark designation but is presumed to be 1949, the year in which construction was completed and the store opened for business. Therefore, the exterior characterdefining features are those that survive from the building’s initial construction and include the following:
• Rectangular plan, simple two-story massing, and asymmetrical composition • Flat roof with parapets
• Solid wall planes on the upper portion of the north and east façades, terminating in fins
• Tall, cylindrical concrete tower with fluted walls and reeded base • Flat, angled metal canopy with curved corners wrapping the north and east façades
• Bezeled ribbon windows at the second floor
• glazed ceramic tile base, surrounds, and column
• Terrazzo entrance apron
• Concrete blade sign on east façade

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Packet Pg. 1005 Attachment: CEQA Analysis 1202 3rd St [Revision 1] (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street The Project proposes a new, 1,000-square-foot LED digital display to wrap around the corner of the east and north façades of the former J. C. Penney & Co. department store. The display will be bracketed by architectural trim. The Project will also reactivate the blade sign at the southeast corner of the building.

The Historic Resources Assessment report evaluates the Project against the Standards for Rehabilitation. As analyzed in the, the Project conforms with all the Standards, except Standards 2 and 9. Specifically, the report states “…the new digital display will obscure most of the corner tower and its relationship with the flanking fins and blank wall planes. That architectural composition is collectively the primary and most distinctive feature of the J. C. Penney building, designed to catch the eye of passing motorists and pedestrians on Wilshire Boulevard and 3rd Street. The overall composition and its component parts will remain intact behind the LED screen structure, which will be offset from the face of the building, and will be partially visible from certain vantage points at close proximity; however, the added structure will obscure most of the historic composition from general view. As such, it does not follow the recommendation provided by the NPS in Preservation Brief 25 that new signs should not obscure significant features of a historic building and will alter the visual character of the J.

C. Penney building at its most prominent point. Therefore, the Project does not fully comply with Standard 2……
As previously noted, it does not follow the guidance provided by the NPS in Preservation Brief 25 which recommends that new signs should not obscure significant features of historic buildings. The proposed new digital display/billboard is thus not compatible with the historic features, size, scale and proportion of the former “J. C. Penney building. Therefore, the Project does not fully comply with Standard 9.

Therefore, the Project does not follow the Secretary of the Interior’s Standards for Rehabilitation. However, the Project will not materially alter the J. C. Penney building such that its significance would be materially impaired; all the physical characteristics that convey the building’s significance will remain intact. The fluted corner tower and its component features will be obscured when viewed at a distance from Wilshire Boulevard and Third Street but will remain visible on closer view behind the digital display screen which will be offset from the building’s façades; and the building’s other

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Packet Pg. 1006 Attachment: CEQA Analysis 1202 3rd St [Revision 1] (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street features will remain fully visible, including its scored plaster walls, ribbon windows, blade sign,
canopy, storefronts and display windows. The dormant existing concrete blade sign will be reactivated with current tenant identification lettering. The building will retain integrity of location, setting, materials, workmanship, feeling, and association, and sufficient integrity of design to convey its historic Late Moderne architectural style.

Therefore, the Project will not cause a substantial adverse change in the significance of 1202 3ʳᵈ Street Promenade and will not have a significant effect on the environment as defined by CEQA.

As noted in the Secretary of the Interior’s Guidelines, “the Secretary of the Interior’s Standards for Treatment of Historic Properties are only regulatory for projects receiving federal grant-in-aid funds otherwise, the Standards and Guidelines are intended only as general guidance for work on any historic building.). Therefore, since the Project is generally consistent with all but two of the Standards, the Project is exempt pursuant to Section 15331.

Additionally, the Digital Display on the Landmark building would be reversible1 and all physical characteristics that convey the Existing Building’s significance will remain intact behind the digital display screen, as determined by a Qualified Historic Preservation Professional. Therefore, with these requirements, the Project would be generally consistent with the Standards and is exempt under Section 15331. • Section 15332 of CEQA Guidelines exempts projects characterized as in-fill development meeting the conditions below.
a) The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations.
b) The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses. c) The project site has no value, as habitat for endangered, rare or threatened species.
1 Under the Secretary of the Interior Standards for the Treatment of Historic Properties, Standard 10 requires that any new additions or alterations to a historic property be done in a way that, if removed, the essential form and integrity of the historic property would remain unimpaired

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Packet Pg. 1007 Attachment: CEQA Analysis 1202 3rd St [Revision 1] (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street d) Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality.
e) The site can be adequately served by all required utilities and public services.

The Project meets the qualifications of the in-fill exemption as it would be generally consistent with the general plan, would consist of the installation of a Digital Display on a site of no more than 5 acres in an urban area that has no value for endangered, rare, or threatened species. Additionally, the installation of the Digital Display would not result in significant effects related to traffic, noise, air quality or water quality, and the display can be adequately served by all required utilities and public service.

Therefore, the Project is exempt under Section 15332.

In addition, none of the exceptions specified in Section 15300.2 of CEQA Guidelines would apply that would preclude the use of these CEQA exemptions:
• The project site is not located in a sensitive environment – The Digital Display District (District) is located in the urbanized Downtown area of Santa Monica, encompassing specifically the Third Street Promenade and Santa Monica Place shopping center. The Project area is fully developed with existing buildings and urban infrastructure, and does not contain any natural or sensitive habitats. The likelihood of the presence of any sensitive or special status species is extremely remote. The Project would install and operate a new Digital Display on an existing building. No vegetation, including sensitive or riparian vegetation, would be affected by the Digital Display.
• The project will not have a significant effect on the environment due to unusual circumstances – Digital displays are not unusual for entertainment districts and shopping centers. Such digital displays are common in high activity urban areas in the Los Angeles region, particularly within entertainment districts, downtowns, and commercial nightlife corridors (i.e., Downtown LA, West Hollywood’s Sunset Strip).

