By Jorge Casuso
September 22, 2025 -- A plan to impose emission standards on more than 750 existing buildings was removed from the City Council agenda over concerns it could impact Santa Monica's struggling economy.
The item the Council was scheduled to take up September 9 would have required commercial and residential buildings of more than 20,000 square feet to reduce carbon emissions or face fines.
Mayor Lana Negrete, who as mayor can help shape the agenda, said City Manager Oliver Chi agreed it was not the "appropriate time" to discuss the item, which would have taken effect on June 1, 2026.
"As a business owner myself, I know firsthand the struggles our local businesses are facing just to stay open," Negrete said. "We made the decision to pull this item after hearing feedback from the business community.
"The current economic environment is beyond challenging, and we need to be realistic about what businesses are going through," the mayor said.
"Our goal is to engage directly with business owners and property owners so we can find the right balance between our commitment to environmental sustainability and the urgent need to stabilize our local economy."
The proposed Building Performance Standards (BPS) ordinance was scheduled to be heard shortly after the Council approved a resolution at the same September 9 meeting declaring the City is in "fiscal distress."
While the City has focused on reducing emissions from new construction, which is at a standstill, the proposed ordinance covers a total of 762 existing buildings of more than 20,000 square feet.
"Targeting this sector could cut building-related emissions by up to 44 percent, delivering an 14.5 percent reduction in citywide emissions," according to the staff report from the City's Office of Sustainability & Environment.
While similar State legislation only applies to buildings of more than 50,000 square feet, the ordinance "sets benchmarking requirements for all buildings" between 20,000 and 50,000 square feet.
Those properties "have not been subject to statewide benchmarking and must first provide annual energy data under the ordinance," staff wrote. "This allows time to establish baselines before their BPS targets take effect."
The ordinance would establish a final target of net-zero carbon emissions by 2050 and requires interim performance targets at 5-year intervals, according to the staff report.
"Buildings must meet each interim target and maintain or improve performance in the subsequent compliance cycle," staff wrote.
"The ordinance anticipates using fines paid by property owners in place of meeting required performance or reporting obligations," staff said, adding that "larger gaps from the target result in higher fines."
Property types exempted from the ordinance could include all-electric buildings, federal facilities and industrial buildings, staff said, adding that other buildings could be exempted due to "financial hardship."
The ordinance was postponed as the City faces it's own financial crisis declared in a resolution to "articulate and capture in one place all of the different challenges the City is facing," according to City Manager Chi.
The resolution was unanimously approved after the City paid out some $229 million to settle four rounds of child sexual abuse cases and faces declining revenues from sales taxes, transient occupancy (bed taxes) and parking revenues.
