CITY OF SIGNAL HILL - File #: 26-1909

• File #: 26-1909
• Type: City Manager Report
• Status: Agenda Ready
• File created: 10/15/2026
• In control: City Council
• On agenda: 11/10/2026
• Title: OPPORTUNITIES STUDY AREAS PROJECT UPDATE

AGENDA ITEM

TO:                                           HONORABLE MAYOR

AND MEMBERS OF THE CITY COUNCIL

FROM:                      CARLO TOMAINO

CITY MANAGER

BY:                                           GREG KAPOVICH

COMMUNITY DEVELOPMENT DIRECTOR

CARLOS LUIS

PLANNING MANAGER

SUBJECT:                      

title

OPPORTUNITIES STUDY AREAS PROJECT UPDATE

summary

Summary:

To catalyze the redevelopment of vacant and underutilized properties across our compact 2.2-square-mile landlocked footprint, the City initiated the Opportunities Study Area (OSA) Project. Partnering with consulting firm PlaceWorks, the City established a market-tested, flexible regulatory framework designed to diversify its long-term tax base and achieve the highest and best use of land. Unlike traditional planning efforts based on internal wish lists, this framework is rooted in a comprehensive regional economic study confirming that Signal Hill can actively absorb and sustain the specific uses, densities, and scope of proposed development.

By aligning zoning with true market demand; paired with expanded by-right uses, flexible development standards, modernized parking, and streamlined entitlements, the City eliminates regulatory friction, expands building envelopes, and creates certainty for property owners. Crucially, to overcome upfront delays and costs associated with legacy oil field remediation, the City is proactively executing a municipally funded      Programmatic Environmental Impact Report (PEIR) across the entire 243-acre project area. This programmatic CEQA coverage drastically lowers entry barriers, enhances land values, and ensures local project economics can compete directly with neighboring markets.

Tonight, staff is presenting a comprehensive status update on the OSA framework and PEIR progress and is requesting City Council direction on key development standards and immediate next steps in this comprehensive process. Following feedback tonight, public review of the Draft PEIR this winter and Planning Commission review in April 2027, staff anticipates bringing the OSA framework and Final PEIR back to the City Council for formal review in May 2027.

Strategic Plan Goals:

Goal No. 1                     Financial Stability: Ensure the City’s long-term financial stability and resilience.

Goal No. 3                     Economic & Downtown Development: Improve the local economy, support local businesses, and create a vibrant downtown core.

Goal No. 4                     Infrastructure: Maintain and improve the City’s physical infrastructure, water system, and recreational spaces.

Goal No. 5                     High-Functioning Government: Strengthen internal communication, recruitment, retention, systems, and processes to increase the effectiveness and efficiency of City services.

recommendation

Recommendations:

1.                     Provide direction to staff regarding all proposed Overlay Zoning District development standards including specific direction regarding changes to parking ratios.

2.                     Provide direction to staff regarding a two-pronged design approach, pairing objective citywide standards with non-prescriptive architectural style guidelines.

3.                     Provide direction to staff regarding the proposed framework for publicly visible art.

4.                     Provide direction to staff to issue a Request for Proposals to evaluate the potential of establishing an Enhanced Infrastructure Financing District.

5.                     Provide direction to staff to issue a Request for Proposals to develop a dedicated Opportunities Study Area marketing website.

recommendation

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Fiscal Impact:

The City Council previously approved a total of $1,300,000 for the Overlay Zoning Districts Project to fund professional services, including the PlaceWorks agreement to perform the economic study, development standards, CEQA analysis, and associated environmental studies. Across fiscal years, funding was allocated as $300,000 in FY 2023-24, $400,000 in FY 2024-25, and $600,000 in FY 2025-26, with $405,812 currently carried over to FY 2026-27 to finish the project ($370,312 for CEQA Analysis and $35,500 for the Economic Study). Any subsequent work related to the potential formation of an Enhanced Infrastructure Financing District (EIFD) would require future budget allocations based on the scope and cost of work identified as the project advances.

Background:

Revenue diversification remains a top strategic priority for the City. Following the dissolution of redevelopment agencies and the loss of traditional tax increment financing, the City has actively pursued alternative strategies to increase property values, attract private investment, create jobs, and generate long-term revenue. Concurrently, the development landscape is shifting away from traditional heavy industrial uses and storage yards toward aerospace, high-tech manufacturing, biomedical, and related emerging technology. These industry-wide shifts have created the opportunity for Signal Hill to reevaluate its land uses. Given the City’s immediate proximity to aerospace and high-tech manufacturing businesses in Long Beach, there is a need to reassess the City’s land uses relative to these industries with the broader goal of creating new jobs within Signal Hill as well as housing opportunities for employees of these industries.

