PROPERTY COST FOR PROJECT IS SOARING TOWN CENTER PRICE UP MILLIONS MORE.

Byline: Naush Boghossian Staff Writer

GLENDALE - Buying the 15.5 acres for the Town Center complex may cost Glendale $10 million to $15 million more than expected, with the hot real estate market and difficult negotiations pushing up the price.

City officials had expected to pay $45 million for land to build the outdoor retail, dining and entertainment complex next to the Glendale Galleria. Now, $60 million is the more likely cost, said Jeanne Armstrong, the city's director of development services.

``They are demanding significantly more than the appraised value,'' Armstrong said of the property owners.

Property owners, like Sue Garabedian, who has owned her 219 S. Brand Blvd. site since 1985, said they are just determined to get fair prices for their land.

``It's peanuts what they're paying,'' Garabedian said. ``It's unfair.''

In the past 18 months alone, commercial property values in Glendale have soared by 15 percent to 20 percent, said William R. Boyd Jr., senior vice president of Grubb Ellis Real Estate. For example, a square foot of office space during the period has gone from $250 or $275 to about $350 now, Boyd said.

The city currently owns three-fourths of the land between Brand Boulevard and Central Avenue, south of the Glendale Galleria, but has not made any additional acquisitions in the past six months, Armstrong said.

Eleven properties remain to be purchased, including Rite Aid, Big 5 Sporting Goods, the Union 76 station at Central and Harvard, Just Tires and some medical and dental offices and a carpet store.

Some officials cite the city's generous buyout and relocation of the Armenian Society of Los Angeles as a factor in climbing costs. In May, the redevelopment agency - composed of City Council members - voted 4-1 to pay $5 million for the group's property at 221 S. Brand Blvd., as part of Town Center land acquisition.

The agency also agreed to pay an additional $3.9 million to cover the group's relocation costs and parking improvements near its new site.

Councilman Dave Weaver, who voted against the ASLA deal, termed it a ``giveaway of the public dollars'' and said it might be encouraging other landowners to hold out for more.

``I suspect if land that was valued at $2 million was purchased for $5 million - 2 1/2 times more than what it was appraised - it would seem that anybody that has land out there would probably be thinking they could get way more,'' Weaver said.

Armstrong conceded that the deal might be a factor in pushing up the city's acquisition costs.

Garabedian, whose property is next door to the Armenian Society site, said she has hired attorneys to negotiate a higher price.

``If they pay a certain amount to the next door property and a lesser amount for mine, I will not accept,'' she said. ``I'll fight to have the same (as the Armenian Society). We know it's a redevelopment area, but at least we have to have satisfaction financially.''

If negotiations remain at a standoff, the city could exercise eminent domain powers to forcibly take over the properties at fair market value - a process that will end up costing the city in legal fees.

But city officials maintain they're not close to exhausting negotiations and are working hard to negotiate transactions rather than resort to condemning properties.

Naush Boghossian, [phone]

naush.boghossian(at)dailynews.com

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