City Council
Report
City Council Meeting: October 27, 2026
Agenda Item: 12.A
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To: Mayor and City Council
From: Jing Yeo, Director, Administration
Subject: Introduction and First Reading of an Ordinance to Approve Development Agreement for a Digital Display Located at 1355 Third Street Promenade/301 Santa Monica Boulevard and the Installation of a Reconstructed Historic Blade Sign
Recommended Action
Staff recommends that the City Council:
1. Adopt findings of categorical exemptions pursuant to Sections 15301 (Existing Facilities), 15303 (New Construction or Conversion of Small Structures), 15311 (Accessory Structures), 15331 (Historical Resource Restoration/Rehabilitation), and 15332 (In-Fill Development Projects) of the California Environmental Quality Act (CEQA) Guidelines;
2. Introduce an Ordinance for first reading to approve Development Agreement 26ENT-0124 for a Digital Display Located at 1355 Third Street Promenade/301 Santa Monica Boulevard and the Installation of a Reconstructed Historic Blade Sign.
Summary
On June 2, 2026, the applicant, XYZ Now LLC, submitted Development Agreement (DA) application 26ENT-0124 for installation and operation of a new full motion, digital display at 1355 Third Street Promenade/301 Santa Monica Boulevard, the northeast corner of Third Street Promenade and Santa Monica Boulevard. The Digital Display will display paid on-premise and off-premise advertising and community content including civic announcements, community interest content, public safety information, public art programming, events information, and local business spotlights. The proposed DA also provides for the installation of a reconstructed historic blade sign for on-site 2 of 28
branding/identification of the building’s future tenants as well as an on-site commemorative installation depicting the history of the project site.
Discussion
On December 16, 2025, the City Council adopted the Downtown Digital Display District Ordinance (Santa Monica Municipal Code Section 9.61.205), establishing regulations that permit a limited number of digital displays within designated locations in Downtown Santa Monica as part of the City’s economic recovery strategy. The Digital Display District Ordinance allows up to 16 digital displays in the Downtown, which include 12 digital displays at designated corner locations along the Third Street Promenade and four digital displays at Santa Monica Place.
The Ordinance establishes the regulatory framework to enable large-format digital displays at the 16 permitted locations. The Ordinance establishes standards that would be applicable to all new digital displays, including but not limited to:
• Community Benefits • Design Authority
• Permitted Location • Requirements for Landmark Buildings • Display Type • Energy
• Projections/Encroachments • Hours of Operation
• Maximum Display Area • Maintenance
• Content • Illumination
• Audio
Each new digital display in the District is required to be processed through a development agreement and adhere to the requirements of the Ordinance.
To date, the Council has approved seven digital displays through four development agreements pursuant to the Ordinance, four at Santa Monica Place shopping center and three along the Promenade located at 1253 Third Street Promenade, 1202 Third Street Promenade, and 1310 Third Street Promenade. The proposed digital display at 1355 Third Street Promenade/301 Santa Monica Boulevard represents the eighth digital display proposed in the Downtown Digital Display District. The proposed DA for the Digital Display is being processed pursuant to the Ordinance and is required to provide meaningful community benefits.
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Staff recommends that the City Council consider the following key issues in its decision to approve the DA for the project:
• How well the proposed Digital Display, blade sign, and negotiated community benefits advances with the City’s vision of Downtown as a thriving economic and cultural center, consistent with the City’s Land Use and Circulation Element and Downtown Community Plan;
• The degree to which the project features and negotiated community benefits drives economic recovery and revitalization of the Third Street Promenade and the Downtown district as a whole;
• Whether the project design concept is appropriate to the existing Landmark building and surrounding context;
• Whether the proposed display provides innovation with civic responsibility; and • Whether the project and its community benefits supports the City’s public objectives for increasing economic investment, City revenue generation, cultural enrichment opportunities, and activation of public spaces to support community services and needs in Santa Monica.
Project Description
Application 26ENT-0124 is for a development agreement that would allow a new full motion, curved Digital Display proposed to be installed at the corner above the ground floor of the existing vacant commercial building at 1355 Third Street Promenade/301 Santa Monica Boulevard. The existing building is a multi-story commercial structure designated as a City Landmark (Junipher Building) and occupies one of the corner locations identified in the Ordinance as eligible for a digital display.
