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Table of Contents
Executive Summary ………………………….…………………………………………………………………………..3 Background ………………….……………………………………………………………………………………………….3 Jobs and Business ……………………………..…………………………………………………………………………4 Leisure & Hospitality .…………………………………………………………………………………………………….8 Vacancy Rates.……………………………………………………………………………………………………..………10 Office & Commercial…..………………………………………………………………………………………………..12 Retail ….………………………………………………………………………………………………………………………. 15 Hotel Growth …………………….………………………………………………………………………………………..18 Industrial/Flex ..…………………………………………………………………………………………………………… 19 Housing …..……………………………………………………………………………………………………………… …..20 Housing Rents……………………………………………………………………………………………………………… 23 Household Income ……………………………………………………………………………………………………. 25 Continuing Threats ………………………………….…………………………………………………………………..26 Conclusions & Next Steps …………………………………………………………………………………………..27 Appendix………………………………………………………………………………………………………………………28 Attachment 1: Burbank Economic Development Strategic Plan (2018-2022) Attachment 2: Economic Recovery Plan
Report Created By:
Simone McFarland – Assistant Community Development Director Mary Hamzoian – Economic Development Manager
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ECONOMIC DEVELOPMENT UPDATE REPORT 2023
EXECUTIVE SUMMARY
The following report provides an overview of Burbank’s economy based on current economic indicators and trends in the marketplace. This report is the first step in a multi-phased process that will help lay the groundwork data for the Economic Development Strategic Plan that will be developed and presented to City Council in 2023. The report provides data on the following key areas: jobs, business, retail, office, industrial, leisure and hospitality, and housing. The report also highlights factors in the form of threats and opportunities that contribute to Burbank’s success including the efforts of Burbank Economic Development to facilitate job growth, encourage innovation and entrepreneurship, attract new investment, increase revenues, create vibrant neighborhoods, and support businesses while also anticipating potential headwinds in an evolving and rapidly changing economic environment.
BACKGROUND
The City of Burbank has a resilient economy. Like other cities that have been affected by recessions and the COVID-19 Pandemic (Pandemic), Burbank has felt its dips but has come back each time even stronger. Part of this is due to our location regionally and our proximity to Los Angeles, both of which are major commercial hubs that include strong technology, research and development and media and entertainment businesses that make the region and more specifically, Burbank their home. It cannot be emphasized enough that a major contributing factor to Burbank’s resiliency is its strong media and entertainment presence. Burbank is the Media Capital of the World with more than 1,000 media and entertainment companies such as globally recog nized Warner Bros. Discovery, Walt Disney Company World Headquarters, Nickelodeon, and Netflix as well as smaller creative companies that provide post -production, visual effects, sound, and much more. The media and entertainment industry continues to grow and so does the demand for content, which has created new opportunities in Burbank, including future studio and post-production development and with that the potential for the creation of more jobs. Burbank already has a robust jobs market with approximat ely 142,000 jobs, 57,000 of which are in the media and entertainment sector. As dollars continue to flow throughout Burbank, the industry also supports important ancillary businesses within the community such as food services, beauty, dry cleaning, florists, construction, building sets and more.
A resilient Burbank still faces many challenges ahead, the lingering effects of the Pandemic are becoming more prevalent in the office market as Burbank and neighboring cities are feeling the ATTACHMENT 2 - 3
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impacts of the ongoin g work from home trends along with inflation1, supply chain issues, labor shortages2 and a possible recession.
JOBS AND BUSINESS GROWTH
The number of Burbank’s jobs have
almost reached pre-Pandemic
levels. As previously noted,
Burbank has nearly 142,000 jobs, 3
more than 40% (57,000) of these
are within the media and
entertainment industry. These
numbers are slightly lower than in
2019 when we had a total of
149,000 jobs. While most of these
positions are physically located in
Burbank, companies are challenged with enticing employees to return to the office as well as rightsizing their workforce, physical space and business expenses. Additionally, Burbank currently has 12,488 businesses, pre-pandemic this figure was 12,600.
Top 10 Industries by Jobs Number of Jobs Average Earnings Per Job
Entertainment 57,230 $166,288
Health Care Services 18,722 $63,429
Administrative and Support Services 9,456 $69,717
Retail/Wholesale 8,533 $59,694
Professional, Scientific, and Technical Services 7,895 $156,525 Local Government and Non-Profits 6,311 $104,172
Food Service and Drinking Establishments 5,943 $32,963
Real Estate 5,394 $78,785
Manufacturing 4,499 $78,284
Construction 3,299 $90,466
1 The one-year inflation rate in the U.S. from June 2021 to June 2022 was 9.1%. https://www.bls.gov/opub/ted/2022/consumer-prices-up-9-1-percent-over-the-year-ended-june-2022-largest-increase-in-40- years.htm#:~:text=Consumer%20prices%20up%209.1%20percent,U.S.%20Bureau%20of%20Labor%20Statistics 2 The June 2023 Unemployment rate is 3.4%.
3 Includes work from home positions. There are currently no reliable numbers for staff working from home and this number continues to change weekly.
144,412 144,173 149,033
124,793 141,932
60,472 58,086 60,745 53,357 57,251
0 50,000
100,000
150,000
200,000
2017 2018 2019 2020 2021
Burbank Jobs
2017 - 2021
Emsi
Total Jobs Media Jobs
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Subleasing and Work from Home
Burbank has five major employers that have already announced subleases of their existing office spaces including Netflix, Hasbro, Cast & Crew, WeWork and Aramark. Specifically, Netflix, the largest of these businesses, announced that they will be subleasing 180,000 square feet of their original 351,000 square feet of space they leased back in 2020.
At the same time, some employees are continuing to return to work, particular those creative types that rely on in-person collaboration to develop and produce w ork product for their jobs.
