Burbank Hopes to Lure Another Car Dealership

Sandwiched between a freeway and railroad tracks sits a prime piece of land that Burbank officials believe is their best chance to bring another new car sales lot into this one-dealership town.

The eight-acre parcel owned by Ford Motor Co. has been sitting unused since a 1998 deal calling for auto sales kingpin Bert Boeckmann to build a super-dealership on the site fell through. City officials said Boeckmann invoked his contractual right to refuse to let another Ford dealership replace him.

The apparent stalemate has left Burbank feeling all the frustration of a 16-year-old with his first driver’s license and no wheels.

There are other development options for the site, situated off Burbank Boulevard between the Golden State Freeway and the Amtrak / Metrolink railroad tracks. But Burbank officials really want a car dealership.

“Automotive is clearly the best use for the property,” Burbank City Manager Robert “Bud” Ovrom said.

It also would boost the city’s annual sales tax revenue.

The Boeckmann dealership would have netted Burbank $55 million in sales tax over 25 years.

Burbank fares well in most retail sales categories--except for car sales, Ovrom said.

The city usually collects about 50% more in sales tax on a per capita basis than the state average. But it runs at about 25% of the state average for automotive sales.

“We want new business and the only way to get that is automotive,” Ovrom said.

The city’s only new car dealership, Community Chevrolet, has been doing business for more than three decades without any local competition.

Then, Ford bought the land at 777 Front St. from Zero Corp. in 1998 as part of a plan to open a nationwide network of superstores.

Boeckmann--owner of Galpin Motors in North Hills, which says it is the largest Ford dealership in the world--confirmed he had an agreement with Ford “that if they were going to put a dealership in Burbank, it would be Galpin.”

As part of the deal, Boeckmann held the exclusive rights to operate the new superstore and could shut out other Ford dealerships even after he backed out.

Neither he nor Ford officials would say whether that agreement was still in force.

Ford later abandoned the superstore plan and is now trying to sell off properties producing inadequate returns, said Wells Lifka, Ford’s regional market representative manager for California.

Ovrom said Ford is paying about $1 million annually for the unused land, which it now wants to unload--even to a competitor.

“The holding costs are high,” Lifka said. “We would prefer not to sell to another manufacturer, but would consider offers. We’re motivated sellers.”

Boeckmann said he found the Burbank deal attractive, but has no plans at this point to expand his dealership into the city.

“Three years ago, we walked away from the deal with nothing,” Ovrom said. “Boeckmann walked away with nothing. No harm, no foul.

“The only one left holding the bag was Ford.”

At the time, Burbank was so committed to luring another dealership into the city that officials offered to sweeten the Boeckmann deal with a four-acre parcel of adjacent land and about $12 million in cash and tax incentives. That offer is no longer on the table.

“Been there, done that,” Ovrom said. “If we gave any incentive now, we would just be lining the pockets of the Ford Motor Co. We would clearly not be inclined to offer anything similar to what we offered Boeckmann, because Ford already owns the land.”

However, the city is willing to talk with anybody who buys the land from Ford about the long, narrow city-owned parcel on the north and east sides of the property, Ovrom said. The parcel is unsuited for development by itself.

Ford reportedly has listed the property for sale with CB Richard Ellis Inc. for $15.5 million. The real estate brokers are working with Burbank city officials to find a suitable buyer.

Ovrom hasn’t heard from brokers for several months, but previous pitches included plans for apartment buildings, a recycling company and a storage facility for Internet equipment.

Still, Burbank really wants cars.

Attracting other kinds of businesses to the city would increase competition with existing companies, Ovrom said.

Ovrom said the city staff would not recommend changing the site’s zoning from automotive to residential even though the demand for apartments in Burbank far exceeds the supply.

A North Hollywood Ford dealer once tried to buy the property for a dealership, Ovrom said, but was stymied by Boeckmann’s right of refusal.

Ford tried “a couple of failed strategies to get Metro Ford [now Sunrise Ford], but due to protests by other dealerships, it didn’t happen,” Lifka said.

Any time the company seeks to move a dealership, it must prove to the Department of Motor Vehicles--which oversees new car dealerships--that there is enough business in the area that the move will not hurt existing dealers, Lifka said. He would not say whether Boeckmann blocked the deal.

But Ovrom said Boeckmann has invoked his right of refusal to keep competing Ford dealerships at bay.

“In terms of competition, a weak dealership on Lankershim Boulevard [in North Hollywood] is better for Boeckmann than a strong dealership on the freeway [in Burbank],” Ovrom said.

Sunrise owner Bob Bruncati declined to discuss the failed deal or whether he plans to pursue the Burbank site.