TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Michael Codron, Interim Community Development Director
Adam Finestone, AICP, Planning Manager
Tari Kuvhenguhwa, Associate Planner
SUBJECT:Title
Study Session on the Redevelopment of City-Owned Properties Located at 400 Manhattan Beach Boulevard (Former US Bank Building) and 1155 Morningside Drive (Parking Lot 3), and Consideration of the Associated Public Engagement Program (Partially Budgeted) (Interim Community Development Director Codron).
(Estimated Time: 90 Min.)
DISCUSS AND PROVIDE DIRECTION
Body
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RECOMMENDATION:
Staff recommends that the City Council discuss and provide direction regarding the redevelopment of City-owned properties located at 400 Manhattan Beach Boulevard (former US Bank building) and 1155 Morningside Drive (Parking Lot 3), and the associated public engagement program.
FISCAL IMPLICATIONS:
At this time, design services related to the redevelopment of 400 Manhattan Beach Boulevard have been partially-budgeted through a $784,000 allocation in the FY 26 - 30 Capital Improvement Program. (The total FY 26 allocation related to 400 Manhattan Beach Boulevard is $1,000,000, however $216,000 is specifically earmarked for demolition of the existing structure, should that occur.) City staff anticipates a potential need to allocate an additional $1,000,000 in the next fiscal year for the design services to be fully-funded. Funding for design services for a future permanent use at Parking Lot 3 has not been allocated at this time and will need to be addressed as part of future capital improvement programs. Construction funding for the projects at either site has not yet been allocated, and staff will return with potential funding sources for that work based on City Council direction at a future meeting.
BACKGROUND:
Parking Lot 3 (1155 Morningside Drive)
During a routine inspection of Parking Lot 3 in the summer of 2024, the Public Works department identified structural issues that resulted in the immediate closure of the top floor of the parking structure, and ultimately the entire structure. In November 2024, the Parking Lot 3 parking structure was demolished and an interim surface parking lot was subsequently constructed on the property at the direction of the City Council.
The City Council also directed staff to identify locations for new temporary parking spaces around downtown to further mitigate the loss of parking from the demolition of the structure. Those temporary off-site parking spaces were installed in November 2024 and the interim parking lot opened in June 2025. Currently, 125 parking spaces have been established to partially replace those lost as a result of the demolition of Lot 3.
400 Manhattan Beach Boulevard
On April 15, 2025, the City of Manhattan Beach closed escrow on a property located at 400 Manhattan Beach Boulevard (“400 MBB”). The property is occupied by a vacant commercial building (formerly U.S. Bank) with a surface parking lot and three former drive-thru ATM lanes.
At their May 6, 2025, meeting, the City Council approved interim uses for 400 MBB until a permanent use is identified. The approved interim uses include the use of the existing parking lot as overflow parking for the City’s commercial/merchant parking permit program, and the installation of bicycle racks at the site. Twenty-six parking spaces have been striped in the lot for commercial parking permit holders and the bicycle racks were installed along the Manhattan Beach Boulevard frontage in June 2025. In June 2025, the City Council identified the future redevelopment of 400 MBB as a Capital Improvement Program project.
In August 2025, the City issued tax-exempt Certificates of Participation (2025A COPs) to replenish the General Fund balance for the purchase price plus closing costs ($13,004,145.47) of 400 MBB. The 2025A COPs were issued as a 30-year obligation, with an initial soft put period of interest-only debt service payments until principal payments begin on July 1, 2028. This structure allowed for flexibility and lower debt service costs while the City determines the best use of the 400 MBB project site. The City plans to refinance the Series 2025A COPs on or before July 1, 2028, in conjunction with the financing of the design and construction costs of the ultimate use of the project site.
Community Outreach
Upon acquisition of 400 MBB, City staff established Project Pulse as a coordinated approach to the redevelopment of both properties. The name Project Pulse represents a commitment on behalf of the City to keep its collective finger on the pulse of the community with regard to the future of development in downtown Manhattan Beach.
On May 21, 2025, City staff held a community outreach kick-off meeting for the Project Pulse work effort. The goals of this community meeting were threefold:
1. Provide an open forum for City staff to meet with the community and collect initial ideas and input to report back to City Council;
2. Summarize the initial potential Parking Lot 3 redevelopment options that City Council discussed at the December 9, 2024, City Council meeting; and
3. Provide an opportunity to discuss options with the community that have not yet been presented to City Council for consideration.