Starting June 1, 2022, Warner Bros. Discovery employees were required to return to the office at least three days a week .4 Beginning March 2023, Disney require d their employees to come to the office four days a week. Nickelodeon encourages their employees to return with on-site amenities and perks such as free food. This may signal a trend with entertainment companies to encourage employees to return to the office.
Right Sizing and Job Reduction
With the acquisition of Warn er Bros by Discovery, jobs are being reduced as rightsizing occurs within these entities along with the animation division of Cartoon Network that was acquired during the AT&T/Time Warner merger in 2018. Additionally, Disney has announced the rightsizing of jobs by reducing their workforce by 7,000. What that means for Burbank is still unknown. These constant mergers, consolidation and rightsizing of both large and small companies provides a stark reminder to Burbank that there is always volatility in a v ery competitive industry and business environment.
Job Growth and Development
Regarding job growth, Titmouse signed a lease for 95,000 square feet of space in Burbank adding 500 jobs in February 2020 and in May 2022, the MSG Big Dome opened adding another 300 high- technology jobs paying $100,000 +. Nickelodeon has continued to hire people even during the Pandemic and Worthe Real Estate and Warner Bros. Discovery are still moving ahead with the redevelopment of the Warner Bros. Ranch Studio site in Burbank with the intent of adding 16 new sound stages and office space that will result in more than 750,000 net -new square feet of working space. The sound stages and office space are expected to bring an ad ditional 2,000 to 3,000 jobs to Burbank over the next five years.
The ONNI Group has purchased the Burbank Town Center (excluding the former Ikea building and Office Depot site) and is looking at potential opportunities to redevelop the 1.2 million - square-foot Town Center over the next 20 years with new office, retail and housing opportunities that complement the Town Center businesses and help create an urban neighborhood with retail, commercial and housing opportunities. Included as part of these redevelopment opportunities
4 https://variety.com/2022/tv/news/warner-bros-discovery-return-to-office-1235265845/ ATTACHMENT 2 - 5
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are the creation of new office space and affordable and workforce housing, which will be a major employment center for the City and support the City’s efforts to facilitate the build out of new housing to meet its Regional Housing Needs Allocation (RHNA) of 8,772 units by 2029.
Opportunities
As the City continues its long-range planning efforts to develop specific plans in Downtown, the Airport District and the Media District, staff will be talking to property owners and developers about the feasibility of adaptively reusing5 office space to create new housing opportunities. This is not always as easy as it seems due to the way plumbing is located differently in office vs. housing and some of the California Building Codes can make it economically infeasible.
Facilitating ways to accommodate the needs of major employers and their staff, which includes creating synergies between housing, transit and proximity to major employment centers allows opportunities to make the local economy more resilient as jobs in media and entertainment continue to grow, the salaries for these employees are on the rise as well . This p rovides an opportunity to look at ways to house employees and keep their spending power locally.
Burbank jobs are some of
the highest paying jobs in
Entertainment and Digital
Media. The average
household income in
Burbank is $124,0566
while the average annual
income for a single
employee in the media
and entertainment sector
was $166,288 in 2021.
With more than 40% of Burbank’s jobs focused on the media and entertainment sector, the question becomes; Does Burbank have too many jobs focused on one industry, and should we seek ways to help diversify our job base? Planning for the future, economic development staff has been monitoring and researching trends in this sector to come up with strategies on how to best move ahead . What we learned, specifically during the Pandemic is that the media and entertainment industry is multi-layered with multiple subsectors included within it such as visual effects, video, animation, sound, post -production, music , gaming, entertainment, equi pment
5 Adaptive reuse refers to the process of reusing an existing building for a purpose other than which it was originally built or designed for.
6 Claritas 2022 Pop Up Demographics
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rental, design and innovation. This has helped safeguard the industry during potential downturns.
The more Burbank can diversify in these subcategories, the better insulated we will be in the case of another downturn.
It was suggested by City Council that staff investigate the Miami-Dade model of attracting and retaining jobs. They use a Targeted Jobs Incentive Fund (TJIF) , where financial incentives are provided to businesses that create at least 10 new , above-average paying jobs and makes a capital investment of at least $3 million. These types of programs have been used as economic tools to foster job growth for years, particularly before California’s Redevelopment Agency was dissolved in 2012, by cities and counties that have difficulty recruiting capital investment into their area. As evidenced by these numbers above, Burbank does not currently have this problem; however, if future funding could be identified, staff could look at implementing a similar type of incentive program to target companies that provide more job diversification. Th ese types of economic development program s will be vetted during the update to the City’s Economic Development Strategic Plan.
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LEISURE & HOSPITALITY
Burbank’s Leisure and Hospitality industry was hit the hardest during the Pandemic and has taken the longest to bounce back due to travel restrictions and the lack of an available workforce.
Hospitality is on a growth
trajectory with 2022 ho tel
occupancy averaging 73.2%,
which is greater than the 2021
average of 67.9% but still below
pre-Pandemic figures of 82.3% in
2019.
Additional tools that measure
tourism recovery are the
Average Daily Rate (ADR) and
RevPAR (Revenue Per Available
Room). Annual ADR for 2022
was $179.84, a 25.2% increase
from 2021, while RevPar has
increased to $1 31.63, a 35.0%
increase from 2021. All of these indicators are showing that growth in the tourism sector is moving in the right direction . Experts predict that tourism figures won’t fully rebound back to pre-Pandemic figures until 2024.
As mentioned, prior to the Pandemic, Burbank’s occupancy rate averaged at 82%, this included both business and leisure travel. Burbank is in a unique position where it ha s both a strong business travel market as well as a leisure market. Prior to the Pandemic, most of our hotels were full of business travelers attending conferences and
business meetings during the weekdays and leisure
travelers on the weekends.
