City Council
Report
City Council Meeting: February 24, 2026
Agenda Item: 12.B
1 of 29
To: Mayor and City Council
From: Jing Yeo, Director, Administration
Subject: Introduction and First Reading of an Ordinance (1) Permanently Adopting Economic Recovery Interim Zoning Ordinance 2825 (CCS) and (2) Amending the Text of Article 9 Zoning and Planning of the Santa Monica Municipal Code to Promote Economic Recovery and Increase Land Use Flexibility in the City’s Downtown and Citywide Areas by Streamlining, Simplifying, and Modifying Land Uses and Limitations, Updating Standards for Specific Uses and Activities, Including, But Not Limited to, Alcohol Permits and Review, Modifying Definitions, Adding Flexibility for Certain Non-Conforming Uses, Adjusting Standards Regarding the Applicability of Resource Recovery and Recycling Requirements and Trash Enclosure Dimensional Standards, and Making Other Minor Changes, Corrections, Clarifications, and Clerical Amendments
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of Categorical Exemption from the provisions of the California Environmental Quality Act (CEQA) pursuant to Sections 15301 (Class 1 Existing Facilities of the California Environmental Quality Act (CEQA) Guidelines and pursuant to Section 15061(b)(3) of the State Implementation Guidelines.
2. Introduce for first reading the attached ordinance permanently adopting economic recovery changes to the zoning ordinance and amending the text of Article 9 of the Santa Monica Municipal Code to promote economic recovery and increase land use flexibility citywide and Downtown by streamlining, simplifying, and modifying land uses and limitations, updating standards for specific uses and activities, including, but not limited to, alcohol permits and review, modifying definitions, adding flexibility for certain non-conforming uses, adjusting standards regarding the applicability of resource recovery and recycling requirements and trash enclosure dimensional standards, and making other minor changes, corrections, clarifications, and clerical amendments.
Summary
2 of 29
Based on City Council direction, staff recommends permanent adoption of the Downtown Interim Zoning Ordinance (IZO) standards that have been effective in establishing new businesses within the Downtown area. Additional streamlining of land use limitations and expanding current alcohol exemptions to the entire Downtown, including the Santa Monica Pier are also proposed.
Staff also recommends zoning amendments that would apply to non-residential commercial districts citywide outside of the downtown area consistent with the approach taken with the Downtown IZO to (1) simplify land use processing and operational standards that have demonstrated to be overly restrictive for new businesses, (2) simplify alcohol-related operating standards for new and existing businesses, and (3) adopt remaining Interim Zoning Ordinances and land use flexibility provided for schools, child care, and early educational facilities displaced by the Palisades fire pursuant to the City’s 2025 Regional Fires Emergency Order and accompanying supplements (“2025 Fires EO”). These proposed changes build on past successes of simplifying land use processing and standards of the current and prior economic recovery IZOs.
Background
On August 12, 2025, Council adopted permanent amendments to the Zoning Ordinance (Resolution 2826 (CCS)) and amendments to the current economic recovery (IZO 2825 (CCS)), promoting economic recovery and increased land use flexibility in the City’s Downtown area. The permanent amendments were previously adopted as interim zoning regulations, with minor changes, and included expanded opportunities for Alcohol Exemption permits, increased operational flexibility for restaurants with entertainment, and removal of the prohibition against certain fast-food restaurants in establishments with frontage along the Third Street Promenade. An amendment to the IZO included allowing floor area ratio (FAR) flexibility for existing non-conforming buildings on the Promenade.
On January 21, 2026, the Planning Commission adopted Resolution Number 26-001 (PCS) recommending the City Council adopt the proposed amendments with certain 3 of 29
modifications including but not limited to the permanent adoption of economic recovery Interim Zoning Ordinance 2825 (CCS) and amending the text of Article 9 Zoning and Planning of the Santa Monica Municipal Code to increase land use flexibility in the City’s Downtown and citywide areas by streamlining, simplifying, and modifying land uses and limitations, updating standards for Specific Uses and Activities, including alcohol permits and review, modifying definitions, adding flexibility for certain non-conforming uses, and making other minor changes, corrections, clarifications, and clerical amendments. The Commission also provided recommendations to staff’s policy questions regarding the potential expansion of Alcohol Exemptions for certain land uses to citywide districts outside of the Downtown. The Commission’s recommendations are outlined in this report.
Past Council Actions
Meeting Date Description
July 25, 2023 Council adopted Interim Zoning Ordinance Number 2754 (CCS) (“IZO 2754”), establishing interim zoning regulations promoting economic recovery in the City’s Downtown, including the Third Street Promenade Area and Santa Monica Place.
September 26, 2023 Council introduced Interim Zoning Ordinance Number 2761 (CCS) (“IZO 2761”), adopted on October 8, 2023, extending and amending the interim zoning regulations established by IZO 2754 through November 22, 2028. Zoning changes included supporting a variety of potential commercial uses within the Downtown, enabling certain outdoor rooftop commercial uses on Public Parking Structures owned by the City, greater flexibility for restaurants providing entertainment, and provided a streamlined review for alcohol permits.
October 22, 2024 Council introduced Interim Zoning Ordinance Number 2794 (CCS) (“IZO 2794”), adopted on November 11, 2024, amending the interim zoning regulations to further promote economic recovery efforts within the Downtown and Third Street Promenade area, streamlining land use review by eliminating discretionary permits, and expanding the streamlining of alcohol permits for a variety of commercial uses. Additionally, Council also introduced and adopted Ordinance Number 2793 (CCS) amending the Sign Code by relaxing limitations to encourage the use of creative signs and to enhance overall business promotion on the Promenade.
March 25, 2025 Council adopted additional amendments (IZO No. 2809 (CCS)) to the existing Downtown IZO, encouraging the reuse and
occupancy of existing buildings. Council also introduced and adopted Ordinance Number 2805 (CCS) amending the Sign Code for consistency in allowable digital sign area for each property facing the Promenade.
