City Council
Report
City Council Meeting: December 16, 2025
Agenda Item: 10.A
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To: Mayor and City Council
From: Jing Yeo, Director, Administration
Subject: Introduction and First Reading of 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
Recommended Action
Staff recommends that the City Council take the following actions:
1. Adopt findings of categorical exemptions pursuant to Sections 15301, 15303, 15311, 15331, and 15332 of the California Environmental Quality Act (CEQA) Guidelines as described in Environmental Review, below; and
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.
3. Adopt Digital Display Advertising Guidelines.
Summary
Signage in the City of Santa Monica 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 offsite signage. In recent years, the City’s signage regulations have been amended to accommodate advances in advertising technology, to allow for flexibility and creativity with 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.
To date, the City has received four applications for seven large format, off-premise digital displays in the Downtown district, along the Third Street Promenade and at Santa 2 of 26
Monica Place. As the City’s sign code does not permit such digital displays, these applications were filed as development agreement applications:
• 395 Santa Monica Place – 4 digital displays (24ENT-0024) • 301 Arizona Avenue/1253 3rd Street Promenade – 1 digital display (24ENT-0233) • 1202 3rd Street Promenade – 1 digital display (25ENT-0021) • 1310 3rd Street Promenade – 1 digital display (25ENT-0086) On June 10, 2025, consistent with the Council’s direction and to continue the City’s economic recovery efforts within the Downtown and Third Street Promenade Area, staff has prepared a Digital Display District Ordinance (“Ordinance”) that would require new digital displays within the District to be processed through development agreements.
The Ordinance would also establish standards applicable to all new digital displays, including but not limited to:
• Community Benefits • Hours of Operation
• Display Type • Design Authority
• Permitted Locations • Requirements for Landmark Buildings • Projections/Encroachments • Energy
• Maximum Display Area • Maintenance
• Content • Illumination
• Utilities
Background
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 civic and public art component, community messaging, promotion of Santa Monica, and be supported by a revenue-sharing content opportunity to support community programs and services.
On 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 outof-home advertising kiosk network for a 20-year term, per the terms and conditions stated in the ordinance. The City initiated the Digital Wayfinding and Out-of-Home 3 of 26
(OOH) Advertising Kiosk Program to provide interactive information to residents and visitors, enhance public safety via emergency capabilities, deliver community messaging, and generate revenue through advertising sales. The City and BIG Outdoor executed a franchise agreement, effective February 22, 2023.
Additionally, on October 22, 2024, Council adopted an emergency ordinance amending Santa Monica Municipal Code Chapter 9.61 to increase flexibility for on-premises signage in the Bayside Conservation District and Third Street Promenade to promote economic recovery. With the adoption of the emergency ordinance, animated onpremises signs (including digital display signs) are now permitted on a façade facing the Third Street Promenade. These animated signs are permitted only if they are onpremises signs (i.e., advertisement that pertain solely to goods or services that are produced or offered on the premises where the advertisement is displayed).
Furthermore, animated signage is limited in size to the area above the storefront. At this meeting, Council also provided direction to staff to provide more information about a potential large-scale digital signage program with legal and financial considerations and approaches for policy options.
On March 25, 2025, an emergency ordinance amending Chapter 9.61 was adopted to provide a minor clarification to the sign code amendments that were previously adopted on October 22, 2024.
In its ongoing efforts to promote economic recovery and growth within the Downtown District, the Council adopted an emergency ordinance to establish the Third Street Promenade Entertainment Zone, on May 13, 2025. The establishment of this entertainment zone provides valuable opportunities for the City to also consider synergistic enhancements to existing commercial signage on the Promenade.
On June 10, 2025, Council directed staff to proceed with establishing a new ordinance for a digital signage district for the Third Street Promenade and the Santa Monica Place shopping center. Additionally, Council authorized City staff to initiate development agreement negotiations for new digital displays.
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Discussion
Pursuant to Council direction, staff prepared an Ordinance that would establish a digital display district for the Third Street Promenade and Santa Monica Place shopping center (the “District”). An initial draft of the Digital Display District 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 since been made to the Ordinance based on comments from the public and Planning Commission, and to also include specific requirements for financial community benefits.
