Developer Chosen for Lockheed Property

Lockheed Martin has selected Los Angeles-based developer the Zelman Cos. to create a long-awaited retail-office complex on a 103-acre Burbank site adjacent to the Golden State Freeway, company officials said Tuesday.

Zelman won out over several rival developers, including Phoenix-based Vestar Development Co. Vestar announced plans to develop the site more than two years ago but allowed a December deadline for completing escrow to pass without finishing the deal.

At that time, Lockheed threw the doors open to new competitors and settled Monday on Zelman, a little-known name in real estate development.

“They came in with the better price,” Lockheed spokeswoman Gail Rymer said Tuesday. “It was substantially better.”

In addition to Zelman and Vestar, which upped its ante from round one and resubmitted a bid, Lockheed reviewed a proposal from a team that included Dan Selleck, Donahue Schriber and Legacy Partners (formerly Lincoln Property Co.).

The project, which is tentatively being called the Empire Center, will be Zelman’s first large development in the San Fernando Valley.

Burbank officials, who see the planned development as a potentially key source of tax revenue for the city, said Tuesday they were happy to see a new developer on board.

“We’re sorry things didn’t work out with Vestar, but we have tremendous confidence in the Zelman Cos. and we look forward to working with them,” said Burbank City Manager Bud Ovrom.

Unlike Vestar, which was working with subcontractors to develop large portions of the Burbank land, Zelman may do all the work itself. The company has experience in retail, office and auto developments--three of the major components of the project.

Zelman, which developed the busy Puente Hills East office, retail and auto center in the city of Industry, plans to raft a Burbank project on the site at Buena Vista Street, Empire Avenue and Victory Boulevard.

The project includes 50 acres of retail space, nearly 18 acres of office space, 27 acres for auto dealerships and 6 acres for a hotel.

The final 2 acres is intended to house a system designed to remove underground toxins that remain from the site’s use as a Lockheed warplane factory.

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The retail component will include about 600,000 square feet of space, occupied mainly by big-box retailers, said Ben Reiling, Zelman’s president and owner.

Although Reiling declined to name any potential tenants, he said the mix would be similar to that of the Encinitas Town Center near San Diego, a retail center he developed that includes a Target, Linens n’ Things, Office Depot and Barnes & Noble.

“This is all coming pretty quick,” he said. “We just got a hint of this this morning. We’ve been picked, now we have to get down to the hard work.”

One key ingredient needed for the project to move forward is the draft environmental-impact report, which has yet to be completed. Reiling, noting that environmental studies have been done on the land for years, said he was not worried about any environmental bombshell.

“It’s hard to imagine that there is anything there that hasn’t already been studied,” he said.

Ovrom said that “every site in Burbank has some toxic issues with it, but we’re very comfortable that all of the issues on the Lockheed property have or will be dealt with.

“I don’t think there’s going to be additional delays in the EIR. We’re going to move forward right on schedule.”