In a blow to redevelopment efforts in downtown Burbank, Regent Properties backed out of a $100-million deal Wednesday to build a sprawling office, hotel and retail project near the Media City Center mall.
Jeff Dinkin, managing partner with Beverly Hills-based Regent, said the Burbank Plaza deal collapsed because Regent was unable to secure financing for a planned 300-room Marriott hotel.
"Bottom line, we are withdrawing because we couldn't get it to pencil out," Dinkin said in a statement.
The proposed project, at San Fernando Boulevard and Olive Avenue, would have included an eight-story office building and 68,000 square feet of retail space, including an art-house movie theater. The plan also featured landscaped public plazas, underground parking, and a 13,000-square-foot home for the Burbank Masons.
"It was a disappointment," said Ruth Davidson-Guerra, project manager at the Burbank Redevelopment Agency. In a letter to the agency dated Monday, Dinkin explained that it would take an estimated 90 days to finance the hotel transaction. But Regent's contracts to acquire several other private parcels for the project were set to expire in June.
Dinkin, who estimated that the hotel portion of the project cost about $60 million, said it has become tough to finance hotels.
"Basically, they just ran out of time in terms of acquiring the privately-held property," Davidson-Guerra said.
The 3.4-acre development involved a patchwork of nine parcels, six of them privately owned and three held by the redevelopment agency. The property, the former site of the Burbank Police Department, is now a mix of stores, the Masons' lodge, parking lots and vacant land.
The Burbank City Council approved the development on a 4-1 vote in July. At the time, city officials said the project could pull in $60 million in revenue from the hotel bed tax and increased sales and property taxes.
Despite Regent's withdrawal, Burbank officials said the city still anticipates working with Marriott to develop a hotel at the site.
"Although this may appear to be a setback for the agency, this is only a minor slowdown," Davidson-Guerra said, adding that the city was seeking a new developer. Burbank Councilman Bob Kramer, who supported the Regent project, said he was sorry to see the agreement fall apart after "hundreds of hours of staff time.
"We thought that this developer could deliver, and that wasn't the case," he said. "This was a major project. . . . You hate to start over."