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City Council Meeting: October 27, 2026 Santa Monica, California ORDINANCE NUMBER __________ (CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA APPROVING THE DEVELOPMENT AGREEMENT
BETWEEN THE CITY OF SANTA MONICA, A MUNICIPAL CORPORATION, AND XYZ NOW LLC, A CALIFORNIA LIMITED LIABILITY COMPANY (“OWNER”) TO ALLOW A DIGITAL BILLBOARD DISPLAY AT 1355 THIRD STREET PROMENADE WHEREAS, pursuant to California Government Code Section 65864 et seq. and Chapter 9.60 of the Santa Monica Municipal Code (collectively, the “Development Agreement Statutes”), the City is authorized to enter into binding development agreements with persons or entities having a legal or equitable interest in real property for the development of such real property; and
WHEREAS, Owner is the owner of approximately 7,483 square feet of land located in the City of Santa Monica, State of California, commonly known as 1355 Third Street Promenade and also known as 301 Santa Monica Boulevard, as more particularly described in Exhibit “A” attached to the Development Agreement (the “Property”); and
WHEREAS, the Property is developed with an existing approximately 18,439 square foot commercial building includes approximately 18,439 rentable square feet above grade excluding the basements (the “Existing Building”); and 2 of 17
WHEREAS, the City has included the Property within the Downtown Core land use designation under the City’s Land Use and Circulation Element of its General Plan (the “LUCE”). The Property is in the Bayside Conservation “BC” (Promenade) District under the Downtown Community Plan (“DCP”) and is located within the Bayside Conservation “BC” (Third Street Promenade Area) designation under the City’s Zoning Ordinance and is located within the boundaries of the Digital Display District. The Property is also located in the California Coastal Zone; and WHEREAS, on September 8, 2014, the Santa Monica Landmarks Commission designated the Existing Building as a City Landmark and the Property as a Landmark Parcel. (13-LM-011.); and
WHEREAS, the City and Owner desire to allow Owner to install, operate, maintain, and repair a high-quality LED digital display and associated sign structure (the “Digital Display”) on the Existing Building for displaying paid static or full motion on-premises and/or off-premises advertising, artistic creations, civic announcements of public interest or importance and content promoting the City and/or its rich history, including Downtown Santa Monica and the Third Street Promenade. The operation of the Digital Display will generate revenues for the City through the Community Benefit Payment set forth in the Development Agreement; and
WHEREAS, Owner has advised the City of Owner’s intent to allow a third-party billboard operator to operate and own, lease, or license the Digital Display from Owner during the term of the Development Agreement; and
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WHEREAS, on June 3, 2026, Owner filed an application for a Development Agreement (26ENT-0124), pursuant to Santa Monica Municipal Code (“SMMC”) Section
9.60.020 (the “Development Application”). The Development Application proposes an approximately one thousand (1,000) square foot full motion, animated Digital Display to be installed under guidance by a Qualified Historic Preservation Professional to wrap around the corner of the west and south facades of the Existing Building generally above the second floor windows and below the top of the fourth floor windows; and WHEREAS, the design of the Digital Display is more particularly depicted on the Digital Display Plans dated October 19, 2026 (the “Digital Display Plans”) attached as Exhibit “B-1” to the Development Agreement; and
WHEREAS, after filing the Development Application, Owner made a request to add an historic blade sign for on-site advertising of future tenants of the Existing Building that could be approved as part of the Development Application both (a) to streamline the approval process and (b) because Owner believes this additional tenant signage could facilitate leasing of the Existing Building; and WHEREAS, the design of the blade sign is more particularly depicted on the Blade Sign Plans dated October 19, 2026 (the “Blade Sign Plans”) attached as Exhibit “B-2” to the Development Agreement; and
WHEREAS, prior to filing the Development Application, a Qualified Historic Preservation Professional (as defined in Article 1 of Development Agreement) was retained by the applicant team to advise it with respect to the location/positioning and design of the Digital Display and, more recently, the Blade Sign. Subsequent to filing the 4 of 17
Development Application, City also retained a Qualified Historic Preservation Professional to advise it with respect to the location/positioning and design of the Digital Display and Blade Sign; and
