Downtown Santa Monica will soon host a bold new wave of illuminating signage that is sure to alter the downtown fabric.
On Tuesday evening, the council voted to amend the Municipal Code and approve a new ordinance establishing a digital display district, which would permit digital installations to be approved by development agreement, in specified locations along the Third Street Promenade and Santa Monica Place.
The installations would be subject to a 30-year agreement.
The city had already amended its signage regulations to accommodate advances in advertising technology, to allow for flexibility and creativity with on-premise signage on the Third Street Promenade and at Santa Monica Place, and to support revenue opportunities for wayfinding signs in the public right-of-way.
In September of 2022, the council directed staff to establish a digital signage pilot program at Santa Monica Place to help stimulate economic recovery efforts. Additional direction asked that the pilot include a civic and public art component, community messaging, promotion of Santa Monica, and be supported by a revenue-sharing content opportunity to support community programs and services.
In January of 2023, the city awarded a 20-year contract to Big Outdoor for the installation, operation, and maintenance of a digital wayfinding and out-of-home advertising kiosk network.
Then, in October of last year, the council passed an emergency ordinance to allow animated, on-premises signs – including digital display signs – to be permitted on a façade facing the Third Street Promenade.
The new signage district’s development agreement requirements will allow the city to require standards for the new digital displays. This allows the city to establish rules and operational procedures on permitted location, hours of operation, energy usage, maintenance, level of illumination, content limits and requirements, and a few other community benefits.
Specifically:
- Display area limits are set at a maximum of 1,000 square feet per digital display
- Operational hours for digital displays are limited to sunrise to 1:00 a.m. in consideration of the comfort of nearby light-sensitive residential uses
- Digital displays are allowed to include off-premise advertising, with content guidelines addressing prohibited language, offensive content, to be set by the city council in accordance with the First Amendment
- Mandatory use of 100% renewable energy resources for all displays, where commercially available. To the extent that it is available on-site, digital displays may also utilize solar power to satisfy a portion of its energy demand
- Digital displays, including underside portions that project or encroach into the public right of way, must be continuously maintained in good condition and free from blight (graffiti, rust, etc.)
- Illumination controls limiting brightness to the following levels at specific times of day:
- Daytime: From sunrise until sunset, luminance shall not exceed 6,000 candelas per square meter
- Evening: From sunset until 10:00 p.m., luminance shall not exceed 300 candelas per square meter
- Nighttime: From 10:00 p.m. to 1:00 a.m., luminance shall not exceed 200 candelas per square meter
Concern has been raised by some that several of the proposed digital displays would be installed at landmarked buildings. To address that, the ordinance would, according to a staff report, require such installations to meet certain conditions, “including reversibility, must not materially impair the significance of the Landmark building, and all physical characteristics that convey the Existing Building’s significance must remain intact behind the Digital Display screen.”
Future projects will also be required to consult with the Landmarks Commission.
The city will also require each digital display to “allocate at least 20% of screen time for city and art content, curated through a city-administered program that will highlight civic information, cultural programming, local storytelling, and artwork,” according to a staff report. The city says this will ensure “that digital displays not only serve commercial purposes but also act as public communication and cultural platforms.”
The location of the new digital displays will be at each corner of the Third Street Promenade where it meets Wilshire, Arizona Ave., Santa Monica Blvd., and Broadway. There will also be four lighted displays around the outside of Santa Monica Place.
The Planning Commission was asked to weigh in on the proposed ordinance, and among their notes were recommendations to direct revenue raised from the display district to public improvements, restrict right turns at red lights, and post such signage before any displays are installed, and to consider expanding the display district’s boundaries.
In terms of the revenue expected to be generated, it will happen in one of two ways. The city will receive the greater of either:
- 20% share of the gross revenue generated from ads, or
- The Minimal Annual Guarantee (MAG), which is established at a minimum of $500,000 per digital display. That amount will escalate annually by 3% beginning on June 30, 2027.
If all 16 digital displays are installed and operated in the district, the city could receive up to $7 million per year from the MAG of all the displays. The city’s estimated earnings could be potentially higher if the 20% share of gross annual revenues exceeds the MAG.
Several members of the public spoke enthusiastically in favor of the display district ordinance. However, Gabrielle Ipalé, representing PMI Properties, which owns the building at 1460 4th Street across from one of the proposed digital displays at Santa Monica Place, expressed reservations. She supported the overall program but said her residents at 1460 would be affected by the illumination. She stated, “excessive brightness could impact tenant retention.”
Ipalé even suggested that 1460 4th would itself serve as a better location for digital signage, given that it would face away from her tenants and be visible to northbound traffic that has exited the 10 freeway.
Former Mayor Denny Zane, who in the 1980s and 90s was instrumental in the development of the Third Street Promenade we know today, expressed strong reservations about the project.
“I think a 30-year commitment, without having any real experience with how the marketplace responds [or] reacts to this kind of digital signage, is really unwise,” he said.
Zane encouraged the council to proceed incrementally to see how not only the marketplace responds, but also the overall community. He said it may attract some tourists, but not residents.
“Virtually no one I have spoken to – and I speak to a lot of people in town – embrace this, and thinks it’s a good idea. Most think, or worry, that it will be too gaudy and garish and off-putting, and say they will not likely come to the Promenade frequently.”
Councilmember Barry Snell asked staff if a shorter-term lease had been discovered in their research, to which staff said they had found 20-year programs. However, those were more for digital signage in the form of digital freeway billboards, not something that is attached to a building. He then inquired if the rollout could be conducted as more of a pilot program in designated areas to test how they are working.
Assistant City Attorney Susan Cola responded that while staff isn’t using the word “pilot,” the tight geographic boundaries and limit of 16 displays are intended as a measured approach to “see if it works.”
Councilmember Dan Hall moved the staff recommendation to pass the ordinance and suggested a prescription for revenue generated from the project. He asked that the first $5 million be put toward the city’s Realignment Plan, and then 10% to repay the city’s housing trust fund, and 85% toward downtown revitalization and business infrastructure. He also said he would love to see some kind of zero-interest loan program for entrepreneurs looking to convert retail space to bars, restaurants, or nightclubs. He was seconded by Mayor Pro Tem Jesse Zwick.
Councilmember Lana Negrete expressed a few concerns, including turning downtown “into a mini Vegas.” She also said, “Thirty years is a really long time, and I don’t know where digital media and advertising are going to be in 30 years.” But she remains hopeful about the financial benefits of the project.
Snell repeated his reservations about the size of the rollout, particularly the placement of four signs at both 3rd and Arizona and 3rd and Santa Monica, and hoped the council would be willing to slow things down during the development agreement process.
Nevertheless, the digital district ordinance passed, 6-0, with councilmember Ellis Raskin recusing himself.
The council then went on to discuss and pass, though not all unanimously, four subsequent development agreements for projects that had already received bids:
- 395 Santa Monica Place – 4 digital displays
- 301 Arizona Avenue/1253 3rd Street Promenade
- 1202 3rd Street Promenade – 1 digital display
- 1310 3rd Street Promenade – 1 digital display
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