After extensive public comment, the Santa Monica City Council on Dec. 16 introduced an ordinance to create a limited Digital Display District (Promenade corners and up to four displays at Santa Monica Place) and approved several corresponding development agreements (DAs) that set financial and operational conditions for digital signage.

Key ordinance and DA elements approved at first reading and in subsequent DA votes:

- Locations and size: The district confines displays to corner buildings on the 3rd Street Promenade (one display per corner building) and up to four displays at Santa Monica Place. Standard maximum face size is 1,000 square feet; one proposed board at the mall is 650 square feet and receives a proportionate fee reduction.

- Community benefits and revenue: Each full‑size board is required to pay a $500,000 one‑time community contribution upon permit/installation (escalating 3% annually if payment is delayed past June 30, 2027) and to provide either 20% of gross annual advertising revenue to the city or a minimum annual guarantee (MAG) of $500,000 (also with 3% escalation); smaller boards have proportionate lower MAGs. Staff added a 3% saturation discount at the 10th display to address operator concerns if more boards come online.

- City content and public art: Operators must allocate 20% of total operating time to city‑curated content (public service announcements, civic programming, cultural or art content). Staff indicated the city will need dedicated resources to program and curate that allocation.

- Content restrictions and safety: The ordinance and DAs prohibit political advertising, tobacco, cannabis and alcohol product advertising, predatory‑lending or misleading ads and split screens (only one ad at a time). Audio is barred except for city programming. Illumination limits and a 3‑foot‑candle standard protect residential windows; transition rates and auto‑brightness controls are required to reduce glare and driver distraction (minimum image duration 12 seconds; measured luminance bands defined for daytime and nighttime). Staff said pre‑operation lighting studies and biennial rechecks are required.

- Occupancy and enforcement: Each DA includes minimum building‑occupancy thresholds (examples: 50% of rentable floor area or fully occupied ground floor as negotiated per site). If occupancy thresholds are not met within set time windows, the MAG is increased (25% prorated) and persistent non‑compliance can lead to shut‑off (after a site‑specific period such as 3–4 years) and DA termination (after 5 years in most agreements). The city retains audit rights (twice yearly) and contract remedies including notice, cure rights and termination.

- Terms and timelines: The negotiated DA template generally uses a 30‑year base term with options for two 10‑year extensions; construction deadlines and options to extend building‑permit issuance were negotiated per site.

Council debated design, historic preservation, and staffing needed to administer the city content allocation. Staff noted the John Reed (landmark) building proposal was revised to preserve character‑defining elements and produced specific historic findings supporting reversible installation. The economic consultant Playfly presented market sizing that ranged from about $19 million to $27 million annually if all 16 permitted displays were developed; staff designed the MAG and revenue share assumptions based on that analysis.

Recusals and procedural notes: Councilmember Raskin disclosed at the start of the meeting that he would recuse himself from items 10(a) and 12(b)–(e) because his law firm represents an outdoor advertising client; he did not vote on those digital‑signage matters.

The ordinance introduction and the set of development agreements were approved at first reading or by roll call votes after amendments staff incorporated in green in the updated materials. Council directed staff to prepare implementation steps including lighting studies, content guidelines, auditing processes and a plan for staffing the city’s 20% content allocation.

What’s next: Ordinance adoption will proceed through required second reading and any additional CEQA or coastal reviews; each DA is recorded against property title and contains enforcement remedies for noncompliance.