UPDATE: Council voted 6-1 to remove all six appointees and replace them with Gleam Davis, Richard Bloom, Jonathan Gregory, Sean Besser, Hodge Patterson, Elaine Polachek. Councilmembers voting for the removal echoed the statements made by Snell in his motion alluding to issues but did not provide any specific instance of wrong doing or problematic decisions. Mayor Lana Negrete was the lone opponent.
Three members of the City Council want to gut the board of Downtown Santa Monica and replace up to half of the board with new appointees who will then oversee the hiring of a new CEO for the organization.
Councilman Barry Snell, who used to sit on the board before joining council, authored the memo to the City Manager alongside Councilmembers Dan Hall and Caroline Torosis. The discussion will be held on Tuesday night as part of a recently scheduled special council meeting.
The letter requesting the mass firing has vague reasons for the extreme action.
“As we all know, DTSM plays a pivotal role in shaping the vitality, safety, and economic success of downtown Santa Monica,” said the memo requesting the action. “Unfortunately, members of the public and this City Council have identified growing concerns regarding the lack of transparency and accountability as it relates to the policy direction being provided by DTSM’s current Board of Directors.”
No specifics are given regarding any of the concerns and there have been no public complaints filed against DTSM or its board members.
However, the Board has expressed concerns over the City’s handling of some issues Downtown and the current CEO, Andrew Thomas, announced his resignation after failing to secure a new contract.
Earlier this year, members of the DTSM Board said they wanted to withdraw from an agreement with City Hall over maintenance costs. Under the agreement, DTSM incurs additional costs above its mandated levels for work in some parking structures and the City is supposed to provide increased street cleaning on roadways. Boardmembers said the deal is one sided and wanted to withdraw prompting warnings by the City that any attempt to alter the agreement would result in a rejection of the DTSM budget and the funding remained in place.
Thomas subsequently announced his resignation from the organization after three years on the job. The timing of his resignation followed months of internal review and debate by the organization’s 13-member board. In April, the board held a split vote in closed session to authorize contract negotiations with Thomas, with six members in favor and four opposed. A separate motion to open the CEO role to outside candidates failed. The board then voted unanimously to create an ad hoc committee tasked with defining leadership performance standards, negotiating terms and commissioning an organizational analysis.
Downtown Santa Monica, Inc. (DTSM) is a private 501(c)(3) nonprofit organization that partners with the City of Santa Monica to manage the downtown business improvement district. It evolved from the former “Bayside District Corporation” and today oversees services like maintenance, hospitality ambassadors, marketing events (such as the annual ICE skating rink), and economic development programs in the city’s central business district. DTSM operates under a services agreement to enhance downtown beyond baseline city services, with the mission of promoting economic vitality and community life in the area. A volunteer Board of Directors governs DTSM and provides oversight of these programs.
It is governed by a 13-member Board of Directors structured to balance public and private stakeholder input. Six board members are appointed by the Santa Monica City Council, six are elected by the downtown property owners, and one seat is reserved for the Santa Monica City Manager (or their designee).
The current City Council Appointed Members are Luke M. Cain, Lucian Tudor, Leonid “Leo” Pustilnikov, Michelle Cardiel, Berta Negari, and Jon Farzam. Property Owner-Elected Members are Eric Sedman (Board Chair), Michele Aronson, Julia Ladd, Edna Galindo, Bruce Fairty, and Joshua Gilman.
Downtown Santa Monica, Inc. has a significant annual operating budget, funded primarily by special assessments on downtown properties and businesses. In the most recent fiscal year, total revenue was about $10 million. About 70% of the budget comes from fees and taxes paid for by businesses in the zone. The zone can be disbanded if a majority of the businesses covered by those taxes were to vote to do so. The Council has authority to distribute the taxes collected and in addition to appointing six seats it has to authorize DTSM’s annual budget. Boardmembers usually serve staggered four year terms with new members joining every two years.
Snell said his motion is specifically tied to the opportunity to hire a new CEO.
“By taking these actions now, prior to the selection of a new CEO, the City Council can ensure that DTSM is better positioned to serve the public interest, respond to evolving downtown challenges, and become a more effective and aligned City partner moving forward,” said the memo.
In talking with SMDP, Snell declined to provide any specifics about wrongdoing or elaborate on the accusations of transparency and accountability alluded to in his memo. He said the hiring of a CEO was in and of itself enough of an emergency to warrant bypassing the regular cycling of appointments and trigger the provisions in DTSM’s bylaws that allow Council to mass fire its appointments.
Snell said the current Board is too heavily weighted toward property and business owners. He said it lacks enough representation from individuals who are not economically connected to DTSM and the Promenade, to provide accurate advice to City Hall.
“We have, right now, a Downtown Santa Monica Board, and that's the uniqueness about it, that is made up of mostly property owners and businesses actually skewed right to the Third Street Promenade,” he said. “And we've had, over the last number of years, a number of discussions about the Third Street Promenade, which I haven't been very or at least I don't believe, has really benefited the economic development of our downtown. So when I talk about independence, I'm talking about independence with respect to not owning a property downtown, independence or not owning a business downtown. That's really skewed the discussion.”
He said his decision had nothing to do with Thomas’ contract and that there had been no contact between himself and Thomas over the move. Snell did say that the current Board had much of the responsibility for the area’s economic decline and that if nothing else, revamping the board to move it away from Downtown stakeholders was justified given past iterations that were not so business focused oversaw a DTSM area that was more successful.
“I spent 12 years on that board, all right, I know, I know in the workings, I dealt with property owners and businesses that I have an incredible amount of respect for that brought downtown Santa Monica and promenade to a point where it was before it faltered.”
Boardmember Lucian Tudor strongly disagreed saying the effort was a power grab dressed up as policy to retaliate against boardmembers who have stood up to City efforts to control the Downtown businesses.
"This decision isn’t about governance. It’s about control. The Council appears to be retaliating against a board that stood firm in defense of public interest—refusing to rubber-stamp proposals that would damage the already fragile ecosystem of our downtown," he said.
Tudor cited a recent confrontation over parking rates. He said the city wanted to increase parking rates and DTSM was in opposition to the move saying it would hurt foot traffic.
"Now, those who dared to defend common sense and community interests are being purged," he said. "This isn’t democracy. This is retaliation."
Downtown property owner and vocal City Hall critic John Alle sent out an email Tuesday morning alleging the move was corruption to help Thomas keep his job and keep the District under the direct control of the the city’s prevailing political party.
“Information our team has collected from City Hall leads us to believe — DTSM CEO Andrew Thomas colluded with the City Council to remove the existing DTSM, Inc. Board Members and be replaced by SMRR operatives who will agree to give him the $300K + salary he demanded. This is legitimate corruption. Truly another new low for the City.”
Alle has long threatened to organize a campaign to dismantle DTSM and reiterated those threats in his email.
“We will contact assessment-paying DTSM Stakeholders to arrange a combined in-person and zoom meeting to discuss dismantling the assessments and required payment prior to 2028, and establishing a new BID (perhaps even block by block) and lawsuit against the City,” he said.