Since 2021, the business travel market has not yet fully rebounded and continues to lag behind the leisure
market because of the continued hybrid work from
home policies as well a s the ability for businesses to meet virtually . In 202 1, a total of 2.8 million visitors traveled to Burbank, of that amount only 7.6% of
travelers were her e for business while the remaining
82.3 50.6 67.9 73.3
20 70
120
2019 2020 2021 2022
Percentage
Year
Hotel Occupancy By Year
137
64.27 97.54 132
0 100
200
2019 2020 2021 2022
Dollars
Year
Rev PAR By Year
Burbank Travelers 2021
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92.4% were here for leisure7. In 2018, a total of 3.4 million v isitors came to Burbank of which
10.7% was business related8 and 89.3% was leisure related travel.
As noted above the business travel has not yet rebounded for Burbank . If we compare the occupancy rate for 2022 at 72.3% with the occupancy rate for 2019 at 82.3%, we can conclude that the business travel market comprises approximately 10% of the visitor market in Burbank .
While this may be true, there is some crossover between both segments known as the “bleisure market”, which is a term used to describe travel that combines both business and leisure travel.
Visitors on a bleisure trip typically add some extras days to their business trip for leisure.
Leisure and Hospitality is a strong sector for Burbank and most cities would be content with an average occupancy rate of 70%, which is an industry benchmark, and indicates that there is enough demand for tourism and the potential to add additional hotel rooms without oversaturating the market. This is why Burbank has multiple proposed hotel projects as noted below in the Hotel Growth section.
The local success in this sector is in part due to the efforts of Visit Burbank, the City’s official destination marketing organization that was formed by City Council back in 2011. Economic Development staff manages the efforts of Visit Burbank, by developing strategies and initiatives to enhance tourism spending in Burbank. During the Pandemic, t he Visit Burbank team quickly pivoted their marketing efforts to focus initially on the drive time market, those visitors that could come to Burbank by driving just a few hours. Then gradually as travel restrictions were removed and sentiment increase d, the marketing campaign expanded to target ed domestic travelers, markets with direct flights coming into the Hollywood Burbank Airport, and most recently international travelers coming from Canada and Mexico.
The Hollywood Burbank Airport is
a major contributor to the Leisure
& Hospitality industry in Burbank.
During the Pandemic, the
Hollywood Burbank Airport
passenger rate dropped off by
almost 98% and it’s been a rocky
road with passenger traffic slowly
increasing, with 2022 figures back
up to almost pre-pandemic
numbers.
7 Economic Impact of Visitors in Burbank 2021, Tourism Economics (2022) 8 The Economic Impact of Tourism in Burbank 2018 (Tourism Economics (2019) 0 2000000
4000000
6000000
2019 2020 2021 2022
5,983,737,
1,995,348,
3,732,971,
5,898,736,
Annual Passenger Traffic Counts
Year
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VACANCY RATES9
As of August 22, 2022, Costar (a
real estate analytics platform) ,
reported almost 31 million square
feet of existing development in
Burbank. This is substantial and
reflects why Burbank’s population
increases each day to around
200,000.
Burbank’s real estate sector has historically been resilient and strong. We previously discussed that five major employers have already announced subleases of their existing office space. In the short-term, this trend may continue with the impacts of the work from home model as well as the ongoing mergers and right -sizing of major corporations. These types of mergers generally reduce redundant positions in the organizations and consolidate office/workspace. While sublease opportunities will increase vacancy rates in the short -term, it is anticipated that with the continued growth and development planned for Burbank, vacancy rates will stabilize once again. Should subleases and vacancy rates increase at a much faster pace, and office buildings remain dormant, City Council may consider new opportunities for the adaptive reuse of office buildings and/or sites including mixed -use and residential opportunities if some of the building codes are changed to make this feasible. Even though it is too soon to tell whether reuse will be necessary, the ongoing long range planning effort to develop and update specific plans in the City’s three major employment centers of Downtown , Airport, and Media districts create s an opportunity to plan for the future.
With the realization of the new subleases some of the main commercial districts in Burbank like Downtown and the Airport District are seeing higher than usual vacancy rates for office space in Q4 2022, 14.2% for Downtown and 1 5.8% in the Airport District. Additionally, Downtown has a higher retail vacancy rate at 11.9% due to large unfilled spaces at the Burbank Town Center. This rate is still exceptional after the recent devastating hit to the U.S. economy . Lease rates within the City are stable even with the impacts from the Pandemic.
Some notable statistics include Magnolia Park’s low 2.8% office vacancy rate in Q4 2022 which basically means there is little to no office vacancy in the area. Magnolia Park’s office lease rates have stayed consistent with pre-Pandemic levels ($2.84/sq ft). Additionally, within the Airport District, vacancy rates fluctuated both showing decreases and increases with the addition of Avion, the 60-acre mixed-use project that was completed in 2022 and the closure of HomeTown Buffet, converting to an Amy’s Restaurant and Fry’s, an under-utilized electronics store that has approved plans to be redeveloped into a mixed-use housing project known as Aero Crossing.
9 The vacancy rate is the amount of space that is available for lease at any particular point in time. The lower the number the less property inventory available. A strong market will have less than 10% vacancy and less than 2.5% vacancy rate basically means that all of the available property is leased.
Existing
Development in
Burbank Existing Buildings Square Feet
Office 560 13,030,997
Retail 975 7,678,183
Industrial 703 9,991,794
Totals 2,238 30,700,974
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The average time to re -lease a vacancy varies with office taking considerably longer than r etail.
It is important to consider that re-leasing may include not only negotiations for the lease but also due diligence and obtaining tenant improvement permits , all of which adds time to the cycle.