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, off-premise digital displays based on four policy objectives:
• Advancing the City’s Vision of Downtown
• Driving Economic Recovery and Revitalization
• Balancing Innovation with Responsibility
• Expanding Community Benefits and Cultural Enrichment Opportunities Advancing the City’s Vision of the Downtown
The Ordinance builds on the City’s vision for a thriving and dynamic Downtown, complementing the goals of the Land Use and Circulation Element and aligning with the Downtown Community Plan. The City’s recent planning efforts, such as the designation of the Third Street Promenade Entertainment Zone and modifications to the Zoning Ordinance to streamline permitting and increase flexibility for land uses in the Downtown, have focused on bold, innovative measures to reinvigorate Downtown and maintain its prominence as one of Southern California’s premier and vibrant entertainment destinations. Therefore, establishment of the District (which encompasses the Promenade and its retail anchor – the Santa Monica Place shopping center) would be in keeping with the City’s current and past land use approaches for this important area.
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The boundaries of the District are deliberately drawn to encompass the areas that best represent the vision of the City’s commercial and entertainment core. Centered around the Third Street Promenade and extending to its anchor, Santa Monica Place, the District includes the City’s most active concentration of entertainment, retail, dining, and cultural uses. These areas collectively form the heart of Downtown’s economic and social life, making them the most suitable locations for creative digital displays that enhance both the visitor experience and the Downtown’s identity as a regional destination while ensuring compatibility with existing land uses. By aligning the District boundaries with the City’s pedestrian-only shopping area, the Ordinance ensures consistency with the City’s broader planning and economic goals—reinforcing ongoing efforts to reinvigorate Downtown, encourage foot traffic, and support a thriving, dynamic urban environment without encroaching upon adjacent residential neighborhoods.
Pursuant to Council direction, the Ordinance requires that all new digital displays in the District be approved by development agreement, 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. The development agreements are contingent upon effectiveness of the Ordinance adopting the District. Without the District in place, the City will lack the ability to control the proliferation of digital displays throughout the City. Further, the Ordinance ensures all digital displays are legally required to conform to the requirements therein, in compliance with CEQA and to control impacts on surrounding properties.
By adopting an Ordinance that establishes uniform standards to guide the review and installation of large format digital displays within the District, the City can advance its vision while maintaining oversight, consistency, and quality. The Ordinance creates a framework that celebrates innovation and creativity while regulating the new digital displays to ensure that such displays will not diminish the Downtown’s pedestrianoriented character.
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. The District’s 6 of 26
boundary is shown in green in Figure 1 below. Specifically, digital displays would only be permitted at the following locations and sizes:
• On corner buildings located on the Promenade with a maximum of one display comprising no more than 1,000 sf of display area on a single display face, wrapping the corner of each building. On Landmark buildings, to provide for flexibility in design, a digital display may be double-sided so long as the total display area does not exceed 1,000 sf.
• On the exterior facades of the Santa Monica Place shopping center with a maximum of 4 digital displays and each display at no more than 1,000 sf, with no more than 4,000 sf of total display area cumulatively
By concentrating the displays to these locations, the City can minimize lighting impacts on residential uses outside of the District and leverage the prime visibility of these high traffic corners while limiting the proliferation of digital displays and saturation of economic benefits. Based on these limited locations, up to sixteen (16) digital displays could be potentially installed in the District.
Figure 1: Proposed Digital Display District
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Pink indicates proposed permitted digital signage locations. Green indicates the District.
Permitted Digital Display Corner Location – Third Street Promenade and Wilshire Boulevard
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1202 3rd Street Promenade 1201 3rd Street Promenade
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Permitted Digital Display Corner Locations – Third Street Promenade and Arizona Avenue
225 Arizona Avenue 301 Arizona Avenue/1253 3rd Street
Promenade
1310 3rd Street Promenade 1311 3rd Street Promenade/302 Arizona Avenue
Permitted Digital Display Corner Locations – Third Street Promenade and Santa Monica Boulevard
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1352 3rd Street Promenade 301 Santa Monica Blvd/1355 3rd Street Promenade
1402 3rd Street Promenade 1401 3rd Street Promenade
Permitted Digital Display Corner Locations – Third Street Promenade and Broadway 11 of 26
227 Broadway 1453 3rd Street Promenade
Permitted Digital Display Locations – Santa Monica Place shopping center Third Street Promenade and Broadway 4
th Street and Colorado Avenue
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2 nd Street and Broadway 4th Street and Broadway
Driving Economic Recovery and Revitalization
The Third Street Promenade anchored by Santa Monica Place shopping center remains the economic and cultural heart of Santa Monica, yet it continues to face challenges from shifting retail trends and the lingering economic effects of the COVID-19 pandemic.
