Lender takes over planned NBC Plaza's property.

The lender financing purchase of the Burbank "Media District" site slated for NBC's planned West Coast headquarters has taken over ownership of the property from Cushman Investment & Development, an arm of super-broker John C. Cushman III's Cushman Realty Corp.

Despite NBC's 100,000-square-foot lease commitment and the Ventura freeway-fronted site's prime location adjacent to NBC's 43-acre studio property, Cushman Investment hadn't secured financing to start construction on the two-tower, 720,000-square-foot project it had been planning with NBC for seven years.

Hence, the would-be developer has lost the 4.2-plus-acre development site to lender Bank of New York. A Bank of New York spokesman confirmed that the institution is assuming ownership of the property, but wouldn't elaborate on specific financial transactions.

Cushman Investment & Development President Charles Peck noted that "confidentiality agreements" with other parties to the transaction limit what he can say to the press. But he did state that the development firm is "happy to be out" of the project at this time, and that the ownership change has been negotiated "amicably."

Public records indicate that the 16 parcels comprising the site -- which now houses two small, aging motels and some office facilities -- were collectively assessed at about $14 million in 1991. Records also indicate that a grant deed transferred ownership of one of the parcels from NBC Plaza Limited Partnership to a Bank of New York subsidiary on Dec. 30.

Cushman has said he had been negotiating with NBC since 1985, when his firm's development affiliate began assembling the site. NBC's participation in the project was put on hold in 1986, when General Electric Co. bought NBC parent RCA Corp., but negotiations reportedly resumed in the summer of 1988.

Cushman's firm again announced its intentions to develop the $200 million NBC Plaza complex in May 1989, and the network agreed to anchor the project with a 100,000 square-foot lease commitment. NBC also agreed to transfer about 315,000 square feet of development rights from the network's adjacent property to the NBC Plaza sight, explained Jack O'Neill, NBC's Vice President/Entertainment Production Operations.

Cushman was ready to break ground on the first tower last March after the city adopted the Media Center redevelopment district's specific plan. The specific plan downsized the project's two towers from the 21 and 17 stories initially contemplated to 18 and 15, but facilitated final project approval.

Had the Cushman team broken ground on the project, NBC would have become a part-owner of the site and improvements through the lease commitment and the "transfer of development rights" rather than any cash investment in the project, said O'Neill. Instead, with the development approvals in place, ownership is being transferred to the Bank of New York subsidiary, Burbank Holdings, Inc., Cushman and Bank of New York spokespersons confirmed.

Officials at NBC and the city expressed optimism that the project will come to life again under a new development team when office financing conditions improve.

"It will at some point be a great project for a development specialist with all the necessary resources" to finance and construct the towers, O'Neill said. "If we had got steel in the ground, I think it would have been a great success" in an office submarket with a shortage of space for larger entertainment tenants.

"We're not happy about (the announcement), but it's not the end of the world," O'Neill added.

Burbank City Manager Bud Ovrom said he's "disappointed that Bank of New York is taking the site back from Cushman," but added that he thinks "the bank can handle the development better than Cushman can at this point."

The city "will grant all entitlement extensions required" to revive the project in some form under another development team. The rebirth "will probably be viable two to three years from now," Ovrom added.

The Cushman Investment & Development-led team, which completed the nearby Disney Channel building in 1985, sold that 400,000-square-foot project to its anchor tenant for an estimated $80 million in December. The developer's other major local project is downtown Long Beach's 440,000-square-foot Landmark Square, completed in 1991. The office building has sat with 270,000 square feet of never-occupied space for more than a year.