Burbank near deal on 4-building office project at ex-Lockheed site.

The City of Burbank and Westside development company Wolff Sesnon Buttery White are close to inking a deal for the construction of a four-building office complex called the "Airport Center Project" on land previously occupied by Lockheed Corp., City Manager Bud Ovrom confirmed last week. The price-tag of the project was not yet available.

Development of the proposed project, which calls for 680,000 square feet of commercial space on a 10-acre site, was actually initially undertaken several months ago by CMS Development Co. But negotiations between Burbank-based CMS and the City of Burbank broke down. So CMS agreed to transfer its negotiation/development rights to Wolff, said Ovrom.

Meanwhile, the clean-up of toxic waste on another portion of the sprawling 200-acre Lockheed site will take longer than originally thought and may slow plans for development of a retail center there by as much as two years, Ovrom revealed.

A celebration/announcement regarding the Airport Center Project has been tentatively scheduled for Aug. 21.

The first phase of the office project will involve the construction of a three-story, 120,000-square-foot building and parking garage to be completely pre-leased by CADAM Inc., a computer software subsidiary of IBM, acknowledged Ovrom and developer Lew Wolff.

Burbank already is CADAM's world headquarters, so the move to the new office building will not involve bringing any new jobs to the community, said CADAM spokesman Grant Thomas. "We won't be transferring people here en masse," he said.

CADAM was a subsidiary of Lockheed until it was sold by the aerospace firm to IBM in January 1990, noted Thomas. CADAM is now leasing space from Lockheed in a building on Buena Vista Street.

Ovrom explained that the 10-acre parcel now designated for office development is part of a larger 30-acre parcel that the city purchased from Lockheed three years ago. The city demolished a warehouse on the lot and subdivided it, selling 20 acres to Wolff for development of a Hilton Hotel and Conference Center, now operational, which will adjoin the Airport Center Project, he said.

He explained that the Airport Center Project is a planned development, on which a draft environmental impact report has already been written. That draft EIR was completed while CMS was developer of the project.

"It's going to work out," Ovrom said.

Mark Kellman, an attorney with Heller, Ehrman, White & McAuliffe, representing CADAM in the transaction, said financing for the first phase of the project is "still in discussions." He said two lenders have "expressed very strong interest" and IBM is "not too much concerned." Financing of the construction of the other buildings likely will wait until tenants are secured, Kellman added.

Lockheed, based in Calabasas, announced in 1990 that it was closing down its Burbank operations and shifting them to Marietta, Ga., a move that eliminated about 6,000 aerospace jobs in Burbank. Since then efforts have been ongoing to sell more than 200 acres of Lockheed land.

The city has been trying to secure development of "clean" industries, retail and entertainment/media development to replace that lost manufacturing base.

About 116 acres of the Lockheed property are being sold by the aerospace giant to the Burbank-Glendale-Pasadena Airport Authority for construction of a new terminal. Negotiations are continuing between the airport and Lockheed for that parcel, said Ovrom. A portion of that property was already sold for construction of an airport control tower.

Eighty-six acres of the Lockheed property have been designated for retail development, and the Burbank Redevelopment Agency has been in exclusive negotiations since January with Wal-Mart Stores to develop that land as a 750,000-square-foot open-air mall, anchored by a Wal-Mart and/or Sam's Club store.

Ovrom said Lockheed, which is committed to cleaning up contaminants on the site before it delivers the land, has started demolition and found "more toxics than they wanted to run into." As a result, Lockheed is unwilling to commit to a time frame for delivery of the land, he said.

"It's not going as fast as we would like, but it's not going to fall apart," said Ovrom. "It could be two years."

One option being considered involves Lockheed selling the land piece by piece, as it is cleaned up. Lockheed may sell Wal-Mart 14 acres in the next six months, to build an anchor store, and the rest over the next two years, Ovrom said.

"We do, in our quarterly report, talk about that some of the clean-up costs are likely to exceed expectations," said Lockheed spokesman Bob Slayman. "The significance or degree of this is not known yet."

Slayman, however, declined to comment on how the extended clean-up may affect a sale to Wal-Mart. "We don't comment on the stage of a sale," he said.

Wal-Mart officials could not be reached for comment.