Address 1355 Third Street Promenade/301 Santa Monica Boulevard Parcel Size: Approximately 15,000 sf
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Zoning District: Downtown Community Plan – Bayside Conservation (BC) Existing On-Site
Improvements:
Display Type Building mounted, full motion
Dimensions Approximately 54’-9” width by 18’-3” by height Projections 8’ onto Promenade; 8’ onto Santa Monica Boulevard 5 of 28
Rendering of Proposed Digital Display
The proposed Digital Display, which would wrap the western and southern elevations of the building, has been designed in collaboration with a qualified historic preservation consultant. The display is elevated above the storefront but below the parapet of the building, preserving visibility of the Landmark’s important character defining features such as the terracotta stringcourse at top of storefronts and below the parapet. The proposed display incorporates a minimalist design, with a champagne bronze finish.
The display would provide approximately 1,000 square feet of display area with overall dimensions of approximately 54’-9” in width and 18’-3” in height. The design of the display has incorporated initial staff comments, with the bottom trim being reduced in width to ensure subtlety. The display is elevated above the first row of windows to preserve daylight into the ground-floor tenant spaces and minimize impacts to the primary façade.
Installation of the Digital Display would be conducted under the guidance of a structural engineer with experience in historic buildings. The display would be connected to the existing building via the use of outriggers. Where these connections occur, full face bricks of the building would be salvaged, crated, and stored onsite for future reinstallation.
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The distance from street level to the bottom of sign is approximately 25’. The display will be visible to drivers traveling eastbound on Santa Monica Boulevard and to pedestrians walking along the Third Street Promenade. The Digital Display would project out approximately 8’ onto the Promenade and 8’ into the Santa Monica Boulevard right-of-way. This projection would require an encroachment permit from the City’s Public Works Department and would be subject to Section 9.21.180 of the Santa Monica Municipal Code (SMMC) to ensure that it does not constitute a hazardous visual obstruction.
Additionally, in alignment with the building’s historical condition, the applicant proposes to install a two-sided, blade sign on the Santa Monica Boulevard façade of the building for on-premises tenant identification in support of the DA’s minimum building occupancy requirements. The blade sign, measuring approximately 19’-4” in height and 3’ in width, would re-construct an architectural sign feature that previously existed on the building for the Kress department store during its period of significance (1930s). The blade sign would be reconstructed in general conformance with the Secretary of the Interior’s Standards for the Treatment of Historic Properties and would consist of a painted metal sign panel with LED bulb lettering providing tenant identification. The blade sign would be oriented vertically and installed approximately 25’ above the sidewalk level to the bottom of the sign. The blade sign would connect to the existing building with the use of outriggers, providing a minimum 2” clearance from the sign to the building face. Similar to the Digital Display, where these connections occur, full face bricks of the building would be salvaged, crated, and stored onsite for future reinstallation. 7 of 28
Kress Department Store Blade Sign (1936)
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Proposed Reconstructed Blade Sign
Development Agreement Overview
DA’s are negotiated contracts between the City and an applicant that specify the design parameters, development standards, and requirements of a project. DA’s provide some flexibility from the development standards of the Zoning Code in return for some level of public benefit. While a DA 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 DA’s are negotiated contracts, both parties must agree to all terms. A DA is adopted by ordinance. Pursuant to a DA, the City can negotiate community benefits within the bounds of its police power and statutory authority.
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The proposed DA is included as Attachment C and is being processed in accordance with the Ordinance.
Terms of the Development Agreement
The applicant of the proposed Digital Display will be required to provide community benefits pursuant to the DA throughout the 30-year term of the agreement plus two 10- year options. Section 2.5 of the DA enumerates the negotiated community benefits for the project, which are generally established in the Ordinance. The applicant has proposed meaningful community benefits that include financial contributions and allocated display time for City art and community content. The following discussion presents a summary of the community benefits that have been negotiated in good faith between the City and applicant.
Financial Contribution
The installation of large format, digital displays on the Promenade provides a valuable opportunity to generate financial revenue for the City and to stimulate commercial activity in the City’s Downtown. Pursuant to the SMMC Section 9.61.205(F)(1), the DA for the project includes a revenue-sharing percentage along with a minimum annual guarantee that will be paid to the City. The required revenue-sharing and minimum annual guarantee model ensures that the City would receive a steady stream of financial proceeds that could be used for public improvements, citywide services, public arts progr
amming, and City programming. In addition, the applicant is providing a financial contribution for improvements to the Third Street Promenade.
