RESIDENTIAL OVERLAY DISTRICT: Developer defends North Sepulveda residential project

by Mark McDermott 

Matt Moore had no illusions he was going to win over the residents on Oak Avenue who oppose the seven-story, 40-unit multifamily residential project his family’s LLC is planning to build at 2301 North Sepulveda. But in mid-April, he introduced himself on Nextdoor anyway. 

His intention mainly was to make himself available when construction begins in order to mitigate any problems that might arise on Oak, which is on the west side of the same block as the development. Moore expected some back and forth and of course some criticism. 

“I thought some people would express their views,” he said. “I thought other people would be like, ‘Okay, we know how to reach him and they would use that as the project is going through construction to say, ‘Hey, Matt, it’s this time of day and I’ve got all these people in front of my house.’ Or, ‘I have a child with some special needs and this noise is really affecting him.’ I kind of thought of it as ‘I need to be out here and be accessible and accountable during the construction period,’ because it will be a while, and it will be disruptive.” 

He didn’t expect a dialogue that at present includes 184 comments, most opposing the project, many respectfully so, some less so. Almost none of the exchange was about construction issues. 

“I think people are expressing a more fundamental disagreement with the height and the scale of the project and so I’ve been in that conversation more than I thought I would be,” Moore said. 

The development has become an early poster child for the City’s Residential Overlay District (ROD), a new zoning designation required by the State of California in which cities must add high-density residential and mixed-use zoning to commercially zoned areas. The City of Manhattan Beach, in order to have its state-mandated 6th Cycle Housing Element certified, in 2022 added RODs throughout the city’s two main commercial corridors, Sepulveda and Rosecrans, as well as a few sites on Aviation.

At present, only the ROD project at 2301 N. Sepulveda is in advanced planning stages, while a 285-unit project featuring a 10-story and 7-story building at the former Fry’s Electronics site at the corner of Sepulveda and Rosecrans is in preliminary planning stages.  All totalled, Manhattan Beach’s Residential Overlay District is applicable to 34 sites covering nearly 42 acres throughout the city. In addition to the Fry’s site, three other projects are in process: a 48-unit multi-family apartment building at 2705 N. Sepulveda Boulevard; a 70-unit mixed use (multi-family residential and commercial) at 2905 and 2909 N. Sepulveda; and 582-unit multi-family apartment building at 1440 Rosecrans. 

The ROD projects are designated “by right,” meaning they are not subject to public hearings or input processes. Neither the Planning Commission or City Council have oversight or input over such projects. Similar to projects that qualify under the state’s Density Bonus law, the streamlined, administrative process is meant to encourage residential development and add affordable housing. To qualify, twenty percent of an ROD project’s overall units must be deemed affordable under state guidelines. The rest of the development sells for market rate. This combination is meant to incentivize affordable housing by allowing developers to absorb the unprofitability of lower rent units through the higher profit rate of market rate units, thus incentivizing such developments in places they otherwise would not be financially feasible. 

Moore did not purchase the property with the intention of building a residential project. His family’s LLC — which includes Moore, his wife, and her parents — has built multiple preschools and high-end doggy daycare facilities as well as some retail and industrial projects. When Moore bought 2301 N. Sepulveda in August, 2021, it most recently had been an Enterprise Rent-A-Car agency. He thought a doggy day care business would be perfect for the site, which is actually four parcels —  three on Sepulveda, and a connected parcel on Oak that has long served as a parking lot for the site. The corporate franchise he’d worked with previously, Dogtopia, were likewise on board. Moore thought Dogtopia would be a slam dunk. 

“We have two Dogtopias, and there’s 250 across the country,” Moore said. “Their core customer is the professional millennial family that maybe doesn’t have kids, but their dog is like their kid, or the empty nester where the grandma says, ‘I want a dog,’ and grandpa says ‘I don’t.’ And then it ends up being grandpa’s best friend. And I was just like, ‘This is great. It’s the right size. It’s a concrete building. It’s on Sepulveda.” 

City staff recommended approval of the project. It conformed to the existing commercial zoning at the site but required a use permit for animal boarding, which was not unusual. But a funny thing happened on the way to the Planning Commission. A campaign arose against the proposed Dogtopia. 