As discussed in greater detail in the report, the City’s economic development goals are multifaceted and interrelated. Staff has summarized the City’s broader goals for the City Council’s review:

•                     Address remediation challenges by creating market-based development standards that correspond to the City’s economic study; further encourage development by reducing regulatory barriers through a comprehensive certified environmental document that reduces uncertainty, risk, and cost to future development partners.

•                     Leverage emerging technology clusters that will directly and indirectly support proximate aerospace and related businesses which will create new high-paying jobs and redevelop existing properties. Adapt the City’s land uses to enable emerging industry clusters in Long Beach to extend into Signal Hill.

•                     Enable residential development to support those working in established businesses such as Vast and Relativity as well as upcoming major employers such as Anduril. These future developments will create new high-quality neighborhoods and increase revenue through property taxes, sales tax spending, and one-time Development Impact Fees.

•                     Facilitate the development of high-quality market-rate housing to support current and future sales tax generating business, especially along the City’s commercial corridor on Cherry Avenue. The increased population would enhance market demand for existing and new commercial uses.

•                     Establish hotel development opportunities that align with existing regional demand including the Memorial Medical Center and tourism associated with the broader Long Beach trade area. Hotels generate Transient Occupancy Tax, which supports the City’s efforts to further diversify its tax base.

•                     Encourage development that will increase the City’s property tax valuation and generate additional revenue to support future operations.

•                     Improve infrastructure through new development opportunities and enhance connections to the City’s sidewalks, trails, and roadways. 

To support this effort, the City initiated the Opportunities Study Area (OSA) Project to evaluate redevelopment and economic diversification opportunities within three underutilized areas north of East Willow Street. In undertaking this effort, the City recognizes a unique and significant structural constraint: unlike neighboring jurisdictions where environmental contamination is typically isolated to single, ad-hoc sites, almost every property in Signal Hill's compact, 2.2 square-mile footprint carries the legacy of a century of heavy oil production. Consequently, mandatory on-site environmental remediation is required prior to vertical development across nearly all parcels. Remediation represents a substantial, unique upfront cost and timeline hurdle for developers that does not exist in standard greenfield or less encumbered neighboring communities. Furthermore, because of Signal Hill's proximity to the Port of Long Beach and local oil operations, many property owners have historically chosen to hold land in low-effort, passive uses such as truck storage, enjoying steady, low-risk monthly cash flow while keeping valuable commercial and industrial land severely underutilized.

To break this economic inertia and help make a Signal Hill downtown core area, the        City Council directed staff to partner with a third-party consultant to assess development opportunities. Following the release of a Request for Proposals in March 2024 and the subsequent award of a professional services agreement to PlaceWorks in November 2024, the City completed an Economic Analysis that found a robust market foundation identifying viable opportunities for residential, mixed-use, retail, research and development, hospitality, industrial, and emerging employment uses (Attachment A). In essence, the economic study confirmed that the regional area surrounding Signal Hill can support much of the redevelopment sought to replace undeveloped and underutilized land. Upon completion of the study, city staff and PlaceWorks started to develop a comprehensive market driven strategy to include the following:

•                     Upzoning and increasing the buildable area on each property.

•                     Expanding the roster of allowed uses by right to eliminate discretionary Conditional Use Permits (CUPs) and reduce entitlement friction.  

•                     Lowering and creating a flat parking ratio for commercial uses so developers dedicate less land to surface parking and retain more space for rentable, revenue-generating structures. 

•                     City initiated and led CEQA review process for the entire 243-acre Overlay Zoning Area, eliminating the need for site specific CEQA analysis for each future development.

To ensure the proposed regulations are grounded in real-world operational realities, staff conducted targeted outreach to key members of the local development community to review the draft land use definitions, matrix, and flexible design standards. This peer-review process confirmed that the framework aligns not only with the macroeconomic trends identified in our market study, but also with practical constructability and financial feasibility metrics required to make private projects pencil.

Crucially, by strategically enhancing development standards and streamlining entitlements, the City dramatically increases the residual land value of these underutilized parcels. This economic shift creates a powerful catalyst where holding onto passive truck storage and similar uses becomes financially irresponsible, compelling existing property owners to either undertake vertical development themselves or sell to highly motivated developers ready to build. Staff will detail the development standards and methods for streamlining projects further below.

To directly offset the heavy financial barrier of oil remediation and level the regional playing field, the City is also proactively funding and preparing a comprehensive Program Environmental Impact Report (PEIR) covering the entire 243-acre project area. By absorbing the immense cost and protracted timeline of project-level California Environmental Quality Act (CEQA) reviews at the municipal level, the City legally shields conforming projects from subjective CEQA challenges, eliminates redundant consultant expenses, and drastically compresses pre-development timelines. This upfront municipal investment saves developers critical time and capital, directly helping to balance on-site oil remediation expenditures and making site economics in Signal Hill highly competitive with surrounding regional markets.

Analysis:

The proposed OSA development standards establish three distinct overlay zones: Community Core (Mixed-Use); Innovation & Enterprise; and Workshop, Studio & Entertainment. The following analysis outlines the key framework for each zone (Attachment B).