WHEREAS, prior and subsequent to filing the Development Application, Owner held a virtual community meeting and also held meetings with community members and stakeholders, including various preservation advocates, regarding the Digital Display and Development Agreement. Following some of that initial outreach, Owner elected to pursue reconstruction of the historic Blade Sign as well, as added incentive to attract quality tenants for the Existing Building and in an effort to evoke more of the Existing Building’s history.; and
WHEREAS, Owner has paid all necessary costs and fees associated with the City’s processing of the Development Application and Development Agreement; and WHEREAS, the primary purpose of the Development Agreement is to allow for a Digital Display on the Property to (1) create a visually stimulating and informative experience at the corner of Santa Monica Boulevard and the Third Street Promenade; (2) promote the City, including the Third Street Promenade, and the arts, (3) attract visitors and patrons to the Promenade; (4) complement the City’s Entertainment District; as well as (5) generate a new source of revenue for the City, while at the same time respecting the prominence of the Existing Building, a City-designated Landmark and its Beaux Arts inspired design and character-defining features. The Parties desire to enter into the Development Agreement in conformance with the Development Agreement Statutes in order to achieve the development of the Digital Display and Blade Sign on 5 of 17
the Property. The purposes of the Blade Sign are (1) facilitate occupancy of the building as required by Section 2.5.5 of the Development Agreement and (2) reestablish an aspect of the Existing Building’s historic architectural integrity; and WHEREAS, the Digital Display and Blade Sign are also consistent with and implements numerous LUCE, DCP, and Historic Preservation Element goals and policies including:
• LUCE Goal D1 - “Maintain Downtown’s competitive advantage as a premier local and regional shopping, dining, and entertainment destination, and support its evolution in order to respond to changing market conditions.” • LUCE Goal E1 - “Create an economic base that satisfies the commercial service needs of the City’s residents while providing employment opportunities and a strong fiscal infrastructure for the City.” • LUCE Goal E4 - “Support the retail sector in order to provide for the needs of local residents and visitors and augment sales tax revenues.” • LUCE Policy E1.1 – “Make land use decisions that respond to changing market conditions and meet the needs of City residents and visitors.” • LUCE Goal HP 1 - “Preserve and protect historic resources in Santa Monica through the land use decision-making process.”
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• LUCE Policy HP 1.3 - “Ensure that new development, alterations or remodeling on, or adjacent to, historic properties are sensitive to historic resources and are compatible with the surrounding historic context.” • LUCE Goal HP 2 - “Preserve and protect historic resources through the development of economic incentives and neighborhood conservation approaches.”
• LUCE Policy E4.6 - “Support Downtown as Santa Monica’s primary destination for comparison retail, including a mix of local, national and international shops and restaurants that serve residents, visitors and area employees.”
• DCP Goal CCP2 - “Downtown continues to be a thriving and diverse economic force that supports the city’s vitality, fiscal stability and high levels of community services.”
• Goal CCP5: The Third Street Promenade continues to anchor the Downtown’s retail and public space experience with updated features and activities.
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• Policy CCP5.1 New public art should be encouraged and located to enhance the pedestrian experience and create an immersive arts experience.
• Action CCP5.1A Install Pathway Art, Banners and Urban Design Features to support the walking experience and to promote awareness of Downtown’s cultural offerings.
• Policy CCP5.2 Consider opportunity for negotiated development agreement art contributions to be aggregated in order to facilitate the acquisition of significant public art pieces.
• DCP Goal LU3 - “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.”
• “The Bayside Conservation district is considered the pedestrian and economic heart of the City. Anchored by the Third Street Promenade, it is a vibrant urban atmosphere supported by a broad mix of building types, office space, entertainment, retail, restaurants, cafes, salons and exercise studios.
The DCP supports the continued expansion of the central retail district by increasing the energy and pedestrian traffic on streets around the Promenade.” (DCP p. 22-23.)
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• Historic Preservation Element Goal 3 – “Increase public awareness of the history of Santa Monica and historic preservation in the City.” • Historic Preservation Element Objective 3.2 – “Promote the benefits of owning historic property.”