“Really close to hearing, we started seeing the signs,” Moore said. “Some of the neighbors had printed these yard signs and put them up. They had one dog with its fangs showing, and one dog eating the feces of another dog. It was bizarre.” 

The public hearing was by Zoom, due to the pandemic, and over 100 people attended, mostly to voice opposition. 

“It was like, ‘I live on Oak, and these dogs are going to bite my kids,’ or ‘I live on Oak, and the whole street is going to smell like urine,’” Moore recalled. “One woman said she was never going to leave her house again…I tried to make the case, ‘Hey, we are not bringing the dogs, the dogs are already in your neighborhood. These are your dogs, and you are bringing them to the facility where we have coaches, trainers, and a spa and everything.” 

The Planning Commission bowed to the will of the people and rejected the project. Moore went back to the drawing board. He rented the existing building to EVmo, an electric car rideshare company, but they went bankrupt in less than a year. In 2023, city staff informed him that the site was part of the newly designated Residential Overlay District. Though he’d never built residential, much less multifamily residential, Moore thought such a project made a lot of sense for what had unexpectedly turned out to be a problematic property for his family’s LLC. He explained some of this backstory in his introductory Nextdoor post. 

“In response to that change [the ROD zoning], we have designed a project that we believe will meet the needs of people who grew up in Manhattan Beach, or may work in town, but who cannot find suitable housing,” Moore wrote. “Notably, this residential overlay allows us to replace the parking lot on Oak Avenue with a new residence, which is one of the desires that was expressed by neighbors in the past, when we had commercial uses planned for the property.”  

Moore wrote that he and his family sought a place in the community “as friends and neighbors” and said that his family hoped to eventually move to Manhattan Beach. The family, with two kids still in high school, currently live in Claremont. 

“Manhattan Beach is a place we ourselves hope to live after our children move away to college,” he wrote.  “We are a family that has developed in other cities, and who has in every case exceeded the standards in terms of quality of design and the professionalism of our team. We may not agree on everything. Although we believe in real estate development as a serious and honorable calling to make great places where we can live, work, and be together as families and friends, I also understand that this change may be unwelcome and unsettling. So I created this page because I want to be accessible and accountable to the community, starting today and for as long as we have the privilege of being here.” 

Though many residents expressed appreciation for Moore’s outreach, most were also skeptical. 

“To say real estate development is an honorable calling is another way of  saying I want to make money in your community regardless of what residents want,” wrote Michelle Gilley.

 “Unfortunately, transparency is very kind, but totally doesn’t make up for the fact that you’re about to put a giant building nobody wants in our backyard,” wrote a resident who called herself Michelle Michelle. “As you stated you do not live in this community you have no idea about the culture. I think the most important thing to know is that in other areas where buildings such as these have gone up crime has gone up with it.  Not only are you taking the value of our houses down, you’re bringing what has been proven in other neighborhoods to change the entire vibe of our community.  I’m sure the government gave you plenty of money and you’re going to look the other way …You could choose to wait, and rent to a local business owner or other, but your greed and disregard for our actual community is showing.  I understand it was rezoned, but you could fight it. You aren’t. Put it in YOUR backyard.”  

Other residents asked him to scale the project down, primarily by limiting its height. The ROD designation allows such projects to exceed existing zoning for such things as height limits, which Moore’s project does. 

“I know you have the right to build this under current laws but would you want a 7 story building adjacent to your family home (and investment)?” wrote Joan G. “I can’t help but feel that you, like other developers, don’t care about our community. You can easily see that there isn’t anything similar to this along this corridor. Please reconsider the height.” 

Moore responded that this project does not receive any public subsidies and defends its scale. 

“The density of the project accomplishes two things,” Moore wrote. “First, it allows us to meet demand for smaller and more affordable units.  Housing in town is scarcely available, highly unaffordable, and oftentimes in much older buildings that have some challenges. Second, it allows us to deliver a mix of market rate and income restricted units without taking any government/taxpayer subsidies. The height specifically is allowing us to achieve density while pulling the massing of the building toward Sepulveda and away from Oak. As to how you feel about me, I understand. If you knew me under different circumstances, then perhaps you would feel differently…I respect your position and hope that we might reconcile in the future.” 

