Considering New Proposals : Burbank Upbeat After Demise of Towncenter

The 17-year dream of a major indoor shopping mall in Burbank may have come crashing to an end Tuesday, but city officials, instead of grieving, were upbeat Wednesday about the future of the site.

Burbank administrators said they have received dozens of offers from developers who want to build on the 40-acre property where the Burbank Towncenter was to be built.

The City Council on Tuesday found the developer of the Towncenter, Ernest W. Hahn Inc., in default for its inability to get the project started. Hahn was unable to find a fourth department store to anchor the mall after Robinson’s withdrew last August.

Although officials said they had been besieged with offers to build on the redevelopment property for several weeks, an offer from Walt Disney Co. has created the most interest so far. It wants to construct a retail-entertainment complex.

Eisner Writes Letter

In a letter to City Manager Bud Ovrom, Michael D. Eisner, president of the Burbank-based corporation, said the Disney company “had several retail-entertainment concepts that could productively utilize this property in a quality manner consistent with the desires of the citizens of Burbank.”

Ovrom said negotiations with developers interested in the Towncenter site cannot begin until the city completes an agreement ending Hahn’s participation. That agreement must be signed within 30 days.

Vernon Schwartz, executive vice president and chief operating officer of Hahn, said he was “disappointed that the city found us in default.” He added that he was also disappointed that his company was not able to complete the project.

“I believe the city understands that we’re not really to blame in all of this,” Schwartz said. “Circumstances put us in this position.”

May Department Stores, which merged with the parent company of Robinson’s last year, said it did not want a Robinson’s in the Towncenter.

Schwartz said he felt that negotiations with the city to end the contract would not become tangled up in the courts. “It’s unfortunate it’s reached this point, but we plan to deal with this judiciously and fairly,” he said. “We’re going into this with as little antagonism as possible.”

City Can Sue for Damages

Under the default clause of its contract, the city can sue the Hahn company to collect up to $2 million in damages. The company paid $1.1 million for the site in 1975. Burbank City Atty. Douglas C. Holland said, however, that he hoped that a lawsuit could be avoided.

Officials said the collapse of the Towncenter project may have been a blessing in disguise.

“We may look back on Hahn’s demise at the best thing that ever happened to Burbank,” said Councilman Michael R. Hastings. “We have 40 acres of prime raw ground, and I would like to see something on the cutting edge of new and different. This is not a tragedy. The only thing that can come out of this is good, better, best.”

Ovrom agreed that the interest of Disney and other developers gave the city a much-needed injection of hope.

“We’ve had more than our share of bad news this week, and the fact that someone with the reputation of Michael Eisner is personally interested in developing that property is pretty good for us right now,” Ovrom said.

The Towncenter site is bordered by Magnolia and Burbank boulevards, 3rd Street and the Golden State Freeway. The mall had been intended to lure shoppers away from the Glendale and Sherman Oaks gallerias and revitalize the troubled downtown retail community.

Property Deemed Marketable

Larry Kosmont, the former community development director for Burbank who now runs a development and consulting firm, said that, despite the failure of the Towncenter, the property should be marketable.

“It’s one of the last suburban downtown-related sites available,” Kosmont said. “It’s free and ready to develop, close to freeways, in an area with a good population and a good level of economics.”

Although he did not spell out specifics of his proposal, Eisner said the Disney company, along with Jim Rouse, who develops shopping centers emphasizing smaller stores over department stores, was developing retail-entertainment facilities for major metropolitan areas.

Burbank developer Thomas Tunnicliffe said this week that he also had a proposal for a retail-commercial development with a “village atmosphere” that he would like to build on the site.

“Malls are passe,” Tunnicliffe said. “Our project doesn’t require the commitment of major department stores. We could go in there right now. We’re local and ready to go.”