New owner faces huge hurdles with Burbankland.

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After a protracted bankruptcy proceeding, a choice, four-acre property in Burbank has finally been sold to a New York investment group for about $42 million, well under the $60 million appraisal value.

But the purchase price may not turn out to be much of a bargain after all.

The property, along the 3400 block of West Olive Avenue at West Alameda Ave. in the prestigious Burbank Media District, is a site designated for redevelopment by the city of Burbank. And some of the terms of the development agreement could create real headaches for anyone wishing to develop the property.

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The market for condominiums has changed since the agreement was first struck, a possible relocation of the church that sits on the property has yet to be resolved, and there is a new Burbank city council that may or may not entertain different ideas for the development.

"There are too many unanswered questions for someone to put up that kind of money," said John Battle, a principal with real estate brokerage Lee & Associates who, with Duncan Lemmon, represented the trustee in the bankruptcy sale proceedings. "There's a lot of money out there for real estate investments, but they're not stupid."

As the Burbank Media District evolved into a prestigious address with some of the most expensive office buildings in the Valley, the project area, characterized by older, mom-and-pop businesses including a local landmark Dimples, had become increasingly incongruous, and the city of Burbank earmarked it for redevelopment.

In 2005 the city reached an agreement with Platt Co. to redevelop the Burbank Media District property into a mixed-use site with 30,000 square feet of office space and 220 condominium units.

But in 2006, with foreclosure looming, Platt filed bankruptcy and the future of the property fell into the hands of the bankruptcy court.

Last week, the court resolved a final wrinkle allowing an agreement to sell the property to DB Burbank LLC, a unit of Platt's lender, Fortress Investment Group LLC, in New York, to proceed.

The sale is contingent on closing by June 15, according to the court order.

The purchase price was essentially the amount Platt owed Fortress on the land acquisition, well under the $60 million the parcel had been appraised at last year, according to court documents.