City leaders and residents gathered Wednesday for a study session to discuss the future of two key downtown properties: Parking Lot 3 at 1155 Morningside Drive and the former US Bank site at 400 Manhattan Beach Boulevard.

The meeting, part of the city’s “Project Pulse” initiative, highlighted redevelopment options as part of a public engagement program. City leaders are collecting input to shape the long-term vision for the two properties in the heart of Manhattan Beach.

While redevelopment of Lot 3 had been under consideration by itself, now the city prefers to consider the two together. “There needs to be good synergy between both of these sites,” said Associate Planner Tari Kuvhenguhwa, who shared a 30-minute presentation about the properties.

The session underscored a widespread sense that it is the city’s mission to preserve its small beach town character while enhancing quality of life. 

With both properties now under city ownership, officials are exploring a range of possibilities, from public parking and commercial development to boutique hotels and community spaces.

Wednesday's session also included questions and comments from City Council members, city staff, and the public. Kuvhenguhwa's presentation can be viewed at this link. 

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Parking Lot 3: A Prime Candidate for Parking Expansion

Centrally located just behind businesses on Manhattan Beach Boulevard, Parking Lot 3, formerly a three-story structure with 145 spaces, was demolished in late 2024 due to structural issues. A temporary surface lot with 69 spaces opened in June, supplemented by 56 additional spaces elsewhere downtown. 

(A view of the temporary Lot 3 in downtown Manhattan Beach. Photo credit: City of Manhattan Beach.)

Options for new development at Lot 3 include a traditional self-park structure, parking with some ground-level commercial frontage, or even a 35-room hotel. 

However, concerns remain about balancing public parking needs with any other uses. The California Coastal Commission likely will require the city to account for all of the 145 spaces that were a part of Lot 3’s original structure. If a new building does not host that many spots, they'll have to be created elsewhere.

City Traffic Engineer Erik Zandvliet noted that Lot 3’s geometry makes it more suitable for a new parking facility than 400 Manhattan Beach Blvd. 

Zandvliet said that a 3-story structure could hold up to 170 above-ground spaces – provided that the city takes action to raise the height limit from 26 to 30 feet. (A 2-story structure could host about 105 spaces, but a third level with some overhang could have 65-70 spaces.) Underground spaces would be an option at the site as well.

There was some enthusiasm expressed at the meeting for the idea of merging underground levels at a new Lot 3 with the underground lot at Metlox Plaza, which was described as “very possible,” with the option of adding even more spaces.

400 MBB: Gateway Property with Constraints

Acquired by the city in April 2025 for over $13 million, via tax-exempt Certificates of Participation, the 400 Manhattan Beach Blvd. site includes a vacant building and surface parking. 

(The former US Bank building at 400 Manhattan Beach Blvd.)

Its prime location at the downtown entryway makes it attractive for high-visibility uses, but its irregular shape and proximity to residential areas pose challenges.

Both Mayor David Lesser and Mayor Pro Tem Joe Franklin expressed curiosity and support for the potential of merging of 400 Manhattan Beach Blvd. with the site of the Von’s market at Valley Drive and Manhattan Beach Blvd.

Franklin said it would be “a much better site if you combine it with Vons.” The sentiment was echoed by Jonathan Tolkin, developer of the Metlox property, and Michael Zislis, who owns and operates Shade Hotel. 

Public comments emphasized traffic concerns for the 400 Manhattan Beach Blvd. site, which runs along narrow Morningside Drive. 

It will be some time before anything is done with the 400 Manhattan Beach Blvd. site, leading to several suggestions for interim uses of the old bank building and the lot.

Community Voices Shape Vision

The city has gathered input from residents through earlier meetings and at Wednesday’s session for the two sites, both near-term and long-term. Suggestions included:

• Parking solutions: Subterranean structures, off-site parking with trolley service, and expanded permit parking.

• Commercial and cultural uses: Retail, restaurants, art studios, and open-air marketplaces.

• Community amenities: Art studios or a gallery, a social club, dog park, playground, teen center, and multi-family housing – including affordable and senior units.

• Revenue-generating concepts: Hotels and mixed-use developments that combine parking with commercial or public spaces.

(This is not an official plan! This is an image of a potential Lot 3 redesign - assuming underground parking - that MB News' graphics team designed with AI. But it's pretty cool, right?)

Financial and Regulatory Considerations

Regulatory hurdles include Coastal Commission oversight and the Surplus Land Act, which may affect development options. 

The Surplus Land Act creates a process the city must go through if any non-public uses of the land are being considered, including a hybrid of public/private uses for the same site. On larger lots than either Lot 3 or 400 Manhattan Beach Blvd., it can be required that "surplus land" be made available for development of affordable housing, but city officials said that would not be a requirement here.

Cost estimates for construction at either site were not presented Wednesday, as there are no specific projects yet to consider. Finance Director Libby Bretthauer said "once we get closer to knowing what the potential desired uses are, then we can really start to analyze all the financing options and weigh those with the public, with the council."

Meantime, the total fiscal year 2026 allocation for 400 Manhattan Beach Boulevard is $1,000,000. Of that, $216,000 specifically earmarked for the demolition of the existing structure, should that be ordered, while $784,000 is for design services for the site. There is no budget currently for design services for Lot 3. 

In terms of revenue, city planners estimate that while a boutique hotel could generate up to $750,000 annually, public parking structures would also offer steady revenue and community benefits, with annual revenue of about $600,000. (The amount generated by the Lot 3 structure before it was demolished.)

Next Steps: Public Engagement and Council Direction

The city’s engagement program will run through July 2026, featuring booths at local events, focus groups, surveys and design workshops. A conceptual proposal is expected by August 2026. 

Development might begin as soon as early 2028, most likely on the 400 Manhattan Beach Blvd. site due to its bond financing. The new projects will be “staggered” rather than under construction at the same time.

City Council is now tasked with approving the public-engagement strategy, refining redevelopment options and considering code amendments — such as height limits. Residents urged the council to balance revenue with community needs and to preserve the city’s unique charm.