Landowners Wait to See If Disney Has Midas Touch

Despite past disappointments, property owners near a vacant 40-acre lot in downtown Burbank appear cautiously optimistic about the Walt Disney retail-entertainment complex planned for the site, real estate experts said.

If the $611-million project is built, some owners feel that their properties could increase in value as much as three times, the experts said. And, according to some, the hope of future gains may be causing some owners to hang on to their properties until the Disney proposal is more concrete.

Although those in the real estate business doubt that land values actually will triple, they acknowledged that values in the area would increase significantly if the project were built.

Real estate broker Robert Crandlemire said he hopes that two buildings he recently purchased on Olive Avenue near the site will benefit from the Disney project. “It wasn’t the only factor which made me buy the property, but it was on my mind,” he said.

Bonnie Sommerville, 48, said the possible added value that the Disney project could bring has been a recent topic of conversation between her and neighbors. Her three-bedroom Angeleno Avenue home near the proposed site is up for sale.

Disney executives are to bring specific details of the project, to be called the “Disney-MGM Studio Backlot,” before the Burbank City Council by May.

Disney has offered to build a shopping mall, entertainment center and offices, including for facilities that would be relocated from its crowded Burbank headquarters. The complex, which would include a man-made lake, a multiscreen movie theater and a hotel, is expected to attract more than 12 million people a year.

Some Skepticism

“The project is on everyone’s mind,” said real estate agent Chuck Boecher. “From what I can see, people who live 2 miles from the location feel their home will be worth more if it goes in.”

But that hope is probably sprinkled with more than a little skepticism since other ambitious proposals for the site, including a major shopping mall, have fallen through in the last 12 years.

“There’s been such a history of disappointment over that location over so many years that I think everyone has cautious optimism that the Walt Disney project would get built,” said Joe Terranova, president of the Burbank Board of Realtors. “The city of Burbank keeps publicizing that nothing is really set yet. It’s just a proposal.”

The vacant lot, now a wasteland, is the centerpiece of a redevelopment district in downtown Burbank.

The site is bounded by the Burbank Civic Center and the Golden Mall pedestrian center to the south, commercial businesses on Burbank Boulevard to the north, the Golden State Freeway to the west, and a mixed business and residential community on 3rd Street to the east.

Since many property owners were still upset by failure of the site’s previous developer, Ernest Hahn, to bring the Towncenter shopping mall to Burbank, announcement of the Disney proposal did not spark any immediate speculation or real estate activity, developers and brokers said.

“There’s been a cloud over that property for so long,” said Stuart Chase, one of the city’s more prominent developers. “People know that almost anything that goes on that site will push their values up, but it’s been going on for so long, they’re now saying, ‘Gosh, how long will I have to wait for this increase?’ There’s a lot of doubt.”

The City Council last year gave Disney an option to purchase the property for $1 million, but did not give formal approval. Even if approved, the project may take at least four to five years to complete.

‘Sitting Tight’

Developer Thomas Tunnicliffe said: “There’s been very little discussion that I’ve heard from property owners about the Disney project. Everyone is sitting tight and holding on during this period of uncertainty.”

Real estate agent Morgan Suycott said: “When people heard about the Disney proposal, I think the level of interest in the area remained the same.”

He said interest in residential property east of the site and leading to the hillside residences in the Verdugo Mountains has been high for the past several years. Most of the residential area is zoned for apartment buildings, but is sprinkled with pre-World War II single-family homes.

A two-bedroom home on a lot zoned for 10 apartment units sells for around $250,000, said Chase. If the Disney project were to materialize, the value of that property could shoot to $300,000, he said. Rents for two-bedroom residences, now between $775 and $850 a month, could go up to more than $1,000 monthly.

“That project is the spontaneous nucleus for everything in this city,” he said.

Property Values Rise

Officials said because of stable interest rates and the momentum of growth in Burbank, the value of residential property rose by about 15% to 20% in 1987. “The Disney project would further enhance those values,” Chase said.

Crandlemire said the value of his two properties would go up even without the Disney project. A three-unit apartment building that he bought in December has appreciated in value from $215,000 to $325,000, he said.

Brian Rosayro of Chase Realty said he felt that values of nearby commercial properties may double with the presence of the Disney project. He said residential values would go up slightly. “It might disappoint people who think their property will triple in value,” he said.

The downtown area and the city already have been revitalized, said Terranova. “What has had a tremendous effect is the success of the three restaurants--Bobby McGee’s, Stuart Anderson’s and the Bombay Bicycle Club,” he said. The three First Street restaurants are geared toward a young adult crowd and are packed on weekends and evenings.

And new office buildings have added to the allure of the area, he said.

Sommerville, who is listing her three-bedroom home at $389,000, said she won’t wait for the Disney project if she can get her price now.

“I feel the property would go up in value, but who knows if or when it would go in?” Sommerville said.