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Zelman

By CHRISTOPHER WOODARD Staff Reporter Lockheed Martin Co. has averted what could have been costly delays on its efforts to sell its 103-acre site in Burbank after an earlier sales agreement fell out of escrow. By forging ahead with environmental studies and choosing another developer willing to take on the project as is, Lockheed has managed to keep the deal rolling forward. Lockheed had initially agreed to sell the site to Phoenix-based Vestar Development Co., which was to develop the site, but that deal fell through in late December. Now, Los Angeles-based Zelman Development Co. has agreed not only to buy the site, but to develop the retail-office complex Vestar had been pursuing. “The main thing is, it’s a valuable piece of property, and there was a lot of interest in it,” said Gail Rymer, a Lockheed spokeswoman. “We also let the developers know that we didn’t want to reinvent the wheel.” The site, formerly a Lockheed aircraft manufacturing operation, is considered to be in a prime location situated along the Golden State (5) Freeway. Vestar pulled out after its proposed project hit several planning delays. The developer decided not to risk closing escrow on Dec. 31 without the necessary entitlements in place. Vestar made a new offer in the hope of regaining the project, but Zelman came in with more money, said Rymer, who declined to disclose terms of the sale. “It came down to a financial consideration,” she said. A team that included Dan Selleck, Donahue Schriber and Legacy Partners also bid on the project, which is tentatively being called the Empire Center. The property, which is between the Golden State Freeway and Buena Vista Street, south of Empire Avenue, is one of the largest, choicest pieces of property left to develop in Burbank. Zelman will inherit Vestar’s plan to develop 585,000 square feet of retail space, mostly of the big-box variety; up to 600,000 square feet of office space; a 350-room hotel; and a 28-acre auto row. Burbank City Manager Bud Ovrom expressed confidence in the developer, describing the company as “very competent” and its leaders “very experienced.” “Everything we’ve heard about Zelman is very good,” he said. “Zelman has done projects in West Covina and Monrovia, and I checked with the city managers of those cities and they said they’re a high-quality development company.” Zelman has 34 years of experience and has developed similar office, retail and auto projects, including Puente Hills East in the city of Industry. Lockheed’s decision to turn the entire project over to another developer initially rankled a couple of local auto dealers who had hoped to deal directly with the aerospace firm to develop an auto center. Those dealers, Guy Schmidt Automotive Group, which runs a GM dealership in Glendale, and Community Chevrolet out of Burbank, are satisfied that Lockheed has selected a company with experience developing auto centers, said Michael Hastings, a former Burbank mayor serving as an advisor to the dealers. The dealers had been attempting to put together a deal with Vestar, but became frustrated with the slow pace of negotiations, said Hastings. Reiling said that since Lockheed announced his firm’s selection on March 2, the company has been approached by two other auto dealers as well as other potential tenants. “We’ve been approached by most of the people that Vestar had been working with, and some additional ones,” he said. “We’re very optimistic we’ll have more than enough tenants to fill the project.” Rymer said Lockheed hopes to ink a contract with Zelman within a couple of weeks, at which time escrow would be opened. It’s hard to say how long it will take to close the deal, Rymer said. The property is contaminated deep underground with industrial solvents, but a vapor extraction system has been put in place to deal with that problem. “It won’t impact the development,” Rymer said.

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