Overlay Zoning Districts

Community Core (Mixed-Use) Overlay Zone

The Community Core (Mixed-Use) Overlay Zone serves as the catalyst for Signal Hill’s future Central Business District and civic urban village. Positioned as a focal point for citywide activation, this district transitions single-use commercial corridors into a vibrant, walkable destination featuring horizontal and vertical mixed-use development. By integrating multi-family housing with resident supporting uses such as boutique retail, dining, gyms, and professional service spaces, the Community Core creates a dynamic environment where residents and visitors can live, work, shop, and recreate within a cohesive district.

Development standards within this overlay emphasize human-scale architectural design, active street frontages, robust pedestrian connectivity, and inviting public realm enhancements, such as plaza spaces and outdoor dining areas. This district is designed to catalyze local economic activity, capture regional retail potential, and create a true sense of place and identity for the Signal Hill community.

Under the proposed land use matrix, uses allowed by right in this zone include multi-family residential, mixed-use developments, and commercial uses meant to support residents and visitors within the zoning district including retail, restaurants, hotels, offices, and personal care services such as gyms, laundry facilities, nail salons, and barber shops.

Innovation & Enterprise Overlay Zone

The Innovation & Enterprise Overlay Zone positions Signal Hill at the forefront of the region’s growing high-tech economy by establishing a forward-looking innovation district. This overlay is specifically designed to accommodate next-generation employment uses, including biomedical research and development, clean manufacturing, aerospace technology, and modern creative office spaces.

Strategically situated to capitalize on key regional economic engines, this district creates a direct synergistic bridge between the advanced aerospace cluster near Long Beach Airport and the emerging bioscience and healthcare R&D ecosystem surrounding nearby regional medical centers. By offering flexible development standards, expansive modern building footprints, and streamlined approvals, the Innovation & Enterprise Overlay removes regulatory friction, attracting high-wage employers, fostering commercial investment, and expanding Signal Hill’s resilient economic base.

Under the proposed land use matrix, uses allowed by right in this zone include research and development facilities, custom manufacturing (e.g., woodworking, ceramics, custom apparel, metalsmithing), offices, and uses that support those employment uses such as restaurants, banks, gyms, utilities, and recreation/entertainment activities.

Workshop, Studio & Entertainment Overlay Zone

The Workshop, Studio & Entertainment Overlay Zone celebrates Signal Hill’s entrepreneurial spirit and industrial heritage by establishing an active, culturally rich district for creative production, artisan spaces, and unique commercial entertainment. Designed to foster a dynamic mix of light industrial crafts, specialized trade workshops, digital media production, indoor/outdoor commercial recreation, and social entertainment concepts, this overlay creates a destination where local creativity and commercial enterprise intersect.

A primary pillar of this district is the support and encouragement of adaptive reuse, providing property owners and developers with flexible standards to reimagine existing light industrial and commercial building stock. By permitting integrated social spaces, tasting rooms, breweries, boutique assembly, fitness/recreation studios, and gathering venues under streamlined standards, this overlay turns underutilized spaces into lively, experiential hubs that draw residents and regional visitors alike.

Under the proposed land use matrix, uses allowed by right in this zone include breweries, distilleries/tasting rooms, custom manufacturing (e.g., woodworking, ceramics, custom apparel, metalsmithing), indoor and outdoor commercial recreation, restaurants, retail sales, offices, banks, and personal improvement services (e.g., dance studios, health clubs, business/trade schools, art studios).

Land Use Classification & Modern Definitions

The proposed Land Use Classification Table streamlines local development by permitting a broader range of everyday commercial and light industrial uses "by right." By eliminating unnecessary Conditional Use Permits (CUPs), the City reduces processing times, lowers financial risk for prospective business owners, and positions Signal Hill to adapt quickly to evolving market demands. For instance, an operator seeking to convert an existing light industrial space into a specialized fitness studio, micro-brewery, or specialized R&D facility currently faces a three-month discretionary CUP process. During this period, the applicant must pay thousands of dollars in application fees, retain design professionals to produce the required architectural plans, and absorb monthly carrying costs just to hold the property. Crucially, approval is never guaranteed, an applicant can incur these significant upfront expenses and wait months for public hearings only to face potential denial at the end of the process. Facing this combination of holding costs, professional fees, and entitlement uncertainty, prospective tenants simply take their investment to neighboring cities.

To further help eliminate these barriers and support a streamlined approach, the OSA shifts away from overly rigid, business-specific listings in favor of broader, defined, modern land use categories (e.g., grouping barber shops, beauty salons, and tailors under "Personal Services"). Managing land use through broader categories benefits the community in two critical ways:

•                     Prevents Unintended Business Bans: Under a rigid, business-specific table, if an innovative business model or emerging concept is not explicitly named, the code legally prohibits that use. Broad categories ensure staff can place new, creative business types into closely related land use categories, allowing new businesses to open in Signal Hill without requiring a months-long, costly Zoning Code Text Amendment.

