City Council has approved a Development Agreement for a new 7-story building at the site formerly occupied by Fred Segal (500 Broadway).

The agreement received initial approval at the Council’s May 10 meeting and returns for a second reading on May 24. While the project was approved, three minor modifications were made to the staff recommendation.

Applicant DK Broadway LLC has proposed a mixed-use 7-story (84 feet) building consisting of 301,830 total square feet, including 24,217 square feet of basement area, 35,428 square feet of ground floor commercial space (including a grocery store/market), 249 residential rental units, and 524 parking spaces within a four-level subterranean parking garage.

The project will be located on two adjacent parcels equaling 67,500 square feet along the southeast corner of Broadway and 5th Street.

In addition to funding various street improvements and contributing to city established mitigation funds, the developer will provide land for a new, separate, affordable housing project at 1626 Lincoln Blvd. The 100 percent affordable project will be managed by Community Corporation of Santa Monica and include 64 residential units.

Council made three revisions to the D.A. as proposed by staff. The agreement includes rules that require the developer to notify the Council in addition to the Planning Commission during the search for a grocery store tenant, expands the prohibited uses on the property to outlaw office uses and explicitly prohibit vacation rentals (with those prohibitions also written into the residential leases) and limits the Architectural Review Board’s ability to reduce the floor area.

Councilwoman Gleam Davis said the project is an example of next generation sustainable construction.

“While I really appreciate the green elements built into this building to me what’s equally important to it is its part of sustainable overriding city planning,” she said. “It’s not just enough to build green buildings, we have to build green cities. We have to cut down on people driving in their cars, we have to make more walkable cities, we need to make it easier for people to bike and use public transit.”

Mayor Pro Tem Ted Winterer also praised the sustainable elements such as incorporation of recycled water into the project via a developer-funded expansion of the city’s purple pipe system. He voiced support for the design that avoided tiered floors.

“I welcome the opportunity for this project to deviate from the wedding cake formula and have a sort of a consistent floor plate ratio from the top to the bottom and I welcome that as innovative approach to creating some open area but not doing it in the formulaic approach we’ve seen in other buildings.”

Several councilmembers stressed the importance of the grocery component to their approval of the project and expressed concern over a provision that would allow the developer to terminate the search for a grocery tenant after 180 days. Some councilmembers suggested formalizing an incentive package for a grocery, something City Manager Rick Cole argued against saying it would be more effective to let staff work with the developer on an as-needed basis to provide only what is required to secure the tenant.

“Santa Monica has been remarkably successful at not entering into subsidy agreements which have been so destructive in so many other cities,” he said.

The agreement will return to council for a second reading at their May 24 meeting.