Oak Avenue Resident Todd Cochran noted that the Greenberg family, owners of Skechers, have built a lot of commercial developments on Sepulveda that better fit the community. He wrote that the development would worsen already dangerous traffic, putting children at risk in crossing the thoroughfare — a concern echoed by many other residents, who point to the several pedestrian fatalities that have occurred on Sepulveda in recent years. 

“Manhattan Beach wasn’t designed for high-density housing…We understand this is being pushed by the State under the guise of affordable housing — but it’s not being welcomed with open arms by this community,” Cochran wrote. “I hope you can understand why we’re pushing back. Would you consider scaling the project down to match the 36-foot height limit other respected local developers have followed?” 

Moore replied that at a recent town hall the City conducted regarding ROD projects, he learned of much bigger projects, including one with 18 stories and nearly 600 units. Moore said he is trying to minimize the project as best he is able while still making it feasible. 

“The way I am choosing to respect the limits is to seek minimum concessions and waivers from the City code,” he wrote. “We have sought 1 concession and 1 waiver while 3 concessions and unlimited waivers are allowed. I don’t expect that this makes me a hero, but it is a genuine attempt to meet the code however possible. Unfortunately, a 36-foot high residential project would be entirely financially infeasible. It couldn’t be built and couldn’t be financed. I am glad to hear that the Greenbergs have been able to find common ground with the community. Skechers is generating income from their business, and not the real estate. In our case, the real estate is the business.” 

Resident Dave Wein expressed appreciation for the dialogue, and asked Moore what he saw as the perfect balance that could be achieved with such a project. 

“Respect for doing this, you could easily hide in the shadows, but you are choosing to show up here,” he wrote. “I’m curious — what does the win-win-win for you look like? Where Sacramento wins, you win, and the residents of Oak Ave win.” 

Moore responded at length. 

 “I think the state government would say that they want a housing stock in all of our communities that allows for enough income diversity that our teachers, first responders, artists, and even doggy daycare coaches can find somewhere to live locally,” he wrote. “But I think the idea has gone from aspirational to existential as our American dream has become much harder to attain than it was when I was a 23 year old newlywed who bought a condo near the Rose Bowl for $188,000 with $6,000 down on an FHA loan and a mortgage of $1100. I sold that condo in 2004 for $440k, and it came on the market earlier this year for $800k. So now 3% is $24k, the mortgage is $4650 per month, and the HOA dues are $300 higher per month than when I lived there. And the newlyweds today are not compensated enough to make any of that work. So that’s an actual problem in my view, and a win for all of us is fixing that problem somehow.” 

“A win for Oak Avenue residents appears to be challenging and it seems to be structural. What I mean by that is you have a very narrow street with sidewalks on one side (sometimes) that is parallel and close to a major state highway. The concerns are myriad and they are valid, whether it is safety, traffic, parking, noise, etc. In principle, I think that eliminating commercial parking lots on Oak, requiring Sepulveda to park itself, and pulling building massing toward Sepulveda are all moves in the right direction.” 

“Finally, a win for me means being committed to the safety of our construction site and workers, being honest with our neighbors and community stakeholders, delivering on our promises to our debt holders, operating a first class community for our future tenants, and walking away with my shirt. Crazy as it sounds, I’d also like to live in Manhattan Beach, and I would likely live at 2208 Oak Avenue right behind this project. In that sense, I guess it would be in my own backyard. But I’ve got a lot to prove before I get to that point. Projects lose money and go into foreclosure all the time. Sometimes they are built without attention to detail or safety, and hardworking people get injured or die on the job. So I am trying to focus on doing the best job that I can. I appreciate the confidence of folks who think I’ll make a ton of money and that greed is the motivator. I wish I shared their optimism, but I can’t afford to. Doing this well requires me to focus on every detail in front of me. If it all works out, then I’ll be grateful. But I don’t think you’ll find me counting stacks of bills and laughing my way to the bank. That’s not who we are, no matter what people want to believe.” 