Additionally, a storefront or office may be closed lon ger than the re -lease period while improvements are done, staff is hired and shelves are stocked.
Below are statistics for office, retail and industrial properties for Burbank as a whole and within each commercial district.
Average Time To Lease
(Time Vacant) Office Retail
Magnolia Park 2.3 Months 3 Months
Downtown Burbank
12.4 Months 30 Months
Media District
38.8 Months 1.5 Months
Airport District
11.5 Months 12.5 Months
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OFFICE & COMMERCIAL10
Citywide office vacancy rates
decreased from 2019
through Q3 2022, and began
increasing in Q4 2022 due to
the onset of subleases . The
most significant changes are
within Downtown Burbank
and the Airport District.
Vacancy rates in Downtown are at 14.2%, reflecting the 91,000 square foot sublease of Aramark.
The 15.8% office vacancy rate in the Airport District reflects the subleases for Netflix, Cast & Crew and Hasbro , a combined total of 303 ,000 square feet of space as well as the last few spaces remaining at the Avion project. Vacancy rates also increased in the Media District as a result of a sublease for WeWork and remained stable in Magnolia Park . Office lease rates overall have increased $.16/square foot since 2019.
On a positive note, the Economic Development Team helped Black Angus Corporate offices find a new location in Downtown Burbank occupying 3,000 square feet and adding 25 new jobs.
There are multiple new projects in Burbank that continue to add to the growth of the office and commercial market. The chart below highlights current of fice/commercial projects in Burbank.
Some of this reflects current user expansions. The Avion project that was recently completed, was built as a speculative development project that reflects the belief that there is demand for
10 Costar, EDD, HdL, Nielsen
Office
Lease
Rates Downtown
Magnolia
Park
Media
District
Airport
District
2019 Q4 $3.12 $2.64 $3.99 $3.31
2020 Q4 $3.15 $2.70 $4.07 $3.40
2021 Q4 $3.17 $2.72 $4.03 $3.40
2022 Q4 $3.32 $2.84 $4.16 $3.57
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
Office Vacancy Rates
2019 Q4
2020 Q4
2021 Q4
2022 Q4
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new space and Burbank has a strong market to absorb industrial and creative office space11. Most of the buildings at Avion have been leased; however, some office units remain available. Below is a list of Burbank’s current office and commercial projects.
Burbank Office & Commercial Projects
Project Location Description Status Sq Ft
Avion 3001 N
Hollywood Way
60-Acre 1.25M sf Business Park,
Retail, 150-room Hotel; Creative
Industrial and Office
Business &
Industrial Park,
Completed; Hotel
Completion
Spring 2023
1,000,000+
Warner Bros.
Second Century
West Olive Ave. 800,000 sf Office; Two Buildings Completion 2023 800,000 Providence Saint
Joseph ER and
Urgent Care
501 S. Buena
Vista Street
34,500 sf (44 bed) Emergency
Room; 8,500 sf (12 bed) Urgent
Care
Completed 43,000
MSG Sphere
Studios
3401 Empire
Ave.
Production Studio to support
Las Vegas Dome
Completed 28,664
Hollywood
Burbank Airport
2627 N.
Hollywood Way
Replacement Terminal; 14-gate
355,000 sf
Completion 2024 355,555
Warner Bros. The
Ranch Lot
411 N
Hollywood Way
16 New Film Studio and 1M Sq
Ft Production Space: 751,737
Net-new Sq Ft
In Planning 751,737
11 Speculative Development are projects built without a current proposed lease with a prospective tenant.
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Burbank Commercial Projects
Project Location Description Status Sq Ft
624-628 S., San
Fernando Boulevard
Project
624-628 S. San
Fernando Blvd
Four-story mixed-use
residential commercial
development with 42
residential units and
ground floor retail, and
office space
Entitled 55,500
First Street Village First Street and
Magnolia Blvd.
Residential, Retail Under
Construction; Est.
Completion of
Phase 2 in 2023
18,876
Aero Crossing 2311 N.
Hollywood Way
Mixed Use Approved in Plan
Check
150,000
La Terra 777 Front Street Residential, Retail, Hotel Under Construction; Est.
Completion 2025
1,067
3700 Riverside 3700 Riverside
Drive
Residential; Retail; For
Sale Units
Entitled 2,000
Bob Hope Center 3201 W. Olive
Avenue
Mixed-use
residential/commercial
project with 144
residential units, 1058 sq.
ft. of commercial space
and publicly accessible
open space.
Entitled 1,058
Burbank Civic Center 150 N. Olive
Ave.
65,000 sq ft library and
35,000 sq ft office space,
52,000 sf Open space, 475
housing units
Pre-entitlement TBD
Total 2,206,399
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RETAIL12
For the most part, the
retail sales remained
strong throughout the
Pandemic in Burbank
albeit buying habits
shifted to online and food
delivery. Many
restaurants and retailers
that were not able to
open and not positioned
to withstand an economic
downturn closed. These closures while unfortunate provided lease opportunities for alternative tenants to occupy these spaces and at potentially higher lease rates. This is mainly a function of supply and demand. Some examples include Market City Café being replaced by Finney’s; City Nail Salon by Boba Time, Pizza Rev by Silverlake Ramen, La Pain Quotidien by Mendocino Farms, P.F. Chang’s by Han Korean BBQ and Simple Things by Roku Japanese BBQ.
This success is also in part due to the efforts of Burbank Economic Development team and multiple permitting departments that worked quickly to provide outdoor dining opportunities for struggling restaurants by allowing for in-street dining parklets in Downtown Burbank, the use of private parking lots for expanded outdoor dining citywide, the temporary removal of the Administrative Use Permit Process in Do wntown Burbank, and a citywide Chow Down Burbank campaign in conjunction with the Burbank Chamber encouraging locals to patronize Burbank businesses.
