As government deal stalls, IKEA announces own plans to expand in Burbank

In a surprise announcement Thursday, IKEA announced plans to go ahead with a new store in Burbank that will be nearly twice the size of its current location.

The new store – if approved by the city – would be open in 2016 and be built on 22 acres west of San Fernando Boulevard and south of Providencia Avenue, less than one mile from the current location, according to the company.

“Because of this store’s success, we are excited about the opportunity to build upon our established presence in Burbank with a new, roomier store so close to the existing one, and in the same city,” IKEA U.S. president Mike Ward said in a statement.

The announcement comes just days after city officials said the state had temporarily squashed a series of deals put in motion by the Burbank City Council last month to keep IKEA within city limits because they involved land owned by the now-defunct Redevelopment Agency.

The Swedish furniture retailer has had its eyes on the much larger property at 805 South San Fernando Blvd. for some time. The owner, Crown Realty and Development, had expressed a willingness to sell the land provided it could acquire the current IKEA building through a series of land deals made within the wind down of redevelopment-related properties and obligations at City Hall.

But city officials on Tuesday said those deals were on hold pending a decision by state finance officials over whether Burbank had the legal right to transfer the $1.3-million IKEA property to a middle-man agency that, in turn, would have sold the property to Crown Realty, moving the retailer one step closer to the larger parcel.

But that decision wasn’t expected until mid-2013.

Meanwhile, IKEA agreed to buy the larger property. As part of the deal, Crown Realty also agreed to buy out the remainder of IKEA’s 72-year lease in which the retailer pays no rent for occupying the property.

The current 242,000-square-foot IKEA building -- which opened in 1990 on 6.4 acres to become the first store in California – will remain open while the new, larger version is being constructed.

As for the fate of the current building, once it’s no longer needed by IKEA, the retailer said in a statement that it could be incorporated into a plan led by Crown Realty “to spur further economic growth at the Burbank Town Center.”

“This is something most cities would be dying for today, not a lot of retailers are expanding,” said Jim O’Neil, executive vice president of Crown Realty.

-- Jason Wells and Alene Tchekmedyian, Times Community News

Follow Alene Tchekmedyian on Google+ and on Twitter: @atchek.


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