This report requests that the City Council approve the Burbank-Glendale-Pasadena Airport Authority�s request to amend the Grant of Easements, Declaration of Use Restrictions and Agreement for Trust Property ("Trust Property Easements") to permit Desmond�s Studio Production Services ("Desmond�s") to utilize approximately 20 acres of the Trust Property portion of the former Lockheed B-6 site as a temporary location for its movie production vehicle and equipment storage facility while its permanent facility is being constructed on the Adjacent Property portion of the B-6 site. City Council previously approved the relocation of Desmond�s to the Adjacent Property site, including authorization of an amendment to the Grant of Easements, Declaration of Use Restrictions and Agreement for Adjacent Property ("Adjacent Property Easements"). The proposed amendment to the Trust Property Easements would not permit any additional use of the Adjacent or Trust Property without further approval by the City Council, and Desmond�s ability to use a defined portion of the Trust Property would expire by September 1, 2003. A draft of the proposed amendment, which as of the date of this report has not yet been approved by the Authority, is attached as Exhibit A.

Desmond�s currently leases from the Authority approximately 10 acres of a portion of the B-6 property located in the City of Los Angeles immediately north of the proposed project site (Building 360 site). Desmond�s intends to consolidate that operation with vehicles currently stored at other sites in the Los Angeles area onto a single facility on the Adjacent Property portion of the B-6 property located in the City of Burbank ("Adjacent Property Site"). A site plan for the Adjacent Property Site is attached as Exhibit B. Pursuant to PUC Section 21661.6, the City Council adopted Resolution 26,348, approving the Airport Authority�s plan to lease approximately 25 acres of the Adjacent Property portion of the former Lockheed B-6 site by Desmond�s for its movie production vehicle and equipment storage facility. The City Council also authorized staff to enter into the appropriate amendment or modification to November 16, 1999 Adjacent Property Easements required to allow Desmond�s to use that portion of the Adjacent Property. On November 4, 2002, the Burbank Planning Board approved a Conditional Use Permit for the relocation of Desmond�s to the Adjacent Property Site (Exhibit C).

Sometime in late January, 2003, the Authority and Desmond�s completed negotiations regarding the lease for the Adjacent Property Site. The Authority and Desmond�s are about to begin the work necessary to make the Adjacent Property Site ready for use by Desmond�s. That work, including permitting, is expected to take approximately seven months. The Authority is under contract to sell the Building 360 site, including the current Desmond�s leasehold, to Voit Development Company. Prior to closing, the Authority is required to demolish the existing pavement and subsurface improvements from the Building 360 site. In order to perform this work in time to close on the sale of the Building 360 site, Desmond�s must vacate its current leasehold by approximately February 2, 2003. Because its Adjacent Property Site will not be ready until approximately August, 2003, however, Desmond�s needs a temporary site for its business while its Adjacent Property Site is being constructed.

By letter dated January 28, 2003, the Authority asked the City to amend the Trust Property Easements in order to permit the temporary use of approximately 20 acres of the M-2 zoned portion of the Trust Property for the interim relocation of Desmond�s (Exhibit D). A map depicting the proposed temporary site, and temporary improvements such as lights and fencing, is attached as Exhibit E. Construction of the temporary facility and the Adjacent Property Site will occur in phases (see Exhibit F).

Desmond's has about 500 pieces of equipment at their current location and it is anticipated that this same number will be on the interim site. The usable portion of the interim site is about the same size as the current site so the capacity is similar.

It is anticipated that Desmond's will be able to go directly from the existing offices and dump facility to the new offices and dump facility on the Adjacent Property site. He will continue to use his existing office on the 360 site even after all of the vehicles have been moved, and when escrow finally closes in May, the new offices will be in place on the Adjacent site (prior to the completion of the rest of the facility). As such, there will be no office trailers at the interim facility. The light standards should be less than 35 feet tall.

The proposed temporary facility will allow Desmond�s to move the approximately 500 trailers and pieces of equipment currently stored on the Building 360 Site to the Trust Property while the Adjacent Property Site is completed. Once the Adjacent Property Site is completed, Desmond�s will consolidate his other operations there. Desmond�s would park its trailers and equipment on existing pavement (approximately 13 acres of the 20 acre site is paved), which is similar in size to the existing Building 360 Site. Desmond�s will not pave additional areas of the Trust Property and the unpaved portion of the temporary site would not be used for storing or parking trailers or equipment. Desmond�s would continue to use its existing office and sanitary dump facilities until May, 2003, at which time it would move into the new office and sanitary dump facility on the Adjacent Property Site.

