MORE ROOM FOR LOCAL HOTELS? DEVELOPERS EYE BURBANK AND GLENDALE SITES.

Byline: Lee Condon Staff Writer

Seven new hotels are on the drawing board in the Burbank-Glendale corridor, with developers saying guests will be attracted to the sites because of the closeness of entertainment companies, Universal Studios and an expanded Burbank Airport.

Officials and industry experts say there's little chance that all seven will be built. But most agree that the area could see a doubling of hotels - from three currently to six or more - in the next few years.

Just last week, the Burbank City Council approved the third hotel development to come before it in a year. This spring, two more hotels are expected to be included in the Zelman Development Co.'s application to build Burbank Empire Center, a massive, big box retail development.

The city of Glendale is now circulating the environmental impact report for a proposed 400-room Marriott Hotel on Central Avenue just north of the Ventura Freeway. In the same area, Maguire Thomas Partners is considering a hotel as a part of its long-stalled office park project on Brand Boulevard, just south of the freeway.

``We think Burbank is ground zero for the hotel marketplace. It's geographically convenient to corporate locations,'' said Karl Sternbaum, a principal with Accord Interests LLC, the developers of a 253-room, extended-stay Marriott Residence Inn approved last week by the Burbank City Council.

Burbank currently has the 500-room Hilton Burbank Airport and the 500- room Holiday Inn; Glendale has a 350-room Hilton Glendale, which until recently was known as the Red Lion.

NEED CITED

Still, developers say the area lacks facilities for business executives who need to stay more than just a few nights and more full-service hotels are needed.

``There is demand for high-quality product in the community that is not being met,'' said Robert Zarnegin, the owner of the Peninsula Hotel in Beverly Hills, and developer of Graciela Burbank, a 101-room extended stay hotel he plans to build this year near Warner Bros. and other studios in the Media District. ``There are 1,000 companies in a five-mile radius of the property.''

Burbank and Glendale officials are eager to see more hotels built, noting that cities can generate substantial revenues from a 10 percent tax levied against hotel rooms. However, they also say they doubt all these hotels will actually be built.

``It's very typical of the hotel industry that they tend to overbuild and then absorb,'' said Burbank City Manager Robert ``Bud'' Ovrom. ``But I don't believe they can all get built. I don't believe the area can support that many hotels.''

NOT SEEKING HOTELS

Although Burbank is known for taking an aggressive posture in luring retailers and businesses to the city, there has been no big push to snare hotels.

``We're not out there banging the drum for more hotels,'' Ovrom said.

He noted that the each of the five hotels in development all serve a different hotel marketing niche.

``A lot of it is location, location, location,'' Ovrom said, noting that the Graciela Burbank has a plum site near Warner Bros., NBC and Disney, while the Zelman properties are very close to the Burbank Airport.

MULTIPLE MARRIOTTS

Marriott is also planning to diversify its products.

Marriott has two hotels planned in Burbank and a third proposed in Glendale. Sternbaum's Marriott Residence Inn, the project approved Tuesday, would be built on First Street, near the Golden State Freeway, on a 1.7-acre parcel that was once home to the Bombay Bicycle Club. It would be a 253-room, extended-stay hotel, with suites designed for people who will be staying for a week or more.

The other Marriott Hotel in Burbank would have simpler rooms designed for guests staying one or two mights. It is planned as part of Burbank Plaza, a retail development by Regent Properties on an Olive Avenue site which once housed the city's police headquarters building. Another 400-room Marriott, also targeted at business travelers, is proposed in Glendale at a city-owned site on Central Avenue.

While the Burbank Marriott projects have been approved, the Glendale project is still in the planning stages.

Ben Reiling, president of Zelman Development, said he is not intimidated that the Graciela Burbank and the two Marriott Hotels in Burbank already have city approval. The two hotel proposals in his project, Embassy Suites and Extended Stay of America, will likely not be presented to the city council until late June. But Reiling noted that Embassy Suites and Extended Stay of America will be smaller and less expensive hotels serving different guests than the Marriott maneuvers and Graciela sites.

``I believe these hotels fit the market,'' Reiling said.

Jeff Lugosi, a vice president for PFK Consulting, said his company studied the Burbank area for clients in 1999 and found there was demand for new hotels.

`STRONG MARKET'

``It's a strong market with the entertainment companies and the proximity to Universal Studios and Burbank Airport,'' Lugosi said.

Since there are few large hotels in Burbank and Glendale now, Lugosi said the cities may have to start promoting themselves as a place for tourists and business travelers to stay.

``They are going to have to create an identity for themselves,'' Lugosi said.

SOURCE OF REVENUE

Jeanne Armstrong, director of development for the city of Glendale, said the room tax on a large hotel can generate $1 million in extra revenues for a city each year. Armstrong said Glendale has been trying to attract hotels for years. But it was only recently that the hotel industry started taking the Burbank-Glendale-Pasadena area seriously.

``A few years ago it was impossible. The financing wasn't available for hotels,'' Armstrong said. ``This is a very attractive market. I think there is demand at least for two or three more hotels.''

Still, Reiling said city officials are probably correct when they predict not all of the projects will be built.

``A lot of (the hotels) are figments of people's imaginations,'' Reiling said. ``There are no guarantees in life, especially in the real estate business.''