•                     Eliminates Arbitrary Inconsistencies: The current matrix lists over twenty individual retail types (such as bookstores, gift shops, and apparel stores) and treats them differently across commercial districts for no clear planning reason. Broader categories ensure that similar businesses are treated fairly, consistently, and logically under the law.

Updating these definitions ensures our commercial districts remain vibrant, eliminates administrative bottlenecks, and signals that Signal Hill is open for business.

Flexible Development Standards

Staff proposes substantial flexibility regarding residential density, floor area, building height, setbacks, and lot coverage to maximize buildable footprints for the development community. The underlying economic principle here is to maximize the economic development potential of a site, thereby inducing new development while protecting the City’s character and scale:

•                     Setbacks & Coverage: Minimum setbacks along rights-of-way have been reduced and are tailored strictly to accommodate a 10-foot-wide dedicated sidewalk, which reflects the desired pedestrian-oriented connectivity in a downtown core area and allows space for placemaking items such as outdoor dining or publicly visible art. Maximum lot coverage caps, which is the maximum percentage of a site’s footprint that can be covered by buildings, have been entirely eliminated. This provides the development community with design flexibility to maximize rentable square footage and eliminate dead space on a lot, which again is a common trait in urban downtown core areas that the City is intending to create with the OSA.

•                     Height by Stories: The City replaces rigid vertical measurements (tied to a 1960 datum grade line) with a maximum story count (up to 4 stories in the Community Core, 6 stories in the Innovation & Enterprise zone, and 2 stories in Workshop & Entertainment zone). This change allows for extended 18-foot ground-floor commercial ceiling heights without squeezing the residential floors above to meet a rigid standard that often results in low ceilings on the upper floors. Furthermore, rooftop appurtenances (such as stair/elevator overruns, solar panels, and mechanical equipment) and active rooftop amenities (gardens, pools, and outdoor dining) are explicitly exempt from overall height limits. This allows the development community to utilize the rooftop area for necessary equipment or for desirable building amenities.

Measuring height in stories provides vital flexibility when grading around abandoned oil wells. State regulations (CalGem) strictly prohibit increasing or decreasing pad levels above abandoned wells, which historically penalized new development under rigid vertical height limits. The story-based framework empowers designers to navigate these subsurface constraints successfully.

•                     Density & Lot Consolidation: Residential density scales based on overall property size to incentivize parcel aggregation with more density afforded per acre for larger sites. Staff also proposes a further height incentive by rewarding projects with an additional allowable story for developers that do successfully aggregate parcels

Staff is seeking City Council feedback on the proposed development standards designed to expand the building envelope on each property, maximize site potential, and enhance project feasibility for the development community.

Parking Requirements

Parking mandates represent one of the heaviest financial burdens on project pro formas. Parking areas are often the most expensive component of a project for developers because these standards consume vast amounts of site area that cannot be sold or rented. To ease these constraints, staff proposes modern, highly flexible parking standards that reflect Signal Hill’s urban environment and foster a vibrant "park once and walk" downtown atmosphere.

The proposed standards establish a single, flat parking ratio of 1 space per 300 square feet across commercial uses, and 1 space per 1,500 square feet for industrial and R&D uses.

•                     For Developers: Reducing parking ratios requires dedicating less land area to surface parking or expensive structured stalls. This reduction translates directly into a smaller parking area footprint and more space dedicated to rentable or saleable floor area, and significantly higher returns on investment. When developers are not forced to wrap sites in parking structures or vast setbacks, they can push buildings closer to the sidewalk, create active ground-floor frontages, and deliver the high-quality human-scale design typically found in downtown core areas.

•                     For Business Owners & Commercial Leasing: A flat parking rate removes traditional regulatory issues for incoming tenants. Under old standards, if a restaurant sought to occupy a former office space, the restaurant's higher parking requirement frequently triggered an impasse. Because built-out urban sites lack room to expand parking garages, staff are often forced to deny business licenses, leaving storefronts vacant. The new flat parking rate eliminates this barrier, ensuring that vacant storefronts can be filled quickly and seamlessly by right.

•                     For the City of Signal Hill: From a municipal planning and city-building perspective, lowering parking requirements is not just a developer concession, it is a critical policy tool to achieve the City’s long-term vision for a vibrant, economically resilient, and walkable downtown core. Signal Hill is a compact, urbanized municipality entirely surrounded by the dense urban fabric of the City of Long Beach. Suburban-style parking ratios are fundamentally misaligned with           Signal Hill’s built environment. A primary goal of the overlay district is to allow for and foster development of a central place for the community and support a cohesive downtown core. Vast fields of surface parking create pedestrian dead zones that physically sever blocks and destroy walkability. Lowering requirements knits the district together into a human-scale, continuous environment.

