Major Burbank Project Set to Begin
Zelman Development Co. will break ground next month on Burbank Empire Center, a 1.4-million-square-foot shopping center, office complex and hotel development at Empire Avenue and Interstate 5 in Burbank.
The center will include 900,000 square feet of retail space for such stores as Costco, Target, Sears, Lowe’s, Best Buy and Linens ‘N Things, along with 390,000 square feet of office space and two hotels, said Bill Bauman, a Colliers Seeley International broker who represented Zelman in a recent land purchase and subsequent land sales involving the center.
Los Angeles-based Zelman acquired the 103-acre Empire Center site from Lockheed Martin Corp. and subsequently sold about half the land to Sears, Costco and other developers that will build the office and hotel portions of the project.
The 18-acre office portion of the project will be built by Palo Alto-based Menlo Equities, which recently signed Allianz Insurance to lease a 97,000-square-foot office building where Allianz will relocate its North American headquarters from 3400 Riverside Drive in Burbank, according to brokers at Julien J. Studley Inc. who represented Allianz and Menlo.
Terms of the Allianz lease were not disclosed, but sources indicated it was a 15-year agreement valued at $50 million.
In addition to the 97,000-square-foot Allianz building, Menlo Equities is now building a 130,000-square-foot office building and expects to complete all 390,000 square feet of office space by early next year.
The project’s hotels will include an Extended Stay America and a Courtyard by Marriott. Zelman is in escrow to sell six acres to two developers that will build the hotels, according to Brett Foy, a Zelman vice president. He said those land sales are expected to close in April.
The $50-million retail portion of the project that Zelman will develop will include about 600,000 square feet of space, Foy said. All of it is scheduled to be completed by late this year.
Costco is expected to complete its 155,000 square feet at the same time on its 15-acre site, and Sears acquired a 12-acre site where it is planning to open a 145,000-square-foot Great Indoors store in 2002.
Zelman’s portion of the project is being designed by Perkowitz & Ruth Architects of Long Beach. Whittier-based Oltmans Construction is the general contractor for site preparation, including grading, utilities, parking and landscaping, according to Foy, who said Zelman has not yet named a general contractor for construction of the retail buildings.
Menlo Equities’ office buildings are being designed by Tommy Landau of Landau Partnership.
Zelman is developing Burbank Empire Center through its Zelman Retail Partners Inc. The company’s other projects include the 500,000-square-foot Encinitas Town Center, the 200,000-square-foot Ontario Gateway Shopping Center, and other retail projects in California, Denver, Miami and Orlando, Fla.
Menlo Equities is the general partner and principal owner of partnerships and limited liability companies that own and operate about 7 million square feet of office, research and development space and industrial buildings in a portfolio valued at $1 billion.
Zelman was represented in all of its land transactions except the Menlo Equities deal by Bauman and Boyd Higgins, chairman emeritus of Colliers Seeley, with Bauman and Higgins also representing Lockheed Martin.
In the Menlo Equities transaction, the principals represented themselves. In the Allianz lease, Mark Sullivan, Seth Dudley and Rosey Miller of Julien J. Studley represented Allianz, and landlord Menlo Equities was represented by Studley’s Paul Stockwell and Onno Zwaneveld.
