City Manager Oliver Chi is asking Council to sign off on a wholesale rewrite of what it means to be Santa Monica in a widespread "revitalization plan" up for debate next week.
“Once the most vibrant and activated destination on the Westside – anchored by a bustling downtown, a thriving beach economy, and a strong civic identity – the City has spent the years since COVID in a prolonged period of instability,” he said in the opening to the Santa Monica Realignment plan released Thursday.
“Disorder, homelessness, and economic contraction have weakened public confidence. Commercial vacancies, reduced levels of tourism, and physical deterioration of public spaces have reshaped once-lively corridors. Meanwhile, fiscal pressures – including rising costs, slowed revenues, and the childhood sexual-abuse settlements – have drawn down reserves and created a projected structural General Fund operating deficit of $29.6 million in FY 2026-27.”
To pull the city back from the abyss, Chi is recommending a collection of programs, projects and strategies, some new and some old, that he says are necessary to restore order, rebuild economic capacity, and re-establish long-term fiscal health.
Chi paints a bleak picture of the City’s current reality. Santa Monica, once among California's most prosperous cities, held $435.8 million in reserves in 2018. Since then, COVID-19, rising homelessness, public safety concerns, and deferred maintenance have severely weakened the city. Retail vacancies approach 16%, office vacancies reach 35%, and tourism has declined. Sales tax dropped 6% and transient occupancy tax fell 10% in FY 2024-25, creating a projected $29.1 million annual deficit by FY 2026-27. Free cash reserves have fallen to $158 million—with only $98 million unobligated—largely due to $230 million in sexual-abuse settlements. Staff is developing a comprehensive recovery plan addressing safety, revitalization, economic growth, and fiscal balance.
He says that to start to rebuild, the city must first reestablish a reputation for safety.
“Public safety and cleanliness are the foundation of civic confidence,” said the report. “The realignment plans calls for a new deployment model that repositions the Police Department and allied field teams to create a sustained, visible presence Citywide, all while investing in a comprehensive capital improvement program to improve the look and feel of the City’s Downtown core.”
The Safe Neighborhoods Program focuses public safety resources on downtown, where 36% of crime calls and 50% of homeless-related calls originate. A new Downtown Police Substation at Santa Monica Place will house an expanded 8-10 officer Downtown Services Unit, supplemented by 5 patrol officers and 2 homeless outreach officers daily. Eight new Public Safety Officers will patrol high-impact areas including the Promenade and parks. The plan also expands the Crime Impact Team citywide and traffic enforcement. With 43 officers eligible for retirement, the city will overhire 10 officers to maintain staffing levels during the 12-18 month training period.
The plan also calls for four key public safety enhancements: partnering with Metro to address impacts from end-of-line train services, working to align training and enforcement standards; relocating the SamoShel homeless shelter from Downtown to implement a "healing center" model integrating addiction treatment, mental health services, and clear pathways to permanent housing; investing in the City Attorney's Criminal Unit to increase prosecutorial capacity to approximately 90% of fileable cases, handling over 3,500 annual misdemeanor prosecutions; and exploring new policy options including a Vehicle Habitation Ordinance modeled after San Diego's approach and expanding the SaMoBridge diversion facility.
Once made safe, the streets themselves would then be subject to improvements.
Santa Monica plans a $3.5 million downtown revitalization targeting streets, sidewalks, and public spaces, with most work completed by early 2026. The program includes comprehensive tree pruning, planting 37 new trees, and refreshing 403 tree wells. Infrastructure repairs cover 20,000 square feet of sidewalks, crosswalk repainting, modernized signage, and replacement of 125 trash cans. Gateway enhancements at Lincoln, 4th, and 5th Streets will feature native landscaping and sustainable design. The project aims to restore downtown's appearance after years of deferred maintenance while strengthening civic identity and improving pedestrian safety and comfort.
The plan also calls for new traffic controls downtown, additional beach maintenance and $500,000 for use towards engaging with areas outside downtown.
Another $500,000 would be used to deliver new projects to enhance pedestrian and bicycle safety, particularly in the Downtown area, school zones, and high-injury corridors.
The newly safe and clean streets would then be able to support new economic development activity. The strategy includes creating large-format public activations: monthly music and festival events on the Promenade partnering with DTSM, funding activation events in other Business Improvement Districts, and developing a major Santa Monica Music Festival in 2026. These programs aim to drive economic activity in Downtown and at the Pier while generating sustainable city revenues through regular large-scale events and restored private sector investment.
To allow for additional activation, the plan calls for the City Council to authorize staff to explore expanding the Downtown Entertainment Zone, while also assessing ways to allow for Entertainment Zone activations for our other BIDs located through Santa Monica, and at the Pier.
Chi also envisions changes to Santa Monica’s legendarily Byzantine permitting. Key improvements include deploying new Clariti software and a customer portal within 180 days, with streamlined behind-the-scenes procedures removing bottlenecks. The city will pilot Archistar AI for rapid single-unit dwelling and ADU plan reviews. To incentivize restaurants, wastewater capacity fees ($1,400/seat) will be waived, and outdoor dining license fees reduced to $1-2 per square foot. An Interim Zoning Ordinance consolidates sidewalk dining standards for administrative efficiency. Annual TDM survey requirements for businesses will be temporarily suspended, mirroring COVID-era relief measures.
