Walk behind Metlox Plaza on Morningside Drive and you'll find a flat, 69-space lot where a three-story parking structure stood since 1971. The city tore it down in late 2024 after engineers found it structurally unsound, and what's there now is a placeholder, striped asphalt with pay stations, waiting for something permanent. A block away, at the corner of Manhattan Beach Boulevard and Morningside, sits the old US Bank building, empty since the branch closed, its three drive-thru ATM lanes still visible behind a chain-link fence. The city bought that building in April 2025 for roughly $13.2 million.
Both sites have been sitting there for the better part of two years while Manhattan Beach runs a planning process called Project Pulse, and both are about to hit a decision point. City Council reviews final design concepts for Lot 3 and the bank site, known officially as 400 MBB, at a meeting in September. Residents have already told the city what they want built there. The sites' dimensions and the city's borrowing schedule are also factors in the options under consideration, alongside the survey results.
What the survey actually said
The city's outreach effort included a phone survey of 588 residents along with booths at the Hometown Fair and multiple farmers markets. For Lot 3, a new parking structure led with 160 votes, open space or a park came in at 131, and mixed-use development trailed at 104. For 400 MBB, the order flipped: open space or a park led with 172 votes, mixed-use followed at 140, and cultural or community arts space came in at 76. At both sites, a hotel, social club, or visitor center finished last.
That's a fairly clear signal. Residents want Lot 3 to stay functional and want 400 MBB to become breathing room.
Mike Zislis, who owns the Shade Hotel directly across from Lot 3, pitched a hotel expansion on the site, with subterranean parking connecting to the nearby Metlox garage and rooms built above. His hotel has run at 96 percent occupancy since it opened and has generated more than $10 million in transient occupancy tax revenue for the city, according to figures he shared at a council session. The proposal remains under consideration as a privately proposed project.
How site dimensions affect parking
In assessing the options, the city's traffic engineer, Erik Zandvliet, told planners that Lot 3's geometry makes it better suited to parking than 400 MBB. A two-story structure at Lot 3 could hold about 105 spaces under the current 26-foot height limit. Raise that limit to 30 feet, and a third level pushes capacity up to roughly 170, meaning four feet of additional height is worth something like 65 extra parking spots. At 400 MBB, the irregular lot shape and its proximity to residential streets work against a comparable structure.
That single finding explains a lot about why the two July 2026 concept designs look the way they do. The 400 MBB concept includes buildings, while both Lot 3 options include parking, with different capacities and above-ground uses.
How financing affects the timeline
The city financed the 400 MBB purchase by transferring $13.2 million from its General Fund and then issuing tax-exempt Certificates of Participation to pay itself back. A city official told council members that the bond option chosen for 400 MBB is one reason the timeline is aggressive, while noting that the city technically has an off-ramp and that taking it would have repercussions.
The FY2026 budget and planning documents provide more detail. The city's FY2026 budget allocates $1,000,000 to 400 MBB alone, with $216,000 earmarked for demolition and $784,000 for design services. Construction on either site likely won't start before early 2028, and city planning documents indicate that the projects will be staggered, with 400 MBB going first because of its bond financing.
What's actually on the table right now
The concepts unveiled in July give a sense of where all this pressure lands. For 400 MBB, the city is proposing a two-story "anchor hub" with three food and beverage spaces on the ground floor, opening onto a plaza that would absorb part of Morningside Drive behind retractable bollards. The second floor would hold roughly 5,400 square feet of creative office space with a 3,000-square-foot patio offering some ocean peeks. A small 16-space lot would sit behind Vons, accessed from Morningside and 10th Place.
For Lot 3, there are two competing options. Option A puts 129 parking spaces underground across three levels, freeing up three stories above ground for retail, restaurants, and a community patio with event space, contingent on the council approving a height override that would give the top floor real ocean views. Option B skips retail and restaurants entirely, trading them for 200 total parking spaces, 71 more than Option A, split between two above-ground levels and three below, while preserving a third-floor community patio that still needs the same nonconforming height approval.
The options balance parking capacity with other uses differently. The survey's leading preference also differed by site: parking at Lot 3 and open space at 400 MBB.
None of this is waiting on September to affect daily life downtown. Parking rates and fines already went up on August 1. Metlox, the Civic Center lot, the Marriott garage, and Lots 1, 2, 3, 6, and 7 now cost $3 an hour in summer, up from $2.50, dropping only to $2 during the eight off-season months. Common citations for expired meters, street sweeping, red zones, and blocked driveways rose from $59 to $65. Fire-lane violations climbed from $117 to $123, blocking an intersection now runs $130 instead of $124, and a disabled-parking violation is up to $350. The city projects roughly $675,000 in new meter revenue and $291,000 in additional fine revenue this fiscal year. Council did turn down a proposal for automatic annual rate increases going forward. The current rate and fine increases are in place months before construction is expected to begin on either lot.
What happens in September
Council's next move is to review the final concepts alongside whatever public feedback comes in before the meeting. Residents can still weigh in directly through the Planning Division at [email protected], and the city has posted the full concept renderings and outreach history on its Project Pulse page for anyone who wants to see the options before the vote rather than after.
The survey results are one part of the decision. The concepts and timeline also reflect site dimensions, financing, and proposals made during the planning process.
If you're weighing what any of this means for property near downtown, whether you're already living a few blocks off Morningside or thinking about what these two lots could do to parking, foot traffic, or resale value down the line, Dana Benyehuda has been tracking Manhattan Beach's daily rhythms long enough to talk through it plainly, no spin required.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
