Developer to Turn Rail Yard Into Business Park
A long-vacant railroad maintenance area in northeast Los Angeles known as Taylor Yard is poised for a second run as home to entertainment businesses, along with other industrial and retail uses.
City officials are expected to announce Monday that a Dallas developer plans to turn a 53-acre piece of the old rail yard into a business park catering to entertainment-related tenants who cannot find space in Burbank or Glendale.
Lincoln Property Co. has agreed to purchase the vacant property sandwiched between the Los Angeles River and San Fernando Road in a sale valued at $36 million by sources close to the deal. Lincoln plans to begin construction this summer on a complex of buildings for companies that work behind the scenes on film and television production.
Developers acknowledged that the gritty, urban location probably wouldn’t draw sound-stage development or offshoots of major studios, but work space is scarce in Glendale and Burbank for the set builders, lighting companies and post-production businesses that support the majors.
“We’re not going to get Warner Bros. or Disney,” said Lincoln partner Bill Shubin. “But there are a lot of companies that provide services to the studios that need industrial space.”
Although no formal plans have been drawn up for the site, Shubin anticipates it would accommodate about 600,000 square feet of light industrial buildings. Lincoln would build some of them itself. It would also consider selling land to companies that want to build their own facilities.
The site has remained vacant since its owner, Union Pacific Railroad Co., closed a rail maintenance yard there in the late 1980s, said City Councilman Mike Hernandez. Hernandez and Mayor Richard Riordan had tried attracting other businesses to the site to help provide jobs for the surrounding communities of Cypress Park, Riverside Drive and Lincoln Heights.
“I’d love to see that place just teeming with paychecks,” said Los Angeles Deputy Mayor Rocky Delgadillo. “I think this [project] will do a lot for the community.”
Companies locating in the revitalization zone would be eligible for such government incentives as tax credits or industrial bonds to help finance construction and pay for equipment within the buildings, Delgadillo said.
Interest in Taylor Yard was rekindled last year as the economy rebounded and commercial real estate values began rising. KABC-TV considered building a new studio at the site, and Federal Express decided to build a regional distribution facility there that is now almost complete.
Although KABC ultimately chose a Glendale location, a 200-employee manufacturer, Nelson Name Plate, has now agreed in principle to move its Los Angeles facility to Taylor Yard at some time in the future. And an adjoining parcel is now under contract to Chicago-based Dalan Development Co., which is planning a large “big-box” retail development.
“That whole corridor has been itching for development,” said Hernandez. “It’s an island whose time has come.”
Lincoln was one of several development firms bidding for Taylor Yard land, one of the last large open parcels available near the entertainment hotbeds of Glendale and Burbank. In the last year, vacancy in those markets has shrunk to just 3%, giving businesses little room to expand.
Shubin said Lincoln is betting that many companies would move away from the entertainment hub in exchange for a larger, new facility. Lincoln does not plan to offer discount rents, he said.
Brokers say that pricing is a huge gamble, considering the nine miles between the site and many of the studios in Glendale, where industrial space generally rents for more than 80 cents per square foot per month.
“The jury’s still out on if this will be successful,” said Greg Barsamian, an industrial broker with the Glendale office of CB Commercial Real Estate Group Inc. “I don’t know if someone’s going to pay [high] rents to be in that location.”
Making New Tracks
Lincoln Property Co. is planning to build a business park catering to the entertainment industry at the site of a former rail yard near the Glendale Freeway. Construction on the 53-acre project should start this summer.