City Council
Report
City Council Meeting: July 14, 2026
Agenda Item: 12.A
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To: Mayor and City Council
From: Jing Yeo, Director, Administration
Subject: Adoption of a Resolution to Amend the Text of the Downtown Community Plan and Introduction and First Reading of an Ordinance to Amend the Text of the Zoning Ordinance to Implement the City’s Realignment Plan by Increasing the Development Potential of City-Owned Sites in the Downtown and Sites Located Within the Gateway Master Plan Area
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding that the potential environmental effects of the Ordinances have been previously analyzed as part of the certified Downtown Community Plan Environmental Impact Report, the 6th Cycle Housing Element Environmental Impact Report and subsequent addendum, and a finding of no possibility of significant effect pursuant to Section 15061(b)(3) of the California Environmental Quality Act Guidelines;
2. Adopt a Resolution to Amend the Text of the Downtown Community Plan to Effectuate the Goals of the Realignment Plan by Increasing the Potential of CityOwned Sites in the Downtown Community Plan Area and Sites Located Within the Gateway Master Plan Area; and
3. Introduce for First Reading an Ordinance Amending the Text of the Zoning Ordinance to Effectuate the Goals of the Realignment Plan by Increasing the Potential of City-Owned Sites in the Downtown Community Plan Area.
Summary
Pursuant to the City’s Realignment Plan, the proposed recommended amendments to the Downtown Community Plan (DCP) and text of the Zoning Ordinance will implement the key strategic goals of strengthening economic opportunity in the Downtown by unlocking potential of City-owned property and Gateway sites. Specifically, the amendments include (1) exempting City-owned property from the regulatory framework of the Zoning Ordinance to allow the City to evaluate proposals based on economic 2 of 13
opportunities and public benefits, and (2) increasing development standards and providing flexibility in the entitlement process for Gateway sites to better encourage and support transformative projects around one of the main entrances into the city’s Downtown. In addition to the proposed amendments, a policy question and potential options are included regarding the appropriate entitlement process for Gateway sites.
Further, two additional policy questions are posed for the Gateway sites regarding whether land use limitations should be applied to the entitlement processes and how best to structure community benefits.
The proposed amendments do not include implementation of a boulevard low-scale incentive program, Downtown housing incentive program, or general upzoning for housing projects in the Downtown. These programs were not recommended by the Planning Commission at this time in the interest of ensuring that the City can plan holistically and more comprehensively consider these proposals within the context of a future Senate Bill (SB) 79 Transit Oriented Development (TOD) Alternative Plan and the 7 th Cycle Housing Element.
Background
On October 28, 2025, City Council adopted the Realignment Plan, a guiding framework for public safety renewal, revitalization of key public spaces, and achievement of organizational stability and fiscal balance. This framework consists of a series of interconnected programs, projects, and strategies to effectuate the Council’s established priorities of achieving (1) safe neighborhoods and clean streets, (2) activating economic opportunity and growth, and (3) developing affordable, livable, and secure housing.
Of the implementation efforts, the following two fell under the purview of City Planning staff and the Planning Commission to initiate and were authorized through the adoption of two Resolutions of Intention (ROI):
1. Authorize staff to explore opportunities to update development standards, land uses, and processes for City-owned sites in the Downtown Community Plan area 3 of 13
and public and private sites within the former Gateway Master Plan area to provide more flexibility to unlock land value and redevelopment potential, and
2. Authorize staff to focus City housing development efforts in the Downtown core, and concurrently direct that staff initiate studies to identify policy options that do not jeopardize Housing Element certification and ensure that future development on boulevards achieves compatibility with existing residential neighborhoods.
Both of these strategies aim to focus and expand future growth and opportunities within the Downtown, where proximity to employment, transit, services, and amenities can support sustainable development patterns to continue to address the city’s housing needs, while also stimulating economic activity and generating public benefits.