This meeting was the first of many in a comprehensive community engagement and visioning process, which is discussed in greater detail in the Public Participation Program section of this report.
DISCUSSION:
Redevelopment Options
Economic Development Analysis
At its December 9, 2024, meeting, the City Council received a presentation from City staff and its consultant, the Kosmont Companies, regarding potential redevelopment options for Parking Lot 3. The potential redevelopment options addressed at the meeting and detailed in a report prepared by the Kosmont Companies were as follows:
• New public parking structure (including automated, self-park, above-grade, and subterranean options)
• Public parking structure and limited commercial use
• Hotel
• Public Parking on Alternative Sites (utilize Lot 3 and 400 MBB for non-parking uses and identify alternative downtown sites for development of new parking spaces to recapture lost parking and address new demand)
The staff report from the December 9, 2024, City Council meeting, including the Kosmont Companies’ report, is included as Attachment 2 to this report.
In addition to its proximity to Lot 3, the 400 MBB site is comparable in size and shares the same zoning (CD - Downtown Commercial) as Parking Lot 3. Given the shared site characteristics, the City now has the opportunity to consider that initial list of options for Lot 3 for 400 MBB as well, and for the purposes of building synergy between the two sites, would benefit from not considering the redevelopment of Parking Lot 3 in isolation. The redevelopment options previously presented are still available for consideration, however the City now has an opportunity to think more broadly. Certain uses may be better suited for 400 MBB given its prime location at the entryway to the City’s downtown, while other uses would be more appropriate for Parking Lot 3. Uses subject to consideration can include those already identified in the aforementioned economic development analysis, as well as others permitted or conditionally permitted in the CD zone.
Initial Community Feedback
At the Project Pulse kick-off meeting on May 21, 2025, staff introduced the Project Pulse work effort, provided background information on both properties, and summarized the potential Parking Lot 3 redevelopment options that were presented to the City Council in December 2024. During the meeting, City staff conducted an interactive exercise with the attendees and answered questions from attendees. There were 23 community members in attendance who provided a range of feedback related to potential redevelopment options for both properties. The meeting attendees included Manhattan Beach residents and business owners/employees, with more than 70% of those in attendance being City residents.
The community members in attendance suggested potential uses for one or both of the properties which included:
• Parking
o Public parking
o Employee parking
o Resident permit parking
• Commercial (i.e. retail/restaurant)
• Hotel
• Open space/park
• Multi-family residential
• Library annex
• Social club
• Visitor center
• Mixed-use development
o Parking with commercial use(s)
o Parking with public space
o Live/work concept
When discussing the potential uses at each site, the attendees requested the following be considered in future discussions:
• The demand for parking downtown
• The overall potential positive and negative impact(s) of increasing the parking supply downtown
• The potential community benefits associated with each type of use
Additional concerns noted specifically for the 400 MBB site include its proximity to residential uses and potential traffic congestion along Manhattan Beach Boulevard.
While other potential uses were identified, the most frequent use mentioned was parking. With regard to parking as a primary use for either site, City Traffic Engineer Erik Zandvliet shared with participants that Parking Lot 3 is likely better suited for a public parking facility than 400 MBB. The City Traffic Engineer’s preliminary assessment determined that greater parking capacity could likely be achieved at Parking Lot 3 than at 400 MBB because of the geometries and dimensions of the two properties.
Previous City Council Direction
At the December 9, 2024, City Council meeting, the City Council directed staff to return with additional research related to the redevelopment options for Parking Lot 3 presented in the economic development analysis. One of those research topics was related to an automated parking facility. City staff conducted additional research into that option, including consultation with staff from the City of West Hollywood, where an automated parking facility was installed at that City’s city hall in 2016.
While it is likely that an automated parking facility could provide greater parking capacity than a traditional parking facility, automated parking is a newer technology and long-term viability and reliability of such a facility in a coastal environment is yet to be determined. City staff does not have the expertise to conduct further research without the assistance of a consultant specializing in automated parking facilities. Funding would have to be allocated to continue pursuing this potential redevelopment option without any idea of whether it would be feasible or how much it would ultimately cost to construct. As such, staff recommends that further consideration of a parking facility for either Parking Lot 3 or 400 MBB, or both, be limited to a traditional self-park facility with both above- and below-grade options.