The proposed parking standards explicitly exclude outdoor dining and rooftop dining areas from parking calculations; this exemption delivers dual benefits for both developers and restaurant operators:

•                     Construction Stage (Developers): Developers do not need to permanently over-park a site to account for a restaurant use that may change tenancy over time or for seasonal open-air seating, lowering upfront hard costs.

•                     Operational Stage (Restaurant Owners): Restaurant profit margins are notoriously narrow, the ability to add outdoor tables, chairs, and rooftop seating without needing permanent parking stalls allows operators to serve more patrons and expand revenue.

•                     Placemaking Value: Beyond financial metrics, active outdoor dining and rooftop activation animate the streetscape, draw foot traffic, and create the lively, pedestrian-oriented public realm essential to a successful downtown core.

To further optimize site design, the City will permit administrative approval for flexible parking strategies, including shared parking plans (which capitalize on differing peak demand times among mixed-use tenants), valet parking, tandem parking, and mechanical parking stackers upon completion of a study that illustrates the creative parking solution will work to meet site parking demand. Overall, these modernized parking provisions improve project feasibility, reduce site constraints, and support creative, high-quality urban design. By right-sizing parking and encouraging creative parking plans, visitors can park once and patronize multiple businesses (retail, dining, entertainment, and civic spaces) on foot, increasing foot traffic for local merchants.

Staff is seeking City Council feedback and direction on the following parking recommendations designed to encourage a walkable, vibrant downtown environment:

•                     Establishment of a Flat Parking Ratio: Transition from land-use-specific parking matrices to a simplified, standardized flat parking ratio across the district to reduce barrier-to-entry for new commercial tenants.

•                     Exemption for Outdoor Dining: Formally exempt outdoor dining areas from off-street parking requirements to foster active streetscapes and maximize usable outdoor commercial space.

•                     Flexibility for Creative Parking Strategies: Authorize staff to consider alternative, creative parking solutions, such as shared parking agreements, off-site arrangements, or valet options, subject to applicant-funded parking studies verifying operational feasibility.

Design Standards and Guidelines

A key priority expressed by the City Council at the February 2026 City Council meeting was to ensure that adjacent new developments do not feature heavily conflicting architectural styles. Staff proposes a two-pronged approach to address this priority. First, in a parallel effort separate from the OSA framework, City staff are preparing the annual omnibus ordinance. A part of that ordinance is the establishment of objective design standards that would apply citywide. These objective standards will govern all new development, encompassing projects subject to discretionary entitlements and those moving straight to building permits.

The introduction of objective design standards serves a critical legal and regulatory purpose. Under recent state housing and streamlining laws (such as SB 35, SB 330, and the Builder's Remedy), municipalities risk losing their local design review authority unless they enforce clear, objective, and non-subjective design criteria. Without these standards, the City remains vulnerable to "bad actor" developers who might exploit State provisions to the fullest extent; bypassing local oversight and producing low-cost, unarticulated buildings with zero aesthetic value.

While these objective standards successfully defend the City against unwanted, out-of-scale projects, they also establish a dependable baseline of quality for every “good actor” developer operating in Signal Hill. Examples of these objective criteria include:

•                     Massing and Articulation: Requirements for vertical or horizontal changes in plane (e.g., a 2-foot offset for every 30 linear feet of wall length) to break up long building façades along public streets.

•                     Mechanical and Utility Screening: All rooftop mechanical equipment, electrical transformers, and above-ground utility meters must be fully screened from public rights-of-view using integrated architectural parapets, solid durable enclosures, or matching building materials.

•                     Blank Wall Prohibitions: Restrictions prohibiting blank, unarticulated exterior walls exceeding 15 continuous linear feet without a window, door, or architectural relief.

In addition to the citywide objective design standards that will also apply to the OSA’s, staff recommends including language in the OSA’s that encourages but does not mandate the developer utilize a curated list of complementary architectural styles appropriate for Southern California’s urban context including:

•                     Spanish Colonial Revival & Mediterranean: These styles are deeply rooted in Southern California's climate and architectural identity. Features like light stucco finishes, clay tile accents, recessed windows, and deep overhangs naturally complement the coastal-desert climate and lend themselves well to the indoor-outdoor dining and active streetscapes envisioned for the OSA’s.

•                     Craftsman: As a foundational Southern California residential and small-scale commercial vernacular Craftsman influences lend a human scale, high-quality timber detailing, and an established sense of place.

•                     Art Deco & Streamline Moderne: These styles tie directly into the 1920s history of Signal Hill. Incorporating these sleek, horizontal lines, curved corners, and industrial-aviation aesthetics pays homage to the era when Signal Hill was first incorporated.

•                     Modernism, Mid-Century-Influenced, & Contemporary: Clean lines, large expanses of glass, flat roofs, and industrial materials (such as exposed steel and board-formed concrete) reflect the modern tech, R&D, and creative manufacturing uses targeted by the economic study. They also align seamlessly with the adaptive reuse of light industrial buildings.

