A New Image : Oft-Maligned Burbank Is Bustling With Entertainment Industry Expansion

Few cities have been as ridiculed, but these days Burbank can afford to laugh.

The butt of jokes dating back to the ‘60s comedy show “Laugh-In” and perpetuated by Johnny Carson, Burbank was until recently a fitting target. It was hot, smoggy and, in some areas, downright ugly. Adding injury to insult, Burbank lost nearly 14,000 jobs after its biggest employer, Lockheed Corp., packed up and moved in 1990.

But instead of being a poster child for aerospace downsizing, Burbank now stands as a glowing example of a trend that economists and local politicians are increasingly trumpeting: More than any other industry, the fast-growing media and entertainment business is helping to revive the long-beleaguered Southern California economy, and to offset the pain felt throughout the region from aerospace industry shrinkage.

That growth is apparent throughout Burbank’s media district. The city’s two movie studios, Walt Disney and Warner Bros., have ruled the box office for the past five years. They are bustling with production activity, thanks to the explosion in demand from overseas markets, cable TV and broadcast networks.

Facilities at NBC Studios in Burbank are also full to the brim. Scores of other enterprises--from sound companies to post-production firms to studio equipment suppliers--are bursting with work. More keep popping up all the time, quickly filling buildings vacated by ball-bearing manufacturers and other former Lockheed suppliers.

There’s no end to the growth in sight. Disney and Warner Bros.--along with neighbor MCA, whose Universal Studios is just across the Los Angeles River from Burbank--have embarked on long-term expansion plans. And pending mergers promise to solidify their positions as the world’s dominant media concerns.

“There’s still a strong sentiment that somehow Los Angeles is weaker than it was 10 years ago because of a loss of manufacturing, and particularly that the Valley is hurting because of the loss of aerospace,” said Gary Anderson, a principal consultant at SRI International, a Menlo Park-based research group.

“That’s true,” Anderson said, “but it’s being replaced by an equally high-tech industry. Its product is up on the screen.”

To be sure, the startling growth of the media business can never fully compensate for agonizing aerospace cutbacks.

Nonetheless, Burbank boasts the tightest office market in Southern California, a relatively low unemployment rate and growing tax revenues. The entertainment jobs being created are high-paying--salaries average about $45,000 a year--and the amount of money spent in Burbank has been growing at a 10% annual clip.

Burbank City Manager Robert (Bud) Ovrom credited Burbank’s resurgence to a combination of luck and an aggressive, business-friendly municipal staff. Unlike Los Angeles, for example, Burbank has no gross receipts tax. And five years ago, with Lockheed’s departure imminent, the city had the foresight to develop a master plan to guide media industry growth.

So when Disney and Warner Bros. submitted their long-term expansion plans to the city, approvals took less than a year.

Disney, whose work force in the Burbank-Glendale area has already grown 25% in the last four years to about 8,000, is continuing to gear up at its 44-acre Burbank lot under the 25-year plan passed in 1992. At the time, Disney projected spending $600 million to add 1.9 million square feet of facilities.

Among the first projects Disney undertook was a gleaming new building to house about 700 animators. The building was completed a year ago, and already “it’s overflowing,” said Peter Rummell, president of Disney design and development.

Disney has another office building under construction, and plans to begin work soon on two new sound stages and accompanying offices. Plus, Disney occupies space in about 25 buildings scattered across Burbank and Glendale.

Rummell said it is unclear how Disney’s pending acquisition of New York-based Capital Cities/ABC, which operates the ABC television network, will affect the company’s long-range growth. But, he said, “it means the pressure is greater, not less” to accommodate Disney’s burgeoning empire.

The pressure is also apparent at Warner Bros., whose parent, New York-based Time Warner Inc., has its own mega-merger in the works with Turner Broadcasting.

Between 1992 and 1994, Warner Bros.’ work force in the Burbank-Glendale area grew by about 1,000, to 13,350. Several new buildings have been added at the company’s Burbank lot in recent years, including offices, a state-of-the-art theater, a film archive and a wardrobe facility. And last month, the Burbank City Council approved Warner Bros.’ 20-year plan to triple its local employment and add 3.3 million square feet of new facilities at a cost of $800 million.

At NBC “all the studios are full” said Jack O’Neill, the network’s vice president of facilities. “Basically, we’ve never been busier.”

It isn’t just the studios that are bulging. The growth has also spilled over into the intricate network of companies that provide media-related products and services, from law firms and banks to costume-rental businesses and film suppliers.

But there’s also a downside to Burbank’s ballooning media industry. The city’s commercial real estate market has become so tight that some firms are forced to look elsewhere for space. Rapidly expanding Saban Entertainment, which produces the “Mighty Morphin Power Rangers” children’s TV show, is moving to larger quarters in Westwood.

Burbank City Manager Ovrom would love to land the new DreamWorks SKG studio, which is housed on the Universal lot. But most observers expect that DreamWorks will eventually set up shop at the huge Playa Vista project in Playa del Rey, and the studio is negotiating to locate its animation division in Glendale.

Nearly 1 million square feet of new office and industrial space is being built each year in Burbank, the city estimates. But Ovrom said there’s still a crying need for more, and he has high hopes that the abandoned Lockheed property will eventually be converted to entertainment industry use.

The city is eager to get a 103-acre parcel that was the site of Lockheed’s B-1 bomber plant back in use. However, the land and underground water there were badly contaminated and are now being cleaned. Ovrom estimates the site will be ready for redevelopment within two years, after which he envisions the establishment of a “Media District North” on the grounds. But even if the property is determined to be clean, the shadow of former toxic contamination is “a big psychological issue” for prospective tenants, said Seth Dudley, senior vice president at the commercial real estate brokerage Julien J. Studley Inc. in Los Angeles.

Still, observers expect the studios to keep close to home as much as possible, despite mounting competition for media businesses from other parts of Southern California and other states.

“The infrastructure is already there,” said Joel Kotkin, a public policy fellow at Pepperdine University. “It would cost a fortune to rebuild what is already there.”

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Bustling Burbank

For decades, Burbank was a two- industry town. Then with the departure of aerospace giant Lockheed Corp., it became a one- industry town. But the remaining industry- entertainment-is growing so fast it is quickly replacing the lost aerospace jobs and is helping create a vibrant local economy.

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Robust Employment Growth

Entertainment industry employment in the San Fernando Valley:

1987

No. of employees: 32,168

1992

No. of employees: 51,924

% change: 61%

Note: Employment figures are from companies involved directly with motion picture and television production.

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Unemployment Rate

As of August,1995

Burbank: 6%

California: 7.8%

Los Angeles: 9.8%

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Office Vacancy Rates

As of August,1995

Burbank Media District: 3%

Burbank- Glendale: 10%

Greater Los Angeles: 18.4%

Sources: SRI International, state Employment Development Department, Julien J. Studley Inc.