Below is a summary of the financial terms for the proposed DA:
• One time community benefit payment of $30,000 to be used by the City for its evaluation of future improvements to the Third Street Promenade and/or implementation of proposed improvements to the Third Street Promenade. 10 of 28
• One time community benefit payment of $500,000 to be paid within 30 days of issuance of a Certificate of Occupancy or final building permit approval of the Digital Display. If this one-time payment is not made on or before June 30, 2027, the amount will escalate by 3% on June 30, 2027 and annually by 3% each June 30th thereafter until it is made.
• Ongoing community benefit payment in an amount equal to the greater of:
➢ The Revenue Share Contribution, which will be based on 20% of the annual gross revenue received for advertising on the display. This revenue share contribution shall be paid annually.
➢ Minimum annual guarantee (MAG) of $500,000 which shall be paid quarterly, with a 3% annual escalation starting on June 30, 2027 over the 30-year term of the agreement. This escalation rate reflects an average annual rate of inflation. Additionally, to account for market saturation as more digital displays become operational in the District, the MAG would de-escalate by 3% when the 10th digital display in the District “goes 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 SMMC Section 9.61.206(F)(2), the Applicant is required to allocate 20% of the total annual display time for community content such as civic news, public service announcements, emergency notifications, Amber Alerts, community event updates, and/or cultural arts.
Based on the permitted operational hours as established SMMC Section 9.61.205(G), up to 12 minutes of City and Art content would be displayed per hour for the Digital 11 of 28
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 SMMC Section 9.61.205(G), the operator of the Digital Display would be required to participate in a City-administered Digital Display City Content Program that will highlight civic information, cultural programming, and local art. The program would ensure that City and Art Content is displayed and managed in a coordinated manner through the City. This ensures that the Digital Display not only serves commercial purposes but also acts as public communication and cultural platforms, reflecting Santa Monica’s values of creativity, innovation, and civic pride.
Unlike traditional physical art installations, the proposed Digital Display offers the flexibility to continually refresh and rotate art content, creating opportunities for seasonal showcases, artist residencies, or themed collaborations. The required City and Art Content allocation 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.
Building Occupancy
The proposed Digital Display would also implement the City’s strategic economic development and placemaking goals, consistent with the objective of the Ordinance.
The existing commercial building has been vacant for more than six years. As an additional community benefit, the applicant is required to adhere to minimum building occupancy standards, which would reactivate the project site. As specified in the DA, no more than 50% of the rentable floor area within the existing building’s above grade levels (excluding the basements) or the entire ground floor level of the existing building is permitted to remain unoccupied for more than 12 months. If this occupancy threshold is not met, then the DA requires the MAG Contribution to be increased by 25% (non-compounded) on a daily basis. Additionally, the DA provides the City the right to shut off the display if the occupancy threshold is not met within three years and the right to terminate the DA if threshold is not met within five years. 12 of 28
Key Issues
Historic – The existing building at 1355 Third Street Promenade (the Junipher Building) was designated as a Santa Monica Landmark on September 8, 2014, and is recognized for its architectural significance and contribution to the historic commercial development of Downtown Santa Monica. Constructed during the period when the Third Street commercial corridor was evolving into Santa Monica's primary downtown shopping district, the building retains the architectural characteristics that define its historic significance. Despite alterations to portions of the ground floor storefront over time to accommodate changing commercial tenants, the building retains sufficient integrity to convey its historic significance through its massing, scale, architectural detailing, upper-story fenestration, decorative cornice line, and primary façade composition.
Character-defining features include, but are not limited to, the building's overall massing and corner orientation; symmetrical façade composition; vertical bays defined by pilasters; recessed window openings; decorative cornice, terracotta stringcourse at top of storefronts and below parapet, catenary hooks, masonry wall construction; and the rhythm and proportions of the upper-story fenestration. These architectural elements collectively convey the property’s historic significance and contribute to the character of the surrounding historic commercial streetscape. The proposed Digital Display has been designed to avoid permanent alteration of these character-defining features. According to the applicant’s historic preservation consultant, the installation has been designed to be reversible, allowing removal of the display in the future without permanently damaging the historic building fabric.
On July 13, 2026, the Landmarks Commission reviewed the proposed Digital Display and provided non-binding consultation regarding the display. Pursuant to SMMC Section 9.61.205(H)(7)(b), the City Manager certifies that, after consultation with the Landmarks Commission the proposed Digital Display:
• Is reversible in accordance with the Secretary of the Interior’s Standards; • Avoids materially impairing the significance of the designated Landmark; and 13 of 28
• Preserves the physical characteristics that convey the building’s historic significance behind the display.
