The next visible change at 400 Manhattan Beach Boulevard will be payment kiosks. On September 15, the City Council looked at a year of Project Pulse planning, including Gensler's renderings of a two-story "anchor hub" with restaurants and a plaza at the former U.S. Bank corner. Council kept the building standing and directed staff to turn its 26 existing spaces into paid public parking. The rest of the decision was pushed to a December 1 council update. That update covers the talks with the Vons property next door and the bond financing that paid for the corner.
That order of events matters. The renderings got most of the attention, but a debt schedule and a neighbor's lease will decide when, and whether, the plaza gets built.
The Bank Building Stays Up, and the Lot Starts Charging
Staff gave council two ways to use the site in the meantime. Demolishing the bank building would have cost about $216,000 and produced a 41-space lot. Keeping the building and adding kiosks keeps the current 26 spaces, and staff estimates paid parking there would bring in $243,000 to $275,000 a year. Council chose the kiosks.
The change affects people who already park there. Merchant permit holders currently use that lot, and opening it to paid public parking moves them out. Staff proposed sending them to Lot 7 off Valley Drive. Councilmembers Amy Howorth and Steve Charelian both questioned the idea, and Charelian put it plainly, according to Easy Reader's account of the meeting: "Lot seven is packed." Mayor Joe Franklin suggested asking Vons about its underused rear lot instead. The final minutes direct staff to contact Vons about using its backlot for overflow commercial permit parking.
So the grocery store next door is already part of the interim parking plan, well before any partner is chosen or any construction is scheduled.
The Clock Is Set by a 2028 Refinancing
The city bought the bank property with tax-exempt certificates of participation that mature July 1, 2028, and that debt has to be refinanced before construction. Easy Reader reported the city's municipal advisors' finding: if the site is leased to private commercial tenants, the refinancing would need taxable bonds at a rate about 1.3 percentage points higher. That adds roughly $128,000 a year in debt service, about $3.8 million over 30 years, to be paid from tenant lease revenue.
The city has $2.3 million in its five-year capital improvement program for design work at both downtown sites. No construction funding has been set aside.
Those numbers explain why the second floor keeps coming back. Wil Soholt of Kosmont Companies, the city's economic development consultant, defended the proposed upstairs creative office because it makes the project work financially. He cited ground-floor rents above $100 per square foot a year, upstairs asking rents above $125, and construction costs of $800 to $1,000 per square foot. Using those rents, councilmembers estimated the building would gross about $1.3 million a year, with roughly half of that from upstairs.
Councilmember David Lesser summed up the risk: "We could come up with a wonderful project that we won't be able to afford to build." Every councilmember agreed the city should not act as its own builder. Staff is now doing due diligence and market analysis toward a request for qualifications for a private development partner.
The Neighbor With the Bigger Lot
If a private partner changes the debt math, the Vons parcel could change the size of the whole project. According to Easy Reader, city staff and Kosmont met with the property's ownership repeatedly over the past year. They learned that Vons owns only the southeast corner of the parking lot and holds a long-term lease on the rest, including the store building. Kosmont has approached the underlying owner.
The city has tried this before. About two decades ago, while planning Metlox, it asked Vons to join the project with a modernized store and underground parking, and Vons declined.
This round has a deadline. The minutes set a 90-day limit on the Vons talks and an update to council by December 1, 2026. At the meeting, Community Development Director Masa Alkire agreed to report back in 75 days while keeping the full 90 to reach a decision. She said the Vons talks would run alongside the search for a development partner rather than hold it up.
During public comment, resident James Devan urged council to treat the parcel as an opportunity. He asked the city to work toward redeveloping the whole Vons site and keeping "a high-quality grocery store for downtown residents that doesn't require a car journey."
