City Council
Report
City Council Meeting: December 16, 2025
Agenda Item: 12.B
1 of 22
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 2 of 22
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 3 of 22
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.
4 of 22
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
5 of 22
• 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 6 of 22
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)
7 of 22
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 8 of 22
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 9 of 22
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
10 of 22
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 11 of 22
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 12 of 22
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. 13 of 22
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 14 of 22
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. 15 of 22
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 16 of 22
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.
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 Digital Display incorporates automatic 17 of 22
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 18 of 22
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 19 of 22
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 20 of 22
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. 21 of 22
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).
22 of 22
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