Therefore, the City Manager certification is consistent with SMMC Section
9.61.205(H)(7)(b).
The Landmarks Commission also endorsed the concept of including an image of the existing Landmark building in its previous historic context on the Digital Display at regular intervals as part of the public programming, requested the applicant review the necessity of the “flair” of the display’s projection onto Santa Monica Boulevard, and endorsed the concept of a commemorative historic plaque to be installed at the property. Although the Landmarks Commission’s comments are non-binding, these suggestions have been incorporated into the DA. Specifically with regard to the Landmarks Commission’s concern about the angled “flair” of the display, the applicant has reduced the projection of the Digital Display onto Santa Monica Boulevard from 10’ to 8’.
A historic report (see Attachment D) was prepared by HRG, the City’s historic consultant, to analyze the potential effects of the proposed Digital Display and the blade sign on the significance and integrity of the existing Landmark building. The report determined that the proposed Digital Display would be installed in a manner that is reversible; would not materially alter the Junipher Building such that its significance would be materially impaired; and all physical characteristics that convey the Junipher Building’s significance would remain intact. While the display would partially obscure some features at the southwest corner of the building at the third and fourth floors, the partially obscured features would remain intact behind the display screen, and the rest of the building’s character-defining features, which constitute the majority of its exterior historic fabric, would remain fully visible. Specifically, the display would not affect the Junipher Building’s other distinctive features and materials including its form and massing, tripartite articulation, symmetrical composition, glazed face brick veneer, pilasters, mullions, fenestration, terracotta stringcourses, cornices, and architectural terracotta ornament, which will remain intact and visible. 14 of 28
Additionally, the metal blade sign would be compatible in size, scale, proportion, and design with the Junipher Building; is located at the building’s southeast corner and as such, would not damage or obscure character-defining features and materials; and would be consistent with historic signage utilized at the Junipher Building during the period of significance, including previous blade signs. Therefore, the Digital Display and the blade sign would not cause a substantial adverse change in the significance of the Landmark and/or Landmark Property and would not have a significant effect on the environment as defined by CEQA.
Tree Removal – The applicant is proposing the removal of the first two existing street trees along the north side of Santa Monica Boulevard, west of the Promenade to provide an unobstructed viewshed of the proposed Digital Display for vehicles traveling eastbound on Santa Monica Boulevard. The two street trees are Koelreuteria bipinnata trees, one measuring approximately 11” in diameter (Tree A) and the other approximately 3.8” in diameter (Tree B). The applicant commissioned a tree report to assess the condition of the street trees and their viability for relocation. The report determined that due to their compromised conditions, both existing street trees should be removed - with the second smaller tree (Tree B) relocated to another location. 15 of 28
Location of Proposed Street Tree Removals
The Urban Forest Commission, the City’s advisory body for street tree removals, requested review of the proposed Digital Display and the applicant’s proposed street tree removals. Pursuant to the Urban Forest Commission’s request, the applicant presented information on the proposed removal of the two street trees and the proposed restitution set forth in the DA, detailed below, at their September 9, 2026 meeting. After discussion and review, the Urban Forest Commission expressed general reluctance for removal of otherwise healthy street trees for digital displays and indicated that approval of the applicant’s tree removal request would establish a precedent for future requests.
Therefore, the Urban Forest Commission recommended denial of removal of the two street trees.
The City’s Public Landscape Division agrees that there is an unavoidable conflict between the Digital Display authorized by the DA and the Digital Display District 16 of 28
Ordinance, on the one hand, and Tree A and Tree B, on the other hand. This conflict cannot be sufficiently mitigated through periodic pruning of the two street trees, nor through redesign/repositioning of the Digital Display because the Digital Display’s positioning – generally located above the second floor windows and below the top of the fourth floor windows of the Landmark building – corresponds with: (a) guidance of a Qualified Historic Preservation Professional using the Secretary of the Interior’s Standards for the Treatment of Historic Properties, including the importance of ensuring that the character-defining terracotta stringcourse at the top of the storefronts and below the parapet will remain fully exposed consistent with the Existing Building’s designation as a City Landmark and (b) the viewshed necessary to support the Digital Display’s financial success and viability, including the need to support the community benefits required by the Digital Display District Ordinance and the DA. The City’s Public Landscape Division has further determined that Tree A is not a good candidate for relocation due to its current health.
