Santa Monica's Third Street Promenade Is About To Look Very Different

SANTA MONICA, CA — Santa Monica's new digital billboard district is beginning to take physical shape, with construction underway at both ends of the 1200 block of Third Street Promenade.

Patch observed crews and large steel framing around buildings near Wilshire Boulevard and Arizona Avenue, where digital displays have been approved at 1202 Third Street Promenade and 301 Arizona Ave./1253 Third Street Promenade.

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The installations are arriving on a block that continues to have several vacant storefronts as city leaders pursue a broader effort to revitalize the Promenade and downtown Santa Monica.

But the displays have also drawn opposition from residents and preservation advocates concerned about bringing large-scale commercial advertising to a city that banned off-site billboards more than 40 years ago.

The work follows City Council approval of a new district allowing up to 16 large digital displays along Third Street Promenade and at Santa Monica Place.

Displays are generally capped at 1,000 square feet. The council initially approved development agreements covering seven displays: four at Santa Monica Place and one each at 301 Arizona Ave./1253 Third Street Promenade, 1202 Third Street Promenade and 1310 Third Street Promenade.

The projects at 1202 Third Street Promenade, 301 Arizona Ave. and Santa Monica Place subsequently went before the California Coastal Commission, which approved the development agreements in April.

The district represents a major change in Santa Monica's approach to outdoor advertising. The Digital Display District ordinance says the city prohibited off-premises advertising, including billboards, when its Sign Code was adopted in 1985.

City officials have promoted the displays as part of downtown revitalization efforts and as a potential new revenue source while Santa Monica implements its Realignment Plan.

Under the ordinance, a 1,000-square-foot display is subject to a $500,000 one-time community benefit contribution and an annual payment equal to the greater of 20% of gross advertising revenue or a $500,000 minimum guarantee. Contributions and minimum guarantees can be proportionally reduced for displays smaller than 1,000 square feet.

If all 16 displays ultimately become active, the city estimates the program could generate between $3.5 million and $7 million annually.

At least 20% of each display's operating time, equivalent to 12 minutes per hour, must be reserved for city messaging and arts content.

The billboard program is separate from Santa Monica's existing digital Wayfinder kiosks, operated by BIG Outdoor. The city receives 50% of net kiosk revenue, with a $5 million annual guarantee, and received a $4 million signing bonus.

With the new billboard district adding substantial digital advertising inventory downtown, Patch asked Kiley Kmiec, executive vice president, West Coast, at BIG Outdoor whether the new displays could cut into the company's kiosk advertising revenue and potentially affect the revenue supporting that minimum guarantee.

Kmiec declined to comment.

After years of debate, planning and regulatory approvals, the most visible phase of Santa Monica's billboard experiment has now begun, with the first structures rising above Third Street Promenade.