• Historic Preservation Element Objective 3.8 – “Encourage the installation of plaques and/or public art related to historic buildings and sites in the City.” • Historic Preservation Element Policy 3.8.3 – “Investigate the possibility of coordinating historic preservation and public art programming.” • Historic Preservation Element Policy 4.1.3 – “Allow for appropriate additions to and adaptive reuse of historic resources.”
• Historic Preservation Element Goal 5 – “Promote the preservation of historic and cultural resources through incentives and technical assistance.” • Historic Preservation Element Objective 5.2 – “Promote and award incentives.”
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WHEREAS, the City Council has determined that a development agreement is appropriate for the proposed development of the Digital Display and Blade Sign on the Property. The Development Agreement will (1) eliminate uncertainty in planning for the Digital Display and Blade Sign and will result in the orderly development of (i) the Digital Display in accordance with the Digital Display District Ordinance and (ii) Blade Sign in accordance with the Santa Monica Municipal Code (SMMC) findings and criteria, (2) assure installation of necessary improvements on the Property, (3) provide for public infrastructure and services appropriate to development of the Digital Display and Blade Sign, (4) secure for the City improvements that benefit the public, (5) ensure the provision of community benefits as envisioned in the LUCE, DCP, and the Digital Display District Ordinance, and (6) otherwise achieve the goals and purposes for which the Development Agreement Statutes were enacted; and
WHEREAS, the City Council has also determined that the Blade Sign meets the sign adjustment findings in SMMC Section 9.61.130; and
WHEREAS, the City Manager has certified, after non-binding consultation with the Landmarks Commission at a duly noticed public hearing, and in accordance with SMMC Section 9.56.140, that:
i. The Digital Display is installed in a manner that is reversible as defined by the Secretary of the Interior Standards for the Treatment of Historic Properties; ii. The Digital Display will not materially alter the existing building such that its significance would be materially impaired; and
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iii. All physical characteristics that convey the existing building's significance will remain intact behind the Digital Display screen, as determined by a qualified historic preservation professional; and
WHEREAS, the Development Agreement is consistent with the public health, safety, and welfare needs of the residents of the City and the surrounding region. The City has specifically considered and approved the impacts and benefits of the development of the Digital Display on the Property in accordance with the Development Agreement. The Digital Display will provide a number of significant project and community benefits as set forth in Section 2.5 of Development Agreement; and WHEREAS, the City Council has found that the provisions of Development Agreement are consistent with the relevant provisions of the City’s General Plan, including the LUCE, the DCP, the Digital Display District Ordinance, and the 1992 LUP; and
WHEREAS, on July 13, 2026, the City’s Landmarks Commission held a duly noticed public hearing on the Digital Display and Development Agreement; and WHEREAS, on October 7, 2026, the City's Planning Commission held a duly noticed public hearing on the Development Application and Development Agreement, and at such hearing, the Planning Commission recommended that the City Council approve the Digital Display including the Development Agreement; and WHEREAS, on October 27, 2026, the City Council held a duly noticed public hearing on the updated Development Application and Development Agreement, and at 11 of 17
such hearing the City determined the Digital Display is exempt from the California Environmental Quality Act (“CEQA”) pursuant to a Class 1 exemption (existing facilities) per CEQA Guidelines Section 15301, a Class 3 exemption (new construction or conversion of small structures) per CEQA Guidelines Section 15303, a Class 11 exemption (accessory structures) per CEQA Guidelines Section 15311, a Class 31 exemption (historical resource restoration/rehabilitation), and a Class 32 categorial exemption (in-fill development) per CEQA Guidelines Section 15332.
