END OF AN ERA WITH LOCKHEED; DEAL ENDS 10-YEAR EXIT FROM BURBANK.

Byline: Lee Condon Staff Writer

When Lockheed Corp. officials announced they were leaving Burbank in 1989, this company town had to find a way to reinvent itself.

The challenges were great.

Lockheed left the city short 15,000 well-paying jobs that had to be replaced. Before they could sell off their land, Lockheed had to clean up dangerous toxins in the soil and groundwater that had been left behind by six decades of heavy aircraft manufacturing. In the early 1990s the economy tanked, hobbling the more ambitious redevelopment proposals.

But after a decade of wheeling and dealing, all 305 acres of the Lockheed properties are now spoken for. Last week the company, now known as Lockheed Martin Corp., cut a deal to sell the final 31 acres up for grabs.

``Here we are 10 years later and the transition is starting to come to an end,'' said Burbank City Manager Robert `Bud' Ovrom.

The biggest wave of post-Lockheed development is expected to occur within the next three years, transforming the face of eastern Burbank.

A 103-acre vacant lot along Empire Avenue is slated to be turned into a massive new shopping center. Burbank Airport plans to use 130 acres, also vacant, for its proposed new terminal building. The old Lockheed headquarters building and several abandoned manufacturing plants are finally slated to be demolished to make way for a proposed light industrial complex and a 115,000-square-foot office building.

Those enterprises will join others already in place at smaller sites once owned by Lockheed. Those businesses include Disney Feature Animation, the headquarters of Warner Bros. Studio Stores, the second tower and conference center at the Burbank Hilton Hotel, the nine-story Bank of America building and Media Studios North, a massive office complex built by developer M. David Paul. ``The plan was always diversity. We wanted to end up with more jobs, more taxes and a cleaner environment,'' Ovrom said. ``It has come out surprisingly close to what we talked about.''

False starts

While Lockheed's departure was devastating to Burbank and many local families who worked for the company, it also provided an opportunity to reinvent Burbank, Ovrom said. For decades the city had gone through ups and downs with Lockheed, whose business rose and fell dramatically based on how many military contracts they secured.

With so much open land available in strategically located Burbank, there were many proposals floated about how the land should be recycled. The most sought-after site was known as B-1, now a 103-acre vacant lot along Empire Avenue.

Warner Bros. proposed building a sports arena there for the Kings and the Clippers. Price Club wanted it for a new store. Disney considered moving some operations there too. The city used the site in its failed attempt to lure DreamWorks to Burbank. Vestar Development Company planned a major retail development and spent more than a year in negotiations to buy the property from Lockheed Martin before pulling out late in 1998.

Ovrom said a variety of factors killed previous proposals. But he acknowledged that concerns about toxic contamination at the site were a major issue for developers interested in all the Lockheed sites.

``It's been a struggle. A lot of these companies wanted to move fast. The toxics took a long time to clean up and scared a lot of people away,'' Ovrom said.

Ben Reiling, president of Zelman, said his company has been angling to buy Lockheed properties for nine years. But it wasn't until 1999 that Lockheed Martin picked Zelman from among other contenders.

``We followed the Empire site for nine years. They went through a beauty contest and we weren't pretty enough,'' Reiling said.

But in early 1999, Zelman cut a deal to buy the B-1 site from Lockheed Martin. Zelman plans to build Burbank Empire Center a 750,000-square-foot retail development. It may also include hotels and an office complex.

Last week Zelman agreed to buy another old Lockheed property, a 31-acre parcel he will develop as a ``clean and green'' light industrial complex. Reiling said he expects the site will generate some 950 new jobs.

Environmental nightmare

Before Lockheed announced they were moving operations to Palmdale and Georgia, the company had been ordered by the U.S. Environmental Protection Agency to clean volatile organic compounds from the soil and groundwater around their manufacturing plants.

Today, Lockheed Martin officials say they have largely completed their cleanup. The Zelman retail site is ready for development, although a vapor extraction system will continue to clean deep soils for another six years, said Gail Rymer, a spokeswoman for Lockheed Martin.