The introduction of new, carefully regulated digital displays offers an opportunity to:
• Create new, on-going revenue streams for the City and local businesses • Reinvigorate storefronts and façades with dynamic, visually-engaging content • Draw new visitors and investments to the Downtown
• Encourage advances in creative signage that blends technology, art, and design to enhance the urban character of the Promenade and Downtown as a whole The Ordinance is not designed simply as a signage regulation, but as a placemaking tool to support strategic capital improvements and activations that align with the City’s goals for an active, creative, and economically sustainable Downtown core. This targeted strategy complements ongoing initiatives such as the Promenade Entertainment Zone, reinforcing Downtown’s reputation as a vibrant and engaging destination for residents and visitors.
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To that end, the Ordinance requires that each digital display operator adhere to minimum building occupancy standards to be established in the development agreements. These occupancy standards ensure that activity and businesses are maintained at existing buildings. Ensuring that the ground floors of the existing buildings are fully occupied would encourage pedestrian activity, provide “eyes on the streets”, and contribute to a lively streetscape. Consistent building occupancy supports activity throughout the day and evening, helping to sustain the Downtown’s economy and retenant vacant storefronts. While the City aims to establish a 100% ground floor occupancy threshold for the development agreements, there is a recognition that deviations to this threshold may be necessary to account for unique site/building conditions and operations. Each development agreement for a digital display would be required to specify occupancy thresholds that would be negotiated between the City and applicant.
Balancing Innovation with Responsibility
The Ordinance was crafted to balance technological innovation with standards that respect the existing land uses in the area and are aligned with sustainability goals. The Ordinance would require that all new digital displays in the District be processed through a Development Agreement (DA) between the City and the digital display applicant. Each DA would be negotiated individually to ensure meaningful community benefits and operational safeguards. The DA would establish the terms and conditions under which the digital display applicant may install and operate the display, including the obligations of the applicant with respect to the digitals display(s) and enumerated community benefits - but all DA provisions would ensure consistency with the Ordinance.
The Ordinance includes safeguards that are embodied in the standards within Section
9.61.205(F) and 9.61.205(G). Key standards include:
• Size – Display area limits are set at a maximum of 1,000 square feet per digital display (architectural features excluded from the total display area) 14 of 26
• Hours of Operation – Operational hours for digital displays are limited to: sunrise to 1:00 am. These hours are intended to strike a balance between the Promenade Entertainment Zone’s operating hours with the comfort of nearby light-sensitive residential uses.
• Content – Digital displays are allowed to include off-premise advertising, with content guidelines addressing prohibited language, offensive content, etc., to be set by the City Council in accordance with the First Amendment. • Energy – Mandatory use of 100% renewable energy resources for all displays, where commercially available. To the extent that it is available on-site, digital displays may also utilize solar power to satisfy a portion of its energy demand. • Design – Design of digital displays will be approved as part of the development agreement approval and no subsequent review pursuant to Chapter 9.55 or Section 9.61.050 is required unless required pursuant to the development agreement.
• Landmarks – Displays on Landmark buildings must meet specific conditions, including reversibility, must not materially impair the significance of the Landmark building, and all physical characteristics that convey the Existing Building’s significance must remain intact behind the Digital Display screen • Emergencies – Mandatory emergency use of displays for public announcements • Audio – Displays are prohibited from utilizing audio and sound effects, except when approved for City programming/events
• Maintenance and Appearance – Digital displays, including underside portions that project or encroach into the public right of way, must be continuously maintained in good condition and free from blight (e.g., graffiti, rust, etc.) and operators must ensure that utilities are not publicly visible (i.e., covered, hidden, or undergrounded).
• Malfunction – Displays must have a control system, including an emergency shutoff switch, and monitoring in place to either turn the display off or show full black screen in the event of a malfunction.