The DA thus proposes that the City remove and replace Tree A and Tree B, subject to the following conditions:
1. Owner must provide City with written notice of commencement of construction of the Digital Billboard no earlier than ninety (90) days prior to the anticipated commencement of construction (“Notice of Construction”);
2. Concurrently with the Notice of Construction, Owner must pay to the City the amount of Twenty Thousand Dollars ($23,000) (the “Street Tree Contribution”), to cover the following: (A) the value of Tree A, (B) the cost of removing Tree A and Tree B, (C) the cost of replacing Tree A and Tree B with a species that is a single trunk specimen with mature maintenance height of 10 to 12 feet (“Replacement Trees”). The final determination of the species satisfying this criterion will be selected by the City’s Urban Forester, including, for example, a Marina Strawberry Tree or Tristaniopsis laurnina ‘Luscious” species or similar stature species; (D) the cost of transplanting Tree B to another location that does not impair viewing of the Digital Display; (E) the cost of planting two new street trees of species determined by the Urban Forester in any vacant tree wells within 17 of 28
Downtown Santa Monica; and (F) costs of ancillary sidewalk and/or hardscape repairs.
3. Upon receiving the Notice of Construction and the Street Tree Contribution, City will have up to sixty (60[PL3.1]) days to remove Tree A and Tree B. The City will have no obligation to remove the trees until Owner has obtained a building permit for the Digital Display.
The City will generally maintain a normal and customary schedule for tree maintenance.
Owner may maintain and/or prune the Replacement Trees to supplement the City’s level of maintenance and/or pruning under the guidance of a licensed arborist and solely to avoid them growing beyond a stabilized mature maintenance height of 10 to 12 feet; provided that Owner obtains the prior approval of the City’s Urban Forester and any required City permits.
Blade Sign - Subsequent to submittal of the DA application and after review by the Landmarks Commission, the applicant requested that the proposed DA include the approval of the blade sign to facilitate commercial leasing of the existing building to support compliance with the building occupancy standards in the DA. Typically the blade sign would require a sign adjustment, as it exceeds the size and placement limitations in the Sign Code, and approval of a Certificate of Appropriateness as an alteration to a designated historic resource. The DA would streamline the approval process by having the City Council make the findings for the sign adjustment and assess its consistency with the findings for a Certificate of Appropriateness for the blade sign since no Certificate of Appropriateness or other Landmarks Commission review would be required for its installation. This streamlined approval of the reconstructed blade sign would allow the sign to be utilized for tenant identification (an important consideration for attracting and securing future tenants), thereby supporting compliance with the DA’s building occupancy requirements for a building which has been vacant for more than six years.
The DA authorizes approval of a sign adjustment for the Blade Sign, subject to the 18 of 28
following required findings pursuant to SMMC Section 9.61.130:
1. The strict application of the provisions of the Sign Code would result in practical difficulties or unnecessary hardships for the business or property owner, which would be inconsistent with the purposes of the Sign Code, and which would arise from unique physical or topographic circumstances or conditions of project design;
2. The granting of the requested variance would not constitute a grant of special privilege inconsistent with limitations imposed on similarly zoned properties or inconsistent with the purposes of the Zoning Ordinance;
3. The granting of the requested variance would not be incompatible with other nearby signs, other elements of street and site furniture, or with adjacent structures. Compatibility shall be determined by the relationships of the elements of form, proportion, scale, color, materials, surface treatment, overall sign size and the size and style of lettering; and
4. The granting of the variance would not be inconsistent with the purposes of the Sign Code.
As stated in the findings provided in Attachment E, the requested sign adjustment is warranted because strict application of the Sign Code would create practical difficulties for the Landmark property by preventing the reconstruction of a historically significant upper-level blade sign in its original location and orientation. The approximately 60- square-foot, double-sided sign is substantially larger than the maximum allowable sign area in the Sign Code, but the additional sign area is necessary to maintain its historic visibility, particularly given existing street trees. The adjustment would not constitute a special privilege because the building, which is a designated historic resource that was originally constructed in 1912 and the original blade sign predates the prohibition on upper-level signage. The proposed blade sign reconstructs an important architectural and tenant-identification feature that historically characterized the building. The blade sign is appropriately scaled and compatible with the Landmark building and surrounding streetscape, is located near the Third Court alley, and will not detract from nearby businesses. Additionally, the Blade Sign replaces a similar sign for Kress department 19 of 28
store that adorned the building during the 1930s.The adjustment is consistent with the purposes of the Sign Code because the reconstructed sign is historically accurate, integrated with the building’s distinctive Beaux Arts design, and enhances the building’s architectural character and visibility while serving its tenant-identification function.
