Huge ‘Power Center Mall’ Awaits Burbank’s Blessing

BURBANK —  In the last few months, the pieces have quietly dropped into place for what could become the San Fernando Valley’s biggest “power center” mall.

Located on 102 acres near Burbank Airport, Burbank Empire Center would not only contain a 750,000-square-foot super mall anchored by the likes of Costco, Target and Staples, but also 450,000 square feet of office space, two hotels and a car dealership.

The sprawling development would provide a major boost to an emerging office and retail market taking shape in north Burbank on hundreds of acres formerly owned and used by Lockheed Martin Corp.

Burbank city officials will recommend approval of the project when it goes before the City Council, which is expected to happen in May or June, said Bob Tague, community development director for the city of Burbank. An environmental impact report was released this month.

Tague said the development is attractive to the city because it recycles land that has been fallow since Lockheed left the area in 1991. The project also promises to bring hundreds of new jobs to the area and generate about $4.6 million in annual tax revenues for the city and its redevelopment agency.

The retail component at the heart of Burbank Empire Center is particularly well-positioned to become one of L.A. County’s best performing malls, said Mark McGaughey, a retail specialist and first vice president at CB Richard Ellis.

The list of stores with signed leases or letters of intent includes not only Costco, Target and Staples, but a Lowe’s home improvement store, PetSmart, Linens ‘N Things, a Michaels crafts store, Marshalls and Best Buy, according to site developer Zelman Development Co.

Restaurant tenants include Hometown Buffet, TGI Friday’s, Roadhouse Grill and a Krispy Kreme doughnut store.

What’s special about the site, according to McGaughey and others, is its size, its proximity to the freeway and the fact that it is in an urban area--not an expanse of desert far from the city.

“If you draw a 10-mile circle around the Burbank property, you’d find the population density gives them a pretty good trade area to draw from,” he said. “In Palmdale, you do a 10-mile circle and you get 350,000 people. Do that with Burbank, and I’d say you have over a million people. This one will also have good freeway visibility, which means these anchor tenants will also enjoy good visibility from the freeway.”

Parcels of this size are rare in the Valley, and in this case the land only became available because Lockheed Martin decided to shutter its aircraft assembly plant and other operations in Burbank.

Zelman Development intends to spend about $100 million to build the super mall and another $65 million for the office space, said company President Ben Reiling. Costco would develop its own space, as would the two planned hotel operators, Embassy Suites and Extended Stay of America.

The car dealership would be developed by CAG Investments, which is owned by Marshall Chesrown, an auto retailing specialist who tentatively plans to open Dodge and Chrysler dealerships on 12 acres, Reiling said.

The 102-acre site bounded by Buena Vista Street, Empire Avenue, Victory Place and Victory Boulevard is now in escrow for sale to Zelman for about $68 million.

Reiling said the close of escrow hinges on approval by the City Council.

“Overall, it’s a mixed-use project with many components,” Reiling said. “We think it offers something for everyone. In terms of the office, we’re creating a campus environment as opposed to an urban environment--low rise with a lot of open landscaped areas--which appears to be the general trend of what people are looking for today. In terms of retail, this area has been dramatically underserved by these major tenants, and they’ve all been very interested and excited to open here.”

The mall would be the first major retail project in the emerging area of Burbank known as Media District North. But the office component would be the third such major development there during the last three years.

First out of the gate among office developers was M. David Paul and Associates, which has built and fully leased two office buildings with a combined 415,000 square feet of space several blocks from the Zelman site. M. David Paul plans to build as much as 1.2 million square feet of office space on its 19 acres bounded by Hollywood Way, Empire Avenue and Ontario Street by the time the campus is complete.

More recently, Trammell Crow Co. broke ground late last year on a 158,000-square-foot office building on Hollywood Way, across from Burbank Airport.

Also late last year, Zelman was selected by the city of Burbank to develop a 630,000-square-foot, 11-building complex of industrial and “flex” space for industrial and office use on another 30.5 acres of former Lockheed land, Reiling said.

That land, known as the A-1 North site, where Lockheed formerly stamped out wings for its P-38 fighter planes, is at Hollywood Way and Empire Avenue.

The addition of so much new space to the area is not a concern for M. David Paul and Associates, which is getting ready to build a 100,000-square-foot building in the latest phase of its north Burbank campus, company spokesman Jeff Worth said.

“I think the more services you can offer in the vicinity of these proposed office workers, the more appealing the area is going to be,” he said. “It all helps.”

Reiling said the biggest obstacle to development of the site several years ago was soil contamination left from the Lockheed era. To address that problem, a vapor extraction system was installed to remove contaminants from the soil over the next seven or eight years, Reiling said.

Tague said the city required Lockheed Martin to conduct more health risk studies after the vapor extraction system was installed. A new round of tests were recently done, which identified a series of sites that had some small remaining surface problems, he said.

“As a small precaution, we asked them [Lockheed] to take those spots and clean them out,” he said.