Burbank Moves to Launch 2nd Media District

Tough as it is to picture just yet, a vacant, contaminated, fenced-in stretch of dirt near Burbank Airport appears destined for show biz.

The vast space, city officials say, is needed by a bustling media and entertainment industry that helped Burbank survive a troubled economy and the lost aerospace jobs caused by the departure of Lockheed Martin Corp. in 1990.

Eager to oblige, officials are pushing the buttons they hope will produce an even larger, thriving area to be called Media District North.

The planned extension of the existing Media District, home to Walt Disney Co., Warner Bros. and NBC, could help the city meet the needs of companies clamoring to be in a media center--something Burbank has been unable to do lately.

“It’s crucial,” said Robert M. Tague, the city’s community development director. “It’s the largest piece of land available for media and industrial uses.”

Indeed, the city is determined to keep reaping the benefits, including growing tax revenues from local development sparked greatly by an industry that is going like gangbusters.

The problem is that success is choking Burbank. The three major studios are moving ahead with long-term expansion plans, but even more space is needed. The demand is so great that city staff two weeks ago recommended ending the 3-year-old practice initiated after the Lockheed exodus of offering businesses sweet monetary incentives--a device that helped create today’s enviable 5% office vacancy rate citywide.

Enter Media District North.

Tague and his staff are preparing to ask the City Council to approve spending $10 million to begin infrastructure improvements in the area that would become the new district. The work would include landscaping as well as upgrading streets, sidewalks, sewers and electrical systems.

Several top officials, including Mayor Bill Wiggins and City Manager Robert R. Ovrom, support developing the site as soon as possible, their preference being to generate high-paying entertainment jobs.

“We have people knocking on our doors who are good people,” Wiggins said. “My only concern is that we’re seeing people turn away from Burbank and go to Glendale or the North Hollywood area because we have vacant land but no buildings.”

Several recent disappointments for Burbank included seeing prestigious DreamWorks SKG--founded by media moguls Steven Spielberg, Jeffrey Katzenberg and David Geffen--choose Playa del Rey and neighboring Glendale for its new facilities. Disney and Warner Bros. lease space in Glendale.

So to city officials, the reasons for encouraging the swift development of the new district--which would include the 103-acre site which sources say Lockheed is close to selling--are obvious.

“We consider ourselves the center of the media industry,” Tague said. “It’s an opportunity we need to seize.”

Essentially, the Lockheed site is seen as a potential new hot spot just three miles north of the long-established Media District. The city has a half dozen other projects it considers important, but none approach its size or scope.

The parcel, which sits west of the Golden State Freeway and the Verdugo Mountains, would make up a large portion of the total Media District North. The district’s rough boundaries would likely include Hollywood Way by the airport, Thornton Avenue, San Fernando Road, Victory Place and the railroad tracks north of Victory Boulevard.

The planned district, which technically remains a concept still requiring City Council review, would cover more than 200 acres.

Analysts agreed that the creation of Media District North makes sense.

“It is known that the entertainment community prefers being in Burbank over other locations,” said William R. Boyd Jr., senior vice president of CB Commercial Real Estate Group. “It [Media District North] will be an alternative. It’s not as preferred as the Media District.”

Boyd and others said attractive locations still exist in the Media District, but they are often too small or too expensive.

City officials believe Media District North will meet a demand and become another link in a chain of business development successes that have resulted in growing tax revenues and relatively low unemployment.

They say property tax revenues increased almost $900 million during the past five years, due greatly to the creation of downtown’s Media City Center shopping mall and Burbank Village. In addition, sales tax revenues increased from about $12.5 million in fiscal 1991-92 to about $16.3 million in 1994-95, officials said.

It was not so long ago that Burbank was reeling from the departure of Lockheed and its more than 12,000 jobs, which in turn led to the loss of other companies.

In response, the City Council in 1991 decided to aggressively market Burbank as a desirable business location and to keep more businesses from closing their doors. By 1993, a program was approved to provide tax rebates and low-interest rehabilitation loans to preferred businesses with long-term growth potential, firms which would go elsewhere without such incentives.

In the ever popular Media District, which boasts a less than 3% office vacancy rate, the only beneficiaries were Allianz Insurance Co. and radio station KIIS-FM. The two firms were offered a total tax rebate of $300,000 over 10 years to fill office space on Riverside Drive.

Today, as staff suggests that the incentive program is no longer needed, the city counts 14 businesses--with about 2,200 jobs--that are benefiting from a total estimated public subsidy of nearly $3.7 million over terms ranging from three to 10 years. A few others are currently in negotiations and may be grandfathered if the program is ended.

An example of how the city invested in the businesses can be seen in the case of Fry’s Electronics. The superstore, which opened this summer near the airport, received the largest loan or rebate of all the companies at $2 million.

Christopher L. Foss, special assistant to Tague, said the agreement between the city and Fry’s, which moved into a formerly vacant 95,000-square-foot building, required the store to guarantee 300 jobs. In addition, the store is expected to generate enough sales tax for the city to get back its $2 million in less than four years, or the store must make up the difference in the form of loan payments, Foss said.

Wiggins was among those who said the incentives made perfect sense, even if some critics thought the city gave away too much. The value of the investments is seen in the city’s success, they said.

“I don’t believe it was a mistake,” the mayor said. “At the same time, we are now at the point where a tremendous amount of our buildings are at peak occupancy.”

Even now, city officials are not suggesting that all incentives should be eliminated. To stay competitive, the staff believes the city should remain aggressive in ways such as helping cover fees for new development outside the Media District, offering low-interest rehabilitation loans to businesses, and promoting development with its slogan, “Burbank: Open for Business.”

How soon a developer commits to the 103-acre Lockheed site appears to be anybody’s guess. Some city officials are hoping an announcement is made within 30 to 60 days. Maureen Curow, a spokeswoman for Lockheed, declined to comment because a deal had not yet been struck.

Sources familiar with the negotiations say three companies--Disney, Lincoln Property Co. of Irvine and Vestar Development Co. of Phoenix--are interested in buying the land for media, commercial or retail uses. Officials at those companies either declined to comment or were unavailable.

Curow and other officials have said that the land, which became contaminated over the years, will be cleaned with a vapor extraction system that is expected to be set up in the fall. Development can proceed at the same time as the cleanup, they said.

City officials said if a developer is named soon, construction on parts of the Lockheed land could begin by early 1997. The site should be completely clear for construction by late next year.

Easily, the main concern surrounding any such development, and the issue that has remained constant for many years for residents and business owners around the existing Media District, is traffic.

Several residents said major thoroughfares in the area become unbearable at times.

“It’s just too much for the local homeowners to absorb,” said Barbara Briel, a longtime resident who lives on Fairview Street by Warner Bros.

David W. Gordon, a local optometrist, resident and member of the city’s planning board, was among those who said other concerns involve pollution, noise and the impact on property values. Existing businesses should also be taken into consideration so that they are not hurt by new efforts, he said.

“It’s kind of a soup of things going on,” said Gordon, whose office on Hollywood Way sits between the existing and planned districts. “I think it could be good and it could be bad. . . . It cannot go unchecked.”

City officials said that traffic and other issues are reviewed constantly. Some measures taken so far in parts of the city include limiting access to side streets or adding speed bumps. Also, the three major studios are adhering to the city’s Media District specific plan, adopted in 1991 to control growth.

Likewise, whatever needs to be done to create a productive Media District North will be done, officials said.

“It’s going to happen,” Tague said.

* STUDIO EXPANSION

Nearly every major Valley studio has long-term plans. B2