In addition, as analyzed in HRG’s historic report, the proposed blade sign complies with SMMC Section 9.56.140(A) and the required Certificate of Appropriateness finding in that the proposed work would not detrimentally change, destroy or adversely affect any exterior feature of the Landmark or Landmark Parcel upon which such work is to be done. As discussed above, the blade sign would be compatible in size, scale, proportion, and design with the Junipher Building; is located at the building’s southeast corner and as such, would not damage or obscure character-defining features and materials; and would be consistent with historic signage utilized at the Junipher Building during the period of significance, including previous blade signs.
As established in the DA, any future changes to the on-premises lettering and/or logo affixed to the reconstructed Blade Sign would be processed through the issuance of a staff-level certificate of appropriateness from the Landmarks Commission Secretary. An encroachment permit from the City’s Public Works Department will be required and would be subject to SMMC Section 9.21.180, Hazardous Visual Obstructions, to ensure that it does not constitute a hazardous visual obstruction. The DA allows the blade sign to remain as a nonconforming sign pursuant SMMC Section 9.61.240, Removal or Modification of Nonconforming Signs, after termination of the DA.
Lighting/Driver Distraction – There are no light sensitive uses adjacent to the property.
As required by the Ordinance, the display would be required to comply with the illumination and driver distraction safety standards established in SMMC Section
9.61.205(I). A Lighting Study would be required prior to the issuance of the permit for construction of the display to ensure compliance with these standards.
Community Outreach
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On July 9, 2026, at 6:00 pm, the applicant held an on-line community meeting for the project, via Zoom. The community meeting was also noticed, including the meeting Zoom link, on the on-site signage, as well as on the home page of the website for the project. There were no attendees despite the public noticing that was provided.
Public hearing notices for the Planning Commission’s discussion were mailed 20 days prior to the hearing date to all residents and property owners within 750’ of the subject property and mailed to community members who have previously attended meetings or requested to be placed on the project mailing list, exceeding the noticing requirements for a public hearing by the Planning Commission under SMMC 9.60.100.
Planning Commission Review
On October 7, 2026, the Planning Commission conducted a public hearing to consider a recommendation to the City Council on the DA. The Commission was generally in support of the project but expressed concern about the removal of the existing street trees. The Commission voted to recommend approval of the DA to City Council with the condition that the proposed restitution amount for the street trees be increased to the equivalent of filling two additional tree wells within the Downtown area. In response to the Commission’s recommendation, the applicant has proposed the restitution to be increased to $23,000.
Development Agreement Findings
In order to approve the DA, the City Council is required to determine that it meets the findings of 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 Findings
1. The proposed Development Agreement is consistent with the objectives, policies, general land uses and programs specified in the general plan and any applicable specific plan. The project site is located in the Land Use and Circulation Element’s Downtown District and has a Downtown Core General Plan Land Use 21 of 28
Designation. Goals and policies in this District are geared primarily toward reinforcing the Downtown as the focus of the City, encouraging a broad mix of uses and new investment in the District that creates dynamic daytime and evening activity, and reinforces the Downtown as the place with the greatest concentration of activity in the City. The proposed Development Agreement supports the City’s goals to encourage economic vitality, enhance placemaking, and promote creative, high-quality design within the Downtown. Goal LU2 establishes Downtown as a thriving creative and cultural center with a unique concentration of innovative businesses, performance spaces, museums and programmed events. The proposed 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 proposed 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 proposed Development Agreement is compatible with the uses authorized in the district in which the real property is located, in that the project site is located within the Downtown – Bayside Conservation (BC) District, which permits a variety of active commercial and entertainment-oriented uses. The proposed Digital Display would complement the existing entertainment, retail, dining, and visitor activities. It will enhance the visual and economic activity of the Promenade while complying with operational and design standards established in the Digital Display District Ordinance, including limits on brightness, operating hours, and maintenance. These measures ensure the display complements the district’s entertainment character without negatively affecting nearby light-sensitive residential uses. The proposed 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 22 of 28
experience and Policy PPS4.3 calling for the Third Street Promenade to be regularly updated to remain consistent with the surrounding areas in terms of infrastructure, landscaping, signage and aesthetic upgrades.