4 of 29
Council gave staff direction on bringing forward interim zoning regulations related to economic recovery efforts that can be permanently adopted into the Zoning Ordinance.
August 12, 2025 Council adopted portions of the Downtown IZO as permanent amendments to the Zoning Ordinance (Resolution 2826 (CCS)) additional amendments to the current economic recovery (IZO 2825 (CCS)), promoting economic recovery and increased land use flexibility in the City’s Downtown area. The permanent amendments included expanded opportunities for Alcohol
Exemption permits, increased operational flexibility for restaurants with entertainment, and removal of the prohibition against certain fast-food restaurants in establishments with frontage along the Third Street Promenade. An amendment to the IZO included allowing floor area ratio (FAR) flexibility for existing nonconforming buildings on the Promenade.
December 16, 2025 City Council adopted a Resolution of Intention (ROI) to codify amendments to Santa Monica Municipal Code (SMMC) Section
9.21.130, Resource Recovery and Recycling Standards, that were initiated through the newly created Self-Certification Pilot Program for certain building permits applicable to Resource Recovery and Recycling (RRR) requirements. These
amendments are included in this proposal as they will further streamline building permit review procedures for new and existing businesses.
Discussion
The proposed amendments are outlined into the following topic areas:
1. Permanent adoption of current IZOs and Emergency Order items
2. Land Use Streamlining: Downtown and Citywide Amendments
3. Simplifying Restrictive Standards for Specific Uses
4. Alcohol Permit Streamlining
Staff also includes four policy questions for the Council’s consideration related to the following:
1. Medium-Scale Retail size thresholds.
2. Maintain or eliminate pub crawl restrictions for alcohol permits.
3. Alcohol Exemption closing hours for new Taproom uses.
4. Allow non-conforming bar and nightclub establishments in the Neighborhood Commercial Main Street district that are closed for greater than 12 months with the right to reopen the establishment.
5 of 29
Permanent Adoption of Interim Zoning Ordinances and 2025 Fires EO Staff proposes to permanently adopt the following Interim Zoning Ordinances and 2025 Fires EO provisions. Attachment F includes descriptions of each IZO or EO provision proposed for adoption.
• Downtown Economic Recovery IZO 2825 (CCS)
o Simplifying Land Use Review, Limitations, and Development Standards. o Outdoor Rooftop Commercial Uses on City-Owned Parking Structures. o Floor Area Ratio (FAR) Flexibility for Existing Non-Conforming Buildings on the Promenade.
o Outdoor Commercial Uses Exclusively on Private Property in the Office Campus District.
o Temporary Use Permit Extensions
• Outdoor Dining & Seating on Sidewalks IZO
• Personal Service: Massage Establishments Emergency Interim Zoning Ordinance (EIZO)
• Resource Recovery and Recycling (RRR) IZO Emergency Order Provisions for Permanent Adoption: Schools, Child Care, and Early Educational Facilities Displaced by Palisades Fire
The Planning Commission recommended the adoption of all Interim Zoning Ordinances and 2025 Fires EO provisions. The 2025 Fires EO’s alcohol-related operation suspensions are discussed later in the alcohol section of this report.
Land Use Streamlining: Downtown and Citywide Amendments Additional land use streamlining amendments are proposed within the Downtown and in non-residential zoning districts citywide similar to effective Downtown IZOs that focus on streamlined land use and alcohol permit review, and simplified limitations and standards for specific uses.
Staff evaluated land uses in all non-residential districts citywide to determine if the impacts associated with a commercial use warrant discretionary permits such as Minor 6 of 29
Use Permit (MUP) or Conditional Use Permit (CUP) or if the use has no impact and may be permitted by-right. Use permits are intended to allow permitted uses with operational conditions necessary to mitigate potential impacts. However, they are not an appropriate tool if the intent is to not allow certain land uses or as a means to implement design standards.
Staff evaluated all uses subject to MUPs and CUPs, identified their potential impacts, reviewed recently approved permits and their associated operating conditions, and assessed whether such uses warrant a simpler review process. Typical operating conditions include parking and loading operations, refuse operations, hours of operation, and noise mitigation. The following summarizes the proposal for simplifying land use review procedures and ground floor standards.
Downgrading Certain CUPs to MUPs
Requiring a MUP instead of a CUP would still maintain discretionary review through a public hearing by the Zoning Administrator instead of the Planning Commission. MUPs may be granted by the Zoning Administrator who can condition proposals as necessary based on staff and public input, including conditions that address parking and loading operations, refuse operations, and noise to ensure neighborhood compatibility. Both MUPs and CUPs are subject to the same eight findings as stated in SMMC Section
9.41.060, and therefore this change would maintain the same level of criteria for approval.
Uses considered for this change are typically those that are less controversial but still warrant operational conditions and can be shaped by the public review process. With this change, appeals would be subject to the Planning Commission instead of City Council.
Additionally, MUPs are more cost effective for prospective businesses with application fees approximately 38% of the cost of a CUP and have shorter review timeframes in comparison, both of which are critical components for new businesses. Examples of such uses proposed for this change are provided in the following table:
CUPs Downgraded to MUPs
Downtown Boulevards Bergamot Employment
7 of 29
Community Plan Area Districts
▪ Small-Scale
Facilities (less
than 5,000 SF)
▪ Office (new construction)
▪ Grooming and Pet Shops (less
than 12,500 SF)
▪ Food Halls (greater than 10,000
SF)
▪ Entertainment Facilities (less
than 5,000 SF)
▪ Medium-Scale Retail
▪ Offices
(greater
than
5,000 SF)
▪ Small-Scale
Facilities (less
than 5,000 SF)
Community
Assembly (e.g.
membership
clubs)
Downgrading Certain CUPs/MUPs to Permitted By-Right
Uses that have been shown to be compatible without the need for establishing operational conditions are proposed to have use permits eliminated entirely, especially where there is little to no utility in conditioning business operations. Discretionary use permits often disincentivize potential businesses resulting in long-term vacancies throughout the City. A recent example being the historic post office in the Downtown that has been vacant for years.