Requested City Council Direction
Given the new opportunity for development of 400 MBB, staff is seeking community input and updated direction from the City Council regarding potential redevelopment options for both the 400 MBB property and Parking Lot 3. Specifically, staff is seeking direction on the following:
• An updated list of redevelopment options to explore and seek community input on for both properties
• Potential consideration of code amendments to optimize redevelopment options. The 26-foot height limit <https://mcclibrary.blob.core.usgovcloudapi.net/codecontent/16473/434880/10-16-030-C.png> applicable to both properties creates constraints on the optimal use of each site. For example, on Lot 3, the height limit would not allow for development of a structure that would result in full replacement of the 145 parking spaces, unless a subterranean design is utilized. Comparatively, the Metlox property across the street from both sites and the properties north of Lot 3 have a 30-foot height limit.
While it is understood that substantial public outreach will be necessary before any specific use is identified for each property, if the Council can identify any uses that it definitely does not want staff to pursue for either property, it would be helpful to staff. Once updated direction is provided, additional research can be conducted on potential redevelopment options. Said research may require further engagement with the Kosmont Companies and/or other consultants depending on the level of subject-matter expertise needed.
Surplus Land Act
At the December 9, 2024, City Council meeting, the City Council requested additional information regarding the implications of the Surplus Land Act on future redevelopment options for Parking Lot 3. Said implications would be applicable to 400 MBB as well.
The Surplus Land Act (Government Code Sections 54220-54234) (the “Act”) applies to the “disposition” of “surplus land” or “exempt surplus land” by local agencies. The retention of property by the City for public use does not constitute a “disposition” of property within the Act, meaning that the City could retain the property for a public use (e.g., parking) without regard to the Act.
However, under the Act “disposition” includes selling a property or leasing all or a portion(s) of the property if the term of the lease is longer than 15 years. Accordingly, when selling property or leasing a portion(s) of the property pursuant to a lease that constitutes a disposition (e.g., for developing a public/private mixed use of the property), the City must first declare the property “surplus land” or “exempt surplus land” and follow the applicable process set forth in the Act in order to dispose of the property (or portion thereof). Property declared to be surplus land is typically required to be made available to affordable housing developers for construction of affordable housing prior to being offered for sale or long-term lease for other uses. However, due to their small sizes (less than half an acre each), Lot 3 and 400 MBB would typically qualify as “exempt surplus land” under the “small parcel” exemption in the Act and would not need to be made available for affordable housing development. That said, because the properties are located within the City’s Coastal Zone, the City must follow the process that applies to the disposition of “surplus land”, except that the notice of availability of the properties (or portions thereof) for sale or lease only needs to be sent to park and recreation entities. If the City receives a notice of interest from one or more park and recreation entities within 60 days after the notice of availability is sent, the City must enter into good faith negotiations with the responding entities for a period of not less than 90 days.
Public Engagement Program Overview
In an effort to acquire public input and inform City Council of the community’s desires and concerns related to the redevelopment of both Parking Lot 3 and 400 MBB, City staff has prepared a comprehensive community engagement program. Through this program, staff will collect input from the community (i.e., residents, businesses, and other stakeholders) through a series of formal and informal public engagement opportunities.
City staff anticipates the program to run through July 2026, with periodic updates provided to the City Council between now and then in order to receive additional direction and refine the scope of the redevelopment options. Through the engagement program and further direction received from the Council, staff intends to present a conceptual development proposal for City Council’s consideration in August 2026. This is consistent with the timeline presented to the City Council on August 5, 2025, related to bonding for the purchase of the 400 MBB property.
City staff is proposing a public engagement program that will include consultation and collaboration with the community using a variety of communication methods between now and July 2026. The program is designed to concentrate the majority of the community outreach activities towards the beginning of this visioning process in order to provide the City Council with greater community input earlier on in the decision-making process.
The proposed engagement opportunities include City staff presence at community events (Hometown Fair and Farmer’s Market), meetings with community partners (such as the Chamber of Commerce, Downtown Manhattan Beach Business and Professional Association, and Manhattan Beach North Business Association), as well as focus groups (residents and downtown businesses/owners). Staff also proposes attending an Older Adults Program event and conducting study sessions with the Planning Commission .
