For much of its history, Santa Monica has been the subject of glamorous picture postcards: The fun of the pier, the beauty of the beach, the innovative shopping meccas and tourist spots.
But in recent years, Santa Monica has endured its share of unflattering images: empty storefront on the once-bustling Third Street Promenade, the closure of long-serving businesses across the city and challenges with the unhoused population.
Many cities have been slow to recover from the COVID-19 pandemic, but Santa Monica’s struggles have been notable. With tax revenue falling, the city last year declared itself in “fiscal distress.”
Now, Santa Monica leaders says the city is poised for a turnaround,hoping that its historic destination for both tourists and locals can help reinvent the downtown area with new events — and a refreshing drink or two.
The effort is built around a central realization: The days when Santa Monica would expect visitors simply because it was Santa Monica are gone. Now, the city must earn its business. The local economy — and the tourist industry — has changed since the city’s heydays in the early 2000s, officials said, and Santa Monica must change with the times.
“We know that if we want to invite foot traffic to Third Street promenade, the consumer trends are different than they were in early 2000s,” Mayor Caroline Torosis said in an interview. “We have to bring economic recovery back, and we weren’t going to do that doing business as usual. We have to invite people back.”
The city plans to invest $3 million into its moribund Third Street Promenade to help bring businesses and customers back. It is also banking on a series of deals to bring sports fans, concertgoers and diners back, and this year the city is set to have a balanced budget ahead of schedule.
By the end of 2026-27, city officials expect to find itself with a $5.4-million surplus — if the revival is successful.
Some are skeptical, saying the city needs to take much more aggressive measures to ease the homeless problems and lure more shoppers and diners to the city.
“The problem is we’re seeing more restaurants give up on Santa Monica and to go L.A.,” said John Alle, a property owner and founder of a nonprofit group called Santa Monica Coalition. “Santa Monica is doing all the wrong things.”
Part of the city’s revival bet, Torosis said, is banking on Santa Monica’s reputation as a California destination and bringing concerts, sports watch parties, and other large entertainment events to its beaches, Third Street Promenade and its famous pier. By luring in visitors with large events, including the upcoming Olympics, World Cup and Super Bowl, the city hopes the increased foot traffic will also bring in eager shoppers.
The new strategy includes alcohol.
In May, the city approved an “entertainment zone” at the Third Street Promenade where people can now buy and walk with open alcoholic drinks between Wilshire Boulevard and Broadway. In March, city officials voted to expand the entertainment zone to the entire downtown area during special events. The entertainment zones can be expanded to the entire area during large events or to specific sections during smaller ones.
The move is crucial, Torosis said. Retailers have been struggling to find ways to get more shoppers in their stores, and city officials believe they can find events and reasons to lure people into their streets for more social and entertainment events.
The move also comes as Santa Monica and other cities across Los Angeles County expect to see a burst of visitors for large-scale events, including the World Cup, Olympics and Super Bowl.
For the World Cup, City Manager Oliver Chi said, the city has worked with FIFA to create an interactive zone at the pier for fans, including watch parties.
The city is working with concert promoter Goldenvoice for a two-day music festival in the fall and also working with ESPN for another event for the 2027 Super Bowl.
“We can create events and activity that will draw people into the city,” Chi said.
City officials also point to other promising signs along Santa Monica’s breezy streets.
Restaurants that were warning the city they were on the brink of shutting down have signed new leases, Chi said in an interview. Seven housing projects are moving forward with financing and construction despite a challenging macroeconomy, and the city expects large events, such as the World Cup and Olympics, to bring in even more visitors — and money — to the city.
City officials have also hired more police and are filing more cases for prosecution, according to a city report.
Santa Monica police, with 230 worn officers on their roster as of December, have a fully staffed department for the first time in 20 years, according to the report.
So far this year, the city is seeing a 12.5% drop in violent and property crimes when compared with the same period last year, and officers are initiating 40% more of their stops compared with 2024.
Yet there are still signs that there is a tough road ahead.
Along the Third Street Promenade, several empty storefronts still litter the shopping center.
Peter Wright, a 51-year-old from the U.K. who was vacationing in Santa Monica with his family, was surprised at the number of shoppers and people milling about the promenade on a Monday morning.
“It looks pretty hectic and lively,” he said as he waited for his wife and two kids outside the Museum of Illusions.
He’s also noticed a number of homeless people in the area, which he said made him a bit wary because of his younger children. But he said the number of visible police in the area, and the people walking around made him and his family feel welcomed, and do a bit of shopping.
Reviving downtown is just one part of the plan to revive Santa Monica’s finances. The city is also increasing parking fees and issued more traffic citations in recent months while also trying to help businesses with breaks.
The City Council also approved a measure for restaurants to be exempted from a $1,400-per-seat wastewater fee, and eliminate a fee that would allow restaurants to place chairs and tables on sidewalks.
The elimination of the sidewalk fee would benefit 59 restaurants, Chi said.
Santa Monica restaurants and hotels have struggled since the pandemic, and in 2025 they reported still struggling to get people in their doors.
The city has also opened up a “business concierge” program to focus on local businesses’ needs, help streamline the permitting process and walk them through city processes to help them succeed, Torosis said.
But not everyone sees the positive picture that the city is painting.
“We’re not seeing any improvement,” said Alle, of the Santa Monica Coalition. “We’re hearing a lot of talk, but our retail is down.”
Alle and the Santa Monica Coalition have been vocal critics of the city, particularly the city’s handling of homelessness and crime. The group has published videos and pictures of unhoused people in Santa Monica, and interviews with business owners and employees critical of the presence of homeless people and lack of security and police in business areas.
Despite the city’s most recent economic report, Alle, who owns and operates several properties in the city, said he doesn’t believe the tide is turning.
He points to the number of still-empty storefronts along the promenade and the fact that, despite his efforts to bring new businesses into his properties, many are unwilling because of concerns over security. He said homelessness is a major problem.
According to the Los Angeles Homeless Services Authority, more than 72,000 people experienced homelessness in 2025. In Santa Monica, the organization found that about 202 people were living in shelters in 2025 and 475 were unsheltered.
“It’s the homeless,” Alle said. “The homeless and the lack of enforcement.”
City officials disagree.
Officials point to the Santa Monica Police Department’s Homeless Liaison Program, which works with the city’s Fire Department, city attorney’s office, human services division and the county’s Department of Mental Health to identify those eligible for social services.
Officials also say police are being more proactive to make residents and visitors feel safer, adopting a beat model of policing to make their presence more visible.
Between December and March 14, city officials say, officers have initiated 53% of their contacts, police made more than 100 arrests per week in February and March, and increased proactive drug investigations by more than 157% between December and February, according to a city report.
For some businesses and residents, it’s not enough.
The Santa Monica Coalition has in recent months started a program to provide homeless people in the city with one-way tickets — either plane, bus or train rides — out of Los Angeles County and to their original hometowns or family.
So far, Alle said, the group has provided 41 individuals with travel fare out of the city.
He said he’s hopeful that the city’s upcoming entertainment events might draw in visitors and revenue, but he doubts that the incentive for them to be able to carry alcoholic drinks on the streets will help.
“Many retailers have signs on their windows that say ‘No alcoholic drinks inside,’” he said. “We’ll see how it goes. We’re hoping it goes well.”
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