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• Illuminations Controls – Standards that address brightness which include, but are not limited to:
o Luminance for displays must adhere to the following levels:
▪ Daytime: From sunrise until sunset, luminance shall not exceed 6,000 candelas per meter squared.1
▪ 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.
o Illuminance from any digital display or architectural lights of the display shall not exceed 3.0-foot candles (fc) at any nearby residential uses within the District to limit light trespass2
o Automatic dimming and shutoff features to minimize nighttime light o Required Photometric Report and illumination testing to ensure compliance with illumination standards
These standards were developed based on a Lighting Study prepared for the Digital Display District. The Lighting Study conservatively analyzed all 16 potential digital displays that could be installed and operated in the future under the Ordinance. The standards in the Ordinance would regulate light and glare from the Digital Displays, in consideration of existing light-sensitive residential uses. 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 1 Whereas Illuminance indicates the amount of light falling on a given surface, Luminance describes the brightness of an illuminated or luminous surface.
2 Illuminance describes the amount of light falling onto or illuminating a given surface area. Illuminance is measured using a vertical calculation plane at the property line of the residential use. 16 of 26
sleeping. Light exposure does not adversely affect commercial operations in the same way it can disrupt individuals who rely on darkness to sleep.
The Ordinance also includes standards to address concerns regarding driver distraction:
• Driver Safety Features – Standards to protect driver and pedestrian safety, which include:
o Prohibition of directional, warning, danger, or information sign, or any other display likely to be mistaken for a traffic direction sign. o Prohibition of any red, flashing, blinking, or intermittent lighting that may be mistaken for warning or danger signals
o Refresh rate of no more often than once every 12 seconds for static images.
o Transition fade in from the previous image over no less than one second for static or animated image.
o Prohibition of stroboscopic or flashing images, text, or lighting which rapidly change direction, oscillate, flash or reverse in contrast, and scrolling text
Expanding Community Benefits and Cultural Enrichment Opportunities A key requirement of the Ordinance is its emphasis on community benefits and shared value. The Ordinance requires that applicants of the digital displays provide community benefits in the form of financial contributions and allocated display time.
Financial Community Benefits
To ensure a level playing field for applicants, the City retained the services of Playfly LLC to prepare an economic study of the Ordinance, focusing on policy and revenue considerations for potential operation of up to 16 digital displays on the Third Street Promenade and Santa Monica Place Shopping Center. The study’s analysis is based on background research, landscape analysis of best-in-class advertising environments, as well as a review of existing traffic patterns and other key factors that may influence projected values. The study estimates that the potential 16 digital displays in the District could generate $19–$27 million in gross annual revenue, averaging approximately $1.2- 17 of 26
$1.7 million per digital display (in today’s dollars). The economic study provides the foundation for the financial community benefits requirements established in the Ordinance. By embedding these financial provisions directly into the Ordinance, all digital display proposals within the District would be treated fairly and equitably.
The revenue-sharing model and minimum annual guarantee (MAG) outlined in the Ordinance provides a balanced approach to ensure that the City receives a consistent stream of financial benefits throughout the proposed 30-year term of each development agreement while ensuring a level playing field for current and future applicants. Under this approach, the City would receive the greater of, either • 20% share of gross annual revenues from advertisements; or The MAG for each digital display, which is established at a minimum of $500,000 per digital display (to be escalated commencing on June 30, 2027, and annually by 3%). This escalation rate reflects an average annual rate of inflation. If a display is less than 1,000 sf, the starting MAG is reduced proportionately based on square footage up to a maximum of fifty percent (50%). For example, for a 700 square foot Digital Display, the MAG Contribution would be $350,000 on June 30, 2027. This MAG is then increased 3% annually after.
Additionally, to account for market saturation as more digital displays become operational in the District, the Ordinance establishes that when the 10th Digital Display in the District “goes live”, the MAG for a digital display would then deescalate by 3% for every display thereafter (e.g., 3% reduction for the 10th Digital Display, additional 3% reduction for the 11th Digital Display, etc.).
If all 16 digital displays are installed and operated in the District, the City could receive up to approximately $7 million per year (in today’s $) from the MAG of all the displays.
The City’s estimated earnings could be potentially higher if the 20% share of gross annual revenues for a digital display exceeds the MAG.
Additionally, as an added community benefit that is required in the Ordinance, a onetime contribution payment of $500,000 is required per display (this amount will escalate 18 of 26
by 3% starting on June 30, 2027, and annually thereafter until the payment for a digital display is made). The one-time contribution must be paid within 30 days of issuance of a Certificate of Occupancy or final building permit signoff for a digital display.
