Burbank Decides on Downtown Developer
The Burbank City Council voted Tuesday to sell eight acres of prime downtown property to a developer who plans to build apartments, boutiques and a federally subsidized tower for senior-citizen housing.
The council, acting as the redevelopment agency, agreed to sell the land to a group headed by Jacob Schuster, a Beverly Hills real estate developer, and Paul Rothman, president of Associated Hosts, a firm that built the Bombay Bicycle Club in Burbank’s restaurant row.
Under the resolution passed by the council, the developers are to pay $7.3 million for the site, $700,000 of that coming from Wesley Homes Inc., a nonprofit group that will act as a subdeveloper for the senior-citizen project. The sale will not be final for at least 90 days, however, while the developers and the city negotiate details of their contract.
The City Council voted unanimously to sell the land to the Rothman-Schuster partnership after Redevelopment director Larry J. Kosmont announced that a key component of a proposal by another developer, the CMS development Co. of Burbank, would delay the project at least nine months. CMS was the only other company to bid on the land.
Kosmont said that CMS plans to build luxury senior-citizen housing would delay the project because Senior Inns, the firm chosen to build the project for CMS, has decided to build another project in Glendale. Kosmont said the company did not want to build two projects simultaneously.
“I am not willing to wait nine months for a project,” Councilman Larry Stamper said. “We have had this before us for as long time.”
City officials estimate the Rothman-Schuster development, once completed, will generate $461,000 annually in sales and real estate taxes for the city.
Weeks of Lobbying
The council’s decision to sell the land came after weeks of public comment and lobbying by the two developers.
Two weeks ago, the redevelopment agency’s staff recommended that the city sell the land to CMS, but the council requested additional financial analysis of the two proposals.
The proposal by CMS included four separate subdevelopments, with CMS itself financing and constructing just one of them, a 91-unit apartment complex. The plan also called for a 98-unit federally subsidized high-rise for senior citizens, a 160-room residential hotel and 150 units of luxury housing for the elderly.
The proposal by the Rothman-Schuster partnership includes the same 98-unit federally subsidized senior-citizen project, but will develop the remaining land with 50,000 square feet of “specialty retail” buildings and 255 apartments.
The project site lies just north of the Burbank Holiday Inn and is bordered by 3rd Street, Verdugo Avenue, Angeleno Avenue and the Golden Mall pedestrian and shopping area. City officials estimate that the city has invested $9 million in acquiring and clearing the site.
Senior-Citizen Requirement
The redevelopment agency voted last week to require that the high-rise for senior citizens be included in both proposals after a representative from Wesley Homes Inc. said the project might lose its federal grant if it were not placed on the site.
Priscilla Gilliam, a management consultant for the nonprofit firm, said that the project was approved by the U.S. Department of Housing and Urban Development in part because of its prime downtown location.
Councilwoman Mary Lou Howard nonetheless attempted unsuccessfully last week to move the project from that location, arguing that the subsidized housing would not generate tax revenue for the city and should be placed on less valuable property.
The city requested bids for the eight-acre site from developers in November after the City Council, meeting in a closed session, rescinded an earlier agreement with CMS to develop the land. Councilman Robert R. Bowne, appointed to the City Council last fall, said the Council’s move came at his request because of a concern that other developers were not considered fairly in the original selection.
The site, which consists of 40 parcels, has sat empty since 1980 when it was acquired by the city and buildings on it were razed. An earlier agreement to develop the site into several hundred condominium units collapsed several years ago when the developer withdrew its proposal.
Center of Debate
Much of the debate in recent weeks has focused on CMS plans to build a Brocks Residence Inn and a proposal by the Rothman-Schuster group to construct 50,000 square feet of retail space.
Joe Perry, operator of the Burbank Holiday Inn, argued to the city that his downtown hotel maintains an occupancy rate of 34% and that it would be “crazy” to build another hotel downtown, according to City Councilman Robert R. Bowne.
But an analysis prepared by consultants for the redevelopment agency said city tax receipts showed that the Holiday Inn maintained a 52% occupancy. The consultants also said that a residential hotel, which includes suites with kitchens, would not compete with a conventional hotel because it attracts longer-term customers.
Consultant Gerald M. Trimble recommended last week that the city “accept for the time being” projections by the Brock Corp., operators of the proposed 160-unit residential hotel, that the inn would maintain 70% occupancy and would generate more than $300,000 a year for the city in transient occupancy, or “bed,” taxes.
In reaction to the Rothman-Schuster plan, some council members said they feared that additional commercial space would exacerbate problems for merchants in the struggling open-air Golden Mall. An analysis prepared for the redevelopment agency warned, “The retail use may adversely impact the Golden Mall and may further limit the options to rejuvenate the Golden Mall.”