Rymer said Lockheed Martin has received notice from state and federal regulators that the airport site is also clean and that no further cleanup is required. Airport officials are now investigating how extensive a job Lockheed Martin did. If the airport investigation finds problems, Lockheed Martin will pay for any additional cleanup, said Victor Gill, a spokesman for the Burbank-Glendale-Pasadena Airport Authority.

``The book is still open on whether any further environmental work needs to be done,'' Gill said.

The last major environmental remediation Lockheed Martin will have to do involves the A-1 North site, where Zelman plans to build the light manufacturing plant. The sale will likely not be finalized for more than a year as Lockheed Martin demolishes buildings and completes remediation work there, Rymer said. In addition, the Burbank Operable Unit, a groundwater treatment plant built by Lockheed, will be in operation for another 18 to 20 years. The city of Burbank is slated to take over operation of the plant from Lockheed Martin next year, Rymer said.

While its cleanup efforts are winding down, Lockheed Martin still has to resolve lawsuits from residents regarding toxic contamination. In 1996, the company paid $60 miLllion to 1,300 Burbank residents in a secret settlement. The residents had alleged damage to their health and property. Since then, thousands more have sued.

``Lockheed Martin is planning a vigorous defense of the remaining toxic tort lawsuits. We expect to go to trial at the end of (2000),'' Rymer said.

The original settlement was a ``business decision,'' and Lockheed Martin officials insist the contamination did not cause any health and property damage.

``It wasn't that we were admitting we did anything wrong. We felt it in the interest of both parties to settle and go on. We now feel strongly we need to defend our efforts in Burbank and want the truth to come out,'' Rymer said.

While some residents may be wary of all the new retail going in at Burbank Empire Center, Ovrom said it's better than a heavy industrial use like Lockheed.

``Anybody who goes in there will be a better neighbor than Lockheed,'' Ovrom said. ``In retrospect, Lockheed was not a good neighbor. All these people were living next to toxics all those years and never knew it.''

Still, he gave Lockheed credit for taking responsibility for the cleanup, unlike smaller industrial companies who just fled the city and never looked back. While Lockheed will likely finalize all their real estate deals within the next two to three years, Ovrom said the company will always be a major part of the city's history. At its height, Lockheed employed 100,000 people as it built military aircraft in World War II. Many of today's area residents came here then and consider their efforts for Lockheed their contribution toward winning the war.

``So many people in Burbank made their living through Lockheed,'' Ovrom said. ``I think that sentimental attachment is still there.''

Lockheed Martin Corp. has spent the last 10 years selling off 305 acres of property in Burbank.

A-1 North: Zelman Development Company plans to build 690,000 square feet of ``clean and green'' light industrial space on the 31-acre site. Could bring 950 neLw jobs.

A-1 South: Home of Fry's Electronics, the largest generator of sales tax revenues in Burbank.

B-1: Zelman Development Company plans to use the 103-acre site to build Burbank Empire Center, a 750,000-square-foot retail site that may also include two hotels and an office park.

B-5: Owned by Burbank Airport since early 1970s.

B-6: Burbank Airport plans to use 130-acre site for its proposed expansion.

Buildings 85 and 90: Burbank Hilton built a major addition. Bank of America has offices in a 9-story building. M. David Paul has already built a large office complex with tenants such as Equiva Trading and Virtualis, an Internet company. Paul has entitlements to build up to 1 million square feet. Paul renovated Building 90 and has leased it to Disney Feature Animation.

Building 170: Owned by Lowe Enterprises Inc. Used as headquarters for Warner Bros. Studio Stores.

Building 371: Trammell Crow Co. bought site in June and plans to construct a 115,000-square-foot office building in 2000.

Building 369: Purchased and renovated by Holland Trust. Now leased to International Video Concepts.

Building 199: Costco plans to move here.

BOU: Home of the Burbank Operable Unit, a groundwater treatment plant operated by Lockheed.

C-1: Owned by Burbank Airport. Mercury Air Center is now completing work on a new complex, including an executive air terminal.

CAPTION(S):

photo, map

Photo: Hudson bombers were built at Lockheed's Plant B-1 during World War II. Plans call for a 750,000-square-foot retail development on the site.

Map: Lockheed Martin

Burbank past and present sites