The plan calls for reopening all City branch libraries for service 3-days per week starting in January 2026, and expanding to 4-days per week service starting in July 2026.
To help address the constant housing pressures in the city, the housing plan focuses on developing new units while preserving existing stock. New vacant property and rent registry ordinances will track approximately 170 vacant properties and 15,000 non-rent-controlled units, with escalating fees for deteriorating properties. Enhanced code enforcement will operate seven days weekly. The City will prioritize housing development downtown to revitalize the Promenade and leverage municipal property assets for revenue. Staff will study policies ensuring boulevard development remains compatible with residential neighborhoods, balancing housing production goals with neighborhood preservation while maintaining Housing Element certification.
The plan says it will be necessary to restore staff cuts.
“Years of attrition and constrained budgets have limited the City’s ability to keep pace with operational and capital needs, and our realignment plan seeks to reinvests in these foundations by restoring key field positions across the City operation to ensure that every department has the staffing depth needed to deliver results,” says the report.
Santa Monica will boost Public Works capacity by fully funding parking structure maintenance, expanding the Homeless Support Team to seven days, adding groundskeeping for parks, pier maintenance, three fleet mechanics, and downtown district staff. The plan restores urban forest pruning and a forester position. The City will fully deploy its ambulance program in February 2026, investing $2.8 million annually to generate approximately $7 million in new transport billing revenues.
The plan says maximizing revenues from City owned land is a vital step.
Staff recommends reassessing development standards for City-owned downtown parcels and properties within the former Gateway Master Plan area (bounded by 5th Street, Colorado Avenue, and I-10 Freeway). This flexibility would enable creative proposals before major events like the Olympics while maximizing community benefits and supporting housing development. The plan includes hiring real estate consultants for pre-development assessments of key properties: Kiss-and-Ride Lot, Parking Structure 1, Old Fire Station 1, and 4th/5th/Arizona sites. These regulatory adjustments would catalyze downtown reinvestment through redevelopment or joint-venture opportunities.
Additional staff would also be needed to explore three revenue-generating projects: establishing a regional fire dispatch operation, with Santa Monica well-positioned to lead West Side and South Bay agencies; implementing a Pier-to-Pier ferry connecting Malibu, Santa Monica, and Marina Del Rey; and developing a gondola linking beach parking lots to the Pier. The ferry concept is being assessed by a private developer and could provide new transit options. The scaled-down gondola project would offer mobility alternatives while generating revenue. These initiatives would create capacity for implementing the City's realignment plan.
According to the plan, Santa Monica's workforce needs renewal after years of COVID layoffs, civil unrest, and resource disparities. The realignment plan invests in HR to embed "One SaMo" values and creates equitable compensation by increasing non-sworn medical coverage to 100%, adding annual winter closure, and providing $100 wellness reimbursements. These strategies aim to rebuild morale, clarify organizational purpose, and establish collective accountability for achieving the City's renaissance.
The point of the process is to go beyond just stabilization of finances.
Santa Monica faces a $29.6 million structural deficit in FY 2026-27, with cash reserves depleted from $435.8 million in 2018 to $158 million today, largely due to $230 million in childhood sexual-abuse settlements. Only $98 million remains unobligated after Council allocated $60 million for operations.
The realignment plan achieves a balanced General Fund budget by FY 2027-28 through three strategies:
Expenditure controls generating $7.5 million annually through vacancy management ($6 million), improved parking enforcement and fire inspections ($1.4 million), and bond refinancing ($100,000).
Revenue growth producing $24 million annually from: ambulance operator program ($7 million), parking adjustments ($9 million), credit card convenience fees ($1 million), digital signage concessions ($4.5 million), user fee updates ($1.5 million), and investment earnings ($1 million).
School partnership funding through a potential 2026 parcel tax generating $12 million annually to backfill the expiring Joint Use Agreement with SMMUSD. Staff continues assessing this option.
The plan projects modest deficits in FY 2025-26 ($1 million) and FY 2026-27 ($597,000), achieving a $3.4 million surplus by FY 2027-28. Strategic development of four downtown properties could generate $100-200 million to rebuild cash reserves to $200-300 million by 2028.
In the report, Chi says the plan the best way forward for the city.
“It is both a roadmap for civic renewal and a call for fiscal discipline – a comprehensive effort to restore safety, economic vitality, and organizational strength,” says the report. “Truly, this is a plan to create a renaissance in Santa Monica, to help the City find its footing and return to being that community which demonstrates that which is possible. By adopting this framework and the associated programmatic efforts, Santa Monica will be positioned to once again exemplify the excellence and vitality that have long defined its identity.”
Council will debate the plan at their meeting on Tuesday Oct. 28 in City Hall, 1685 Main Street. Meetings begin at 5:30 p.m.