Planning Commission Study Session
To initiate implementation of these Realignment Plan strategies, the Planning Commission held a study session on May 6, 2026, to discuss the following concepts:
1. Boulevard Low-Scale Housing Incentive Program
2. Downtown Housing Local Bonus Incentive Program
3. Driving Downtown Economic Opportunity, which included:
• Regulatory Adjustments to City-Owned Sites to Maximize Community Benefit
• Facilitation of Economic Opportunity on Downtown Gateway Sites – Development Standards, Land Uses, and Process
After discussion of the above concepts, the Commission voted and adopted new ROIs to only move forward with potential amendments regarding a Downtown Housing Local Bonus Incentive Program, City-owned sites in the Downtown, and Gateway sites. The Commission voted to not include language regarding a Boulevard Low-Scale Housing Incentive program in the ROI and therefore amendments to implement this concept did not move forward. Future consideration of this program would need to be initiated through an ROI that may be adopted by the Commission or City Council. 4 of 13
Planning Commission Recommendation
On June 17, 2026, the Planning Commission conducted a duly-noticed public hearing to review and discuss a formal recommendation on the proposed amendments to the text of the DCP and Zoning Ordinance based on their discussion and direction during the May 6 study session. While more detail is provided below on their recommendation to City Council, the Commission voted to not recommend amendments to effectuate a Downtown Housing Local Bonus Incentive Program, stating that this Realignment Plan strategy would be better suited to be incorporated into future work efforts such as the 7th Cycle Housing Element and/or a future SB 79 TOD Alternative Plan. The Commission specified that a Downtown incentive program should be reviewed holistically with development citywide and therefore wanted to reserve potential implementation concepts such as increased development standards and affordable housing compliance flexibility for the future.
Discussion – Driving Downtown Economic Opportunity
Below is an overview of the proposed amendments to the DCP and Zoning Ordinance as recommended by the Planning Commission.
Regulatory Adjustments to City-Owned Sites to Maximize Community Benefit Pursuant to the Realignment Plan, it is vital that the City takes a more strategic approach to our real estate assets to expand economic opportunities and growth through an intentional development program for City property specifically targeting Downtown. Several City-owned properties within Downtown represent significant public assets that can accommodate future housing, civic, commercial, institutional, or mixeduse development. In particular, these properties include:
• Downtown E-Line Station (“Kiss and Ride”) Lot
• Parking Structure 1 – 1234 4th Street
• Former Fire Station No. 1 Site – 1444 7th Street
• 4th/5th Street and Arizona Avenue Site – 1301 4th Street 5 of 13
Currently, pursuant to Santa Monica Municipal Code (SMMC) Section 9.01.040, only projects that include affordable housing on City-owned sites are exempt from the standards of the Zoning Ordinance, which was established through Program 2.E of the 6 th Cycle Housing Element. As such, non-housing projects on City-owned properties are subject to the same zoning standards applicable to private property, including limitations related to height, Floor Area Ratio (FAR), setbacks, and other development requirements. Therefore, in order to be able to solicit innovative proposals ensuring that public property is maximized not only for land residual revenues, but for community benefit and to be a catalyst for driving reinvestment in the Downtown through redevelopment or joint venture opportunities, the proposed amendments include a provision that would exempt all project types on City-owned properties in the Downtown from the development standards and requirements of the Zoning Ordinance. Exempting the City-owned sites from zoning regulations would provide flexibility to evaluate a broad range of projects based on their ability to provide public benefits, including:
• A variety of housing types;
• Economic development opportunities;
• Civic and community-serving uses;
• Public open space and amenities; and
• Revenue generating uses to support City services
As these sites are publicly owned and represent some of the City’s most valuable land assets, a more flexible regulatory framework is appropriate. The proposed amendment to SMMC Section 9.01.040(A)(1) would allow the City to evaluate site-specific opportunities and community benefits without being constrained by standards designed primarily for developments on private property.
Facilitate Economic Opportunity on Downtown Gateway Sites – Development Standards, Land Uses, and Process
The DCP identifies several “Gateway Master Plan” sites as locations of unique strategic importance due to their visibility, proximity to transit, and potential to accommodate significant investments. Gateway sites include:
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A. 402 Colorado Avenue
(Downtown Station Site)
B. 302 Colorado Avenue
(Sears Property)
C. 120 Colorado Avenue
(Pierside Hotel)
Under existing regulations, these properties are subject to the development standards of the underlying zone district (i.e., Transit Adjacent), including a maximum height of 84 feet and FAR of 4.0 for housing projects or 84 feet and FAR of 3.5 for Tier 3 nonhousing projects.
