Burbank OKs sale of IKEA site

Burbank on Monday approved the sale of the IKEA building to a local developer, setting the stage for the furniture giant to move forward with plans to roughly double its operation in the city and become its biggest location in the country.

City officials said they were thrilled about the ability to retain the top sales tax generator in Burbank. And with the expansion, the city only expects to reap more sales- and property-tax revenue, while also holding on to roughly 500 local jobs.

IKEA announced plans in November to build the new store on 22 acres west of San Fernando Boulevard and south of Providencia Avenue — less than one mile from the current location — by 2016.

Company spokesman Joseph Roth said IKEA appreciated the show of support from the city, adding that “we look forward to hopefully a continued long-term partnership with them.”

But there was disagreement over the legality of the move, which must still be approved by California Department of Finance.

The Successor Agency Oversight Board — created to handle the wind-down of local redevelopment — approved the sale Monday in a 4-1 vote amid arguments from Los Angeles County representatives that state law doesn't allow the move.

Two board members were absent.

State law requires that cities produce property management plans for all the former redevelopment properties, of which there are roughly 20 in Burbank.

The board approved a property management plan Monday solely for the IKEA property, located at 600 N. San Fernando Blvd.

Senior Associate County Counsel Shahiedah Coates argued in an email to the board that its sole focus on the IKEA deal was “contrary to the intent of the legislation, which is to require preparation of a long-term plan addressing the total portfolio with an understanding of long-term impacts to taxing entities,” Coates said.

The board was slated to make a decision on the sale in November, but the meeting was canceled after the state temporarily squashed the deal.

State officials at the time said they had yet to determine whether the transfer of the IKEA building from the now-defunct Redevelopment Agency to the city is legal because it occurred three months after the Legislature banned property transfers.

But after a meeting with state finance officials earlier this month, city officials say they're confident the deal will stick.

“They are OK with what we're doing,” said Burbank City Atty. Amy Albano.

If the state approves the deal, the property will be sold to the owners of Crown Realty and Development for $1.3 million, which will be distributed to various taxing entities.

Officials estimate the city will pocket roughly $234,000, with the rest being disbursed to Los Angeles County, Burbank Unified and the Los Angeles Community College District.

Crown Realty has not announced development plans for the 242,000-square-foot property where IKEA currently sits.


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