What the Drawings Show, and What Council Asked to Change
The Gensler concept is still the starting point. The firm presented it as early ideas, and staff said no architectural style has been chosen. Here is what the drawings show and what the September 15 minutes ask staff to look at next.
| Element | Gensler concept | September 15 direction |
|---|---|---|
| Ground floor | Three retail or food and beverage spaces, about 6,500 rentable sq ft total | Keep studying mixed uses, including smaller tenant spaces |
| Second floor | 5,100 sq ft creative office with an outdoor patio | Explore alternatives to the office |
| Morningside Drive | Pedestrian plaza with retractable bollards for events | Keep studying it, with answers on traffic, deliveries and the diagonal spaces |
| Rear parking | 16 surface spaces buffering homes on 11th Place | Explore a larger building with a smaller lot |
Two parts of the drawing matter most for everyday trips downtown. The first is the plaza. The stretch of Morningside between Manhattan Beach Boulevard and 11th Place has eight spaces today, five diagonal and three parallel. Under the plaza concept, the striping comes out and the area becomes a loading zone. City Traffic Engineer Erik Zandvliet said about six of the eight spaces could stay available on most workdays, and that the bollards would go up only for special events or a Saturday evening. Howorth described those as the spaces "you zip into" for Health Nut, Noah's or Peet's. Mayor Pro Tem Nina Tarnay defended the plaza, saying, "We're planning for the next 50 years."
The second is the size of the tenant spaces. The largest ground-floor space in the drawing is 4,100 square feet. Kelly Stroman, executive director of the Downtown Manhattan Beach Business and Professional Association, objected that a space that size would invite big business and take away from the character of downtown. Howorth said a space that large would likely attract a national brand. City Manager Talyn Mirzakhanian said the floor plan was illustrative and noted that city code already requires a conditional use permit for downtown retail with more than 1,600 square feet of sales floor.
These priorities pull against each other, and the trade-offs show up in the numbers. Smaller shops and less office space mean less rent to cover the higher debt cost. A bigger building with less parking brings in more rent but comes closer to the scale that worried neighbors at the meeting. The concept's parapet would reach 30 feet, four feet above what coastal zoning currently allows, and a code amendment to raise the limit is due back before the Planning Commission this fall. Longtime resident Jim Burton told council, in Easy Reader's account:
"Keep it small. It costs money to be small."
Lot 3 Waits for the Next Council
Council also separated the two Project Pulse sites, so Lot 3 at 1155 Morningside Drive now moves on its own timeline. As MB News reported, the former three-story, 145-space structure behind the north-side shops was demolished in late 2024 because of seismic instability, and the site now runs as a 69-space surface lot.
Downtown didn't lose parking overall in that change. Zandvliet said the city found about 80 replacement spaces on nearby streets, which leaves downtown "about five parking spaces more than we've ever had before." The same parking study found downtown short about 150 spaces for current business needs, and another 150 short if existing parcels build out to what the code allows.
Building that parking underground is expensive:
- An engineering study put the proposed tunnel connecting Lot 3 to Metlox at roughly $15 million on its own.
- With the tunnel, cost per stall reached $387,962 for a two-level underground structure and $311,904 for three levels.
- Without the tunnel, three underground levels with 136 spaces came to about $201,610 per stall.
- Above-ground structured parking runs about $100,000 per space, roughly half the underground cost.
Council dropped the tunnel. Lot 3 has less urgency than the bank corner because it earns parking revenue and carries no debt. Its future goes to the council seated after the November election. Lesser asked staff to leave that council a choice between a public space on top or more parking to keep costs down.
The Dates to Watch
As of mid-October, these are the upcoming points on the calendar:
- This fall: The Planning Commission takes up the code amendment that would raise the coastal height limit.
- November: Voters choose the council that will decide Lot 3.
- December 1, 2026: Staff reports to council on the Vons talks and the bond financing timeline.
- July 1, 2028: The certificates of participation used to buy 400 Manhattan Beach Boulevard mature.
The city says the year-long community engagement process for Project Pulse has ended, and its Project Pulse page has the background materials. The December 1 meeting is the next scheduled update.
Changes at the bank corner, Lot 3 and the Vons parcel will affect parking, errands and the blocks around Morningside Drive. If you live near them and want to talk through what they could mean for your street, Deborah Naumovski is following Project Pulse closely and is happy to help. Let's Connect.
