Santa Monica Business and Property Owners Taking Steps to Secede from Downtown Santa Monica Inc

April 12, 2023 - Citing out-of-touch leadership and mismanagement of funds, 54 business and property owners on the Third Street Promenade have hired an attorney to create their own business district, apart from Downtown Santa Monica Inc, with no city government participation.

Currently, DTSM operates the downtown area, including the Third Street Promenade and from Second Street to Lincoln Boulevard and the 10 Freeway. They are to maintain the area, keep it secure, and institute programs and policies that promote economic prosperity. It is a "private" non-profit organization made up of 6 members appointed by the City Council, 6 members elected by the dues-paying property owners in the downtown district, and 1 member who is either the salaried City Manager or his/her designee. The city, therefore, has the deciding vote on all matters, a sore point with the dues-paying members.

In a letter to DTSM members, Promenade property and business owner John Alle announced that 54 of its constituents had begun the legal process of organizing a withdrawal from DTSM. Alle and other tenants and landlords of the area have long complained that DTSM charges high fees but produces poor results. A further complaint is that the top leaders of the organization do not listen to the wants and needs of their constituents.

The use of the high fees paid to DTSM is a main source of contention. Alle describes the budget as approximately $10 million. $2 million of that, he says, is spent on the salary of the CEO and staff together with their health and dental insurance, pensions and other "perks." Another $6 million is spent on the unarmed Downtown Ambassadors, who are unable to act as police, sometimes don't even call the police, and repeat activities already performed by city sanitation workers. "That leaves barely $1.5 million for actual maintenance of the Promenade and Downtown," Alle wrote in his email to other DTSM members. The result is poor maintenance, crime, open drug use with all its consequences, and difficulty in finding tenants or making a profit. Recently T-Mobile left the Promenade, one of many businesses that have done so.

The 54 business and property owners have only just begun speaking to a lawyer about seceding. Alle said in a phone interview he wants to limit the new business district to the Promenade, and have it composed only of tenants and landlords, those who are true stakeholders. "We think we can do better on our own. Get private security, do a better job," Alle said. They hope to be able to complete the process by the end of 2023.

He claims the new organization is not looking to disband DTSM, an action he'd supported in January. "They can continue on. We want to isolate the Promenade and run it ourselves and not be assessed the high fees." Currently, Alle says Third Street Promenade owners pay higher fees than other members of DTSM, which extends out to the freeway, and thus they subsidize areas that "have nothing do do with us."

Alle says the city and the business owners do not have the same goals. One example is the open-air needle distribution program that was exposed in a KTLA segment in mid-March. According to Alle, DTSM Director Andrew Thomas called the existence of the program "a myth." However, LA County Public Health Director Barbara Ferrer has public stated that the needle, condom, and synthetic opioid distribution program is occurring on a weekly basis at several areas in Santa Monica, including Tongva Park, Palisades Park, and the 7-11 at Wilshire and 7th. Alle said he has seen Downtown Ambassadors removing signs from Promenade storefronts asking for the program to be moved indoors and to include support services.

"All of us want the downtown to be the biggest comeback story," Alle said. "That starts with safety and cleanliness. We'd rather pay for that directly than pay it to Santa Monica."