City Council
Report
City Council Meeting: December 16, 2025
Agenda Item: 12.E
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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 395 Santa Monica Place Recommended Action
Staff recommends that the City Council
1) Adopt findings of categorical exemptions pursuant to Sections 15301, 15303, 15311, and 15332 of the California Environmental Quality Act (CEQA) Guidelines;
2) Introduce an ordinance for first reading to approve Development Agreement 24ENT-0024 for four Digital Displays at 395 Santa Monica Place. 3) Approve a license agreement with Trigild IVL, Court-Appointed Receiver for the Santa Monica Place property, for installation and operation of a digital display on Parking Structure No. 7.
Executive 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 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, Macerich LLC, submitted Development Agreement (DA) application 24ENT-0024 on February 1, 2024, for installation and operation of four new full motion, Digital Displays on the exterior facades of the Santa Monica Place shopping center (“Digital Displays”). Since the City’s Municipal Code does not permit such large format, 2 of 24
digital billboards that display off-premise advertising, a development agreement application was submitted for the installation of these four Digital Displays.
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 development agreement negotiations with the applicants of new digital displays. 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, contemplates that digital displays will be approved by development agreement consistent with the ordinance 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 Development Agreement 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 result in the orderly development of the digital displays 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 displays, (4) preserve substantial City discretion in reviewing the Digital Displays’ design, (5) secure for the City improvements that benefit the public, (6) 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 Ordinance, and (7) otherwise achieve the goals and purposes for which the Development Agreement Statutes were enacted.
Key Issues for Consideration
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The City Council should consider the following key issues in its decision to approve the Development Agreement:
• Consider how well the proposed Digital Displays 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 design concepts of the displays are appropriate to the existing building and surrounding context
• Whether the proposed displays balance sign innovation with civic responsibility • Whether the project and its community benefits support the City’s 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.
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
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• 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-and-santamonica-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-scale digital displays. The Ordinance establishes standards that would be applicable to all new digital displays, including but not limited to:
• Community Benefits • Design Authority
• Permitted Locations • 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 5 of 24
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 limited to 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 investments. 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 Displays at 395 Santa Monica Place is being processed pursuant to the Ordinance and is required to provide meaningful community benefits, which are enumerated below.
Project Description
The DA application (the project) is for four new full motion, Digital Displays (24ENT0024) proposed to be installed on the upper level, exterior façades of the existing Santa Monica Place shopping center. The locations where the displays are proposed are:
• Display A - 4
th Street and Colorado Avenue
• Display B - 4
th Street and Broadway
• Display C - 2
nd Street and Broadway
• Display D - 3
rd Street Promenade and Broadway
Digital Displays A-C would have a single display face that would comprise approximately 1,000 sf of display area, while Display D would be smaller at 650 sf of display area. The displays would be full motion, with LED and would provide for paid onpremise and/or off-premise advertising, curated art, and City community content including civic announcements, local event information, and emergency announcements.
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In response to staff feedback, the applicant refined the design of the displays to achieve a more cohesive integration with the existing shopping center while enhancing its overall creativity and visual interest. The revised designs are more modern and playful, introducing a metal architectural frame that would wrap the display in a form that is in keeping with the City of Santa Monica brand identity.
Address 395 Santa Monica Place
Parcel Size: 431,515 sf
Zoning District: Downtown – Transit Adjacent (TA)
Proposed Display A
Display Location 4
th Street and Colorado Avenue
Existing Site Photo
Display Type Building mount, corner wrap
Dimensions 20’ height x 50’ width (excludes architectural elements) 7 of 24
Rendering of Display A – 395 Santa Monica Place
Display A will be installed at the corner of 4th Street and Colorado Avenue. The display will wrap the corner, with most of the display face facing onto Colorado Avenue. Display A will be visible to drivers and pedestrians traveling northbound on 4th Street, and to pedestrians entering/exiting from the Metro Expo Downtown Station and walking along the Colorado Esplanade. Installation of this display will require removal of the existing artwork behind the glass corner entry.
Display A extends approximately 3.5 feet from the property line out into the existing public right of way along 4th Street and Colorado Avenue. This projection would be subject to Section 9.21.180 of the SMMC to ensure that it does not constitute a hazardous visual obstruction for drivers and pedestrians.
Proposed Display B
Display Location 4
th Street and Broadway
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Existing Site Photo
Display Type Building mount, corner wrap
Dimensions 20’ height x 50’ width (excludes architectural elements) Rendering of Display B – 395 Santa Monica Place
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Display B will be installed at the corner of 4th Street and Broadway on the façade of City-owned Parking Structure 7. This display would be visible to drivers and pedestrians traveling on 4th Street and on Broadway. Installation of this display will require removal of the existing metal architectural projection at this corner. Additionally, since this display is located on City property, a license agreement will be required.
