City Council sells downtown land for $100

Laura Sturza

While the Cusumano Group is paying more for city land than the people

who bought Manhattan Island for $24, some community members think

they are getting quite a deal by paying $100 for part of the Old

Police Block.

“Property across the street from City Hall and you can only get

$100 for it?” resident Mike Nolan asked council members at their

meeting Tuesday.

The council voted 4-0, with Councilwoman Marsha Ramos absent, to

approve the sale of the lot across from City Hall, which will become

Burbank Civic Plaza. Plans for the project include 78,000 square feet

of offices, 12,000 square feet of retail businesses like a

restaurant, which city officials say will cater to tenants and

others, and parking.

The plaza is part of the city’s master plan, which includes the

Olson Company’s Burbank Village Walk, with 140 apart- ments.

That adjacent property was sold for $3 million and will include

10% affordable housing, Community Development Director Sue Georgino

said.

The $100 deal was struck because property sold through the

Redevelopment Agency requires the developer to meet the agency’s

mandates.

“I can’t think of a redeve- lopment project that has recouped its

value in land sale,” Councilman Dave Golonski said.

The city wanted to “sell the property for its highest and best

use,” which was determined to be office space, Georgino said.

“We have to look at the block as a whole and say, ‘Do we want

residential across the street from [City Hall] and the courthouse?,’”

Georgino said. “That just [would not] make sense.”

Expected tax-revenue and parking income in current value terms is

$2.4 million through 2021, a city report showed.

Since the city has a glut of office space, the terms had to be

made attractive to a developer, Georgino said. In addition, the city

did not want to continue to hold the vacant land, not knowing if a

willing developer would come forward in three to five years, Georgino

said.

“The land gives the developer a return of 8.22% which is a very

marginal return for a development with this kind of risk,” Georgino

said. “Generally the 10-13% range is more apropos.”

But partner Michael Cusu- mano said his firm believes the quality

of the $17-million pro- ject’s design will attract tenants. He plans

to move the company’s corporate headquarters to the new space, which

is expected to be completed in 2005.