If you've circled Morningside Drive more than once this year hunting for a spot, you already know the number that matters most: 69. That's how many spaces sit in the temporary surface lot where Lot 3's three-story parking structure used to stand. The original structure held roughly 145 spaces. Two years after an emergency demolition, downtown Manhattan Beach is still parking on less than half of what it had, and this month the City Council finally decides what comes next, not just for that lot but for the vacant former US Bank site right next to it on Manhattan Beach Boulevard.
The easy version of this story is "two ugly lots are finally getting redeveloped." The real story is narrower and more useful if you actually live here: residents told the city, in a formal survey, that they want parking back first. The leading design option for Lot 3 doesn't fully deliver that. Whichever way the council leans this month will decide whether your Saturday morning trip downtown gets easier or just different.
The Squeeze You've Been Parking Through
Lot 3 was built in 1971, well before the seismic codes that govern construction today. City engineers had flagged deficiencies for years, but the real trouble surfaced in the summer of 2024, when a routine inspection found rusting rebar and corroding columns in the structure's upper levels. The third floor closed first. By late July 2024 the entire structure was shut down as unsafe for people and vehicles. The City Council declared a local emergency on September 3, 2024, and demolition began that fall.
The fallout reached beyond parking. The Manhattan Beach Farmers Market, which had operated on 13th Street next to the garage for years, had to move. Starting October 29, 2024, the market relocated to the Civic Center's upper parking lot and plaza on 15th Street, split between the top of the 13th Street steps and the lot between City Hall and the police and fire building. Jill Lamkin, who runs the market for the Downtown Manhattan Beach Business and Professional Association, called the reception in the new spot "overwhelmingly positive." Nearly two years later, it's still there. Whatever the council approves for Lot 3 this month, the market's return to its old footprint isn't guaranteed, and no timeline for that move has been announced.
Meanwhile, the temporary surface lot that replaced the structure opened with 69 spaces, a fraction of what downtown had before. That's the baseline every resident is measuring against.
Two Designs, One Real Trade
The city has narrowed Lot 3's future to two concepts, and they pull in opposite directions.
| Option A | Option B | |
|---|---|---|
| Parking spaces | 129, all underground | 200, three levels underground plus two above |
| Restaurant or retail | Yes, plus a community patio and event space | None |
| Height | Requires council approval to build three stories above grade | Preserves a third-floor community patio, pending height approval |
Option A trades parking for use. It opens up three above-ground levels for retail, restaurants, and a shared patio, with two restaurant spaces getting different exposures: one facing Morningside Drive and Metlox Plaza with views toward the Tree Section, another with a north and west patio that catches some ocean glimpses. If the council allows the building to reach three stories, the top floor would have real beach and ocean views. But the net parking number, 129 spaces, still lands below the roughly 145 the original structure held.
Option B goes the other direction. It delivers 200 spaces, 71 more than Option A, by going three levels underground and two above. It skips restaurant and retail space entirely, though it keeps a third-floor community patio and event space if the council approves the nonconforming height.
Here's the tension the city's own outreach surfaced. In a phone survey of 588 residents plus input gathered at the Hometown Fair, area farmers markets, and focus groups, parking was the top vote for Lot 3's future use, with 160 votes, ahead of open space at 131 and mixed-use development at 104. Residents said, in plain numbers, that they wanted their parking back more than they wanted anything else. Option A, the one with the restaurants and patios that tend to generate the most buzz in renderings, is also the one that keeps downtown parking below its pre-2024 level.
The Site Next Door Has Its Own Fight
400 MBB, the former US Bank site on Manhattan Beach Boulevard next to Vons, has a different set of pressures. The city acquired the property in April 2025, transferring $13.2 million from its General Fund to complete the purchase and then issuing tax-exempt Certificates of Participation to reimburse that fund. City Manager Talyn Mirzakhanian has been direct about what that financing structure means for the calendar: it creates real pressure to move forward on an aggressive timeline, whether or not the community engagement process has fully settled.
Resident preferences here point toward open space over commercial use. Open space and park uses led the 400 MBB voting with 172 votes, ahead of mixed-use development at 140 and cultural arts or community space at 76. For both sites, hotel, social club, and visitor center options ranked lowest.
That didn't stop Shade Hotel owner Mike Zislis, whose property sits directly across from Lot 3, from pitching a hotel expansion on the Lot 3 site during a council study session, with underground parking connecting to the existing Metlox garage. Zislis pointed to his hotel's 96 percent occupancy and more than $10 million generated in transient occupancy tax for the city as his case. It's a proposal that runs against what the survey said residents actually want, and it's still on the table as one more voice in a crowded room.
Mayor Pro Tem Joe Franklin has floated his own unconventional idea for 400 MBB: maximize the small surface lot, then build a rooftop park above it. "If you're going to get a sandwich from Health Nut or a to-go order from somebody, you can go over there and you can eat it," Franklin said, describing a quiet perch above Manhattan Beach Boulevard with sightlines to the ocean. Council Member Amy Howorth pushed back, calling the rooftop concept a potential "attractive nuisance" for nearby residents. That exchange is a fair snapshot of where this whole process stands: real ideas, real disagreement, no settled outcome yet.
The current design package for 400 MBB leans toward a two-story building with three food and beverage spaces on the ground floor opening onto a plaza that folds in the underused stretch of Morningside Drive, plus 5,400 square feet of creative office space on the second floor with a 3,000-square-foot patio fronting the boulevard. A small 16-space surface lot would sit behind the building, accessed off Morningside and 10th Place.
Why September, Not August
The city's own Project Pulse page had originally pointed to an August 2026 council decision. As of the most recent design unveiling in July 2026, that timeline had slipped to a September council meeting for review of final concepts and public feedback. A month's delay on a process that's already run for more than a year isn't dramatic, but it tells you something about where things stand: the financing clock on 400 MBB is real and specific, yet the actual design decision is still moving at the pace of public process, not the pace the bond schedule might prefer.
If you're the kind of resident who has been checking the city's Project Pulse updates since the first community meeting in May 2025, this is the moment the process actually resolves into something concrete, for better or worse.
What Changes for You Downtown
However the council splits this decision, a few things are already true. The farmers market stays at Civic Center Plaza for now, with no announced date to move back to 13th Street. Parking downtown, at least in the near term, remains tighter than it was before 2024, regardless of which Lot 3 option eventually breaks ground, since construction on either design is still years away. And the debate itself, parking versus patios, view corridors versus resident privacy, is a genuinely open question that the survey data doesn't fully settle for you. Residents said they wanted parking back first. The most visually appealing option doesn't fully deliver that.
If you're weighing a move within the Beach Cities, or just trying to figure out what your own street will feel like once these two sites finally break ground, it helps to have someone tracking city council agendas as closely as listings. Schneider Properties has been part of this community long enough to know that the small decisions, like what goes into a 145-space parking lot, shape daily life here just as much as the big ones. Contact us if you want a local read on what's actually changing in your neighborhood, downtown or otherwise.