The discretionary use permits in many of these instances have been used as a tool to manage land use preferences or ground floor tenant size and linear street frontage. This has resulted in use permits becoming more of a deterrent for a use rather than a means for evaluating use compatibility and/or mitigating negative impacts.
In cases where a use warrants a more limited scope of review related specifically to access, loading, and circulation, a Parking and Loading Operations Plan (PLOP) subject to Mobility Division approval has been added as a requirement. In other instances, discretionary review was removed for a use in cases where comparable uses were already permitted by-right. For example, food halls, which operate as a collection of foodserving vendors are comparable to restaurant and retail establishments which are typically permitted uses and therefore was downgraded from a CUP to permitted by-right, unless greater than 5,000 SF which would require an MUP. Examples of uses proposed for this change are provided in the following table:
8 of 29
CUP or MUP to Permitted By-Right
Downtown
Community Plan
Boulevards Bergamot Area Employment
Districts
▪ Grooming and Pet
Stores
▪ Community
Assembly (e.g.
membership
clubs)
▪ Banks
▪ Food Halls
▪ Retail exceeding
7,500 SF and/or
50 linear feet of
ground floor
frontage
▪ Community
Assembly not
adjacent to
residential
▪ Banks
▪ Food Halls (less
than 10,000 SF)
▪ Retail (new
construction
greater than
12,500 SF)
▪ Instructional
Services (new
construction
greater than
12,500 SF)
▪ Medical Office
change of use on
ground floor
(greater than
12,500 SF; 7,500
SF for NC)
▪ Community
Assembly
▪ Banks
▪ Medium-Scale
Retail
▪ Commercial
Kitchens
▪ Community
Assembly not
adjacent to
residential
▪ Food Halls
▪ Medium-Scale
Retail
Removing Ground Floor Restrictions on Tenant Size and/or Linear Street Frontage Limitations on ground floor uses have traditionally been in place requiring active pedestrian-oriented commercial uses. Discretionary review in many of these instances is required based on tenant size and linear street frontage, which has served more of a deterrent rather than the purpose of evaluating the use for compatibility. Staff has seen many potential businesses consider alternatives that circumvent discretionary review, 9 of 29
including designing floor plans that include creating unusable floor area within lease spaces. This response from potential applicants indicates that current size thresholds and street frontage limitations are too restrictive.
These size and frontage thresholds are design-related, intended to preserve ground floors for active commercial uses and encourage smaller commercial spaces at the sidewalk to create a more walkable street. Although there is value in their intention, staff believes relief from these standards are necessary to help fill vacant tenant spaces particularly at this time of economic recovery. Relaxing these requirements would provide greater opportunities for business growth particularly along the Boulevards and Neighborhood Commercial districts; however, staff has still retained some of the size limitations for areas on Main Street and Montana Avenue. This shift in policy of allowing greater flexibility in ground floor occupancy was demonstrated with the recent Housing Element implementation during which ground floor residential became permitted anywhere on the ground floor, with a few exceptions in the Promenade area and Neighborhood Commercial districts. These ground floor restrictions have precluded new businesses from opening throughout the City in recent years. Examples of such uses proposed for this change are included in the following table:
Ground Floor Uses
Downtown
Community Plan
Boulevards Bergamot Area Employment
Districts
▪ Media Support
Facilities
▪ All Office Uses
▪ Instructional
Services
▪ Banks
▪ Nurseries and
Gardens
▪ Convenience
Markets;
▪ Small-Scale
Facilities
(commercial
entertainment)
▪ Grooming and Pet
Stores
▪ Media Support
Facilities
▪ All Office Uses
▪ General Personal
Services (e.g.
salons,
laundromats,
tailors, etc.)
▪ All Office Uses ▪ Instructional
Services
▪ Banks
10 of 29
The proposed streamlining changes to the land uses above balance the City’s priority of economic opportunity and growth, while ensuring uses can be adequately reviewed for compatibility with surrounding neighborhoods. Attachment A includes the land use and limitation changes proposed according to each district.
As discussed later in this report, the Planning Commission recommended approval of the proposed changes to citywide districts outside of the Downtown, with changes to certain land use standards. The Commission supported staff’s approach in downgrading or eliminating discretionary review procedures and recommended changes to specific uses that are outlined in the next section. The Commission also supported the streamlining of ground floor standards and recommended additional flexibility in removing maximum size limitations for certain uses. The next section highlights the strategies of changes for common land uses that the Commission discussed in detail.
Simplifying Common Land Uses
Common land uses such as eating and drinking establishments, retail, personal services, and office constitute the vast majority of commercial uses in the city. Staff reviewed these uses to assess whether additional flexibility and clarity is needed to minimize restrictive limitations for prospective businesses The proposed changes would help remove or simplify certain restrictions, streamline review, or further define and modernize uses for improved clarity for prospective businesses.
▪ Restaurants and Food Halls. Currently, restaurants greater than 5,000 SF within the Mixed-Use Commercial Districts (MUB, MUBL, GC, NC) require a CUP.
Proposed changes would downgrade the CUP to an MUP. This maintains discretionary review for larger-sized restaurants particularly along the Boulevards adjacent to residential districts but provides some simplification for the permit review. Similarly, restaurants greater than 7,500 SF located in the WT District (Wilshire Blvd) and the east side of Lincoln Blvd (LT District) would be amended from requiring a CUP to an MUP.