As discussed at the June 10, 2025 Council meeting, financial proceeds received by the City could be used to repay the housing trust fund, for public improvements to support a clean and safe Downtown, citywide services, public arts programming, and City programming –allowing digital displays to serve as an asset that directly benefits the broader community.
Integration of City and Art Content
Additionally, the Ordinance creates a unique and valuable opportunity for the City to showcase creativity through dynamic, large-scale outdoor public art experiences and to highlight local event information. Each digital display must allocate at least 20% of screen time for City and Art Content, curated through a City-administered program that will highlight civic information, cultural programming, local storytelling, and artwork. This ensures that digital displays not only serve commercial purposes but also act as public communication and cultural platforms, reflecting Santa Monica’s values of creativity, innovation, and civic pride.
The installation of the digital displays expands community access to public art, reimagining Santa Monica as a living gallery—where every street, storefront, and public space can spark creativity and engagement. Digital displays provide an innovative new platform to advance this approach, extending the reach of public art beyond static displays and installations into dynamic, time-based media. By integrating curated digital art into the displays, the City can highlight local and international artists, promote cultural events, and transform the City’s most famous pedestrian promenade into an outdoor evolving art museum that is accessible to all.
Unlike traditional physical installations, digital displays offer the flexibility to continually refresh and rotate creative 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 19 of 26
these displays regularly feature community and art programming—such as short video art, digital sculpture, animation, or civic storytelling—bringing art to thousands of daily visitors on the Promenade and at Santa Monica Place.
In addition to expanding artistic reach, digital displays can visually activate the Promenade storefronts and Santa Monica Place facades and support the city’s focus on creative placemaking and civic identity. Coordinated campaigns could feature local artists’ work alongside public safety messages, cultural event promotions, or student art showcases—turning every digital screen into a storytelling surface that celebrates the City, its residents, and values. With partnerships between the City, local arts organizations, and display operators, the digital displays can provide opportunities for artists, strengthen the creative economy, and make art a visible, integral part of daily urban life.
Community Development and Recreation and Arts Department staff have reviewed various models for implementing a comprehensive and coordinated City and Art Content program for Santa Monica. Staff concur that administrative guidelines should be established by an interdepartmental team to guide program implementation. Staff also recognizes that administering a high-quality City and Art Content program will require additional resources and a consistent funding mechanism. Currently, Santa Monica’s private developer cultural arts requirement (SMMC Chapter 9.30) requires 2% of the average square footage cost of construction of a development project for on-site artwork and 1% of this value for in-lieu fees. In the City of West Hollywood, artwork for multiple digital billboards is coordinated and managed through a single city-operated “Moving Image Media Art” (MIMA) Program, which provides the framework for presenting artwork on multiple full-motion billboards at various locations along Sunset Boulevard. The MIMA program is funded by an approximately 1% percentage share of the revenue sharing model, which is utilized for administration and artist fees.
Therefore, Council should consider allocating a portion of the City’s share of future digital display revenues for the purpose of interdepartmental implementation and funding.
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Planning Commission Comments
The Ordinance was presented to Planning Commission for a courtesy review on October 29, 2025. The Commission was generally supportive of the Ordinance and provided various comments addressing the Ordinance and anticipated community benefits expected in all future development agreements for digital display. Comments provided by individual commissioners, but not necessarily in consensus, include:
Design
• Ensure that the process for digital displays includes opportunity for design input, such as an ad hoc committee comprised of Commission members. • It is important for digital displays on Landmark buildings to receive expert review and input from historic preservation professionals, including the Landmarks Commission.
• Digital displays should not cover or cause important architectural features to be removed – if such features must be removed or altered, require that they be restored if digital display is removed.
• Design of the displays should focus on creativity and quality; the displays can be artwork themselves.
• Designs should relate to building architecture and incorporate design elements/screening that responds to the building.
• For digital displays on Landmarks, displays should be differentiated and compatible with the existing building.
Ordinance Requirements
• Where the displays project onto the public right of way, ensure that the undersides of the displays do not create a visual blight. • Include storytelling of local Santa Monica history into the City’s 20 percent allocation of display time.
• Ordinance should be clear that solar power from photovoltaic panels on the building could be used for the digital displays.
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• Suggest that the Ordinance allow horizontal scrolling text with standards that provide for driver safety (e.g., speed of scrolling text, etc).
