BURBANK MIGHT OPT FOR COSTCO ON SITE EYED FOR DEALERSHIPS.

Byline: Jennifer Hamm Staff Writer

The city might allow Costco Wholesale Corp. to build a new store on 15 acres that the city had expected to be developed for auto retailing, city officials said Wednesday.

City staff officials are recommending that the City Council agree to the club warehouse store's proposal, because they don't want the city to lose the sales-tax revenue.

``The bummer for us is that Costco does not represent net new sales because we already have them,'' said City Manager Robert ``Bud'' Ovrom. ``But if we lose them, it is over $700,000 per year right out of the general fund.''

However, if Costco does move, the modern, expanded store near the Golden State Freeway could generate as much as $1.5 million in sales-tax revenue for the city, Ovrom said.

``That increase over their existing level is more money than an average auto dealer would ever generate,'' he said.

But Burbank's car-dealer plans aren't sunk. Even if the 15 acres are approved for Costco, about 12 acres of the former Lockhead Martin Corp. site being developed by Zelman Development Co. will still be set aside for car dealers.

The remainder of the 105-acre site, south of Empire Avenue at the Golden State Freeway, is expected to be used for retail stores, hotels and office or studio space.

In fact, the proposed land-use change for Costco may be a wise move, said Ben Reiling, president of Zelman Development.

``We came to the realization that we didn't have enough car dealers to fill 27 acres of car-dealer land,'' he said.

Ovrom confirmed on Wednesday that the city is in discussions with car dealers but would not say which ones. Ovrom said, however, he was hopeful but not confident that an auto dealer would set up shop at the new site.

One advantage of the proposed site is that it sits along the freeway, which is a location auto retailers prefer, he said.

A 10-acre site at the old Zero Manufacturing plant next to the freeway might also be used for auto sales. The city is working with Bert Boeckmann of Galpin Ford to bring another dealership to that site.

Boeckmann could not be reached for comment.

City officials want to attract auto retailers because it's an area of business revenue in which the city underperforms compared to county and state averages.

But they insist they will not try to take retailers away from Glendale. Because Glendale was so instrumental in reaching a tentative agreement over Burbank-Glendale-Pasadena Airport, Burbank officials said they don't want to damage Glendale's business market.

``As far as I'm concerned, the auto wars with Glendale are over,'' Ovrom said.

City staff struck the agreement with Costco when talks with General Motors, which was considering the site, began to break down and the club membership store expressed interest in a new location.

Although business is good at Costco's current Vanowen Street site, the company doesn't have the space to expand there. Costco went to city officials and explained their desire to move to a bigger site, and city staff officials recommended that the City Council agree to change the land use on the 15-acre site formerly owned by Lockheed.

Costco won't move until the council approves the entire proposed site sometime early next year.