Burbank city officials say Ford Motor Co. is considering two proposals for its 8.14-acre swath of land: one from a competing auto dealer, the other from developers for Wal-Mart Stores Inc., who are considering bringing the discount store and Sam’s Club warehouse operation to the site. The prime piece of property, formerly home to Zero Corp., sits adjacent to the Golden State (5) freeway off-ramp on Front Street. Ford had hoped to lure Burt Boeckmann, owner of Galpin Ford, the largest Ford franchise in the country, to the site when it purchased the property for $12 million roughly three years ago. Anxious to get their first big auto dealership in town, Burbank officials offered Boeckmann $12 million in tax and construction subsidies along with the city’s own 3.8 acre parcel nearby to help close the deal. But Boeckmann backed out of the plan about a year ago leaving Ford with an empty lot the company has said costs roughly $35,000 a month to maintain. Boeckmann also put Ford in a bind with other interested Ford franchisees in the area, namely Bob Bruncati, owner of Sunrise Ford in North Hollywood. According to Bruncati and Ovrom, Ford’s initial agreement with Boeckmann essentially bars the company from ever selling to another Ford franchisee. Ford and Boeckmann have declined to say whether such a deal exists, and Ford has steadfastly refused to meet with competitors. Until now. Ovrom said Ford officials visited him recently, and they admitted to having their hands tied because of the Boeckmann agreement. They said they have no intention of ever selling the land to another Ford dealer, but are now willing to consider offers from non-Ford dealers. The Ford Motor Co. representative “sat here and said ‘I’m here for one purpose, and that’s to tell you that there will never be a Ford dealer in Burbank,”‘ said Ovrom. Regarding the Boeckmann deal, Ovrom said “I recognize that he’s the largest Ford dealer in the world, but I’m amazed that he has that kind of clout.” As a result of Ford’s decision to consider proposals from competitors, Gene Vaughn, owner of Guy Schmidt Automotive Group in Glendale and Burbank’s only auto dealer, and Fred Bell, owner of Fred Bell Chevrolet, have revived their plans to purchase the property and build a joint dealership. But included in their proposal is a request for a 50 percent rebate on the sales tax over a ten year period, which makes the proposal an expensive and politically charged one for Burbank. A recent law bars cities from luring auto dealers in with subsidies and prohibits the siphoning of auto business from one city to another. In addition, Burbank and Glendale are on- and off-again adversaries in the battle to get a new terminal built at Burbank Airport, and two competing dealerships could hurt relations between the two cities. “The downside is (Vaughn and Bell) want a big subsidy and that’s hard to reconcile, and I’m not sure it’s in our interest to steal business from a city that we need to keep as an ally,” said Ovrom. Michael Hastings, of Los Angeles-based Direct Point Advisors representing Bell and Vaughn, said their proposal would skirt the law, legally, because Bell is already in Burbank and the proposal calls for a satellite office for Schmidt, not a competing dealership. “Right now we are in very positive conversations with General Motors and the city and very positive conversations with Ford,” said Hastings. William McNair, vice president, western division for Ford, said Ford hasn’t seen any proposals in writing from Wal-Mart or Vaughn and Bell but the company was willing to sit down with either of the two. “We want to sell the land,” McNair said. Ford is asking $15.5 million for the property, or about $40 a square foot, well over the roughly $15 per square foot automotive retailers usually pay, and the reason why Vaughn and Bell are asking for subsidies. Bruncati declined to comment on the two proposals or say whether he was still pursuing a dealership in Burbank. Meanwhile, Century City based Rothbart Development has also submitted plans for a joint project for the property featuring a Wal-Mart and Sam’s Club. Ovrom said Rothbart is proposing a two-story project a departure from the company’s normal design structure, but one Ovrom said the developer is willing to make because the 12-acre site is much smaller than the parcels the company customarily builds on. “That’s way out of their cookie-cutter plans for one large floor,” said Ovrom. Representatives from Rothbart did not return several calls for comment. The upside to the Wal-Mart project, said Ovrom, is the high revenue potential and the fact that Rothbart isn’t asking for financial subsidies. But the downside there is the potential for taking away business from other retailers, namely the newly opened Costco store at the Empire Center on Victory Boulevard. “We don’t want to cannibalize new business in town,” said Ovrom. Ovrom added, however, that economists for Wal-Mart have shown him evidence that instead of stripping revenue from Costco, research shows the competition would boost sales revenues for both retailers. “Typically what happens is competition breeds more business,” said Ovrom. “And we would become an absolute retail power center in the Valley.” Ovrom said the Wal-Mart project would generate roughly $200 million in revenue, compared to about $150 million a year for the auto dealer. The two proposals will be presented to the Burbank City Council for consideration by the end of the month, Ovrom said. If the council wants to push for a Wal-Mart, they would also have to agree to change the zoning on the property from automotive to retail.
