Price Waterhouse sees Lockheed's cutback bringing benefits to Burbank and company.

Price Waterhouse sees Lockheed's cutback bringing benefits to Burbank and company

Lockheed Corp.'s announcement last week that it will shut down its 320-acre facility in Burbank could mean boom times for the City of Burbank, as well as healthy profits for Lockheed, reported accounting giant Price Waterhouse.

The Burbank boom would result from the redevelopment of Lockheed's sprawling property there. The land is now worth about $1 million an acre, Price Waterhouse estimated, and that value would at least triple if new buildings were developed on the property.

Specifically, Price Waterhouse suggested the development of new office towers, high-technology manufacturing facilities or a retail shopping center on the site.

"What many corporations like Lockheed must begin to realize is that, like it or not, they are in the real estate business," stated David A. Eisner, managing partner of the Price Waterhouse Real Estate Consulting Group. "Too often in the past, corporations in these circumstances never realized the full value of their property, how to find a qualified development partner, or how to identify appropriate uses for the property."

Corporations facing consolidations such as Lockheed's have traditionally sold off their excess land as quickly as possible to speculators and other investors who would then resell it at a profit to developers, Eisner explained.

However, following such a course of action would be unwise for Lockheed, he said.

"Strict new lending guidelines coupled with the failure of so many thrift institutions has forced developers to seek out alternative methods of staying in business," Eisner stated. "And that could prove beneficial to Lockheed."

Price Waterhouse suggested that Lockheed shareholders would be best served by having the company hold on to the land. An outside developer should be hired with internal funds to redevelop the property.

"Most corporations have the financial resources to develop their properties without ever having to visit a lending institution," Eisner said.

Lockheed would not be the sole beneficiary of the redevelopment, either.

The City of Burbank would benefit from increased taxes generated from the redevelopment, and local residents might even benefit from being presented with more diverse job opportunities, Price Waterhouse reported.

The Lockheed property is situated in an area that holds great promise for future redevelopment success. It is adjacent to the Burbank-Glendale-Pasadena Airport and near the center of the city's ambitious redevelopment area.

Projects already approved for that area include office parks, industrial facilities, support retail projects, a new conference center and a 200-room addition to the Burbank Hilton Hotel, which is directly across from the Lockheed site.