Elle Islas, 25, was arrested for assault with a deadly weapon and criminal threats.
According to the Santa Monica Police Department, the incident happened around 9:30 p.m. by the stairway near the Bubba Gump Shrimp Co. restaurant.
Witnesses told officers that the man was "behaving erratically, yelling at bystanders, and confronting individuals without provocation."
"According to witness statements, the suspect produced a pocket knife and advanced toward victims while making threatening statements," police said. "Additional witnesses described the suspect engaging in aggressive behavior toward multiple individuals prior to the incident, including verbal harassment and attempts to initiate physical confrontations."
The department also said officers had to break up a fight between the suspect and a group of people.
No serious injuries were reported. Police said one witness requested medical evaluation due to a medical condition.
The incident remains under investigation.
Anyone with information is being asked to email Detective James McCoy at james.mccoy@santamonica.gov or call the Watch Commander anytime at 310-458-8427.