Similar to City-owned sites in the Downtown, the Realignment Plan envisions considerations for this Gateway area to allow for creative proposals on private property leading up to major global events such as the Olympics while also providing certainty for housing projects at a key entrance to the Downtown. Therefore, the proposed amendments to the DCP, consisting of a maximum height of 130 feet and 5.0 FAR as shown below. Given that housing projects can use State Density Bonus Law to increase height and FAR, the proposed height of 130 feet would provide parity between housing and non-housing projects and aligns with the height permitted in the DCP’s Large Sites Overlay (DCP Section 9.10.080). The proposed 5.0 FAR is based on recently approved projects to correspond to the increased height. The proposed FAR also accounts for the A
B
C
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size of parcels in the Gateway area and the standards necessary to achieve the 130 feet height limit.
Table 1 Gateway Sites – Development Standards
Current Standards
for Housing Projects
Current Standards
for Non-Housing
Projects
Proposed
Standards for ALL
Projects
Max Height 84 feet 84 feet (Tier 3)* 130 feet
Max FAR 4.0 3.5 (Tier 3)* 5.0
*Tier 3 requires the provision of community benefits and a Development Agreement process
The proposed standards would apply to all project types, including residential, commercial, hotel, office, institutional, and mixed-use development providing parity in development potential regardless of project type.
The DCP has long recognized Gateway sites as locations capable of accommodating development of greater scale and intensity. The proposed amendments would better align regulatory standards with the original vision of the Gateway Master Plan and create valuable opportunities for transformative projects that contribute to housing production, economic development, job creation, and fiscal sustainability. The proposed standards would also improve the economic feasibility of redevelopment on these sites and allow future projects to better capitalize on their strategic locations at key Downtown entry points.
Processing Thresholds for Gateway Sites
The DCP currently establishes the following processing thresholds for non-housing projects:
• Administrative Approval (no public hearing) – less than 10,000 SF • Development Review Permit (Planning Commission public hearing – 10,000 – 30,000 SF
• Negotiated Development Agreement – greater than 30,000 SF 8 of 13
In the years since the adoption of the DCP, no Development Agreement applications for non-housing projects have been received largely because new development in the Downtown has focused on housing projects, which have a streamlined approval process. Within the Gateway sites, proposals for non-housing projects have not been received.
As part of the Realignment Plan, Council endorsed exploring opportunities, including process flexibility, to activate the Gateway sites in order to unlock land value and redevelopment potential. Therefore, within the Gateway sites Council may wish to consider whether, instead of Development Agreements, non-housing projects should have a more streamlined and predictable entitlement process similar to housing projects.
The Planning Commission recommended:
• Administrative Approval (no public hearing) – up to 30,000 SF • Negotiated Development Agreement – greater than 30,000 SF The Commission’s recommendation was made in order to retain discretion over nonhousing projects in the Gateway area (which could be significantly larger) and to allow the City to negotiate community benefits.
However, staff has identified a policy question for Council to confirm whether there is agreement with the Planning Commission’s recommendation. In response to Council’s direction to explore process flexibility in the Gateway sites, staff separately recommends that the Council consider options that provide a more predictable process and that is based on the DCP’s existing development standards tier system instead of arbitrary project square footage. The table below shows the potential options and a summary of what each option would mean.
Policy Question 1:
What entitlement process should non-housing projects on Gateway sites be processed under?
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➢ Planning Commission Recommendation: Administrative Approval ministerial entitlement for projects up to 30,000 SF / Development Agreement for projects greater than 30,000 SF
➢ Alternative Options:
Option Description Type of Entitlement Size Threshold
1 Administrative
Approval provides
maximum
process certainty
for non-housing
projects
Administrative
Approval (no public
hearing)
No size limit
2 Permit process
connected to
existing DCP tier
system and FAR
limits
Administrative
Approval for Tier 1
FAR (no public
hearing)
Up to 1.75 FAR
Ex: 50,000 SF site x 1.75
FAR = 87,500 SF project
(current process for nonhousing projects less than
10,000 SF)
Development Review
Permit for Tier 2 FAR
(Planning Commission
public hearing)
Greater than 1.75 FAR and
up to 3.0 FAR
(current process for nonhousing projects between
10,000-30,000 SF)
Development
Agreement for Tier 3
FAR (City Council
public hearing)
Greater than 3.0 FAR and up
to 5.0 FAR
Ex: 50,000 SF site x 3.5 FAR
= 175,000 SF project
(current process for nonhousing projects greater than
30,000 SF)
Interrelated to the policy question above regarding what entitlement process nonhousing projects on Gateway sites should be reviewed and approved under, staff has the following policy questions regarding land use limitations and implementation of community benefits.