11 of 29
The Neighborhood Commercial (NC) district further limits restaurants to a 50-seat maximum, with Main Street limited to two restaurants per block. Proposed changes would eliminate the maximum 50 seat limitation, and the maximum number of restaurants per block along Main Street.
Currently, restaurants greater than 5,000 SF within the Downtown (except for WT/LT), Oceanfront, Bergamot Districts, and Employment Districts are permitted by-right. No changes are proposed.
Additionally, Food Halls currently require CUPs for any size and would be simplified from requiring a CUP to an MUP only for establishments greater than 10,000 SF within the Mixed-Use Commercial Districts, as recommended by the Planning Commission. The City has yet to receive any food hall proposals since it was added as a new use classification. This change would provide a more streamlined review in efforts to encourage this type of operation as Food Halls can be used as incubators for small local restaurants and food-related establishments given their lower risk nature.
Furthermore, for organizational purposes, Eating and Drinking Establishments which is currently inclusive of bars, nightclubs, restaurants, and food halls will be divided into two separate land use categories and amended as follows:
1. Eating Establishments include restaurants, brewpubs, and food halls.
2. Drinking Establishments include bars and would also include Taprooms as a new land use classification.
As discussed later in this report, the Planning Commission supported downgrading the restaurant permit review from a CUP to MUP, removing the restaurant caps, and further recommended a by-right threshold to 10,000 SF for food halls.
▪ Bar Establishments. Staff originally proposed a shift in review procedures for bars from requiring a CUP to a MUP, which would be subject to Zoning Administrator 12 of 29
approval. The potential change would maintain a public review process and conditions of approval would be determined by the Zoning Administrator at a public hearing, with appeals subject to the Planning Commission. Standalone bar proposals have been limited over the years as many operators will elect to provide food offerings to qualify them as restaurants so they can be eligible for a more streamlined review. This revised process would help streamline permit processing in both the MUP and any subsequent appeals and reduces the cost of applying for an alcohol permit, reducing both time and application fees.
However, as discussed later in this report, the Planning Commission did not support this proposed change and recommended that a Conditional Use Permit for bars remain warranted, particularly along commercial boulevards due to proximity to residential neighborhoods. Staff supports the Commission’s recommendation.
▪ Retail Use. Retail is currently separated into three land use classifications based on size thresholds. Below is a breakdown of the three categories and examples of the types of retail uses that the size can accommodate:
• Small-Scale up to 25,000 SF: Clothing, small furniture stores, bookstores, etc. • Medium-Scale between 25,000 and 80,000 SF: Outdoor/gear stores, furniture stores, urban-format department or hardware stores, etc. • Large-Scale: greater than 80,000 SF: Department stores, traditional big-box retail, hardware stores, or bulk stores that may require customer membership.
The current regulations allow small-scale retail permitted by-right across all commercial districts, with size restrictions for retail in new construction on the Boulevards and within the Downtown. Medium-Scale retail is largely discretionary across all commercial districts, requiring a CUP. Large-Scale retail is largely prohibited and permitted through a CUP in a handful of zones that are typically characterized by larger parcel sizes and commercial to industrial uses (IC, OC, BTV, MUC). The existing standards do not prioritize or incentivize retail uses of 13 of 29
certain sizes to certain areas, and disproportionately burden and restrict retail in new buildings over retail in existing buildings.
Staff proposes to further refine the distribution of retail classifications based on typical parcel conditions, existing retail, and proximity to sensitive uses, such as residential. Under the proposed regulations:
• Small-scale retail would be permitted by-right across all commercial zoning districts; and
• Medium-scale retail would be permitted by right in the Downtown Core, Bergamot Districts, and in the IC and OC districts.
This ensures that medium-scale retail is prioritized in areas with typically large sites or in commercial centers. A Parking, Loading, and Operations Plan (PLOP) shall always be required for medium-scale retail to mitigate any parking, access, and loading impacts. An MUP is required for districts typically abutting a residential district, such as the boulevards, and Lincoln and Wilshire in the Downtown. Largescale retail is permitted in the IC, OC, BTV, and MUC districts only and will continue to require a CUP. See Attachment B for a detailed description of the existing versus proposed changes, and the general distribution strategy for the three retail categories.
The Planning Commission supported this change; however they recommended to reduce the maximum size of medium-scale retail from 80,000 SF to 50,000 SF.
Staff does not support this added change for reasons discussed later in this report.
▪ General Market. Under current regulations, General Markets (grocery stores) are allowed by-right up to 15,000 SF in all commercial districts (Downtown, boulevards, Employment Districts, and Bergamot). Any General Market proposed above 15,000 SF requires a CUP. In recent years, this size restriction on grocery stores has made it challenging for prospective markets seeking locations in Santa Monica. The City 14 of 29
has several large, vacant commercial properties, greater than 15,000 SF, that were previously occupied by similar large uses, such as retail pharmacies. Staff has received inquiries from operators and feedback that obtaining a discretionary permit impacted their timeframes and raised uncertainty in the permitting process.
Operators have considered alternatives in staying under the CUP threshold including dividing spaces to create unusable square footage within lease spaces to comply with the 15,000 SF threshold. In order to ensure existing large tenant spaces and buildings can be reoccupied and to accommodate prospective markets moving to Santa Monica, staff proposes to increase the by-right size of general markets from 15,000 SF to 25,000 SF. In conjunction with this change, a Parking and Loading Operations Plan (PLOP) must be approved by the Mobility Division that would evaluate existing site conditions during plan development. Markets greater than 25,000 SF will still require a CUP, where a PLOP would be developed as part of the permit review.
The additional 10,000 SF is based on the size of existing, vacant tenant spaces or buildings and the size of existing general markets in the City, which has provided insight to better understand market conditions. Staff believes a higher size threshold of 25,000 SF would provide necessary flexibility for potential markets.