Additionally, the City recently entered into an agreement with FlashVote, which is a public survey platform that helps cities efficiently collect input from residents that can help inform local decisions. This platform is currently used by other jurisdictions and can serve as a method for acquiring statistically significant data during community outreach efforts. The public engagement program will utilize FlashVote to conduct a survey and collect additional feedback
Additional community events are proposed to occur toward the end of the public engagement process. The first is a design charette, which would be a one-day collaborative workshop facilitated by City staff and a consultant with community outreach and design expertise, and would focus on generating conceptual designs for the redevelopment option(s) still under consideration at that time. Design charettes can facilitate an opportunity for a range of community stakeholders to work together and explore design options, develop consensus, and create a shared vision for a project site. This program proposes separate design charettes for 400 MBB and Parking Lot 3. A final community engagement event would be a community workshop or open house to collect final feedback on the conceptual design and vision established during the design charettes.
Throughout the outreach process, staff would report back to City Council to provide updates on the community feedback received thus far, seek further Council direction, and refine the scope of the public engagement program if deemed necessary.
A tentative engagement schedule is as follows:
• Fall 2025
o Hometown Fair Booth (October)
o Farmer’s Market Booth (October, November, and December)
o Meetings with community partners (Chamber of Commerce, DBPA, etc.)
o Focus groups (residents and downtown businesses/property owners)
• Winter 2026
o Older Adults Program presentation and meeting
o City Council meeting (January/February)
o FlashVote survey
o Planning Commission study session
• Spring 2026
o Design Charrette (400 MBB only)
§ Design Charette for Parking Lot 3 will be on a separate timeline
o Community Workshop for both sites
• Summer 2026
o City Council Meeting(s) to further narrow down and select permanent use(s) for both properties
Multiple methods of communication will be utilized to create greater awareness of upcoming meetings and events including, but not limited to:
• Newspaper advertisement(s)
• Social media posts
• Email notification to interested parties
• Coordinated notification through community partners
• Digital and/or physical signate at City facilities
Additionally, the City has established a webpage dedicated to Project Pulse which will be updated regularly to keep the public informed of the status of the work effort and advertise upcoming meetings and events.
The public engagement program is dynamic and certain elements may change or be adjusted as the City progresses through this process. This community outreach and visioning process is anticipated to conclude by the end of July 2026. In August 2026, City staff will be requesting City Council authorization to move forward with an entitlement process and the development of construction drawings for the redevelopment of both properties.
CONCLUSION:
Staff is seeking City Council direction on the following:
1. Refinement of potential redevelopment options to pursue for both properties
2. Potential code amendments to accommodate the redevelopment of both properties
3. Public engagement program and strategies
Should the City Council request additional research into specific redevelopment options, staff will return with that information at a later date for the Council’s consideration and further direction.
PUBLIC OUTREACH:
Public outreach and engagement related to Project Pulse began with the community meeting held on May 21, 2025, as described earlier in this report. A courtesy notice for the August 26, 2025, study session was published in the Beach Reporter, posted at City Hall, and emailed to interested parties (including the Chamber of Commerce and the Downtown Manhattan Beach Business and Professional Association) on August 14, 2025. On August 21, 2025, postcards were mailed out to all property owners and occupants within a 300-foot radius of both sites. Additionally, staff utilized the City’s social media platforms during the weeks of August 3, 2025, August 17, 2025, and August 24, 2025 to inform the public of the upcoming study session. As of the writing of this staff report, staff has not received any public comments.
Subject to City Council direction, additional public outreach and engagement will be conducted over the course of the next 11 months, as detailed in this report.
ENVIRONMENTAL REVIEW:
The study session related to Project Pulse is not a “Project” as defined in Section 15378 of the California Environmental Quality Act (CEQA) Guidelines; therefore, the activity is not subject to CEQA pursuant to Section 15060(c)(3). While the goal of this study session and the identified community engagement program is to develop a concept, any future redevelopment project(s) that the City Council identifies for each property may be subject to CEQA and will be analyzed at that time.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. Location Map
2. December 9, 2024, City Council Staff Report (Web-Link Provided)
3. May 21, 2025, Project Pulse Kick-Off Meeting Presentation
4. CD Development Regulations
5. PowerPoint Presentation