Display B extends approximately 3.5 feet out into the existing public right of way along 4 th Street, and therefore, an encroachment permit from the City Public Works Department would be required. This projection would be subject to Section 9.21.180 of the SMMC to ensure that it does not constitute a hazardous visual obstruction for drivers and pedestrians.
Proposed Display C
Display Location 2
nd Street and Broadway
Existing Site Photo
Display Type Building Mount, corner wrap
Dimensions 20’ height x 50’ width (excludes architectural elements) 10 of 24
Rendering of Display C – 395 Santa Monica Place
Display C will be installed at the corner of 2nd Street and Broadway and will be visible to drivers and pedestrians traveling on 2nd Street and on Broadway. The digital display extends approximately 3.5 feet into the existing right of way along 2nd Street, and therefore, an encroachment permit from the City Public Works Department would be required. This projection would be subject to Section 9.21.180 of the SMMC to ensure that it does not constitute a hazardous visual obstruction for drivers and pedestrians.
Proposed Display D
Display Location 3
rd Street Promenade and Broadway
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Existing Site Photo
Display Type Building Mount – Above existing storefront Dimensions ~32’ height x 20’ width (excludes architectural elements) Rendering of Display D – 395 Santa Monica Place
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Display D will be installed above the existing storefront along the Broadway frontage of the shopping center. This display is 650 square feet and is proposed to be vertically oriented so as to not fully obstruct the distinctive architectural element above the existing Tesla storefront. The display will primarily be visible to pedestrians walking southbound along the Third Street Promenade to the shopping center. This digital display extends approximately 2 feet 3 inches into the existing right of way along Broadway.
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 Displays 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 have been 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 at the Santa Monica Place shopping center 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 June 10, 2025 direction and the Ordinance, the DA for the proposed Digital Displays at 395 Santa Monica Place 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 – the reduction in the one-time community benefit payment and starting MAG for Display D reflects a proportionate reduction in the size of this display (as permitted in the Ordinance). • One time community benefit payment of $500,000 each for Digital Displays A-C and $325,000 for Display D to be paid within 30 days of issuance of a Certificate of Occupancy or final building permit signoff of the Digital Display. For each display, if the 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 each for Digital Displays A-C and $325,000 for Display D, which shall be paid quarterly, with a 3% annual escalation starting on June 30, 2027 over the 30-year term of the 14 of 24
agreement. This escalation rate reflects an average annual rate of inflation. Additionally, to account for market saturation as 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 have monetized value 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 per display 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 each 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 Displays 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 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.
Unlike traditional physical art installations, the proposed Digital Displays offer 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 video art, digital sculpture, animation, or civic storytelling—bringing art to thousands of daily visitors on the Promenade and at Santa Monica Place shopping center. The City 15 of 24
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.
Building Occupancy
The proposed Digital Displays 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 applicant is required to adhere to minimum building occupancy standards. As specified in the DA, the following minimum occupancy thresholds are established for the Santa Monica Place shopping center:
(i) Fifty percent (50%) of the total rentable floor area within the existing shopping center
(ii) One-hundred percent (100%) of the rentable ground floor space of the building to which the display is installed on
(iii) Twenty (20%) of the remaining rentable ground floor space within the existing shopping center (i.e., total rentable ground floor of shopping center minus ground floor of the buildings to which the display is installed on) If either occupancy threshold (i) or (ii) is not met for more than 18 consecutive months or occupancy threshold (iii) is not met for more than 24 consecutive months, then the DA requires the MAG Contribution to be increased by 25% (non-compounded) on a daily 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
Lighting – Display D faces north onto the Promenade, and as such, some of the upper level residential uses to the north at 1453 3rd Street (Residences on 3rd Street Promenade) will have visibility of the proposed display. Light trespass on these existing sensitive residential uses would be minimized 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 analyzed all 16 potential digital displays that could be installed under the Ordinance, which include the 4 proposed digital displays at 395 Santa Monica Place.
Consistent with the Ordinance, the digital displays would adhere to strict brightness limits that vary by time of day:
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• 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 Displays remain visible without producing excessive glare or light spill onto nearby existing residential uses. In addition, the display would incorporate automatic dimming and photocontrol devices that continuously adjust brightness in response to changing ambient light conditions, reducing illumination by at least 65% when appropriate. Further, the Ordinance limits illuminance at nearby existing 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 Displays 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 Displays is the potential for driver distraction impacts, since drivers traveling on the adjacent roadways would have full view of the display. Driver distraction impacts, however, would be minimized as the Digital Display applicant 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 Displays are context-sensitive, safe environment that avoids driver distraction, protects public safety, and creates visual comfort.
Community Outreach
The applicant held an online community meeting for the project on April 15, 2024 via Zoom. The meeting was also noticed, including the meeting Zoom link on the on-site signage.
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Hearing notices for the City 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.
Planning Commission Comments
The project was presented to Planning Commission for review on October 29, 2025.
