Burbank Officials Say Lockheed’s Pullout Will Ultimately Benefit City

Burbank city officials and several business leaders said Lockheed Corp.’s announcement Tuesday of plans to move a large portion of its operations out of Burbank by 1991 will ultimately work to the city’s benefit.

City Manager Bud Ovrom said residents may feel the Lockheed pullout will mean “the sky is falling, but it’s really not. I hate to say . . . we’re happy to see this, because we’re not. But I think the city will be better off when we’re done.”

Lockheed Chairman Daniel M. Tellup said the corporation will accelerate by one year the plans disclosed in 1988 to transfer virtually all manufacturing, parts fabrication and engineering activities to newer facilities in Palmdale, Rye Canyon and Marietta, Ga.

Some Layoffs Possible

An estimated 7,000 of Lockheed’s 14,000 Burbank employees will be moved. The move may result in some layoffs, but no more than 300, Tellup said.

After vacating the aged Burbank facilities, some of which were constructed during World War II, Lockheed will sell about 225 acres adjacent to the Burbank airport. Tellup said the company does not have an estimate of the value of the land, but commercial land brokers have said it is worth more than $1.5 million per acre.

Dick Messer, general manager of the Airport Hilton near the Burbank airport, said he felt that the Lockheed property could be put to better use by other companies and businesses. “The property doesn’t fit Lockheed’s purposes anymore, but I think something new and different will be good for the area,” Messer said.

Ovrom said the city has been in negotiations with the Price Co. and Kornwasser & Friedman Shopping Center Properties for a shopping complex on 89 acres of Lockheed property adjacent to the Golden State Freeway, near the intersection of Victory Place, Victory Boulevard and San Fernando Road. He added that the city had been developing a master plan for the area in anticipation of the move.

“Our number one priority is additional retail for our city,” Ovrom said. “Putting a promotional retail center on that property would give us a broad array of retail opportunities.”

He said the proposed center would complement another shopping center that has been planned for a 41-acre site in downtown Burbank. That center, to be called the Burbank Gateway Center, is being developed by Alexander Haagen Co.

“The Lockheed property is freeway visible and accessible,” Ovrom said. “With that property, we would have a balanced retail base in Burbank for once.”

The partnership of Price Co. and Kornwasser & Friedman offered last year to build a $223-million, two-level, open-air shopping center on the downtown site. The developer withdrew the offer when the Burbank City Council expressed a preference for an enclosed center on that property.

Part of the other Lockheed property closer to Burbank Airport could be used for a new terminal, Ovrom said. The existing terminal is too close to the runways to meet modern Federal Aviation Administration standards.

Ovrom also said Lockheed’s plans mean that Burbank will have “cleaner operations.” The corporation has been responsible for contamination of ground water in Burbank in recent years and has taken steps to clean it up.

Redevelopment Area

Ovrom insisted that the city has no immediate right to the Lockheed property and does not have a first right of refusal for it. But all of the affected land is within one of the city’s redevelopment areas and cannot be developed without the approval of the Burbank Redevelopment Agency.

The property includes a 115-acre site at the intersection of Hollywood Way and San Fernando Road, and a 16-acre site at the intersection of Sherman Way and Clybourn Avenue.

City officials had known about Lockheed’s eventual departure for about five years, Ovrom said. “We allocated about $50,000 in our budget to come up with a master plan in preparation of this,” he said.

He noted that Lockheed was the city’s biggest employer “but we will probably have just as many jobs with the new business and corporations that will come as a result of this move.”

Ovrom added that Lockheed was also the city’s largest user of utilities, spending about $1 million a month on electricity. But since Burbank purchases its power from outside sources, he said that the withdrawal would mean the city would not have to spend as much on buying power, and that the companies that replaced Lockheed probably would use less power.

Some Burbank business leaders doubted that Lockheed’s move would benefit Burbank.

Pamela Corradi, president of the Burbank Chamber of Commerce, said the pullout would have a negative impact. “Lockheed has always been a good neighbor, and this is going to hurt,” she said. “This is not only going to take jobs, but is going to affect businesses near Lockheed that were supporting it.”

Housing Demand

Mario Iacobellis, president of the Burbank Board of Realtors, said the demand for high- and medium-priced houses would probably decline. “Engineers and executives who might want to purchase some of the hillside houses in Burbank will not do it now because they may not work in Burbank,” he said.

Iacobellis said the demand would return to normal in a few years when the new industries and companies replaced Lockheed.

But developer Chuck Cusumano said the pullout would have a negligible effect. “There will be a loss but the void will be filled,” he said. “The property is all centrally located, can attract major corporations and is located near the airport. There will be a lot of interest.”