Construction crews are mounting steel frames and running electrical lines at both ends of the 1200 block of Third Street Promenade, marking the physical start of Santa Monica's Digital Display District. The program could bring up to 16 large LED billboards to the Promenade and Santa Monica Place, generating an estimated $3.5 million to $7 million annually for the city.
Workers were spotted at 1202 Third Street Promenade, the John Reed Fitness building at the corner of Wilshire Boulevard, and at 301 Arizona Ave./1253 Third Street Promenade near Arizona Avenue, Patch reported. The displays will wrap building facades above storefronts, each up to 1,000 square feet.
The construction follows a 5-0 City Council vote on Jan. 13 that established the district and approved the first development agreements. Councilmember Raskin recused himself; Councilmember Negrete was absent. The California Coastal Commission then approved the agreements at its April 15 meeting.
The program reverses a ban on off-premises advertising that Santa Monica has enforced since its Sign Code was adopted in 1985.
Who's building what
Two operators are installing the first screens. UNITED XYZ LLC will run displays at 301 Arizona Ave. and 1202 Third Street Promenade. Trigild IVL, the court-appointed receiver for Macerich SMP assets, will operate four displays at Santa Monica Place, according to the Santa Monica Daily Press. The council initially approved agreements covering seven total displays.
What the city gets
Each 1,000-square-foot display carries a $500,000 one-time community benefit payment and an annual fee equal to 20% of gross advertising revenue or $500,000, whichever is greater. Those annual payments escalate 3% per year starting June 30, 2027.
The first $5 million in revenue goes to the city's Realignment Plan, which addresses Santa Monica's declared fiscal distress. Beyond that, roughly 85% funds downtown revitalization, 10% repays borrowing from the Housing Trust Fund and up to 5% supports a new moving-image media art program.
At least 20% of each screen's operating time, equivalent to 12 minutes per hour, must be reserved for city messaging and arts content.
Rules and concerns
The displays must power off between 1 a.m. and sunrise and are subject to automatic dimming controls based on time of day. The 30-year agreements include options for two 10-year extensions, potentially locking in the program for 50 years.
The program waives Landmarks Commission review for six of the 12 eligible Promenade buildings that hold historic designation, a provision that drew objections from preservation advocates. Opponents also raised concerns about distracted driving and long-term effects on the city's character.
City staff have acknowledged the new billboards could cut into revenue from Santa Monica's existing Wayfinder kiosk network, a separate program operated by BIG Outdoor under a 20-year franchise agreement that guarantees the city $5 million annually. Kiley Kmiec, executive vice president for the West Coast at BIG Outdoor, declined to comment on that possibility.
In her July 27 State of the City address, Mayor Caroline Torosis spoke broadly about downtown's economic recovery: "These are not just new storefronts. They are signs that people believe in Santa Monica again."
A proposal for an additional display on the historic Junipher Building at 1355 Third Street Promenade went before the Landmarks Commission on July 13. No completion date for the first active screens has been announced.