Access to the temporary facility would be from the terminus of Cohasset Street at Lockheed Drive and across an existing private road on the Adjacent Property, as shown on Exhibit B, which is the same access point for the Adjacent Property Site. The Authority does not expect that any grading or excavation will be required, and that no structures will be constructed. The only improvements will consist of temporary light standards, which are expected to be approximately 30-35 feet high and security fencing, both of which will be removed when Desmond�s moves to the Adjacent Property Site.

The site for the proposed facility is located in the M-2 General Industrial Zone. Pursuant to Burbank Municipal Code Section 31-502, an "automobile storage yard" is a permitted use in the M-2 zone. Accordingly no zoning approval or conditional use permit is required for the proposed project.

Uses on the Trust Property are subject to easement and use restrictions pursuant to the Trust Property Easements. A copy of the Trust Property Easements is attached as Exhibit G. The Trust Property Easement was executed as part of a complex transaction between Burbank, the Authority and Lockheed that allowed the Authority to pay Lockheed for the B-6 property, but restricts the ability of the Authority to use the B-6 Property without prior approval by the City. Pursuant to those Title Transfer Documents, title to the Trust Property is held by a Trustee, which is currently The Trust Property Easements essentially prohibit any use of the Trust Property other than certain historical uses as permitted by a 1997 Stipulated Order between the Authority and the City. The proposed use of the Trust Property for the Project is not permitted pursuant to the Trust Property Easements. Accordingly, the project cannot be implemented unless and until the City, the Trustee and the Authority agree to amend the Trust Property Easements. Because the temporary use of a portion of the Trust Property for the Desmond�s project would not enlarge Airport operations, and is temporary in nature, staff recommends that the Trust Property Easements be amended to allow the Desmond�s project. The amendment would permit the use of the portion of the Trust Property identified and described on Exhibit G until September 1, 2003, or until Desmond�s relocates to the Adjacent Property Site, whichever is sooner. The proposed amendment would not permit any additional use of the Trust Property, and would not permit any use of the Trust Property not permitted in the 1999 Trust Property Easements after September 1, 2003.

The Authority released a Negative Declaration for the relocation of Desmond�s to the Adjacent Property Site on June 20, 2001 pursuant to the California Environmental Quality Act (CEQA). The City submitted comments regarding the Negative Declaration and requested that the Authority provide additional information to support its conclusions in the sections of the Negative Declaration dealing with traffic and land use impacts. The Authority revised the document and adequately addressed the City�s concerns in those areas. On August 21, 2002, the Airport Authority adopted the Negative Declaration and filed a Notice of Determination. A copy of the final Negative Declaration with the City of Burbank�s comments attached is included as part of Exhibit H.

On February 5, 2003, the Authority released an Addendum to the Negative Declaration stating that the temporary relocation of Desmond�s to the proposed Trust Property site (which abuts the Adjacent Property Site) constitutes an action that would not result in a significant impact on the environment or change any findings from the original Initial Study and Negative Declaration pursuant to Sections 15162-15164 of the State CEQA Guidelines regarding the preparation of an addendum to a Negative Declaration. A copy of the Addendum is attached as Exhibit I. Staff concurs that the temporary relocation of Desmond�s would not result in any significant environmental impacts and that an addendum to the prior Negative Declaration is appropriate in that only minor technical changes or additions are necessary to the previously approved project, and none of the conditions described in Section 15162 calling for additional CEQA review have occurred.

Part 77 of the Federal Aviation Regulations (14 C.F.R. Part 77) establishes imaginary surfaces that extend upward and outward from runway surfaces. Constructed and natural objects that fall within the Part 77 surfaces are considered by the FAA to be potential obstructions to air navigation. PUC Section 21659 prohibits construction or natural growth in violation of Part 77 standards, unless the FAA has determined that the construction or natural growth would not constitute a hazard to, or create an unsafe condition for, air navigation.

The Airport Authority has stated that the Desmond�s Project does not violate the height limits imposed by Part 77. The temporary site uses lower light standards and is located farther from the runways. Accordingly, if Desmond�s facility on the Adjacent Property

Site does not violate the Part 77 height limits, neither would Desmond�s facility on the Trust Property. Staff notes that as the Airport proprietor, the Airport Authority is responsible for complying with Part 77 and PUC Section 21659. Nothing in the City�s actions under Section 21661.6 should be construed as approving a project that would be in violation of Part 77 or PUC Section 21659.