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Potential Land Use Limitations for Gateway Sites Process Streamlining The proposed increased height and FAR development standards would apply to all project types, including residential, commercial, hotel, office, institutional, and mixeduse development. Procedural modifications are also proposed to streamline review of non-housing projects on the Gateway sites. However, staff would like to confirm with the Council if there are uses that they would not want to be eligible for a potential ministerial entitlement process, such as hotel, motel, bed and breakfast inn, or other transient lodging, given past policy direction to exclude even housing projects that include these uses from the Administrative Approval process.
Policy Question 2:
On Gateway sites, should certain land uses exclude a project from a potential ministerial entitlement process regardless of size? For example, past policy direction has been to exclude projects that include hotel, motel, bed and breakfast inn, or other transient lodging uses from the Administrative Approval process (i.e.: would be required to go through a discretionary process).
➢ YES, exclude projects that contain certain uses from being processed through a ministerial process on Gateway sites. (Council to provide excluded uses) ➢ NO, allow ALL uses to be eligible for a ministerial entitlement process.
Implementation of Community Benefits for Gateway Sites
During Planning Commission’s discussion regarding Gateway sites, one of the main reasons the Commission recommended a Development Agreement be required for nonhousing projects greater than 30,000 SF was in order to ensure adequate community benefits are provided in exchange for the proposed increased development standards.
However, given the uncertainty and extensive process of a Development Agreement, an alternative approach staff would like to present to Council is to use the DCP’s existing structured community benefits system that is based on tiers. The current system requires a 23% increase in impacts fees above the base fee for the portion of the development exceeding Tier 1 standards (1.75 FAR/32’) to be paid in return for increases in permitted height and FAR. Additional Transportation Demand Management measures are also required.
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Policy Question 3:
To ensure proportionate community benefits are provided, should a tiered community benefits system similar to what is currently in place in the DCP be implemented in order for non-housing projects to be granted the proposed increases in height and FAR?
➢ YES, implement a tiered community benefits system for projects that exceed Tier 1 base standards (1.75 FAR/32’) similar to the current structure in the DCP in order for projects to access the proposed increased standards. ➢ NO, increased community benefits should not be required to access increased development standards.
Environmental Review
The amendment to exempt City-owned sites from the Zoning Ordinance is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the CEQA Guidelines. This amendment is a procedural change and therefore, no adverse environmental impacts would occur. Projects on a City-owned site would be subject to future review at the time they are proposed to determine the appropriate environmental documentation necessary for compliance with CEQA.
The proposed amendments regarding Gateway sites have already been subject to CEQA review and are within the scope of the previously prepared EIRs and Addendum.
The proposed amendment to increase the current standards for the Gateway sites to
5.0 FAR and a height of 130 feet for all projects have been previously analyzed in the certified DCP Environmental Impact Report (EIR) (State Clearinghouse No. 2013091056) and the 6th Cycle Housing Element EIR (State Clearinghouse No. 2020100575). Specifically, the DCP EIR analyzed up to 3,024 residential units and 1.71 million net new square feet of commercial development. A review of the City’s records indicates that development in the Downtown for residential and commercial development remains below what was analyzed in the DCP EIR. Therefore, increasing the standards for the three Gateway sites would not significantly increase forecasted commercial growth over what was analyzed in the DCP EIR. Anticipated increases in housing development at these Gateway sites have also been previously reviewed in the 6 th Cycle Housing Element EIR and subsequent Addendum, which analyzed up to the 12 of 13
development of 13,600 units in the City through 2030. Therefore, there are no impacts that were not analyzed in a prior EIR and there are no more severe impacts than those discussed in prior EIRs. Furthermore, the amendment to establish a new entitlement procedure for Gateway sites is administrative in nature and exempt pursuant to Section 15061(b)(3) of the CEQA Guidelines, 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 change in entitlement process is procedural. Therefore, it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
Past Council Actions
Meeting Date Description
October 28, 2025 Santa Monica Realignment Plan
March 24, 2026 Santa Monica Realignment Plan Update
Financial Impacts and Budget Actions
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: Ross Fehrman, Planning Manager
Approved Forwarded to Council
Attachments:
A. CDD-Ord-City-Owned Sites 07.14.2026
B. CDD-RESO-DCP-City-Owned Sites and Gateway Master Plan
07.14.2026_COMBINED
C. Written Comments
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D. PowerPoint Presentation