•                     Cape Cod: Cape Cod elements (such as clean gable rooflines, board-and-batten siding, and simple massing) are frequently adapted in Southern California transitional residential and mixed-use projects. When executed with modern, west-coast color palettes, they offer an approachable, friendly residential aesthetic

Staff cautions against overly prescriptive architectural mandates. Requiring a single, uniform architectural style runs counter to the fundamental intent of the OSA, which is to encourage creative, market-driven design and streamline the entitlement process. Many of the most successful, vibrant downtowns derive their unique charm and character from a rich tapestry of varied architectural expressions. Rather than imposing rigid architectural prescriptions that could create conflicting messaging for development teams, the proposed standards encourage architectural compatibility through contextual design, high-quality building materials, and proper massing.

The omnibus ordinance, which will include the objective design standards, is scheduled to appear before City Council prior to its review of the OSA’s in May 2027 thus allowing City Council to review the objective design standards with the OSA’s in mind. The proposed flexible development standards within the OSA’s and the citywide objective design standards would work together to achieve the same high-quality design outcomes as prescriptive design standards without imposing their limitations. Staff is seeking City Council feedback on this approach.

Publicly Visible Art

Publicly visible art enhances the pedestrian experience by creating visual interest, reinforcing community identity, and adding distinctive features to the public and private realm. Strategically located murals, sculptures, installations, integrated architectural art, and other creative elements activate building frontages, encourage pedestrians to explore the area, and create memorable destinations along sidewalks and publicly accessible spaces. Furthermore, publicly visible art complements streetscape improvements, landscaping, lighting, and building design to establish a cohesive, engaging environment.

Unlike jurisdictions that enforce formal public art ordinances requiring developers to partner with third-party artists and relinquish design control, staff proposes a mandated but flexible, developer-friendly framework for publicly visible art. In the absence of a traditional public art ordinance and associated subjective entitlement review process, developers and their design teams retain full creative control over the art integration; all installations remain privately owned and maintained.

To streamline execution, the City's review process is limited to verifying that an art component is integrated into the project design during the Site Plan and Design Review entitlement or building permit process and ensuring that the installation does not function as an unauthorized on-site or off-site commercial sign. Installations may be located on the project site or within the public right-of-way via an encroachment permit, provided minimum ADA accessibility requirements are fully satisfied. This approach ensures that new developments contribute to the visual character and placemaking goals of the OSA while offering meaningful opportunities for creative expression. City staff is seeking City Council feedback on the proposed approach to art.

East 27^th Street

Following previous City Council direction, staff explored development standards requiring the closure of East 27^th Street to vehicle traffic between Gardena Avenue and Junipero Avenue to establish a pedestrian-oriented downtown core. However, developer feedback indicated that permanent vehicular prohibition introduces significant access limitations/concerns regarding trash and delivery services and reduces storefront visibility, rendering those parcels less desirable for redevelopment. To balance walkability with commercial viability, staff instead proposes advanced streetscape improvements featuring specialized hardscaping and removable street closure mechanisms (i.e. retractable bollards) for all corner properties along East 27^th Street between Gardena Avenue and Junipero Avenue. This dynamic solution maintains essential north-south vehicular flow along intersecting corridors, including Cherry Avenue, St. Louis Avenue, Dawson Avenue, Raymond Avenue, and Junipero Avenue. Furthermore, street furnishings such as retractable bollards keep East 27^th Street open during early morning hours to accommodate necessary utility maintenance, trash collection, and commercial deliveries. Later in the day, staff can activate the bollards to create a secure, pedestrian-only environment that expands outdoor dining footprints, increases restaurant seating capacities, and activates the public realm without compromising long-term commercial marketability. Staff is seeking City Council feedback on this proposed alternative.

Program Environmental Impact Report (PEIR)

City staff and PlaceWorks are currently reviewing over 20 technical studies required to support the CEQA analysis, including assessments of biological resources, geotechnical conditions, air quality, hazardous conditions, historical and archaeological resources, infrastructure, vehicle miles traveled, water supply, and more. These studies form the technical baseline for evaluating potential environmental impacts associated with the future build-out of the 243-acre overlay area and establishing appropriate mitigation measures to help address any environmental impacts. Once finalized, the results of the studies and appropriate mitigation measures will be consolidated into one report called the “Programmatic Environmental Impact Report”.

By taking the proactive step to lead the preparation of the PEIR rather than forcing individual property owners through fragmented, site specific, project-by-project reviews, the City delivers significant cost and time savings for the local development community. A comprehensive, program-level environmental document evaluates cumulative impacts and embeds mitigation measures into a coordinated framework. This approach eliminates redundant consultant costs, shields projects from subjective CEQA challenges and weaponized litigation, and provides absolute certainty for property owners regarding environmental requirements. Furthermore, absorbing the CEQA timeline and burden at the municipal level directly offsets on-site oil remediation expenditures, making site economics in Signal Hill highly competitive with surrounding regional jurisdictions.

