It’s been a rough few years for Santa Monica.
Businesses have abandoned its once-thriving downtown. Its retail and office vacancy rates are among the highest in Los Angeles County. The crowds that previously packed the area surrounding the city’s famous pier have dwindled.
Homelessness has risen. City officials acknowledge crime incidents had become more visible and volatile.
The breadth and depth of the issues became apparent just last month when the city was forced to declare itself in fiscal distress after paying $229 million in settlements related to alleged sexual abuse by Eric Uller, a former city dispatcher.
Now, Santa Monica is trying to plot a new path forward. A significant first step could come Tuesday.
That’s when the City Council is set to consider a plan to reverse its fortunes.
The plan includes significantly increasing police patrols and enforcing misdemeanor ordinances, investing in infrastructure and new community events, and taking a more business-friendly brush to permits and fees. Officials also plan to be more aggressive in making sure property owners maintain unused properties.
The blueprint tackles many “quality of life” issues that critics say have contributed to lower foot traffic in the city’s tourist districts since the COVID-19 pandemic.
It’s far from clear the tactics will work. But given the city’s current trajectory, officials say bold action is necessary.
“We’re trying to usher in a rebirth — a renaissance of the city — by investing in ourselves,” Councilmember Dan Hall said.
Hall, 38, is part of a relatively youthful City Council majority that swept into office in recent years as voters opted for new leadership and a fresh approach. Five of the seven council members are millennials, and six members first joined the council in either 2022 or 2024.
Also new on the scene is City Manager Oliver Chi, who five months ago was hired away from the same position in Irvine.
“The city is in a period of distress, for sure,” said Chi, 45. “We’re not in a moment where the city is broke. The city still has resources. … But right now, if we do nothing, the city’s general fund operating budget is projected to run a structural deficit of nearly $30 million a year, and that’s because we’ve seen big drops” in revenues, such as from hotel taxes, sales tax and parking.
“But part of that is the private sector hasn’t been investing in the city. And we haven’t had people traveling to the city,” Chi said.
Santa Monica is far from the only city — in California or nationwide — to face the pain of a downtown in decline. Brick-and-mortar retailers have long bled business to online offerings, and the pandemic upended the cadence of daily life that was the lifeblood of commercial districts, with many people continuing to work from home at least part of the week.
But the hope is through concerted, planned investment that Santa Monica can shine once again and modernize to be competitive in the postpandemic era.
The City Council had already decided to set aside $60 million from its cash reserves to spend over the next four or five years to cover any operating deficits. But with Tuesday’s vote, Santa Monica would instead use those dollars as an investment in hopes of getting the city back on track.
“Those things really are issues related to public safety, disorder in town, the disrepair that we’ve seen in our infrastructure,” Chi said. “All of those things are preventing, I think, confidence in the local economy.”
In downtown, the city’s plan would include doubling the number of police officers assigned to a specialized unit to at least eight to 10 a day, deploying an additional five patrol officers daily, creating a new police substation, adding two workers daily to address homelessness issues, and hiring eight public safety employees to provide a more constant presence across the city’s main commercial district, parks and parking garages.
Staff in the city attorney’s office would also be augmented to boost the ability to prosecute misdemeanor cases.
Also on the agenda: moving the city’s homeless shelter out of downtown; making a one-time $3.5-million investment to address fraying sidewalks and streets and freshen up trees and trash cans; funding monthly events at the Third Street Promenade to attract crowds; creating a large-scale “Santa Monica Music Festival” next year; upgrading restrooms near the pier and Muscle Beach; and increasing operating days for libraries.
Another proposal would require the owners of vacant properties to register with the city, in hopes of addressing lots that remain in disrepair.
The city is also looking to be more business friendly. It’s seeking to upgrade the current permit process, utilizing artificial intelligence to get nearly instantaneous permit reviews for single-family homes and accessory dwelling units, as well as reduce permit fees for restaurants with outdoor dining.
The plan also outlines strategies to boost revenue. Santa Monica is poised to end its contract with a private ambulance operator, McCormick Ambulance, in February and move those operations in house.
“It’s going to cost roughly $2.8 million a year to stand that operation up. But the reality is, once we start running it, it’ll generate about $7 million a year in new ongoing revenues,” Chi said.
“That’s part of what we’re thinking through: How do we invest now in order to grow our revenue base moving ahead?” he said.
Parking rates are also going up, which city officials estimate should generate $8 million to $9 million in additional annual revenue — though officials say they still charge a lower rate than those of nearby cities.
The city also plans more traffic safety enforcement and will cut the current 90 minutes of free parking in downtown parking structures to 30 minutes.
There’s also been talk of a new city parcel tax, though no decision has yet been made to pursue that. A parcel tax would need voter approval.
Another priority is building back the city’s cash reserves, which have dwindled over the years, largely on account of legal payments. Eight years ago, Santa Monica had $436 million in cash reserves; today, there’s only $158 million in nonrestricted reserves.
The planned $60 million in spending would further reduce the city’s unobligated cash down to $98 million.
Santa Monica’s annual general fund operating budget is nearly $800 million a year.
The city is also looking to redevelop some of its underutilized properties, including a 2.57-acre parcel bounded by Arizona Avenue and 4th and 5th streets, which includes branches of Bank of America and Chase bank, the leases of which are expected to expire in a few years. Also being eyed are a 1.09-acre kiss-and-ride lot southeast of the Santa Monica light rail station; the city’s seismically vulnerable Parking Structure 1 on 4th Street, which sits on 0.75 of an acre; and the old Fire Station No. 1, which sits on 0.34 of an acre and is being used for storage.
No firm plans are in place just yet. The parcels could be sold, leased long term or redeveloped as part of a joint venture. One likely possibility is that the developments would include new housing.
“When you look at any revitalization effort of any vibrant downtown core that’s eroded, there’s always been an element of repopulating the area with people,” Chi said. A smart redevelopment plan for those properties will not only “hopefully help bring back vibrancy to the downtown, but also help replenish the city’s cash reserves.”
The seeds of downtown Santa Monica’s decline actually started before the pandemic. But COVID hit the city hard, and commercial vacancies rose significantly, Councilmember Caroline Torosis, 39, said.
Santa Monica also sustained damage in 2020 from rioters who swarmed the downtown area in what appeared to be an organized attack amid a protest meant to decry the death of George Floyd in Minneapolis.
Tourists never came back in the numbers they had before the pandemic.
Torosis said the new council majority was elected on a promise to boost economic activity in the city.
“We need to absolutely ensure that people feel safe, welcome, invited and included in our city,” said Torosis, who serves as mayor pro tem.
Hall called the plan a bold bet.
“What we’re trying to do here is move us away from a scarcity mind-set, where we’re nickel-and-diming businesses trying to stay open, restaurants trying to open a parklet, residents trying to build an ADU,” Hall said.
The council’s relative youth, he said, is a plus for a city trying to write a bright new chapter.
“I think that that’s something that millennials are finding themselves needing to do as we take ownership of society, and we see a world where past generations have been afraid to make mistakes or afraid to make decisions,” he said.
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