See below for a breakdown summary of a select number of markets within the City and their approximate size:
Store Address Square Feet
Trader Joes 1331 Wilshire 17,800
Erewhon 2800 Wilshire 13,500
Vons 710 Broadway 63,500
Vons 1311 Wilshire 33,000
Bristol Farms 3105 Wilshire 25,166
Pavilions 820 Montana 24,661
Whole Foods 1425 Montana Ave 12,000
Gelsons 2601 Lincoln 41,000
Whole Foods 2121 Cloverfield 26,000
AVERAGE 28,514
MEDIAN 25,166
15 of 29
As discussed later in this report, the Planning Commission recommended to modify staff’s proposal by further expanding the by-right size threshold from 25,000 SF up to 30,000 SF, in which any size greater would require an MUP.
Staff supports this change.
▪ Personal Services, Physical Training. Currently, these establishments (yoga studios, fitness gyms, etc.) that are greater than 5,000 SF often require a CUP. The proposed changes would allow all forms of physical training to be permitted by-right with no size restrictions. The physical fitness definition would also be amended by removing the 5,000 SF size threshold for consistency. These businesses typically do not result in impacts that necessitate public review or specific operating conditions. As demonstrated in CUP requests in the past, there is minimal utility in the conditions of approval placed on these types of businesses. This change would also revise instances where CUPs are currently required in certain areas such as the HMU District.
Relocation Flexibility for Existing Non-Conforming Pawn Shops in the Downtown Pawn shop establishments are currently prohibited in the Downtown area making any existing establishments a legal non-conforming use. Pawn shops are defined in the zoning ordinance as “establishments engaged in the buying or selling of new or secondhand merchandise and offering loans in exchange for personal property.” As a result, existing pawn shops would not be allowed to relocate to another property and retain their non-conforming status.
The proposed change would support existing downtown businesses by allowing existing pawn shop establishments located in the Downtown to relocate to another location within the Downtown area, except within the Ocean Transition (OT) zone. This change is the simplest approach to allowing existing small businesses to relocate within the Downtown based on their leasing or operational needs. Currently, there is only one pawn shop business in the Downtown. This proposed change will not result in any new pawn shop establishments as the use will remain prohibited to new operators. 16 of 29
Prior to the adoption of the Downtown Community Plan (DCP) in 2017, pawn shops were a permitted use in most areas of the Downtown, except along Ocean Avenue within the OT District. The proposal would allow an existing establishment to relocate anywhere in the Downtown except for Ocean Avenue, consistent with former policy in terms of locations for this particular use.
At the August 12, 2025 Council meeting, staff proposed this amendment to the current Downtown IZO; Council did not move forward with this change at the time, expressing concerns with pawn shop establishments in the Downtown. Staff proposes to reintroduce this change in order to clarify that this amendment was brought forward in response to a request from an existing local business to be able to relocate elsewhere within the Downtown. This change would facilitate this existing long-term Santa Monica small business to continue operations and does not allow the establishment of any new pawn shops in the Downtown. The Commission supported this change and expressed the importance of retaining existing local businesses.
Simplifying Restrictive Standards for Specific Uses
Community Assembly
Uses within this category include but are not limited to community centers, religious assembly facilities, meeting halls for clubs, and other membership organizations.
Currently this use includes a minimum parcel size of 7,500 SF for any operator to apply for the use. During the Downtown Economic Recovery IZO, this provision along with other operation standards demonstrated to create barriers for potential proposals in the Downtown and was therefore amended to not apply to businesses located in the Third Street Promenade area. Requiring a minimum parcel size standard in particular appears to be overly restrictive, and therefore staff recommends eliminating this particular standard and replacing it with a Parking and Loading Operation Plan (PLOP) requirement that evaluates the best approach to address specific site conditions on any size parcels for effectiveness. This change seeks to provide flexibility to parcels that could achieve compatibility even on smaller lots as the current provision outright restricts. 17 of 29
As discussed later in this report, the Planning Commission supported this change, and further recommended relaxing distance requirements to residential uses and eliminating operating hour restrictions.
Restaurants, Limited-Service & Take-Out Only
This code section is being updated to allow limited-service and take-out restaurant establishments to close at 12 AM instead of the current 10 PM. This will provide consistency with the closing hours already established as a condition in the Alcohol Exemption (AE) permit for limited-service and take-out restaurants that serve alcoholic beverages, which has been amended to be more flexible in recent years.
Small-Scale Facility (Commercial Entertainment & Recreation, Game Arcades) This would eliminate all standards under this section as they no longer reflect how game arcades are currently established or operated and have become a barrier for new, unique business models centered around interactive commercial experiences.
Alcohol Permit Streamlining: Alcohol Exemptions, Standards, Use Classification Alcoholic Beverage Sales
Proposed changes to this section include:
• requiring a MUP instead of a CUP for all alcohol permits, • expanding Alcohol Exemption (AE) permits for certain uses within the Downtown as discussed earlier, simplifying alcohol exemption criteria, • adding an administrative process for existing alcohol permit holders to request removal of certain alcohol conditions, and
• streamlining the AE administrative procedures.
Currently, any dispensing or sale of alcoholic beverages including beer, wine, and spirits for on-site or off-site consumption requires a CUP, unless an AE permit is obtained. AEs have been critical in streamlining alcohol permits for restaurants and with 18 of 29
the recent expansion of applicable uses within the Third Street Promenade Area, have simplified the review process leading to the establishment of a variety of new businesses in the Downtown.
Consistent with this strategy, staff proposes to simplify the review of alcohol permits that would apply to the entire city by downgrading the review from a CUP to a MUP. This change would simplify the review process for any non-restaurant commercial uses since AE permits outside of the Downtown citywide are currently only available for restaurants. This would capture proposals that are less likely to have alcohol-related issues such as retail wine shops/tasting, art galleries, or personal service businesses proposing to serve ancillary beer or wine. Recent proposals, including ancillary wine service for a retail shop and comedy club, have been approved by the Planning Commission on consent. Shifting the review permit to a MUP would streamline the alcohol review process providing greater certainty for prospective businesses.