3. The proposed Development Agreement is in conformity with the public necessity, public convenience, general welfare, and good land use practices by establishing clear parameters for the Digital Display design, operation, and maintenance, while providing substantial community benefits. These include revenue-sharing with the City, a minimum annual financial guarantee, and a 20% allocation of 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 proposed 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 proposed Development Agreement will not be detrimental to the health, safety and general welfare. The proposed 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 display incorporates automatic dimming technology and is required to power off between 1:00 a.m. and sunrise. The Digital Display will not show flashing or scrolling text and other visual effects that could compromise safety. Collectively, these measures ensure the display operates safely and responsibly without detrimental impacts to the public or surrounding community.
5. The proposed Development Agreement will not adversely affect the orderly development of the property in that the Digital Display will be installed on an existing commercial building, designed to integrate architecturally with the structure. The proposed Development Agreement includes building occupancy 23 of 28
standards to promote active ground-floor use, thereby supporting economic activity and maintaining the vitality of the Promenade.
6. The proposed 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 proposed Development Agreement will also include a one-time payment contribution to the City upon completion of the Digital Display and a financial contribution for Downtown improvements. In addition, by activating a key Promenade intersection and attracting visitors, the project will contribute to increased economic activity, benefiting nearby businesses and generating additional tax revenues for the City.
SMMC Section 9.61.205(F)(16) Findings
1. The Digital Display is consistent with the goals, objectives, purposes and provisions of the Santa Monica Land Use and Circulation Element 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 Land Use and Circulation Element and Downtown Community Plan. As indicated above, the proposed Digital Display aligns with the City’s efforts to reinvigorate the Third Street Promenade and surrounding areas as a vibrant, pedestrian-oriented entertainment district.
2. The Digital Display complies with the regulations established in the Digital Display District Ordinance. The proposed Digital Display complies with all applicable standards and requirements established in the Digital Display District Ordinance for the Third Street Promenade. The project adheres to regulations 24 of 28
governing display size, design review, energy use, illumination, hours of operation, and content.
3. The Digital Display would not otherwise result in a threat to the general health, safety, and welfare of City residents, based on factors including but not limited to such factors as distracted driving, pedestrian and driver safety, light and glare, or aesthetics. The Digital Display would implement multiple safeguards developed through the City’s Digital Display District Ordinance and supporting Lighting Study, which evaluated potential light and glare impacts for all anticipated display locations within the District. The display is designed and regulated to minimize driver distraction and visual clutter through controlled transition speeds, fade effects, and the prohibition of flashing, scrolling, or strobing imagery. Light levels are limited to prevent excessive brightness and protect nearby residences from glare or light trespass. Automatic dimming and shutoff systems will continuously adjust luminance based on ambient lighting conditions, and the display will remain off between 1:00 a.m. and sunrise. These requirements ensure the display operates in a manner consistent with pedestrian and driver safety, visual comfort, and the City’s aesthetic and environmental goals.
4. The Digital Display provides substantial economic and public benefits that would not otherwise accrue to the public in the absence of its installation. The DA includes a revenue-sharing model and a minimum annual guarantee that will generate consistent, long-term funding to support City programs, public improvements, and community services. The display will also allocate 20% of total annual operating time for City and Art content, such as public safety messages, community events, and public art, enhancing the City’s public communication and cultural programming. The DA contributes to Downtown revitalization efforts by providing a monetary contribution to Downtown improvements, activating a highly visible corner on the Third Street Promenade, supporting local businesses, and strengthening the area’s identity as a premier entertainment and cultural destination.
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Environmental Review
As further detailed in the CEQA analysis, the proposed Digital Display is categorically exempt from CEQA pursuant to Section 15301 (Class 1 – Existing Facilities), Section 15303 (Class 3 - New Construction or Conversion of Small Structures), and Section 15311 (Class 11 - Accessory Structures), Section 15331 (Class 31 - Historic Resource Rehabilitation/Restoration), and Section 15332 (Class 32 – Infill Projects) of the CEQA Guidelines.