WHEREAS, the proposed Development Agreement, which is attached hereto as Exhibit “A” to this ordinance, conforms to the requirements of Government Code sections 65450 et seq. as well as the requirement of Chapter 9.60 of the Santa Monica Municipal Code (Development Agreements); and
WHEREAS, the City Council, after consideration of all oral and written testimony presented at the duly noticed meeting of the City Council on October 27, 2026, made the following findings (collectively, “the Findings”):
Development Agreement Findings
1. The Development Agreement is consistent with the objectives, policies, general land uses and programs specified in the general plan and any applicable specific plan. The 1355 3rd Street Promenade site is located in the LUCE’s Downtown District and has a Downtown Core General Plan Land Use Designation. Goals and policies in this District are geared primarily toward reinforcing the Downtown as the focus of the City, encouraging a broad mix of uses and new investment in the District that creates dynamic daytime and evening activity, and reinforces the 12 of 17
Downtown as the place with the greatest concentration of activity in the City. The 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 Development Agreement is consistent with Goal LU3, which imagines Santa Monica’s Downtown continues to be the economic center for the City, providing a diverse and flexible mix of uses that can meet future resident, business and visitor demand and also consistent with Goal CCP2 which calls for Downtown to be a thriving and diverse economic force that supports the city’s vitality, fiscal stability and high levels of community services. The Development Agreement is also aligned with Goal CCP5: The Third Street Promenade continues to anchor the Downtown’s retail and public space experience with updated features and activities.
2. The Development Agreement is compatible with the uses authorized in the district in which the real property is located, in that the project site is located within the Downtown – Bayside Conservation (BC) District, which permits a variety of active commercial and entertainment-oriented uses. The proposed Digital Display and Blade Sign 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 13 of 17
maintenance. These measures ensure the display complements the district’s entertainment character without negatively affecting nearby light-sensitive residential uses. The Development Agreement is also consistent with Policy CCP5.1 that states new public art should be encouraged and located to enhance the pedestrian experience and create an immersive arts experience and Policy PPS4.3 calling for the Third Street Promenade to be regularly updated to remain consistent with the surrounding areas in terms of infrastructure, landscaping, signage and aesthetic upgrades.
3. The Development Agreement is in conformity with the public necessity, public convenience, general welfare, and good land use practices by establishing clear parameters for 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 display time for civic and cultural content such as public safety messages, community event information, and local art. Consistent with the Digital Display District Ordinance, the Development Agreement also advances good land use practices by concentrating digital displays within a focused geographic area and ensuring high-quality design standards that reinforce the City’s goals for a safe, engaging, and economically vibrant urban environment.
4. The Development Agreement will not be detrimental to the health, safety and general welfare. The Development Agreement includes multiple safeguards to protect public health and safety. Illumination levels, transition speeds, and display operations are regulated to minimize glare, driver distraction, and light spillover 14 of 17
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 driver safety. Collectively, these measures ensure the display operates safely and responsibly without detrimental impacts to the public or surrounding community.
5. The Development Agreement will not adversely affect the orderly development of the property in that the Digital Display will be installed on an existing commercial building, designed to integrate architecturally with the structure. The Development Agreement includes building occupancy standards to promote active ground-floor use, thereby supporting economic activity and maintaining the vitality of the Promenade.
6. The Development Agreement will have a positive fiscal impact on the City. Through a negotiated revenue-sharing structure and minimum annual guarantee, the Development Agreement will provide an ongoing source of funding to support City programs, services, and public art initiatives. The Development Agreement will also include a one-time payment contribution to the City upon completion of the Digital Display 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.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS:
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SECTION 1. The above recitals are true and correct, and incorporated herein by this reference.
SECTION 2. The City Council hereby adopts the Findings, and recommends approval of the Development Agreement, attached hereto as Exhibit “A” and incorporated herein by this reference.
SECTION 3. Based upon Findings 1-6, the Development Agreement is hereby approved.
SECTION 4. Each and every term and condition of the Development Agreement shall be and is made a part of the Santa Monica Municipal Code and any appendices thereto. The City Council of the City of Santa Monica finds that public necessity, public convenience, and general welfare require that any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of the Development Agreement, to the extent of such inconsistencies and no further, be repealed or modified to that extent necessary to make fully effective the provisions of the Development Agreement.
SECTION 5. Any provision of the Santa Monica Municipal Code or appendices thereto, inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, are hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance.
SECTION 6. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any 16 of 17
court of any competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional.
SECTION 7. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall be effective 30 days from its adoption.
APPROVED AS TO FORM:
______________________________
HEIDI VON TONGELN
City Attorney
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EXHIBIT A
DEVELOPMENT AGREEMENT
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