The Planning Commission supported all changes except for the downgrading of a Conditional Use Permit to a Minor Use Permit for bar uses. Additionally, staff included policy questions for the Council’s feedback and recommendation related to the potential expansion of Alcohol Exemptions for certain uses in citywide districts outside of the Downtown. The Commission was generally supportive of expanding exemptions to certain uses as further discussed later in this report.
Alcohol Exemption Expansion: Downtown & Santa Monica Pier Alcohol Exemptions (AE) have been critical in streamlining alcohol permits for restaurants and with the recent expansion to other uses within the Third Street Promenade Area, have simplified the review process leading to the establishment of a variety of new businesses in the Downtown. Similar to the recently adopted (August 2025) AE expansion of land uses that could utilize this streamlined entitlement process in the Third Street Promenade area and along Ocean Avenue, staff proposes to:
▪ Expand AE applicability to the remaining portions of the Downtown, excluding the periphery zones along Wilshire Boulevard (WT zone) and Lincoln Boulevard (LT zone) that abut residential districts, and to the Santa Monica Pier. 19 of 29
▪ Food halls, bars, convenience markets, cultural facilities/instructional services, commercial entertainment and recreation (small and large), personal services (day spas, salons, etc.) and retail establishments may obtain an AE permit without the need for a public hearing.
▪ AE conditions including operating hours would remain consistent with currently adopted allowances, with closures at 2 AM.
Alcohol Exemption Expansion: Citywide Districts Outside of the Downtown Alcohol Exemptions (AE) have been critical in streamlining alcohol permits for restaurants and with the recent expansion to other uses within the Third Street Promenade Area, have simplified the review process leading to the establishment of a variety of new businesses in the Downtown. Similar to the recently adopted (August 2025) AE expansion of land uses that could utilize this streamlined entitlement process in the Third Street Promenade area and along Ocean Avenue, staff proposes to:
▪ Expand AE applicability to the remaining portions of the Downtown, excluding the periphery zones along Wilshire Boulevard (WT zone) and Lincoln Boulevard (LT zone) that abut residential districts.
▪ Food halls, bars, convenience markets, cultural facilities/instructional services, commercial entertainment and recreation (small and large), personal services (day spas, salons, etc.) and retail establishments may obtain an AE permit without the need for a public hearing.
▪ Expand AE applicability to the Santa Monica Pier.
▪ AE conditions including operating hours would remain consistent with currently adopted allowances, with closures at 2 AM.
Alcohol Exemption Criteria and Restaurants with Entertainment Restrictions Consistent with the current suspension of certain AE criteria and CUP conditions of approval allowing operational relief for existing alcohol serving establishments as provided in the City’s 2025 Fires EO, proposed changes would eliminate overly restrictive operational requirements for alcohol establishments and establish a process for existing businesses to administratively request removal of such operational conditions from their current alcohol permit as further discussed below. The proposal would eliminate the more 20 of 29
restrictive operational requirements, including maximum television count and alcohol sales revenue restrictions, limitations on amusement games, and pub-crawl and liquor bottle service prohibitions. These restrictions would no longer apply to new Alcohol Exemption permits and would be eliminated as operational restrictions for restaurants with entertainment. Furthermore, staff proposes an administrative process for existing alcohol permit holders to request the removal of these specific operational conditions as further outlined below.
The Planning Commission supported this change, however recommended to maintain the prohibition on pub crawls, stating safety concerns of participating patrons while traveling between participating businesses. The Council should consider whether allowing pub crawls would be appropriate.
Administrative Request to Remove Certain Alcohol Permit Conditions.
As discussed above, in order to continue the suspension of the alcohol conditions included in the 2025 Fires EO, staff includes a process that would allow businesses with existing alcohol permits (CUPs or AEs) to request the removal of certain alcohol conditions from their permit, subject to Community Development Director approval. This process is similar to a Minor Amendment that can be requested by an operator governed by a CUP currently in place. Applicants may request removal of the following alcoholrelated conditions of approval or requirements:
1. Limitations on the number of televisions;
2. Limitation on the maximum percentage cap on total gross alcohol sales;
3. Prohibition on bottle service;
4. Prohibition on participating in “pub crawls”;
5. Prohibition on providing billiards/pool tables, video or amusement games, bowling, darts, and other similar entertainment activities.
The Planning Commission supported this process to ensure that all businesses have the ability to operate under similar standards, however as mentioned, recommended maintaining the prohibition on pub crawls.
21 of 29
Streamline AE Administrative Processing
Currently, AE permits for businesses proposing greater than 50 seats requires the City to provide mailing notice and website posting informing the public that an AE has been approved. Since AE approvals cannot be appealed, staff recommends eliminating this administrative procedure that would help streamline the AE permit processing and improve efficiency as this requirement has resulted in process delays and confusion amongst the community.
Alcoholic Beverage Manufacturing
This land use was extracted as a separate classification as it is currently listed under Industry, Limited. The purpose of this change is to further define the characteristics of such uses that include the manufacturing of beer, wine, and spirits. Establishing this as a separate land use classification also provides greater flexibility in allowable locations and review procedures for smaller facilities.
New Brewery Definition and Related Uses. Establishes a new brewery/distillery use classification and related uses such as brew pubs, taprooms, and restaurants with ancillary on-site brewing. This would provide greater clarity as such uses are not clearly defined or established in the Zoning Ordinance and the review process for approval is equally unclear. For example, breweries, under current regulations, are nested within Industry, Limited. The proposed changes create a new industrial land use classification, Alcoholic Beverage Manufacturing, that will be reviewed under the same land use entitlement as it previously had been under Industry, Limited. This change is meant to increase transparency and clarity of the land use regulations, while also signaling to the business community that Santa Monica is adapting to new business ideas and needs. It will also provide the opportunity for future amendments and flexibility for this specific use if desired.