Moore said that his exchanges with residents have led him to try to alter a few things to the project, such as adding more parking, but that the project is approaching its third and final plan check, so few alterations will be made at this point. 

“I feel for people,” he said. “In my heart, I feel like, gosh, what can we do? How can we change? How can we minimize impacts? I get affected. But sometimes I also have to remind myself — I actually believe in this. I really think a multi-generational, mixed-income community is important for a lot of reasons that maybe you don’t stop and think about.” 

It’s something he’s thought about a lot, and it’s personal. He thinks about his own kids, and how it would be impossible for them to buy a home like he and his wife did when they started their family. And he thinks about his three brothers and parents, and how the youngest brother moved to Tennessee ten years ago and how when people are forced to move to lower cost areas in the country, it means families no longer see each other. 

“Our youngest brother moved to Knoxville, Tennessee. I’ve seen him twice since he moved there almost 10 years ago,” Moore said. “He and his wife have five kids. They’ve seen their grandparents a couple times.” 

Moore encountered the work of writer Sahil Bloom, who wrote a book called “The Five Types of Wealth” which argues that measuring wealth only by money misses equally important kinds of wealth. 

“One was kind of a family or community wealth, and there were statistics in the book from a government survey that said by the time you’re X number of years old, you’re only going to see your parents like 10 more times,” Moore said. “Say somebody’s in Manhattan Beach now, and their grandkids are in Knoxville, Tennessee, and only will see them seven or eight more times, versus 100 times. That’s real, right? And I don’t know that we’re telling that story very well, because I almost feel like we’re just kind of deferring to, like, ‘Well, yeah, California has gotten so expensive. But California is not a person, right? We’re making these choices.” 

The formula for what constitutes affordable housing is somewhat complex, but essentially the units in Moore’s project will be limited to 30 percent of 80 percent of the median family income for LA County, and moderate income units will be limited to 30 percent of 120 percent of the median family income. “Those figures are in the low to mid $2,000 [range] right now,” he said. 

He thinks about the situation his daughter is in, as a young adult, where the little $188,000 condo the family started in that is now valued at $800,000 would be far out of her range. 

“And our daughter is every bit as capable, if not more, so every bit as deserving,” he said. “She has worked every bit as hard as we had, and yet that’s just completely out of reach for her. So what, I’m lucky because I happen to have landed on the Earth in 1977? I don’t feel comforted by that, and I actually don’t think that the people on Oak Avenue would take the opposite view….I would like to believe that a lot more people would agree with me about the problem that we have with housing and, and that we maybe owe it to our own kids to find solutions.” 

Moore said the affordable housing will exist in the city’s Residential Overlay District might also make it more possible for people who work in Manhattan Beach to live here. He and his wife’s favorite local restaurant is Pancho’s, where they also have a favorite server. 

“He is just this real engaging guy, and I wonder about it — like, if he has kids, and if something goes down on a Monday and his shift runs over and it’s his daughter’s soccer game?” Moore said. “If we love this guy at Pancho’s, and we like having him here in our community, why don’t we care enough to take that next step and say, ‘Hey, where do you live? What would work for you?’ And I’m not saying it’s easy to solve, it’s not, but I do think your heart can be in that place to be like, ‘Okay, I understand it’s an imposition to some of us. But what about the guy at Pancho’s, you know?’”

Moore said he’s not advocating for any particular set of laws emanating from Sacramento other than to say they are an attempt to address a problem that is real, and that solutions could actually benefit communities perhaps more than they realize. He said, he does hope to make money from his project, but he also believes it is the right thing to do. 

“I don’t want to make it overly noble,” he said. “There are pros and cons, and there’s money to be made. I don’t deny that. But this didn’t come about out of nowhere, right? This came about out of a series of laws that have been passed now over the last almost 50 years in response to this issue. And they’ve gotten more and more severe, and I think they’ve maybe started to be of a tenor that people feel like, gosh, this is really state government overreach. I’m not going to argue that. But they are in response to an issue that’s real, right?” ER