Overall, Burbank continues to see increases in sales tax, which is important as this is the second largest generator of the General Fund dollars.
Retail vacancy rates have
remained stable with ups and
downs in each district. The only
major change in vacancy rates
are notes in the Airport District
as retail vacancy increased to
8.5% in Q 4 2022 is due to the
addition of new retail space at
the Avion project, the vacancy
12 12 Costar, EDD, HdL, Nielsen
Burbank Retail Sales Tax General Fund Revenue
Calendar
Year
Bradley
Burns
Transaction Use
Tax (Measure P)
General Fund Total
2017 $33,176,921 $33,176,921
2018 $33,377,725 $33,377,725
2019* $37,137,403 $6,951,328 $44,088,731
2020 $33,461,462 $11,546,513 $45,007,975
2021 $34,923,997 $13,824,840 $48,748,837
2022 $43,081,527 $16,333,305 $59,414,832
*2019; Measure P Effective 4/1/19
0.00%
5.00%
10.00%
15.00%
Citywide Downtown Magnolia
Park
Media
District
Airport
District
Retail Vacancy Rates
2019 Q4 2020 Q4 2021 Q4 2022 Q4
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left at the Empire Center from HomeTown Buffet which is currently going through the entitlement process for Amy’s Restaurant, and the closure of the Fry’s Electronics store what had since been approved for a mixed -use residential project. Retail lease rates have gradually increased since 2019 with Downtown commanding the overall largest rate. On an average, increases have gone up $0.25 in the last three years.
Burbank has proven to be resilient in the retail sector and it had welcomed many new retail/restaurant tenants recently and even throughout the Pandemic. The strong list of retail/restaurant attraction is a result of multiple factors, Burbank Economic Development works closely with the broker and real estate community aggressively marketing and promoting available properties in Burbank. Additionally, staff attends trade shows to meet with potential retailers/restaurants and connect them with available spaces in the city. In June 2022, Economic Development staff hosted a broker open house event in Downtown Burbank, inviting more than 40 local brokers and real estate professionals to showcase Downtown Burbank, available spaces and future lease opportunities. Additionally, Onni Group purchased the Burbank Town Center for $138 million with the future intent of creating new opportunities to create vibrancy for Downtown Burbank with the addition of new office, retail and housing.
Below is the list of new retail/restaurant openings as of June 2022.
Retail
Lease
Rates per
square
foot Downtown
Magnolia
Park
Media
District
Airport
District
2019 Q4 $3.66 $2.48 $3.08 $3.12
2020 Q4 $3.60 $2.48 $3.04 $3.03
2021 Q4 $3.67 $2.59 $3.18 $3.06
2022 Q4 $3.93 $2.73 $3.31 $3.35
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Retail Store Openings
NOW OPEN
• Ballers and Brew – 407 Irving Drive
• Boba Time – 234 N San Fernando Blvd
• Burbank Terrace – 112 N San Fernando Blvd
• Han Korean BBQ – Burbank Town Center Mall
• LightBeauty Cryo – 3506 1/2 W Magnolia Blvd
• Pilates Plus LA – 531 N Hollywood Way
• Panini Kabob Grill – 201 E Magnolia Blvd (Re-
opened)
• Randy’s Donuts – 3003 N Hollywood Way
• Reviv’d Wellness Lounge – 4000 W Magnolia
• Smashed Burger – 118 N San Fernando Blvd
• The Kebab Shop – 515 N Hollywood Way
• The Joint – 521 N Hollywood Way, Suite 531D
• Silverlake Ramen – 175 Palm Avenue
• Raising Cane’s – 1750 W Olive Avenue
• Absolute Appliance Store-3510 Magnolia Blvd
(Mag Park)
• Urbane Café – 515 N Hollywood Way
• Club Pilates – 209 E Orange Grove
• Sephora -1403 N Victory Place
• Cider Works at Story Tavern – 150 S San
Fernando Blvd
• Dunkin’ – 321 N San Fernando
• Everbowl – 515 N Hollywood Way
• 800 Degree Pizza – 3619 W Magnolia Blvd
• Unincorporated Coffee – 4017 W Riverside
Drive
• BB’s Café – 2411 W Burbank Blvd
• Oku-Niku Roku Japanese BBQ – 4013 W Riverside Drive
COMING SOON*
• Alfred Coffee – 171 Maple Street (2023)
• Amy’s Drive-Thru – 1850 Empire Avenue (2023)
• Magnolia House – 2623 W Magnolia Blvd (2023)
• Jersey Mike’s – 3003 N Hollywood Way (2023)
• Dog Haus – 3003 N Hollywood Way (2023)
• Kalaveras – 221 N San Fernando Blvd (2023)
• Rumble Boxing – 515 N Hollywood Way (2023)
• Absolute Appliance Store – 1719 N San Fernando
(2023)
• Cycle Bar – 3820 W Verdugo (2023)
• Crumbl Cookies- 3619 W Magnolia Blvd (2023)
• The Toasted Bun – 920 N San Fernando (2023)
• Three Sisters Coffee & Tea – 1706 W Magnolia
(2023)
• Idyllwild Tavern – 4201 W Olive Avenue (2023)
• Republik Coffee – 164 E Palm Ave #103
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HOTEL GROWTH
With a history of high occupancy rates prior to the Pandemic, and demand outpacing supply, there is an indication that more hotel rooms can be absorbed. (See Leisure & Hospitality above.) Currently, there are 18 hotels with 2,569 rooms. There has not been a new hotel development in Burbank since 2016 when Springhill Suites and Hilton Garden Inn opened adding 379 rooms to the market, but t here are f our (counting Aloft and Residence Inn as separate) hotels that are under consideration and/or approved that could potentially adding a total of approximately 877 additional rooms in the next five years.