Planning Commission Recommendation
The Planning Commission expressed full support in permanently adopting all IZO related changes and the new proposed amendments, and held a thorough discussion 22 of 29
on further streamlining land use review within the context of creating greater opportunities to fill vacant tenant spaces. The Commission supported reducing discretionary land use review in districts outside of the Downtown, further relaxing ground floor use restrictions, streamlining markets, food halls, fitness training, and downgrading alcohol permit review. The Commission directed staff to ensure that any Downtown land use review procedures and limitation requirements, particularly for neighborhood-serving commercial uses, be less restrictive compared to citywide districts outside of the Downtown.
Staff also presented the Commission with policy questions on whether expanding alcohol exemptions for certain uses citywide would be appropriate considering district proximity to residential neighborhoods (see Attachment C). The Commission supported the expansion of alcohol exemptions for a limited number of commercial uses citywide and focused on potential alcohol exemption operating requirements for taprooms and wine bars. The Commission supported staff’s recommended changes and also recommended the following additional changes to further address vacant commercial space:
• Land Use: Pet Grooming, Pet Stores, and Banks: The Commission recommended providing flexibility for pet grooming, pet stores, and banks. While current restrictions are intended to mitigate potential noise concerns with pet grooming facilities and overnight stay of a small number of animals for sale in pet stores, grooming facilities typically operate in small tenant spaces and have not been an issue and noise has not been an issue with existing pet stores. While current limitations on banks are intended to preserve ground floor spaces for active uses, such ground floor restrictions have become barriers for prospective businesses overall and do not address commercial space vacancy. Accordingly, staff proposes to further streamline the review for these types of businesses. • Food Halls: In addition to staff’s proposal to streamline food halls consistent with restaurants in terms of permitting based on size, the Commission recommended 23 of 29
to increase the by-right threshold to 10,000 SF before a Minor Use Permit would be required. Allowing food halls to have a greater by-right size threshold compared to restaurants is intended to provide greater opportunities for small local businesses to open within a food hall setting which could be more financially viable in comparison. Staff supports this added recommendation. • Retail: Although the Commission supported downgrading the review permits proposed by staff, some concerns were expressed with the definition of mediumscale retail, which includes retail use between 25,000 SF and 80,000 SF. In efforts to balance the downgrade of the review permits (often resulting from a CUP to MUP) the Commission recommended reducing the maximum size of medium-scale retail from 80,000 SF down to 50,000 SF. This change would also result in the upper limit of large-scale retail down to 50,000 SF from 80,000 SF.
However, reducing the threshold of medium-scale retail ultimately creates more restrictions and implements less flexibility than staff’s original proposal. Under the Commission’s recommendation, retail between 50,000 and 80,000 SF would now be considered large-scale retail, which is largely prohibited in all zoning districts except for the Bergamot Area Plan and Employment Districts. This may create legal non-conforming conditions for existing medium-scale retailers and would prohibit retail between 50,000 SF and 80,000 SF in the Downtown. based on most medium-scale retail requiring an MUP as proposed. Additionally, staff believes requiring a CUP for retail between 50,000 and 80,000 SF can be adequately reviewed under an MUP, which is more efficient in terms of time and cost for the applicant. As such, staff does not support this added recommendation.
• Markets: The Commission recommended to further expand the by-right size threshold proposed by staff from 25,000 SF to 30,000 SF, and downgrade the Policy Question 1: Should the Medium-Scale Retail size threshold be maintained between 25k-80k or reduced to 25k-50k also resulting in LargeScale being revised from >80k to >50k? Planning Commission: Staff Recommendation:
Revise Medium to 25k-50k SF Maintain Medium at 25k-80k SF 24 of 29
review permit for markets greater than 30k from a CUP to an MUP. A majority of the perceived negative impacts associated with markets are related to circulation, loading, and parking, which can be addressed and mitigated through the approval of a Parking, Loading, and Operations Plan (PLOP), a requirement for any proposed market. The increased threshold was selected based on the average size of current markets in the City, including both the existing smaller specialty markets (such as Trader Joe’s or Bristol Farms) and the typical full service markets such as a Vons or Whole Foods. Staff supports this added recommendation.
• Ground Floor Office/Medical Office: The Commission recommended expanding staff’s proposal by eliminating all current restrictions and limitations on ground floor office and medical office, everywhere except for the Neighborhood Commercial (NC) district. The Planning Commission expressed interest in maintaining regulations to protect the NC district to ensure more active, neighborhood commercial uses. While current limitations on ground floor office/medical office are intended to preserve ground floor spaces for active uses, such ground floor restrictions have become barriers for prospective businesses overall and do not address commercial space vacancy. Staff supports this added recommendation.
• Permanent Elimination of Certain Alcohol-Related Restrictions: Consistent with the 2025 Fires EO, while the Commission supports the permanent elimination of the alcohol-related restrictions as currently suspended in the EO, yet the Commission expressed safety concerns with patrons participating in pub-crawls while travelling between alcohol establishments. While staff understands the Commission’s concerns, the Council may wish to consider whether pub crawls can be safely administered and whether such events would be appropriate in furthering goals of economic opportunity for local businesses. Furthermore, prohibiting pub crawls may create future conflicts with the City’s Entertainment Zone program recently adopted in the Downtown.
25 of 29
• Alcohol Exemptions Expanded Citywide: Based on staff’s policy questions regarding whether it would be appropriate to expand alcohol exemptions for certain types of uses citywide beyond the Downtown area, the Commission was generally supportive of the uses proposed by staff, except for bar establishments.
