Lockheed Proposes Development Around Airport

Upping the stakes in the long-running controversy over expansion of Burbank Airport, Lockheed Martin Corp. has proposed more hotels, offices and restaurants near the site of the new terminal--a plan quickly endorsed by city officials.

“We think Hollywood Way should be more like Century Boulevard going down to LAX,” said Burbank City Manager Robert “Bud” Ovrom.

In contrast, officials with the Burbank-Glendale-Pasadena Airport Authority dismissed the proposed design as a gambit by Lockheed Martin to show that the land is worth more than the airport is offering to pay.

Calling Lockheed’s proposal “totally unrealistic,” authority spokesman Victor Gill said, “They are advancing a whole new project, one that would require new plans, many years and multiple dollars.”

Although Lockheed Martin is not directly involved in the long- standing debate over the expansion of Burbank Airport, it owns the property the airport plans to buy for the expansion. Its proposal calls for 2.9 million square feet of commercial development along Hollywood Way.

The airport authority is advancing plans to build a new and expanded terminal on Lockheed land north of the existing terminal that would provide more room for planes to land and take off. The authority wants a new terminal with 19 gates--and the potential to expand to 27--surrounded by a sea of surface parking lots.

By contrast, the Lockheed Martin proposal is for a 16-gate terminal, flanked by airport-related shops, industrial space and restaurants to the north and offices and hotels to the east along Hollywood Way.

Burbank officials, who favor a 16-gate terminal in the hope of limiting noise and congestion, say Lockheed’s approach would also provide greater tax benefits than the large areas of surface parking now planned.

The city currently receives less than half a million dollars in property-tax revenues annually from the Lockheed Martin site, occupied by a mothballed Lockheed aircraft manufacturing plant. Under the airport’s ownership, the land would be removed from the tax rolls.

However, Burbank officials have already calculated the possible tax boon to the city were Lockheed to set aside a portion of the property for development: nearly $4 million annually.

“We don’t think that Hollywood Way frontage should be a parking lot,” said Ovrom. “That land should have a higher and better use.”

Airport spokesman Gill countered that Lockheed’s plan is unworkable for a host of reasons: The spaces between gates would be too small, security difficult and parking scarce, while the long, linear terminal would force passengers to hike long distances, he said.

As for parking lots, which currently supply nearly 50% of the airport’s operating revenue, these are needed to ensure the continued financial health of the airport, he said.

Lockheed’s late entry into the debate over the terminal coincides with a turnaround in the region’s commercial real estate market.

“When Lockheed first looked to get out of that land, it was sort of widely assumed that the combination of a slow and overbuilt market and hazardous substances . . . would make it very difficult to move that property,” said Seth Dudley, a senior vice president of the commercial real estate firm Julien J. Studley Inc.

“What’s happened since is an explosion of the entertainment industry and its seemingly endless need for space.”

Said Bill Boyd, senior vice president of CB Commercial in Glendale: “Burbank is one of the strongest and most active office markets in the country. . . . The airport would be a new concentration of office space, but it would certainly be accepted.”

The vicissitudes of the commercial real estate market are reflected in the current battle between the airport authority and Lockheed over the sale of the land.

The airport authority says the land is worth $39 million; Lockheed Martin believes its worth is closer to $100 million--a gaping discrepancy that reflects the dramatic swings in values in the area during recent years, said Dudley, the broker.

With the two sides unable to agree on a price, the airport authority began condemnation proceedings against Lockheed Martin in Los Angeles County Superior Court last August.

The court has awarded possession of the land to the airport as of June, but the price is still being hammered out in court. And Lockheed Martin now says it plans to petition the court to delay transfer of the property.

Asked whether Lockheed will fight to keep some of the property for development, company spokeswoman Maureen Curow said: “There are always options.”

Both airport and Burbank officials say Lockheed is trying to bolster its case that the land is worth more by floating plans to develop it commercially.

“We understand Lockheed is not doing this to be nice guys to us, but it also serves our purpose,” said Ovrom. He said Lockheed and the city are allies--”strange bedfellows,” he calls them--in an effort to forge alternatives to the current airport plans.

But the airport authority’s Gill said Lockheed has simply “made a decision that destabilizing the debate is to their advantage.” He characterizes the proposed design as “just a sketch on the back of an envelope.”

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Lockheed’s Expansion Plan

Lockheed Martin has come up with its own expansion plan for the land it owns at Burbank Airport. Rather than turning the northeast section into parking, which was previously suggested, Lockheed is proposing adding hotels, offices and restaurants.