McMansions Turn Gritty Beach Town Into Newest Enclave for the Wealthy

By RiSHAWN BIDDLE                                                    Los Angeles Business Journal   May 19, 2003
Staff Reporter

A snapshot of Manhattan Beach these days can be found on Pacific Avenue, about ten blocks from the water. There, a just-finished two-story Mediterranean-style property with two front balconies sits directly next to a one-story home with the white paint on its cinder block fence peeling off.

It won’t be around for long; it’s for sale at an asking price of $3 million.

With a booming housing market, loose building codes and, of course, the ocean view, Manhattan Beach provides an accommodating climate for the rich and famous who want to tear down existing property and build the kind of “McMansions” that the city of Santa Monica has been restricting.

“The construction never ends right now. They’re going up to the lot lines and building up to the limit,” said City Councilman James Aldinger, a resident since 1983.

With its weekend volleyball tournaments and ubiquitous gift shops and galleries, the area still evokes a casual, understated quality befitting a beach town – far from the excesses of Beverly Hills or even Malibu. But in front of the restaurants that line Manhattan Beach Boulevard, the VW Beetles give way to pricey four-wheelers such as a BMW X5.

Twenty years ago, a typical neighbor in Manhattan Beach would be a Northrop Grumman Corp. engineer. These days, it could just as easily be a sports star, such as former L.A. Kings enforcer Marty McSorley.

Last year, 313 homes sold for $1 million or more, eclipsing Beverly Hills and Santa Monica combined, according to DataQuick Information Services. Last year, homes in the area sold for a median price of $822,000, a 17 percent increase over 2001.

Given the price escalation, it’s little surprise that once these former beach cottages and two-bedroom homes are snapped up, they are demolished. In their place rise four-bedroom homes averaging 4,000 square feet. Richard Thompson, the city’s community development director, estimates that 15 homes with an average size of 1,200 square feet are torn down each month and replaced with homes more than double the size.

“There are a lot of teachers who bought their homes 40 years ago who now have $70,000 homes sitting on $700,000 dirt,” said Steve Goddard, a residential real estate agent and a longtime Manhattan Beach resident.

The city’s building and design regulations have assisted in the demolition derby. Until last year, Manhattan Beach had only mandated that additional floors on a house had to be set back 3 percent of the dimensions of the previous floor on each side. A house can still take up to 90 percent of a lot, leaving little room for a front or back yard; it can’t rise any higher than 26 feet. Basements, if designed a certain way, do not count against maximum allowed density.

Architects and developers like the town, said Thompson, because there are no controls on design. “Because the properties are so expensive, you can attract top designers,” he said. “And because they are so expensive, people want to build a bigger home.”

Showbiz, Lakers

This is a major change for a community that started out at the turn of the 20th century as a beach resort for Angelenos. Tucked along the Santa Monica Bay, below El Segundo but above Hermosa Beach, Manhattan Beach (named by New York City native Stewart Merrill after his home borough) was well situated for the emergence of the defense industry after World War II. It drew aerospace and airline employees and their families after the opening of nearby Los Angeles International Airport.

By 1997, the area began attracting former Westsiders seeking access to Century City and Santa Monica via the nearby San Diego (405) Freeway. The well-regarded Manhattan Beach Unified School District was another draw. Then there are the Hollywood types who began arriving upon completion of Raleigh Studios, a 14-stage film and production center managed by Raleigh Enterprises that has filmed TV shows including “Boston Public” and “The Practice.”

Among Manhattan Beach’s notable residents are Lakers forward Devean George, soap opera actor Wally Kurth, KCOP-TV (Channel 13) news anchor Lauren Sanchez and Olympic silver medalist Michelle Kwan, the figure skater.

All the rebuilding has been a boon to city coffers, which benefit from each dollar increase in value through property taxes. Assessed property values increased 57 percent over the last six fiscal years, to $5.7 billion.

Not everyone appreciates what’s happening. Architect Pat Killen, who designed the Pier Patio in downtown Manhattan Beach, complains that some homeowners and developers aren’t taking neighborhoods into consideration when building homes.

“You have developers who hire unlicensed architects to design a home without ever visiting the site. Then you have homeowners who want to get as much as possible and the results are horrible,” said Killen, who admitted to “contributing” to the problem with some of his own designs.

There haven’t been widespread complaints over either the teardowns or the new homes. But city officials, concerned with the bulkiness of the properties, have tightened up the codes, such as by doubling the second-story setback requirement to 6 percent at the front of the building. Aldinger, who was elected two years ago on the mandate of reducing the scope of the Metlox commercial development in downtown Manhattan Beach, would like to do more.

But even he concedes that the demolition will likely continue.

“It’s the quality of life that brings people here. You have the beach, the schools, and it’s not as crowded as the Westside,” he said. “What else can you ask for?”