Burbank Proposed Hotels
Hotel Location Rooms Status
Cambria Suites, Avion
2801 N. Hollywood
Way 150
Under
Construction
Aloft Burbank
Airport/Residence Inn
Burbank Airport
2500 N. Hollywood
Way 420
To be considered
by City Council in
2024
LaTerra Select/Line at
Burbank 777 N. Front St. 307 Entitled
Total Rooms 877
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INDUSTRIAL/FLEX13
In Burbank, the re are some scattered industrial/flex buildings but the largest concentration of these types of buildings is centered within the Airport District. Avion is a new 60-acre project located adjacent to Hollywood-Burbank Airport that consists of 17 buildings, 1.25M square feet and encompasses industrial, office and a hotel. All of the industrial is leased. This flex/industrial office space has helped to raise the lease rate average in the Airport District.
13 13 Costar, EDD, HdL, Nielsen
Industrial/Flex
Lease Rates
Airport
District
2019 Q4 $1.45
2020 Q4 $1.54
2021 Q4 $1.72
2022 Q4 $2.09
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
2019 Q4 2020 Q4 2021 Q4 2022Q4
1.20%
4.80%
3.50%
2.00%
Vacancy Rates
Industrial/Flex
Airport District
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HOUSING
Housing demand has cooled recently; and nationally, housing prices have increased at a slower pace, 1.3% in the last year.14 In California, median prices for the same period went down 4.4%.15 Burbank’s housing prices were also down 18.8% between December 2021 - 2022.16 At first this may seem alarming, but our median sales price is still expensive, coming in at an average sales price of $975,000. This new number negates prior year gains and is still 14.7% higher than the 2020 median sales price.
The long-term price growth is a function of supply and demand. California has added 3.2 times more people than housing units during the last 10 years. (2010 -2020) 17. At this rate the State should have been building at least 70,000 more units a year, and perhaps as many as 110,000 per year, from 1980 to 2010. The estimated shortfall statewide is about 3.5 million units.18 Burbank must also take its responsibility for this shortfall. Between 2010 and 2016, Burbank only added approximately one housing unit for each new 57 jobs created within the City 19, adding only 294 new units to the housing supply. In 2018, our jobs to housing ratio was 3.36 jobs to one housing unit. A healthy job to housing ratio should be between 0.75 to 1.5 jobs to one housing unit .
When considering all currently proposed development (commercial and housing), this ratio does not look to get much better in the future as both are on a rapid development pace, even with a potential recession, housing project applications continue to be submitted.
This means that it is imperative to build housing to enable commercial development to continue.
The one larger caveat to potential growth is developer perception. If Burbank is perceived to not be developer friendly, requiring large concessions, improvements and city ameniti es for approval; thereby perceived to be “sticking it to the developer,” developments will be quickly reduced.
In 2019, City Council set a visionary goal to build 12,000 units by 2035, mostly along the transportation corridors and in our existing commercial districts. This 12,000 unit goal is on par with the City’s Regional Housing Needs Assessment (RHNA) allocation of 8,772 units over the next eight years (2021-2029). 20 Currently, Burbank has 3,072 units under consideration and/or
14 December 2022 National Growth % Year over year, Redfin https://www.redfin.com/us-housing-market 15 December 2022 California Growth % Year over year, Redfin https://www.redfin.com/state/California/housing- market
16 December 2022 California Growth % Year over year, Redfin https://www.redfin.com/city/2320/CA/Burbank/housing-market 17 Public Policy Institute of California, 2020 Census Data 18 2015 Study Legislative Analyst’s Office
19 Burbank Affordable Housing Analysis & Strategy 2017
20 The Regional Housing Needs Assessment (RHNA) allocation is established each eight-year cycle and is determined and enforced by the California Department of Housing and Community Development (HCD). Each Region is required to build a percentage of housing the State’s housing needs for specific incom e levels. Burbank’s RHNA allocation can be found in the Housing Element
ATTACHMENT 2 - 20
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construction. This number does not include Accessory Dwelling Units (ADUs). Between January 2017 and March 2022, 698 ADU permits were issued.
This pace has quickened due to the State passing bills that create by-right building and project review streamlining throughout California. T hese include SB 330 , SB 35, AB 2011, AB 2234 and Accessory Dwelling Unit development regulations, all which as a result have in place approval pressures on staff in terms of mandatory timeline s and have reduced the ability of the City to negotiate community benefits within projects if proposed housing developments are proposed in compliance with applicable state laws. Additionally, SB 9 allows the building of multiple units on existing lots as well as the opportunity to su bdivide existing single-family residential zoned lots. Housing developers are now invoking one or more of these new state -mandated housing laws when submitting their housing projects, adding to the development race.
This increased housing development will help retain employees and employers within Burbank.
It also alleviates pressures for large employers to build housing developments themselves, like the projects developed in the 1940’s when Lockheed built employee housin g around their manufacturing plant. Staff has spoken to the major employers within the City regarding their interest to use this employee housing model and/or their desire to subsidize housing development in the future development and was told that there are currently no future plans.
This is largely due to their ability to easily attract skilled labor for jobs a s well as their ability to relocate divisions and departments to other states when it is deemed fiscally feasible. For instance, Disney relocated parts of Disney Imagineering to Florida where housing is available and more affordable to support their business model . Burbank must not ever rest on its laurels and assume that businesses don’t have choices and could one day elect to relocate from Burbank to another city or state. As opportunities arise with employers to partner in housing opportunities, staff will pursue those avenues. This is included within the 2022 Housing Element update.
