City Council
Report
City Council Meeting: March 24, 2026
Agenda Item: 4.L
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To: Mayor and City Council
From: Jing Yeo, Director, Administration
Subject: Award and Authorize the City Manager to Negotiate and enter into an Agreement with Archistar to Provide AI Plan Check Review Services Recommended Action
Staff recommends that City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
2. Authorize the City Manager to negotiate and execute a fiveyear agreement with Archistar, Inc. for AI-assisted plan check review. This recommended award is made as an exception to the competitive bidding process pursuant to Santa Monica Municipal Code (SMMC)
Section 2.24.250(g) and is for a total amount not-to-exceed $528,000 with future year funding contingent on Council budget approval.
3. Authorize budget changes as outlined in the Financial Impacts & Budget Actions section of the report. (requires 5 votes)
Summary
Staff seeks approval to enter into an agreement with Archistar, Inc. to implement an AIassisted platform that supports early-stage plan review for single family residences, accessory dwelling units and tenant improvements. In light of the City’s declaration of fiscal distress and the economic disruption resulting from the Palisades fire, staff is requesting authorization for an exception to the competitive bidding process to accelerate deployment. Immediate implementation will help streamline development review, support reinvestment, and strengthen the City’s economic revitalization efforts.
Discussion
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Some jurisdictions have begun using AI-based tools to assist with portions of the development review process by analyzing digital plans and identifying potential inconsistencies with zoning standards early in the submittal process. At Council direction, staff has begun the process of incorporating AI into the City’s development services experience to support plan review for accessory dwelling units, single-family residences, and tenant improvements through a phased six-month implementation.
After reviewing demonstrations from Archistar, IchiPlan and CivCheck, staff determined that Archistar best meets the City’s needs for automating early-stage development and permitting workflows. Archistar integrates zoning regulations, parcel data, and spatial analysis to evaluate development potential at the property level and provide visual insights into feasibility, allowing staff and applicants to quickly understand requirements such as setbacks, height limits, and floor area ratios before submitting plans. The platform is already used by public sector agencies and aligns with broader efforts in California to modernize permitting, while also meeting the City’s responsible AI and security guidelines and integrating with the City’s new permitting system, Clariti, making it the best technical and operational fit to help streamline the permitting process.
The City is requesting authorization to contract with Archistar to address urgent economic recovery needs resulting from the recent regional fires. The fires have caused widespread disruption to the regional economy, including business closures, layoffs, and the displacement of residents. These impacts have created significant economic uncertainty for local businesses and investors and have placed additional pressure on the City’s economic recovery efforts.
The City is experiencing declining private sector investment at a time when economic revitalization is critical. Current market conditions reflect an estimated office vacancy rate of approximately 35 percent and a retail vacancy rate of approximately 16 percent.
These conditions threaten the City’s revenue base and long-term economic stability. At the same time, businesses and property owners affected by the fires require timely assistance to rebuild, reopen, or pursue new development opportunities. 3 of 5
Modernizing the City’s development services and permitting processes is therefore essential to supporting recovery and restoring investor confidence.
Immediate implementation of Archistar will provide an advanced digital platform that streamlines development review, increases transparency for applicants, and accelerates permitting timelines. These capabilities will allow the City to more efficiently process development proposals and reduce barriers for businesses seeking to reinvest in the community.
Utilizing the standard competitive procurement process would significantly delay deployment of this critical technology, potentially taking several months to complete.
Such delays would prolong inefficiencies in the development review process at a time when the City must respond quickly to support economic recovery. Continued delays could discourage private investment, slow rebuilding efforts, and contribute to further economic stagnation and declining City revenues.
Archistar has been identified as the vendor best positioned to rapidly deploy a proven automated development assessment platform that integrates with existing permitting workflows and provides immediate value to applicants and City staff. Emergency procurement will allow the City to implement this tool without delay, ensuring that development services can more effectively support business recovery, economic revitalization, and the City’s long-term fiscal stability.
The initial contract request amount for FY 2025-26 is $300,000. Funding for the AI plan check services was approved by Council on October 28, 2025, as part of the City’s Realignment Plan and the ongoing costs for the additional years will be incurred by the Community Development Department. The annual cost for the contract beginning in year two is $45,000 and includes a 10% contingency, resulting in a not-toexceed amount of $528,000 over the five-year performance period.
Vendor Selection
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Exception to Competitive Bidding
Staff recommends that Archistar, Inc. be retained to provide proprietary, subscriptionbased AI plan check services as an exception to competitive bidding per the Procurement Division approved ECB #396 pursuant to SMMC Section 2.24.250(g). (g) Circumstances outside the control of the City, would result in substantial economic loss, substantially compromise a legal position, or substantially interfere with a required City operation
Past Council Actions
Meeting Date Description
10/28/2025
(attachment A)
Realignment Plan
Environmental Review
The award agreement is categorically exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The agreement is covered by the common sense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The agreement will provide the City with AI plan check software.
Therefore, it can be seen with certainty that the contract would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA.
Financial Impacts and Budget Actions
Staff seeks authority to approve available funding from the General Fund to award a contract to Archistar, Inc. for AI plan check services.
Contract Request
FY 2025-26
Request Amount
Future Years
Amount
Department/CIP Account # Total Contract
Amount
$300,000 C0109190.689000 $300,000
$228,000 01700004.529230 $228,000
Total $528,000
Future year funding is contingent on Council budget approval. 5 of 5
Prepared By: Denise Smith, Principal Administrative Analyst Approved Forwarded to Council
Attachments:
A. 102825 Realignment Staff Report
B. Levine Act Disclosure Form - Archistar Signed
C. Oaks Initiative Form - Archistar Signed