By SHELLY GARCIA
J.H. Snyder Co. has filed a breach of contract suit against its financial partners in a deal to develop an office complex in Burbank, a move that could place the giant development in jeopardy.
The suit, filed in United States District Court, alleges that Equity Office Properties Trust abandoned the Media Center project in January 1998 when it told Snyder not to perform any work on the Burbank site, which was to have begun construction last year. The complaint asks for $7.2 million to compensate Snyder for the fees it incurred as a result of Equity's action, plus legal fees and other costs.
The Media Center project, which was to add 585,000 square feet of posh office space to the Burbank marketplace, sat idle for over a year as a result of a merger between Beacon Properties, the company that first teamed with Snyder in the development deal, and Equity Office Properties Trust.
Since the merger a year ago, Cliff Goldstein, a partner with J.H. Snyder, has indicated that Equity was no longer interested in the project, and that the company was seeking a new equity partner.
When Snyder and Beacon first inked the deal in August 1997, the entertainment industry was growing dramatically, fueling a need for high-end office space in the area. The five-acre site at 3300 W. Olive Ave. was conceived to attract that target market with amenities that included operable windows, fiber-optic communication capabilities, restaurants and a health club. But with the office market slowdown, Snyder has not been able to attract tenants willing to pay $3 to $3.25 a square foot per month.
According to Snyder's complaint, Equity approved construction on the site following the merger, but on Jan. 26, 1998 Equity officials told Snyder not to perform any work on the project.
Jerry Snyder, the chairman of J.H. Snyder, said he could not comment on the suit. Officials at Equity did not return phone calls.
Staff Reporter Elizabeth Hayes contributed to this report.
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