Alternative to allowing exemptions for bar establishments, the Commission supported staff’s alternate Taproom classification that would be limited to beer and wine only (no spirits) and approved with an alcohol exemption. The Commission supported expanding the alcohol exemption process to other commercial uses not typically associated with alcohol-related issues, including retail, personal services, instructional services, and cultural facilities. For the new Taproom use classification, the Commission recommended closing hours of 9pm, mentioning patrons would have the ability to seek food options after closing as these establishments do not provide food service. However, staff believes 9pm may be too limiting for such operators and would result in many Taproom businesses seeking later closing hours through an MUP instead, contrary to the streamlining effort afforded by the proposed expansion. In response, staff recommends the Council consider slightly later closing hours consistent with restaurant AE closing hours of 12am.
Policy Question 3: What should be the hours of operations for Taprooms seeking an administrative Alcohol Exemption Permit?
Planning Commission: Staff Recommendation:
9PM Closure Align with Restaurants
(12AM Closure)
Policy Question 2: Should alcohol-serving establishments be prohibited in participating in pub crawls?
Planning Commission: Staff Recommendation:
Maintain pub crawl prohibition Allow pub crawl events
26 of 29
The Commission’s complete recommendation is summarized in a table as Attachment D. The Commission’s Resolution 26-001 that includes its recommended amendments is provided as Attachment G.
Reestablishment of Non-Conforming Bar Establishments within the NC Main Street District
Subsequent to the Planning Commission’s review and recommendation of the proposed amendments, staff proposes an additional change in response to the Commission’s direction on maintaining CUP requirements for bar establishments outside of the Downtown. This proposed change would allow existing bar establishments located on Main Street to continue operations that do not currently have a CUP and are nonconforming uses.
Currently, new establishments are prohibited in the NC Main Street district and obtaining a CUP or MUP is not an option. Staff proposes an amendment that would allow non-conforming bar establishments that have been closed beyond the 12-month period when non-conforming uses must terminate, to reopen and not lose their nonconforming rights. This amendment supports the continuation of existing bars on Main Street, considering new bars are prohibited in the NC district. Zoning currently provides this flexibility for non-conforming retail, restaurants, and food halls in the NC Main Street and other districts citywide, while the Downtown specifically includes this provision for bar establishments. Provided a bar establishment was the last business to occupy the space, a bar establishment that has been closed for over 12-months may reopen.
This proposal seeks to support existing bar establishments that have historically been a part of the Main Street commercial district and is consistent with current non-conforming standards focused on business reopening that were established during prior economic recovery efforts.
27 of 29
Attachment A (Economic Recovery Ordinance) includes the Planning Commission’s recommendations, with the exception of the proposed changes suggested by staff as outlined in the four (4) policy questions above.
Alternative Actions:
In addition to the recommended action, the City Council could consider the following with respect to the proposed amendments:
A1. Revise the proposed amendments for adoption.
A2. Deny the proposed amendments.
Text Amendment Findings
1. The proposed amendments are consistent with the General Plan and any applicable Specific Plans in that they will support Downtown’s role as a visitor destination and economic center by encouraging uses that support local business retention and promote new business opportunities within the Downtown. Citywide amendments are consistent with LUCE Policy E1.1 Policy Question 4: Should non-conforming bar establishments in the NC Main Street District be allowed to reopen if the establishment has been closed for more than 12 months?
What this means:
YES: Allows any of the 3 existing non-conforming bars within the NC Main Street District to reopen operations even if the business has been closed for more than 12 months.
NO: Existing vacant bar establishments closed for more than 12 months will be terminated permanently based on non-conforming status since bars are prohibited uses in the district.
28 of 29
which states to make land use decisions that respond to changing market conditions and meet the needs of City residents and visitors.
2. The proposed amendments to the text of the Zoning Ordinance are consistent with the purpose of the Zoning Ordinance to promote the growth of the City in an orderly manner and to promote and protect the public health, safety, and general welfare in that the amendments will address the needs of the business community and residents and support businesses by simplifying land use standards and streamlining review procedures.
Environmental Analysis
The proposed amendments to interim zoning regulations previously established and current the zoning regulations as described above are categorically exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Sections 15301 of the CEQA Guidelines. Section 15301 of CEQA Guidelines provides (Class 1 Existing Facilities) 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 alterations to existing streets, sidewalks, gutter, bicycle facilities, and other similar facilities and additions of safety or health protection during for use in conjunction with existing facilities. The proposed amendments would allow for flexibility in land uses for the Downtown and districts citywide. No expansion of the existing land uses is proposed. Therefore, the proposed amendments qualify under the Class 1 exemption.
Additionally, the proposed amendments consisting of land use and processing changes supporting economic recovery, growth, and opportunity are categorically exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the State Implementation Guidelines. Based on the evidence in the record, it can be seen with certainty that there is no possibility that the proposed 29 of 29
changes will have a significant effect on the environment. The recommended amendments represent land use and procedural changes do not substantively affect policy decisions made with the City Council’s adoption of the DCP, BAP, and Zoning Ordinance, and is consistent with the City’s economic recovery efforts.
Therefore, no further environmental review under CEQA is required.
Financial Impacts
There is no immediate financial impact or budget action necessary as a result of the recommended action. Staff will return to Council if specific budget actions are required in the future.
Prepared By: Steve Mizokami, Principal Planner
Approved Forwarded to Council
Attachments:
A. 2026.02.24 - Economic Recovery Ord.
B. Comparison of General Retail District Land Use Tables C. Alcohol Exemption Policy Questions for Planning Commission D. Planning Commission Recommendation Summary Table
E. Planning Commission Staff Report (01-21-25)
F. Interim Zoning Ordinances (IZO) & Emergency Order (EO) Descriptions G. 2026.02.24 - Planning Commission Amendments ROR (26-001) H. Written Comments
I. PowerPoint Presentation