CIVIC CENTER -- With the clock ticking, the City Council hurriedly
approved a deal Tuesday that opens the door for a Riverside auto retailer
to buy land for a dealership in Burbank.
By a 4-1 vote, the City Council agreed to a 50-50 split with CAG
Investments of future sales tax revenues generated by the dealership for
10 years or up to $9 million, whichever comes first. The dealership,
which is planned for the Burbank Empire Center on Lockheed-Martin Corp.'s
former “B-1" site, will give the city the auto sales it has long sought.
City officials were eager to approve the deal before Jan. 1 because of
a law taking effect that could require Burbank to share tax revenues
generated by the dealership.
“The deal is a good deal for the city and the taxpayers,” Vice Mayor
Bill Wiggins said Tuesday. “It brings us a source of income.”
Murphy, who was the sole council member to oppose the deal, said there
was not enough time before the vote for a thorough review.
“I think we’re rushing this through without doing enough research,”
Murphy said. “I just have too many questions.”
CAG Investments owner Marshall Chesrown plans to open a
Chrysler-Plymouth-Dodge-Jeep dealership on a 12-acre portion of the
103-acre property. Los Angeles-based Zelman Development Companies is
seeking council approval for the $200-million Empire Center, which will
include large retail stores, at least one hotel and office space.
Chesrown plans to buy the 12-acre site from Zelman for $13 million.
The project’s cost is expected to top $30 million.
Burbank City Manager Bud Ovrom said Chesrown has promised to build a
dealership instead of buying an existing one in Glendale or Los Angeles
and relocating it. If that happens, Burbank wouldn’t have to share sales
tax revenues with other cities under the new law.
Some speakers at Tuesday’s council meeting criticized the timing of
the deal while others lamented the substantial amount of tax revenues the
dealership would keep.
The share of the city’s projected sales tax revenue from the
dealership in its first 10 years is between $5.2 and $7.8 million,
according to a city report.
“It just is so rank,” said former Councilman Ted McConkey. “This is
Bud Ovrom playing Donald Trump and giving away sales tax.”
Ovrom defended the deal, saying the dealership would provide an added
revenue source for the city.
Community Chevrolet is the only dealership within city limits. Burbank
approved a dealership on Front Street for Galpin Ford, in late 1997, but
owner Bert Boeckmann has been unable to resolve conflicts with Ford Motor
Ovrom said Chrysler deal could help Boeckmann get his project rolling.
“This could help Ford make its decision,” Ovrom said. “Getting
Chrysler to move forward is going to help Ford move forward.”