DreamWorks May Build Unit in Glendale : Entertainment: The studio has tentatively agreed on complex for animation division. DWP is willing to sell 12-acre site pending approval by L.A. City Council.

DreamWorks SKG, the studio created a year ago by three Hollywood luminaries, has entered into a preliminary agreement with Glendale to build a $50-million complex for its animation division near the Los Angeles River, city officials said Saturday.

Plans call for the erection of a 500,000-square-foot building in two phases and the eventual employment of 1,000 people. But Glendale City Manager David Ramsey said negotiations, which began a month ago, “stop short of a final agreement.”

The company formed by entertainment leaders Steven Spielberg, Jeffrey Katzenberg and David Geffen has yet to select a site for its main headquarters, although the trio is negotiating for a site in the Playa Vista development near Marina del Rey.

DreamWorks currently houses its animation division on the Universal Studios lot in the east San Fernando Valley. Company officials have said they want to keep their animation operation in the Valley because it is home to a great number of the region’s top animators.

DreamWorks officials were unavailable for comment on their negotiations with Glendale.

The first public discussion of the firm’s preliminary accord will come Tuesday at Glendale City Hall, when the City Council meets as the redevelopment agency.

According to plans filed with the agency, the studio complex would include two 75-foot towers on a 12-acre site north of the intersection of the Golden State and Ventura freeways near a prominent bend in the Los Angeles River. The area, which is vacant, is often referred to as Crystal Springs.

“I am personally thrilled that DreamWorks has chosen Glendale,” said Councilman Larry Zarian, who cautioned that negotiations continue. “It’s one of the best pieces of news we’ve had in a long time.”

DreamWorks, founded last October, brought together a “dream team” of film director Spielberg, former Disney Studios chief Katzenberg and music mogul Geffen.

The partnership signaled its entry into the lucrative animation business in July by hiring two Disney executives--Gary Krisel, the president of Walt Disney Television Animation, and Bruce Cranston, the organization’s vice president of development.

Glendale has long been the home of Walt Disney Imagineering, although several hundred of its workers were recently moved to Disney’s new animation headquarters in Burbank--a colorful building that has become a landmark along the Ventura Freeway.

Noting that two education software companies recently moved into the Crystal Springs area, Ramsey said, “We’re developing this as a home for entertainment high-tech firms.”

The Los Angeles Department of Water and Power owns the site proposed for DreamWorks’ animation building. The DWP board agreed last week to sell the property, Ramsey said. The sale would have to be approved by the Los Angeles City Council.

Ramsey said DreamWorks officials have indicated that they would like to obtain all the required city permits by July.

“They want to move forward as quickly as possible,” he said.

One potential snag could be the proposal to build the office towers: DreamWorks would have to obtain a variance from Glendale’s 35-foot height limit in that area of the city.

Ramsey said Glendale is studying the request and will also consider a long-term discount on electrical rates.

“We haven’t offered any tax break so far, but I expect that we will have to talk about that at some point,” he said.

DreamWorks is likewise negotiating with Los Angeles city officials in an effort to cut utility costs, city taxes and a charge for roads and other infrastructure at its potential headquarters near Marina del Rey.