Lastly, the increase in housing development that was almost zero in the past has put concerted pressure on staff to review and approve projects per mandates. At the same time commercial development has continued to be robust. This includes all departments involved such as Planning, Building and Safety, Public Works, Burbank Water and Power, Housing and City Attorney’s Office. The workload has substantially increased largely without adding staff to meet the on-going demand. For this reason, staff finds itself scramblin g to adjust and having to slow other work down to meet housing deadlines. This is paradoxical as the future on -going revenue for development includes reassessments of property values, if property tax lags behind the work, funding to the general fund will a lso be delayed . The chart below shows the current housing projects that are under review or approved.
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Burbank Housing Projects
Project Location Description Housing Units Status
Aero Crossing Mixed
Use Project 2311 N. Hollywood Way
Residential, Live/Work
Space, Retail, Office 862 In Planning
First Street Village
First Street and Magnolia
Blvd. Residential, Retail 275
Under Construction;
Est. Completion
2023
La Terra Select 777 Front Street Residential, Retail, Hotel 573 Under Construction;
Est. Completion
2025
3700 Riverside Drive 3700 Riverside Drive
Residential; Retail; For
Sale Units 49 Entitled
601 E. Cedar Ave. 601 E. Cedar Ave. Residential 46 Entitled 2814 W. Empire Ave. 2814 W. Empire Ave. SB35 Residential 148 In Planning Pickwick
921-1001 W. Riverside
Drive
SB35 Residential;
Townhomes 96 Approved
3000 W. Empire Ave. 3000 W. Empire Ave. SB35 Residential 340 In Planning 3001 W. Empire Ave. 3001 W. Empire Ave. SB35 Residential 131 In Planning YMCA Facility
321 E. Magnolia Blvd., 300,
320, 344, 353 E San Jose
Blvd. Residential 304 In Planning
215 E. Olive Ave. 215 E. Olive Ave.
Residential - Density
Bonus 60 In Planning
Bob Hope Site 3201 West Olive Avenue
SB35 Residential, Mixed-
Use Project 144 In Planning
4100 Riverside Dr. 4100 Riverside Dr. Mixed Use 44
Submitted for
Design Review
Total 3,072
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HOUSING RENTS
Housing rents continue to increase as a function of
supply and demand in Burbank . Overall, in Los
Angeles County, market rents dropped 11.1% during
the pandemic and remained relatively flat until June
2022. Between 2021 and 2022, rents were up 1.1%.21
Long-term rent increases for Burbank are a different
story. Between December 2018 and December 2022, rents increased for each unit type. Overall, when accounting for the number of units in each unit type, rents increased 9.94% in five years22 while the average rent was $2,525 in December 2022.
According to AB 1482, the California Tenant Protection Act of 2019 , the annual rent increase allowed for existing renters that are affected under this legislation is the Consumer Price Index plus 5% to a maximum increase of 10%. This means that existing rents could be raised by up to 10%. Additionally, under AB 1482, when a renter moves out, landlords can reset the rents to market rates. The Los Angeles County COVID-19 Tenant Protections Resolution (formerly the LA County Eviction Moratorium) ended March 31, 2023. The Resolution applied to residential tenants, commercial tenants and mobile home space renters in unincorporated Los Angeles
21 https://www.apartmentlist.com/rent-report/ca/los-angeles 22 Zumper: https://www.zumper.com/rent-research/burbank-ca Existing Multi-Family Units
Studio
One
Bedroom
Two
Bedroom
Three
Bedroom
1760 6,865 7,041 176
Burbank Average Rent (Monthly)
December/Year Studio One Bedroom Two Bedroom Three Bedroom 2018 $1,769 $2,025 $2,665 $3,468
2019 $1,756 $1,967 $2,564 $3,550
2020 $1,543 $1,811 $2,299 $3,567
2021 $1,826 $1,793 $2,565 $3,932
2022 $1,903 $2,263 $2,900 $4,000
5.5 Year Percentage Increase 7.57% 11.75% 8.82% 15.34%
Average Monthly Rent
Adjusted for Unit type $2,525
Dec 2018 – Dec 2022
Increase Adjusted for
Unit Type 9.94%
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County, as well as cities in the County that did not have a moratorium in place (Burbank’s eviction orders ended September 30, 2020). The City of Burbank did not enforce the County order.
However, tenants were able to utilize the order as an affirmative defense in court. Therefore, it is too soon to see the effects of these eviction orders ending. It is important to note that even when the orders were in place, landlords violated the orders and issued unlawful detainers (eviction notices).
While Burban k’s new housing units will add inventory , there is a long lead time from the entitlement of a project to its construction and eventual occupancy by future tenants . Only one of the existing approved projects (Talaria) during the last five years has opened while First Street Village has begun accepting application for phase 1 . The City must continue to facilitate the approval affordable and workforce housing units in the future to keep up wit h existing demand and with the proposed new jobs that will naturally occur in Burbank.
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HOUSEHOLD INCOME
When looking at average
household income in Burbank,
according to Claritas, the
average household income in
2022 was estimated to be
$124,984 and median
Household income is $8 8,712.23
The median income reflects the
mid-point at where there are the
same number of households
that make less than $8 8,712
annually as there are the
number of households that
make more than $ 88,712. The
average reflects the overall
average household income f or
all households in Burbank.
