By Jorge Casuso

June 9, 2025 -- After a 40-year ban, new large billboards could soon return to Santa Monica using digital display screens that wrap around the upper level facades of existing buildings.

Spurred by a fiscal crisis, the City Council will vote Tuesday night on whether to negotiate Development Agreements for two new digital billboards on the Third Street Promenade.

Proposed Rendering of Digital Display at 1202 3rd Street (Courtesy City of Santa Monica)

If the Council votes to additionally move ahead with a pilot program, the displays -- at 301 Arizona Avenue and 1202 Third Street Promenade -- could be joined by a third sign on the Promenade and three at Santa Monica Place.

The proposed signs provide "a valuable opportunity to generate financial revenue for the City and to stimulate commercial activity in the City’s Downtown District," staff wrote in a report to the Council.

The applicant for the first two Promenade signs, UNITED XYZ LLC, has proposed a 20 percent revenue-sharing structure, as well as a minimal annual guarantee, according to the report from the City's Community Development Department.

The minimal annual guarantee would be $500,000 the first year and gradually rise to $935,000 for years 5 through 9. It would continue rising every five years until it reaches $2,204,681 in years 50 to 55.

Because the cost of installing a large-scale digital display is "a minimum of $1 million or more," the franchise agreement has a 20-year term. The applicant also has proposed a one-time contribution of $500,000 per sign.

The proposed agreements are "for 24/7 operations with signage to be dimmed at night," staff wrote.

On Tuesday, the Council will discuss "the approach for future" digital billboards, "including the adoption of an ordinance to establish a pilot program to limit this signage to the Third Street Promenade area."

The vote comes one month after the City Council gave a go-ahead to advertise alcohol on digital kiosks in an effort to boost revenues for Santa Monica's cash-strapped government ("Council to Consider Alcohol Ads on City Property," May 6, 2025).

The Council directed staff to exclude the ads in parking structures and explore including cannabis advertisements as part of the program. It is unclear how the change will affect the projected $1 million in ad revenues.

The Council vote paves the way for the private company ads to appear on 12 of the City's digital kiosks, six of them on the Promenade.

In May 2023, the Council unanimously approved state-of-the-art digital wayfinding kiosks that also serve as billboards ("Advertising Averse Santa Monica Embraces Digital Kiosks," May 16, 2023).

As part of the program, as many as 50 kiosks -- which are about 8 feet tall and nearly 4 feet wide -- will be placed in commercial areas across the once advertising adverse city.

Staff cautioned the Council before Tuesday's vote that the proliferation of digital advertising could result in "oversaturation," potentially yieilding less return for the advertisers as more signs are added.

The City is "in the process of retaining a consultant to analyze the impacts, if any, on the digital kiosks," staff wrote.

If approved, Santa Monica would join other California cities -- including West Hollywood, Los Angeles and San Jose -- that have recently permitted digital displays within public rights-of-way and on private properties, staff said.