Standard Requirements for the Development Agreements
• Development agreements should clearly define building occupancy requirements; “occupancy” could mean different things for different building owners. General principle of equity should be applied for occupancy thresholds. • There is agreement that it is important to ensure building occupancy, particularly on the ground floor.
• Development agreements could also include a provision that allows occupancy credits if the upper levels of the building are rented out to a non-profit organization.
• Development agreements should clearly define clauses related to impairment of use, including more clarification on the terms if trees canopy interfere/impair use of the digital display.
• Development agreements need to require digital display operators to have a plan in place (“good neighbor” policy) to resolve disputes and complaints of lighting impacts on tenants and landlords of nearby buildings.
• Development agreements must include a cessation clause to address the scenario where a digital display is turned off by the property owner or operator for a significant amount of time.
• Consider whether the early termination fee for the digital displays should be removed, so as to not disincentivize redevelopment of the property.
Other
• Consider the use of the revenue from the digital displays to fund important City goals such as public improvements.
• Council should give direction that the City’s proposal for installation of signage to restrict right turns on reds be implemented prior to the digital displays being operational.
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• Council should consider expansion of the District boundaries. It should be noted that this direction is inconsistent with prior Council direction to establish the District for the Third Street Promenade and Santa Monica Place shopping center only. Expansion of the District will have substantial implications on the financial community benefits that have been negotiated upon with current applicants and which are established in the Ordinance. Furthermore, expansion of the District would require additional analysis on potential advertising market saturation and expanded analysis of increased lighting impacts on residential uses.
Environmental Review
The Ordinance 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 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 Ordinance would permit and regulate digital displays, which would be affixed to existing corner buildings on the Promenade and the Santa Monica Place shopping center. These digital displays are considered alterations to existing buildings and parking structure(s). No expansion of the land uses or existing structure is proposed. Therefore, the Ordinance 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 23 of 26
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 Ordinance would permit digital displays that would be accessory structures to existing buildings. Therefore, the Ordinance 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. The Ordinance would permit the installation of digital displays that would be accessory structures to existing buildings. Therefore, the Ordinance 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”). Section 9.61.205(G)(7) of the Ordinance requires that digital displays on Landmark buildings be reversible3 and that the digital displays do not materially impair the historic significance of the Landmark.
Additionally, the Ordinance requires that all physical characteristics that convey the Existing Building’s significance remain intact behind the digital display screen, as determined by a Qualified Historic Preservation Professional.
Therefore, with these requirements, proposed digital displays on Landmark buildings would be generally consistent with the Standards and therefore, the Ordinance is exempt under Section 15331.
3 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 24 of 26
• 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.
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 Ordinance meets the qualifications of the in-fill exemption as it would be generally consistent with the general plan, would permit the development of digital displays 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 digital displays under the Ordinance 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 Ordinance 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 attached CEQA analysis. Therefore, the Ordinance is categorically exempt pursuant to Sections 15301, 15303, 15311, 15331, and 15332 of the CEQA Guidelines.
Past Council Actions
Meeting Date Description
September 13, 2022 Council directed staff to explore establishing a large-format 25 of 26
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.
October 22, 2024 Council adopted an emergency ordinance 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.
March 25, 2025 Council adopted an emergency ordinance amending Santa Monica Municipal Code Chapter 9.61 to provide a minor
clarification to the sign code amendments that were
previously adopted on October 22, 2024.
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 monitor the program and return to Council if specific budget actions are required in the future.
Assuming buildout of all 16 digital displays permitted in the District, adoption of the Ordinance is expected to generate financial contributions to the City’s General Fund in the form of 1) a MAG, estimated to be between $3.5 million and $7.0 million annually or 2) a 20% percent share of the gross annual revenues for each approved digital display, whichever is greater. The City will also receive a one-time contribution payment of $500,000 per digital display (which will escalate by 3% starting on June 30, 2027 and annually thereafter), estimated to generate an additional $3.5 - $8.0 million in total onetime contributions for all 16 digital displays. 26 of 26
Prepared By: Rachel Kwok, Environmental Planner
Approved Forwarded to Council
Attachments:
A. Digital Display Advertising Guidelines
B. AttachmentB_CEQA Exemption Findings DigitalDisplayOrd C. Santa Monica Sign Ordinance Study_Final_20251208
D. CDD-ORD-Digital Sign District 12.16.25
E. Written Comments
F. PowerPoint Presentation