Lockheed puts huge Burbank site back on the block.

Now that Vestar Development Co. has backed away from its plan to redevelop Lockheed Martin Co.'s 103-acre Burbank property, a half-dozen other developers are expressing interest in building a retail/office project there.

Lockheed will keep pushing the project through the Burbank planning process while seeking a new builder for the huge development, which has been designed for 585,000 square feet of big-box retail space, up to 600,000 square feet of office space, a 350-room hotel and a 28-acre auto row.

"It's a gorgeous piece of flat property right along the 5 (freeway)," said Ken Philbrick, executive vice president of LMC Property Inc., Lockheed's real estate subsidiary. "We've been approached by a half-dozen developers, but I'd say three or four of them have the financial resources, the experience and the synergy to do the project."

Those who want in on the deal, however, can expect to pay 10 percent to 15 percent more than Vestar did two years ago, said Philbrick, who declined to reveal how much Vestar had agreed to pay.

Lockheed's decision to turn the project over to a new developer has rankled local auto dealers who had hoped to open new lots on the site. Guy Schmidt Automotive Group, which runs a GM dealership in Glendale and Community Chevrolet in Burbank, approached Lockheed with a proposal to spin off a portion of the property for a new auto center, but Lockheed declined.

"We're not developers and we'd prefer to sell it all off (to one party)," Philbrick explained.

Frustrated by the prospect of having to wait the weeks or months to put a new developer in place, the car dealers said they might take their business to Glendale.

"They've quite literally exhausted their patience," said Michael Hastings, a former Burbank mayor who is serving as an advisor to the dealers. "My guys are burned out, and they want to move forward."

CarMax, which was looking to open a used-car superstore on the site, also will begin looking at its options. But Larry Kosmont, a CarMax advisor, conceded that his client would have difficulty finding another freeway-visible site in the area.

"My client is interested in any viable site in this part of the Valley, but there's a limit of good sites," he said.

Burbank City Manager Bud Ovrom said he hopes the dealers will stick with Burbank, given what he sees as the superiority of the Lockheed property and its visibility from the Golden State (5) Freeway. "I understand they have to keep their options open, but freeway sites are so rare, so hard to come by," he said.

Lockheed's decision to proceed with the city planning process, meanwhile, will cut the time it takes to get the project going, said Ovrom.

The Lockheed site, situated between the freeway and Buena Vista Street, south of Empire Avenue, is one of the largest developable parcels in Burbank and a priority for City Hall. Environmental studies are expected to be completed by early March.

Vestar canceled its contract with Lockheed on Dec. 23 after the project hit several delays in the planning process. Escrow was scheduled to close Dec. 31, but Vestar decided it couldn't risk closing the deal until all the city approvals were granted, said Rick Kuhle, senior vice president of the firm.

"We were in escrow for two years, but worked on the project for eight," said Kuhle. "We had considerable time and money involved, so it wasn't a decision we took lightly."

Kuhle said the project hit its biggest snag when Burbank officials decided they wanted the office portion downsized from more than 1 million square feet on 30 acres to about 600,000 square feet on 18 acres. That decision, made in response to a cooling in the office market, resulted in a delay of the completion of the project's environmental impact report. That delay, in turn, made it impossible to meet Vestar's Dec. 31 deadline for city approval.

Kuhle believes Vestar could end up retaining the project after other interested developers calculate the costs involved, such as the $5 million it will take to provide an electrical substation or the millions more needed for off-site improvements.

One cloud is a recent lawsuit filed by Kilroy Realty Inc., a developer that had been brought on to handle the office portion of the project. After that portion was downsized, Kilroy filed suit against Vestar in L.A. County Superior Court, alleging Vestar breached its contract with Kilroy by not getting city approval for 30 acres of office development, as originally planned.

Kuhle declined to discuss the case. Kilroy officials did not respond to a request for an interview.