Deal to Develop Old Lockheed Site in Burbank Now Up in Air

More than two years after Phoenix-based Vestar Development Co. announced plans for a major retail and office complex north of Burbank’s burgeoning Media City, no construction has begun and the deal now faces several major question marks.

Although the president of Vestar says plans for the project are moving forward, a spokeswoman for the landowner, Lockheed Martin Corp., says Vestar has canceled its contract to buy the land, leaving Lockheed free to negotiate with others.

A meeting has been scheduled Thursday to see if the two sides can put the deal back on track.

“As of Dec. 23, Vestar notified us that they would cancel the contract,” Lockheed spokeswoman Gail Rymer said last week. “There is a clause in the contract that allows for cancellation if the environmental impact report has not been approved by the city by the time the contract is signed.”

Vestar had been slated to close escrow on the 103-acre property near Burbank Airport on Dec. 31. At least in part because of delays in getting the environmental impact report approved by city authorities, that did not happen.

But Robert Tague, Burbank’s director of community development, said he talked early Monday with Rick Kuhle, senior vice president at Vestar, who “wanted to let us know that they’re still trying to keep the project together,” Tague said.

Tague said Kuhle will meet Thursday with Lockheed’s director of real estate to try to salvage negotiations that have been underway for two years.

In 1996, Vestar announced plans to buy the site, bordered by Buena Vista Street on the west, Empire Avenue on the north, the Metrolink tracks and Victory Boulevard on the south and Victory Place on the east. The aim was to turn the land into the home of several “big box” retailers, office space and a hotel.

But progress has been slower than expected, in part because of lingering concerns about possible chemical contamination of the site once used by Lockheed, the defense industry giant.

Tague said both Vestar and Lockheed now assure the city there are no contamination concerns, a claim the city wants in writing.

“We’re asking them to produce the documents to assure our environmental consultants that that’s true,” said Tague, “so our consultants can be confident that those issues have been resolved.”

While acknowledging that the city still has a number of environmental questions, Lee Hanley, president of Vestar, expressed confidence Thursday that the city’s review process will be completed this spring.

“From an environmental impact standpoint, there is no issue that isn’t resolvable,” said Hanley, who said the complex could include one or more car dealerships. “There are questions that have to be answered before the city can grant entitlement, but those are absolutely normal questions.

“There are no problems that I’m aware of, other than just normal issues,” Hanley added. “There is no major issue. This is an ongoing process.”

Burbank City Manager Bud Ovrom acknowledged that the environmental impact review is behind schedule. Tague said that is due in part to the contamination question and concerns about traffic. He said a draft environmental impact report could be available for public review in mid- to late January. The first public hearing could be held 45 days later.

“We expect the EIR to go to the planning board in February or March,” Ovrom said.

But for the time being, the Vestar deal appears to be in limbo.

“We will continue to talk to Vestar as well as other parties,” Rymer said. “We may move forward with the Vestar plan or talk to another developer. We have two years of work we don’t want to lose. It’s our hope we can close this deal with Vestar.”

Lockheed isn’t the only one with an interest in seeing the project progress.

“I’m kind of waiting with bated breath to see what happens with Vestar and Lockheed to reinstate the deal,” said Tague.

“We have a large stake in making it happen.”