Between 2017 and 202 2,
average household incomes increased 35%. On the surface, this seems to be good as household income is growing at a faster percentage rate than both housing sales prices and rents. But in reality, income has a long way to catch up as most Burbank residents are still priced out of the market. Housing affordability is still out of reach for most people who want to purchase and almost half can’t afford the average rental price.24
Year Average Household Income Median Household Income
2017 $92,568 $69,410
2018 $101,253 $76,211
2019 $106,039 $77,760
2020 $110,845 $80,372
2021 $115,966 $83,245
2022 $124,984 $88,712
Growth Percentage 2017 -
2022 35.02% 27.81%
23 Claritas Pop-up Demographics 2017 - 2022
24 Rent affordability is calculated as 30% of annual income. Mortgage payments are calculated using the following factors: average Burbank sales price, 20% down payment, 30-year mortgage rate at 6% including taxes and insurance with 30% of annual income going toward rent.
2022 Est. Households by Household Income
Income Range Population Percentage
Income < $15,000 3,909 9.24%
Income $15,000 - $24,999 2,750 6.50%
Income $25,000 - $34,999 2,281 5.39%
Income $35,000 - $49,999 3,331 7.87%
Income $50,000 - $74,999 5,934 14.02%
Income $75,000 - $99,999 5,395 12.75%
Income $100,000 - $124,999 4,260 10.06%
Income $125,000 - $149,999 3,306 7.81%
Income $150,000 - $199,999 4,170 9.85%
Income $200,000 - $249,999 2,406 5.68%
Income $250,000 - $499,999 2,895 6.84%
Income $500,000+ 1,691 3.99%
2022 Est. Average
Household Income $124,984
2022 Est. Median
Household Income $88,712
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An annual income of $ 93,794, slightly higher than the median income is needed to afford an average rental in Burbank if 30% of income is allocated towards rent. And more than $240,605 of annual income is needed to spend 30% of a household’s income on a 30 -year, fixed -rate mortgage. Only an estimated 47% (20,076) of households can afford current average rents and only 12% (5,086) of Burbank’s households can afford to purchase a new home. There are 42,328 estimated households in Burbank. 25
What this means in the long run, is that it’s imperative for Burbank to build new housing in all areas and in particular workforce units. More units will help to maintain and/or slow increasing rental rates along with providing more options for current and new Burbank residents.
CONTINUING THREATS
There is good reason to be optimistic about Burbank’s long-term future. The City continues to be poised for continued growth in jobs, retail sales, tourism and development ; however, the possible onset of a recession and continued subleases of excess office space may slightly delay that growth. This is a time of significant change with a focus on rightsizing, new workspace attitudes, retail spending increasingly moving toward online and a possibly slowing economy.
The City’s General Fund will reflect future growth in increased revenue from property valuations and tourism occupancy tax with new development. With more than two million square feet of commercial and hotel space proposed, Burbank is l ikely to add thousands of new jobs over the next five to ten years as these developments come to fruition. Housing development for these future employees will need to keep pace if Burbank wants to maintain and/or reduce its jobs to
25 Claritas Pop-up Demographics 2022
Burbank Affordability
Number of
Burbank
Households that
can Afford to
Spend
Percentage of
Burbank
Households
that can Afford
to Spend
Number of
Burbank
Households that
can Afford to
Spend
Percentage of Burbank
Households that can
Afford to Spend
30% of their Income Toward 50% of their Income Toward
Rent 20,076 47% 29,123 69%
Purchase of a
New Home 5,086 12% 11,962 28%
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housing imbalance, whic h will ultimately be imperative to keeping our large companies in Burbank.
As Burbank continues to recover from Pandemic and the economic indicators improve, threats still linger and will determine how fast our economy will grow and if there are dips along the way.
How we plan for the future, address supply and demand, environmental and economic threats will require ongoing collaboration between the City Council, City staff, our businesses and our residents. Our future economic climate report can be described as optimistic but guarded with additional work needed to ensure that the City is economically resilient and sustainable now and for future generations.
Burbank has a strong base of nationally recognized large and small businesses to help keep our local economy going. At the same time, we must also continue to diversify. Our reliance upon on- going media demand and growth also creates a risk if the media market suddenly shifts and/or other jurisdictions and States offer substantial enticements for companies to relocate. We cannot rest on our laurels and past successes. Burbank must continue to provide and protect a climate where all businesses thrive.
One of the largest threats Burbank may face is pricing itself out of the market. As media continues to grow so does the housing demand for the workforce . Companies will stay as long as they can find workers but if shortages occur, wages will increase , reducing company profits and this will result in businesses look ing for other opt ions and locations . For these reasons, maintaining a happy , skilled and affordable workforce becomes imperative for keeping companies within Burbank, even as work from home options become more prevalent.
Workers want to have a good quality of life where they live, affordable housing, retail options, open space and a sense of community. Burbank must work to keep these in place by building more affordable and workforce housing, continuing to recruit new upper -end retail and restaurants, keeping our parks clean , protecting our neighborhoods and local control, and offering a variety of options while promoting inclusivity all to maintain a safe, bea utiful and thriving community.
CONCLUSION & NEXT STEPS
The City of Burbank has two guiding documents for economic development. The first is the Burbank Economic Development Strategic Plan (2018 -2022) Attachment 1 . This plan was approved by City Council prior to the Pandemic. During the Pandemic, Community Development staff created the Economic Recovery Plan (Attachment 2), which was originally presented to City Council on October 202 0 and then updated in February 2021. This Plan included goals for Mitigation (Immediate), Response (2020-2021) and Recovery (2020-2023). Staff has updated the status of the goals developed within the Economic Recovery Plan and continues to work towards implementing those not yet complete under the Response and Recovery sections.
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This year, staff begins the process of updating the Burbank Economic Development Strategic Plan (2024-2028). During the process , staff will engage the City Council Sub -committee, businesses, stakeholders, and residents to create a draft plan . Once a draft Plan is completed, staff will present it to the City Council for consideration.
APPENDIX
Attachment 1: Burbank Economic Development Strategic Plan (2018-2022) Attachment 2: Economic Recovery Plan
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