This includes digital displays at:
o 8775 Sunset Blvd– two digital displays consisting of approximately 1,000 sf and 500 sf in area
o 8743 Sunset Blvd – approximately 1,000 sf (21’ all and 55’ wide) o 9157 Sunset Blvd - approximately 1,000 sf (20'6" tall and 50'5" wide) o 8739 Sunset Blvd - approximately 1,026 sf (19’ tall and 54’ feet wide)

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Packet Pg. 1008 Attachment: CEQA Analysis 1202 3rd St [Revision 1] (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street o 1200 S. Figueroa (LA Live) – approximately 66’ tall and 120’ wide o 1200 S. Figueroa (LA Live) – approximately 53’ tall and 112’ wide o 1200 S. Figueroa (LA Live) – approximately 53’ tall and 85’ wide o 1260 S. Figueroa (LA Live) – approximately 50’ tall and 300’ wide Key issues of concern associated with the Project include aesthetics (specifically, light/glare), energy use, and driver distraction effects. As described below, the Project would not have a significant effect related to these issues due to unusual circumstances:

Light and Glare
A Lighting Study was prepared to analyze digital displays in the Digital Display District and the potential lighting and glare impacts to nearby sensitive uses, taking into account the illumination standards and regulations that the Project would comply with.

For a worst case (conservative analysis), the Study analyzes all proposed and potentially future illuminated signs that could be installed in the Digital Display District (up to 16 signs) which include the Project’s Digital Display at 1202 3rd Street. In analyzing light and glare impacts, the study identified and conducted monitoring at nearby sensitive receptors shown in the graphic below:

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Packet Pg. 1009 Attachment: CEQA Analysis 1202 3rd St [Revision 1] (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street The District is commercially zoned and is the City’s main economic activity center, and therefore, existing and future lighting levels experienced by residential uses are expected to be higher as compared to a residential use in a residentially zoned area.

Commercial use properties such as office buildings restaurants, or retail stores are not considered sensitive use properties as they are not generally occupied during the evening hours by persons for sleeping. Light exposure does not adversely affect commercial operations in the same way it can disrupt individuals who rely on darkness to sleep – this is the basis for why commercially zoned areas typically have lighting standards that are higher than in residentially zoned areas.

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Packet Pg. 1010 Attachment: CEQA Analysis 1202 3rd St [Revision 1] (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street Appendix G of the California Environmental Quality Act (CEQA) Guidelines (14 California Code of Regulations, Sections 15000–15387) provides a set of sample questions to evaluate impacts with regard to aesthetics, including light and glare.

Therefore, for the purposes of the Lighting Study in compliance with CEQA, the City of Santa Monica provides an analysis of impacts based on the CEQA Guidelines Appendix G “questions”.

As further described in the Lighting Study, a digital display would have a significant impact with regard to artificial light or glare if:

Light
• Light trespass illuminance from a digital display exceeds 3.0 fc at nearby residential use properties within the District and therefore adversely changes the ambient light level.

The 3.0 fc threshold corresponds to the maximum permitted illuminance from signs by the City of Los Angeles Municipal Code, and is appropriate given that the District is an urban downtown, is predominantly commercial in nature, and is a designated nighttime entertainment district. The lighting within District is anticipated to function in a manner similar to the Los Angeles Sports and Entertainment District which supports nighttime activity.
• Light trespass illuminance from a digital display exceeds 1.4 fc at residential use outside the District, and therefore adversely changes the ambient light level.

The 1.4 fc threshold takes into account the high density urban nature of the area, with residential uses that are interspersed amongst predominantly commercial uses.

Glare
• Or, the digital display creates glare with new high contrast conditions, with contrast ratio greater than 30:1, visible from a field of view from a residential use property.
• Or, the digital display creates glare effects on drivers of motor vehicles by exceeding the maximum luminance standards established by Section 21466.5 of the California Vehicle Code, where maximum brightness of the display within 10 degrees from the driver’s normal field of view is greater than 1,000 times the minimum measured brightness in the driver’s field of view, or when the

12.B.d
Packet Pg. 1011 Attachment: CEQA Analysis 1202 3rd St [Revision 1] (7400 : Introduction and First Reading of an Ordinance to Approve the 1202 Third Street minimum measured brightness in the field of view is 10 footlamberts or less, the measured brightness of the light source in footlambert exceeds 500 plus 100 times the angle, in degrees, between the driver’s field of view and the light source.

As analyzed and detailed further in the Lighting Study, there are no residential uses directly facing the Project’s digital display. The closest residential uses are located further to the north. The light trespass resulting from the Project’s digital display will be less than the significance threshold of 3.0 fc for residential use properties within the District and less than 1.4 fc for residential use properties outside of the District. Furthermore, the maximum luminance of the displays will be less than 30 to 1 contrast ratio. Furthermore, the Project would not result in driver distraction under the criteria identified under California Vehicle Code Section 21466.5. Therefore, light and glare impacts from the digital displays would be less than significant.

Santa Monica City CouncilDecember 16, 2025

Santa Monica City Council
December 16, 2025