The Santa Monica City Council voted to establish a digital display district along the Third Street Promenade and Santa Monica Place, approving an ordinance that could generate millions in annual revenue while transforming the visual character of the city's downtown corridor.
The council voted 6-0 to introduce the Digital Display District Ordinance and approved development agreements for seven large-format digital displays at four locations. Council Member Ellis Raskin recused himself from the items.
The ordinance allows up to 16 digital displays at corner buildings on the Promenade and at Santa Monica Place, with each display limited to 1,000 square feet. If all 16 displays are eventually installed, the city could receive between $3.5 million and $7 million annually, according to an economic study prepared for the city.
"The Promenade — especially the 1200 block — is in urgent need of reinvention," said Daniel Negari, owner of properties at 301 Arizona Avenue and 1202 Third Street Promenade. "These digital displays are the next step. They will generate much needed revenue for the city in year one, with a long-term revenue platform."
The ordinance requires each digital display operator to pay the city a one-time contribution of $500,000 plus ongoing annual payments consisting of either 20% of gross revenues or a minimum annual guarantee of $500,000, whichever is greater. The minimum annual guarantee escalates 3% annually.
Council Member Dan Hall successfully moved to allocate the first $5 million in revenue to the city's realignment plan. Above that threshold, approximately 10% would go toward repaying borrowing against the city's Housing Trust Fund, 85% toward downtown revitalization efforts including tenant improvements and public infrastructure, and up to 5% for a new moving image media art program.
"I think it's vital, it's absolutely vital that we'd be investing in these things as we promised we are, and this is a key part of that," said Mayor Pro Tem Jesse Zwick, referring to the city's downtown revitalization goals.
The ordinance establishes strict operational standards for the displays. Operating hours are limited to 6 a.m. or 7 a.m. until 2 a.m., depending on the season, aligning with the entertainment zone. Brightness levels are capped at 6,000 candelas per meter squared during daytime, decreasing to 200 candelas after 10 p.m. Light trespass onto residential properties cannot exceed 3 foot-candles.
Audio is prohibited except for city programming events. Digital displays must use 100% renewable energy where commercially available and cannot show scrolling text in any direction. Static images must remain on screen for at least 12 seconds with a transition rate of no more than once every 12 seconds.
Each display must allocate 20% of its operating time to city content and public art programming. However, Mayor Caroline Torosis expressed concern about the city's readiness to manage this requirement.
"I'm deeply concerned that we are not ready with the 20% of our time," Torosis said. "Someone needs to be programming this, or we need to put it to a third party contractor that specializes in this for civic engagement, art, immersive experiences."
City Manager Oliver Chi acknowledged the need for additional resources, saying staff would bring back a staffing plan to effectively manage the allocation of screen time as the program launches.
Six of the 12 corner buildings on the Promenade eligible for digital displays are designated historic landmarks. The ordinance waives review by the Landmarks Commission, requiring only that displays be reversible and not materially impair the buildings' historic significance. This drew criticism from the Santa Monica Conservancy.
"The Landmarks Commission has the experience and expertise to guide applicants into making good design decisions that balance existing historic features with digital sign overlays," wrote Nina Fresco and Ruthann Lehrer of the conservancy. "Relegating this process to a non-binding consultation makes historic resources subject to alterations that could permanently detract from their significance."
Some Promenade property owners raised concerns in a letter to the council. The group calling itself "Concerned Promenade Property Owners" warned that digital sign revenue could surpass traditional tenant revenue, potentially making ground floor spaces difficult to lease. They called the ordinance "not well thought through" and requested the city "take a step back" for more comprehensive planning.
"Signs follow people, people do not follow signs," the letter stated, questioning whether digital signs would actually increase foot traffic as intended.
Supporters praised the program as essential for economic recovery. Brad Ewing and Carl Hansen, co-chairs of SMF, said the displays "present an opportunity to revitalize Third Street Promenade and support its economic recovery."
Hunter Hall, executive director of the Main Street Business Improvement Association, said his organization has seen positive results from similar digital kiosks already installed in their district. "When the digital kiosks were first introduced, there was understandable hesitation—but the results have been overwhelmingly positive," Hall wrote.
Judy Abdo, a former councilmember and mayor, also voiced support, saying the displays "will create a meaningful and long-term revenue stream for the City, offer a platform to spotlight community programs, and serve as a virtual digital gallery for local artists."
The ordinance will take effect 30 days after a second reading scheduled for early 2026. The approved development agreements include four displays at Santa Monica Place and three on the Promenade at 301 Arizona Avenue, 1202 Third Street Promenade, and 1310 Third Street Promenade.
Development agreements have 30-year terms, though some council members expressed reservations about the lengthy commitment and potential visual impact on downtown.
"Thirty years is a really long time, and I don't know where digital media and advertisement is going to be in 30 years," said Council Member Lana Negrete. "I just hope that we're not regretting this when I'm 75 years old."
Council Member Barry Snell said he had "real reservations with respect to the amount of signs that we're talking about initially" but was interested in how the rollout would proceed.