On July 15, 2026, the City published and distributed the Notice of Preparation (NOP) to responsible agencies and Native American Tribes, followed by a public scoping meeting on August 12, 2026. Staff will also be incorporating local resident and public agency input into the upcoming draft of the PEIR. As noted above, staff is currently reviewing the technical studies, which will be completed in November 2026. Once staff finalizes the studies, PlaceWorks will insert the findings of each study and any mitigation measures into the PEIR, which by State law must be made available for public review and comments for a period of 45 days. The current schedule anticipates making the draft PEIR available by December 2026 with the review period ending in January 2027. State law then requires staff and PlaceWorks to respond to any comments derived from the public comment period before taking the document to Planning Commission in April 2027 and City Council in May 2027 for formal review and possible adoption.

Enhanced Infrastructure Financing District (EIFD)

An Enhanced Infrastructure Financing District (EIFD) provides a mechanism for cities and counties to invest in public infrastructure and community improvements using the growth in property tax revenues generated by new development. Under State law (Government Code §53398.50 et seq.), participating tax agencies may bond against future property-tax increments to fund capital projects that advance economic development, housing, and sustainability objectives. To date, City staff have met with County of Los Angeles staff on two occasions to discuss their interest and the EIFD formation process. If the City Council directs staff to proceed, staff would continue negotiations with the County regarding its formal participation and issue a Request for Proposals (RFP) to retain a specialized EIFD consultant. Staff would then return to the City Council at a future date to recommend a consultant contract award to formally initiate the process.

The EIFD structure would allow both the City and the County of Los Angeles to reinvest the property value created through private redevelopment. For example, the City's Economic Study, estimates that full realization of the project framework is projected to increase the City's property tax assessed valuation by $3.2 billion at approximately 45% buildout. This massive surge in property tax growth illustrates the scale of new wealth generated for both the City and Los Angeles County. Through an EIFD, the County can agree to contribute a portion of its tax increment growth back into the district to co-finance major public infrastructure such as utility upgrades, streetscape enhancements, and storm drain improvements that support new investment and that the City could not fund independently. Reinvesting local tax growth in this manner also creates matching funds for State and federal grants, leverages private investment, and offsets the substantial upfront site preparation and remediation costs unique to Signal Hill.

Forming an EIFD involves a structured statutory process under California law. Following consultant selection, the process begins with the City Council's adoption of a Resolution of Intention defining the proposed district boundaries, targeted public facilities, and district goals. Staff and the consultant will then draft an Infrastructure Financing Plan (IFP) outlining district boundaries, eligible capital improvements, financing structures, and the district's operational duration. Once the IFP is prepared, the City Council would establish a Public Financing Authority (PFA) to govern the district, composed of City Council members, representatives from participating taxing entities (such as County of Los Angeles), and public members. The PFA conducts public hearings to gather owner and resident input before formally adopting the IFP to establish the EIFD. If the district subsequently elects to issue tax-increment-backed bonds, voter approval from 55% of district voters would be required.

Staff seeks City Council feedback on pursuing an EIFD and direction to prepare an RFP to solicit qualified EIFD consultants.

California Opportunity Zones 2.0 Program

In July 2026 City staff submitted a nomination for California’s Opportunity Zones 2.0 Program, an economic development initiative jointly managed by the Governor’s Office of Business and Economic Development (GO-Biz) and the California Department of Finance. The program uses federal tax incentives to encourage private investment in economically distressed neighborhoods. Under this framework, individuals and corporations can roll capital gains, the profits earned from selling assets like stock or real estate into specialized funds called Qualified Opportunity Funds. These funds then invest directly in local businesses, real estate developments, and infrastructure projects within designated census tracts to boost local job growth and economic vitality.

When the federal government renewed the program for its new 10-year cycle (called 2.0), it tightened eligibility rules to ensure tax benefits flow to the communities with the greatest financial need. To qualify under the 2.0 rules, a census tract’s median family income cannot exceed 70% of the surrounding area’s median income. This was a reduction from the 80% ceiling used during the original program. In Los Angeles County, that updated 70% qualification cap sits at $67,484.

The City of Signal Hill is made up of three census tracts:

•                     Census Tract 5734.01: Encompasses the northwest portion of the city, generally bounded by East Wardlow Road to the north, East Spring Street to the south, Orange Avenue to the west, and Cherry Avenue to the east. Although its median income of approximately $69,000 slightly exceeds the updated $67,484 cap, City staff moved forward with submitting a nomination application in July 2026 given how close the tract came to meeting the new threshold. The tract would have qualified under the original program cap of 80% median income.

•                     Census Tract 5734.02: Has a median area income of approximately $74,000, which exceeded the eligibility threshold under both the original program and the tightened 2.0 rules.