• Section 15301 of the CEQA Guidelines exempts the operation, repair, maintenance, permitting, or minor alteration of existing public or private structures, facilities, mechanical equipment or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. Projects that fall into this class of exemption include interior or exterior alterations and new copy on existing on and off-premise signs and additions to existing structures provided that the addition will not result in an increase of more than: (1) 50 percent of the floor area of the structures before the addition, or 2,500 square feet, whichever is less; or (2) 10,000 square feet. The Digital Display that would be affixed to the existing building and the installation of the blade sign would result in a minor alteration of the existing building. No expansion of the land uses or existing structure is proposed. Therefore, the project is exempt under Section 15301.
• Section 15303 of the CEQA Guidelines exempts the construction and location of limited numbers of new small facilities or structures; installation of small new equipment and facilities in small structures; and the conversion of existing small structures from one use to another where only minor modifications are made in the exterior of the structure. Projects that fall into this class of exemption include accessory (appurtenant) structures including garages, carports, patios, swimming pools, and fences. The Digital Display would be an accessory structure to the existing building and therefore, is exempt under Section 15303. • Section 15311 of the CEQA Guidelines exempts the construction, or placement of minor structures accessory to (appurtenant to) existing commercial, industrial, or institutional facilities. Projects that fall into this class of exemption include 26 of 28
construction, or placement of minor structures accessory to (appurtenant to) existing commercial, industrial, or institutional facilities, including but not limited to: (a) On-premise signs. The Digital Display would be an accessory structure to existing building, and therefore, is exempt under Section 15311. • Section 15331 of the CEQA Guidelines exempts projects limited to maintenance, repair, stabilization, rehabilitation, restoration, preservation, conservation or reconstruction of historical resources in a manner consistent with the Secretary of the Interior’s Standards for the Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring, and Reconstructing Historic Buildings (“the Standards”). As analyzed in the Historic Resources Assessment report, the project conforms with all the Standards, except Standards 2 and 9. As noted in the Secretary of the Interior’s Guidelines, “the Secretary of the Interior’s Standards for Treatment of Historic Properties are only regulatory for projects receiving federal grant-in-aid funds otherwise, the Standards and Guidelines are intended only as general guidance for work on any historic building.). Therefore, as discussed in detail in the attached CEQA analysis, since the digital display is designed to be reversible and is generally consistent with all but two of the Standards, the project is exempt pursuant to Section 15331. • Section 15332 of the CEQA Guidelines exempts projects characterized as in-fill development meeting the conditions below.
o The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations.
o The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses. o The project site has no value, as habitat for endangered, rare or threatened species.
o Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality.
o The site can be adequately served by all required utilities and public services.
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The project meets the qualifications of the in-fill exemption as it would be generally consistent with the general plan, and would be installed on a site of no more than 5 acres in an urban area that has no value for endangered, rare, or threatened species.
Additionally, the installation of the Digital Display would not result in significant effects related to traffic, noise, air quality or water quality, and the displays can be adequately served by all required utilities and public service. Therefore, the project is exempt under Section 15332.
In addition, none of the exceptions specified in Section 15300.2 of CEQA Guidelines would apply that would preclude the use of these CEQA exemptions as indicated in the CEQA analysis. Therefore, the project is categorically exempt pursuant to Sections 15301, 15303, 15311, 15331, and 15332 of the CEQA Guidelines.
Past Council Actions
Meeting Date Description
December 16, 2025 Council adoption of the Digital Display District Ordinance for the Third Street Promenade and the Santa Monica Place
shopping center
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of recommended action. Staff will return to Council if specific budget actions are required in the future.
Approval of the DA is expected to generate revenue to the City’s General Fund of approximately $500,000 in the first year after the Digital Display is completed and operational, based on the MAG established in the DA. Additionally, as an added community benefit that is required in the Ordinance, the City will receive a one-time contribution payment of $500,000 per display (which will escalate by 3% starting on June 30, 2027 and annually thereafter). The DA also specifies a one-time community benefit payment of $30,000 to be used by the City for its evaluation of future improvements to the Third Street Promenade.
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Prepared By: Rachel Kwok, Environmental Planner
Approved Forwarded to Council
Attachments:
A. A. 1355 3rd DA 2026.10.20
B. B. Digital Display Exhibit B-1_2026.10.19
C. C. Blade Sign Exhibit B-2_2026.10.19
D. D. HRG_Report_1355 3rd St_Sep 2026
E. E. Heritage Conformance Review Memo 2026.07.08
F. F. Heritage Blade Sign Reconstruction Report 2026.09.09 G. G. Sign Adjustment Findings Council
H. H. City Manager Certification 9.61.205(H)(7)(b)
I. ORD-ord-First Reading 1355 3rd DA