The Santa Monica City Council has unanimously adopted zoning amendments aimed at revitalizing the downtown economy, particularly along the Third Street Promenade. The changes streamline alcohol licensing for retail and entertainment venues, extend permit boundaries to Ocean Avenue, and eliminate long-standing restrictions on fast food and fast casual dining establishments. These adjustments are intended to attract more businesses and boost consumer activity in an area still recovering from pandemic-related disruptions and recent wildfires.
The city faces a $60.5 million budget shortfall over the next five years, necessitating withdrawals from reserves to sustain essential services. Key revenue streams remain below pre-pandemic levels: transient occupancy tax collections are recovering slowly despite rate increases approved by voters in 2023, hotel occupancy remains depressed, sales tax receipts have declined, and parking revenues continue to lag.
Additional financial strain comes from over $230 million in legal settlements tied to former city employee Eric Uller and potential reductions in federal funding. In response, city planners recommended regulatory reforms to improve predictability for investors and entrepreneurs.
The council rejected a proposal to allow pawn shops to relocate within downtown, citing community preferences shaped over a decade of planning. Instead, it reinforced local character by requiring conditional use permits for hotels, motels, bed and breakfasts, and liquor stores on the Promenade—reversing a recent policy that allowed such businesses without special approval.
Councilmember Dan Hall criticized the idea of expanding pawn shops, noting no urgent need related to secondhand goods. Meanwhile, Councilmember Ellis Raskin supported lifting the fast-food ban, emphasizing the importance of flexibility during economic recovery. City Planning’s Steve Mizokami explained that the previous restrictions inadvertently affected small operators like ice cream shops and bakeries and created ambiguity between fast food and fast casual categories. The revised rules now accommodate chains like Yogurtland and Starbucks, which previously faced regulatory hurdles.
These amendments build on interim zoning changes implemented since 2023, reflecting an ongoing effort to stabilize the downtown commercial landscape amid persistent vacancy challenges.
— news from Santa Monica Daily Press
— News Original —
Santa Monica Amends Zoning Laws to Boost Economic Recovery
The Santa Monica City Council has unanimously approved zoning amendments designed to promote economic recovery in the downtown area, while adding restrictions that will require hotels and motels to obtain conditional use permits on the Third Street Promenade. n nSanta Monica faces significant financial challenges requiring $60.5 million from reserves over five years to maintain current services. The city continues to struggle with economic impacts from Covid era lockdowns and recent wildfires affecting its tourism-dependent revenue streams. n nKey revenue sources remain sluggish, with transient occupancy tax recovering slowly despite voter-approved rate increases in 2023. Hotel occupancy is lower than normal, sales tax figures have dropped and parking revenues remain below pre-pandemic levels. n nAdditional financial pressures include over $230 million in legal settlements related to former employee Eric Uller and potential federal funding cuts. n nThe amendments passed last week streamline alcohol permits beyond bars/restaurants, reduce restrictions on entertainment within restaurants and eliminate prohibitions on fast food and fast casual restaurants on the Promande. n nThe council rejected a staff recommendation that would have allowed existing pawn shops to relocate within the downtown area and voted to require conditional use permits for hotels, motels, bed and breakfast establishments, and liquor stores on the Third Street Promenade, reversing recent changes that had allowed such businesses to operate without special permits. n n”I think we spent years on a downtown community plan and as far as I ‘m aware there ‘s no crisis in secondhand baseball cards or diamonds that we need to address,” Councilmember Dan Hall said regarding pawn shops on the street. “It seems like that would be against a decade of community input on what we want to see in our downtown.” n nCouncil upheld the permanent elimination of fast-food restaurant restrictions on the Promenade, despite initial concerns from some members about attracting distinctive locally owned businesses. n nSteve Mizokami from City Planning explained that the fast-food prohibition had unintentionally restricted smaller businesses like ice cream shops and bakeries, and noted the difficulty in distinguishing between “fast food” and “fast casual” restaurants. Staff said the change allowed businesses like Yogurtland and Starbucks that had previously faced restrictions. n nCouncilmember Ellis Raskin supported lifting the fast-food ban, citing economic recovery needs. “I think that in this time of economic recovery, it ‘s important to have that flexibility,” he said. n nThe amendments also expand alcohol permit streamlining beyond restaurants to include retail establishments, bars, and entertainment facilities, with boundaries extended to Ocean Avenue for consistency. n nCity staff had recommended the changes as part of ongoing efforts to support business recovery in Santa Monica ‘s downtown area, which has struggled with vacancy rates in recent years. The amendments build on previous interim zoning changes adopted since 2023 aimed at providing greater certainty and predictability for property owners and prospective businesses.