•                     Census Tract 5734.03: Has a median area income of approximately $115,000, which likewise exceeded eligibility thresholds for both the original program and 2.0.

City staff anticipates receiving formal notification from the State by the end of November 2026 regarding whether Census Tract 5734.01 will be approved for designation. If selected by the State and U.S. Treasury, the designation would take effect in early 2027. Staff will continue to monitor the program's progress and update City Council as official guidance is released.

Proactive Developer Marketing & Post-Approval Outreach

Branding the Overlay Zoning District requires an active, aggressive marketing strategy to ensure these new standards drive real development. Rather than allowing the OSA Project to become a typical planning document that sits on a shelf relying solely on the public hearing process for exposure, the City is initiating a targeted, multi-channel outreach effort directly aimed at the development community.

If the City Council were to approve the OSAs, staff would issue a Request for Proposals and return to finalize an agreement with a specialized firm to build a dedicated, developer-oriented website designed to advertise site opportunities, streamline entitlement information, and promote the overlay districts directly to prospective investors. Additionally, staff will actively market Signal Hill at key industry conferences including the International Council of Shopping Centers (ICSC) in Las Vegas and Monterrey, the Los Angeles Economic Development Committee (LAEDC), 88 Cities, and more, equipped with high-resolution, one-page developer collateral highlighting the economic incentives and site opportunities within the overlay zones, complete with QR codes providing direct links to the new digital platform.

To supercharge the economic positioning of the Innovation & Enterprise Overlay Zone, staff will also leverage strategic regional partnerships with recognized Southern California ecosystem builders such as:

•                     BioscienceLA: Engaging Greater Los Angeles's life sciences R&D organizations to connect Signal Hill directly into regional biotech, medical device, and R&D networks.

•                     Sunstone Group (Sunstone Management / Sunstone Venture & Innovation Center): Capitalizing on their expertise in public-private partnerships with the aerospace industry to attract high-wage employers, startup founders, and innovative enterprises looking for flexible footprints in the Los Angeles metropolitan market.

Summary of Recommended Actions

Staff seeks City Council feedback, direction, and formal input on the following key components of the Overlay Zoning District Project:

•                     Parking Standards: Feedback on proposed flat parking ratios to support a vibrant, walkable downtown, along with policy flexibility for creative solutions (e.g., valet, mechanical, and shared parking) when supported by a parking study.

•                     Flexible Development Standards: Feedback on proposed changes to setbacks, lot coverage, height limits, density, and rooftop activation, all designed to increase the building envelope and encourage a downtown core.

•                     Design Standards and Guidelines: Feedback on the two-pronged design approach that pairs citywide objective standards with non-prescriptive, flexible architectural style guidelines to ensure high-quality design while encouraging market-driven innovation.

•                     Publicly Visible Art: Feedback on the flexible, developer-friendly framework that encourages integrated art installations without enforcing formal art ordinances or subjective entitlement reviews.

•                     East 27^th Street Streetscape Alternative: Feedback on the proposal to install specialized hardscaping and retractable bollards between Gardena Avenue and Junipero Avenue, balancing pedestrian walkability with essential utility, trash, and delivery access.

•                     Enhanced Infrastructure Financing District (EIFD): Direction to engage in further discussions with Los Angeles County to explore forming an EIFD to finance public infrastructure and help offset site preparation and remediation costs, and direction to prepare an RFP to solicit qualified EIFD consultants.

•                     Marketing Strategy: Direction to prepare a Request for Proposals (RFP) and return to City Council to finalize an agreement with a specialized firm to build a dedicated, developer-oriented website designed to advertise site opportunities, streamline entitlement information, and promote the overlay districts directly to prospective investors.

Next Steps / Project Schedule

Based on City Council direction, staff will work with PlaceWorks to refine the proposed Overlay Zoning District (OZD) development standards, incorporate City Council feedback regarding design standards and publicly visible art, and advance the remaining project components. Staff anticipates completing the PEIR in late December 2026 and opening the public review period in January 2027, with Planning Commission consideration of the OZD anticipated in April 2027. If the Planning Commission recommends approval, staff expects to schedule the OZD for City Council public hearings in May 2027.

In parallel, staff is working with MIG, the City's consultant, to prepare an update to the General Plan Land Use Element. The OZD project necessitates this update to maintain consistency between the General Plan, the proposed overlay zoning regulations, and the associated Zoning Code amendments. Staff anticipates presenting the Land Use Element update for public hearings in June/July 2027.

Staff will continue advancing these efforts to establish a comprehensive regulatory framework that supports high-quality development, encourages private investment, and advances the City's long-term economic development and fiscal sustainability goals.

Reviewed for Fiscal Impact:

_________________________

Siamlu Cox

Attachment(s):

A.                     Economic Development Study

B.                     Draft Overlay Zoning District Development Standards