On August 20, 2002, the City Council adopted Ordinance No. 3601, enacting an interim Development Control Ordinance on certain development on and near the Airport requiring only ministerial approvals. On October 4, 2002, the City Council extended the IDCO until August 19, 2004. The Desmond�s project is not subject to the IDCO because it cannot be approved as a ministerial matter. As noted above, the Desmond�s project requires discretionary approval to amend the Trust Property Easements. Furthermore, staff notes that the Desmond�s project is not subject to Measure B because the Desmond�s project does not involve the enlargement, expansion or relocation of the Airport passenger terminal.

California Public Utilities Code �21661.6 requires, in general, that prior to acquiring an interest in land in the City, the Airport Authority must obtain City Council approval of the Airport Authority�s plan to use that interest. PUC Section 21661.6(e) requires City Council approval for any new uses of property the plan for the use of which was previously approved. Section 21661.6 approval is not necessary for Desmond�s temporary use of a portion of the Trust Property because the Airport Authority does not hold legal title to the Trust Property (the Trustee does) and would not acquire title to the Trust Property by virtue of Desmond�s use of the property. As noted above, the City Council has already approved Desmond�s use of the Adjacent Property Site pursuant to Section 21661.6(e).

As several City Council Members and members of the public noted when the City Council approved Desmond�s Adjacent Property Site, the City will benefit from Desmond�s relocation by allowing an important entertainment industry firm to expand and locate in the City. The relocation and consolidation of Desmond�s operations in the City will promote the synergy of the entertainment industry in Burbank by allowing another type of entertainment related use to locate here. In addition, the project will generate new tax revenues for the City. The current request to amend the Trust Property Easements is necessary to achieve those long term benefits by providing a Burbank location for Desmond�s while site work is completed on its previously approved Adjacent Property Site.

As discussed in the Staff Report prepared in connection with the approval of the Adjacent Property Site, staff is not aware of any significant environmental impacts from the proposed project. In particular, staff notes that the traffic analyses performed by the Authority and by City staff indicate that there will not be a significant impact on traffic as a result of Desmond�s project. Because the temporary site would use the same access point onto Hollywood Way as the Adjacent Property Site previously analyzed, staff does not believe there will be a significant traffic impact from this proposed project.

It is staff�s conclusion that the Trust Property Easements should be amended to permit the temporary location of Desmond�s on approximately 20 acres of the Trust Property in order to allow Desmond�s to locate in the City while its Adjacent Property Site is being prepared. The proposed First Amendment to the Grant of Easements, Declaration of Use Restrictions and Agreement for Trust Property allows Desmond�s to use a defined portion of the Trust Property for a defined period of time for the limited purpose to a movie equipment storage area. The proposed First Amendment would not permit any other use of the Trust Property. Accordingly, staff concludes that the proposed First Amendment preserves the City�s control over the use of the Trust Property as contemplated in the 1999 Title Transfer Documents.

Staff recommends that the City Council approve the Resolution entitled:

A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING AN AMENDMENT OF THE "GRANT OF EASEMENTS, DECLARATION OF USE RESTRICTIONS AND AGREEMENT FOR TRUST PROPERTY" TO PERMIT TEMPORARY USE OF APPROXIMATELY 20 ACRES OF THE M-2 ZONED PORTION OF THE TRUST PROPERTY FOR USE BY DESMOND�S STUDIO PRODUCTION SERVICES (BURBANK-GLENDALE-PASADENA AIRPORT AUTHORITY, APPLICANT).

Exhibit A [Proposed] First Amendment to the Grant of Easements, Declaration of Use Restrictions and Agreement for Trust Property

Exhibit B Adjacent Property Site Plan

Exhibit C Conditional Use Permit for Adjacent Property Site

Exhibit D January 28, 2003 Application Letter

Exhibit E Site Plan for Temporary Trust Property Site

Exhibit F Desmond�s Phased Implementation Plan (permanent facility)

Exhibit G 1999 Grant of Easements, Declarations of Use Restrictions and Agreements for the Trust Property

Exhibit H Negative Declaration with the City of Burbank�s comments

Exhibit I Addendum to Negative Declaration