The Commission opined that not all of the Digital Displays should look alike—instead, recommending that the displays should respond to building form and the surroundings, noting that there is opportunity for more-exploratory design with greater variability in the shapes and textures of the display backings for more visual interest. One commissioner also expressed concern regarding removing building features for Display B, asking the applicant to store building elements removed during installation. The Commission generally provided positive feedback on the design of Display D, stating that its distinctive vertical orientation and subtle curve is comparatively refreshing. The Commission also recommend that this display be angled from the residential building across the street to minimize potential lighting impacts. One commissioner also recommended that additional neighborhood outreach be conducted and a good neighbor policy be implemented by the applicant to ensure that complaints can be addressed.
With regard to building occupancy, the Commission stated that occupancy was important with one commissioner recommending that occupancy be required for buildings located along the walk from the parking structure and bike valet into the Santa Monica Place shopping center. 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 18 of 24
plan. The 395 Santa Monica Place 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 Digital Displays support 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 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 – Transit Adjacent Zoning District, which permits a variety of active commercial and entertainment-oriented uses. The proposed Digital Displays would complement the existing entertainment, retail, dining, and visitor activities. It will enhance the visual and economic activity of the Promenade and Santa Monica Place shopping center 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 while minimizing effects on 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. 19 of 24
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 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 screen 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 displays incorporate automatic dimming technology and is required to power off between 1:00 a.m. and sunrise. The Digital Displays will not show flashing or scrolling text and other visual effects that could compromise driver safety. Collectively, these measures ensure the displays operate 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 Displays 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 and occupied ground-floor uses (particularly for the buildings on which the Digital Displays are installed on), thereby supporting economic activity and maintaining the vitality of the Downtown.
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 each Digital Display. In addition, by activating an important shopping center in the Downtown and attracting visitors, the Development Agreement will contribute 20 of 24
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 Displays are consistent with the goals, objectives, purposes and provisions of the Santa Monica LUCE and the Downtown Community Plan, as amended from time to time. 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 Displays align with the City’s efforts to reinvigorate the Third Street Promenade and surrounding areas as a vibrant, pedestrian-oriented entertainment district.
2. The Digital Displays comply with the regulations established in the Digital Display District Ordinance. The proposed Digital Displays complies with all applicable standards and requirements established in the Digital Display District Ordinance for the Third Street Promenade and Santa Monica Place shopping center. The project adheres to regulations governing display size, design review, energy use, illumination, hours of operation, and content.
3. The Digital Displays 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 Displays 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 displays are 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 Displays provide substantial economic and public benefits that would not otherwise accrue to the public in the absence of its installation. The DA 21 of 24
includes a revenue-sharing model and a minimum annual guarantee that will generate consistent, long-term funding to support public art, public improvements, and community programming. The displays 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 the Santa Monica shopping center and Promenade, supporting local businesses, and strengthening the area’s identity as a premier entertainment and cultural destination.
Environmental Review
As detailed further in the CEQA analysis, the proposed Digital Displays are 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 (Accessory Structures), and Section 15332 of the CEQA Guidelines. • Section 15301 of CEQA Guidelines provides (Class 1) exemption for 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 operation, permitting, and minor alterations to public or private structures, involving negligible or no expansion of existing use. The Digital Displays would be affixed to the existing Santa Monica Place shopping center. These Digital Displays are considered alterations to the existing shopping center and parking structure. No expansion of the land uses is proposed, and therefore, are exempt under Section 15301.
• Section 15303 of CEQA Guidelines provides (Class 3) exemption for the construction and location of limited numbers of new small facilities or structures.
Projects that fall into this class of exemption include accessory (appurtenant) structures. The Digital Displays would be accessory structures to the existing shopping center, and therefore, are exempt under Section 15311. • Section 15311 of CEQA Guidelines provides (Class 11) exemption for 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 on-site signs. The Digital Displays would be 22 of 24
accessory structures to the existing shopping center, and therefore, are exempt under Section 15311.
• 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 Digital Displays 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 Displays 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 displays are 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, and 15332 of the CEQA Guidelines.
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 23 of 24
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 Development Agreement is expected to generate revenue to the City’s General Fund of at least approximately $1,825,000 annually, based on the MAG established in the DA. This number could be greater if the City’s 20% revenue share is greater than the MAG. Additionally, the City will receive a one-time contribution of $500,000 each for Displays A-C and $325,000 for Display D in the first year that the Digital Display is completed (total of $1,825,000 for all four Digital Displays). 24 of 24
Prepared By: Rachel Kwok, Environmental Planner
Approved Forwarded to Council
Attachments:
A. CEQA Exemption Findings 395 Santa Monica Place
B. SMP Digital Displays RenderingsPlans
C. SM Place Digital Displays DA 12.16.25
D. ORD-ord-First Reading SMP Digital Displays DA
E. Written Comments
F. PowerPoint Presentation