Studio Deal a Hit With City Council : Business: Members praise package of tax breaks to lure DreamWorks SKG to Playa Vista development. But a new coalition of opponents vows to fight the project.

A proposal to lure DreamWorks SKG to Los Angeles with a massive package of tax breaks and other incentives drew an enthusiastic welcome from City Council members Tuesday, but a band of environmental activists promised to fight the development of 100 acres near Marina del Rey every step of the way.

Economic analysts also praised the package intended to lure the multimedia venture by Steven Spielberg, Jeffrey Katzenberg and David Geffen to the Playa Vista development, calling it a sign that Los Angeles can be flexible when it comes to being business-friendly.

“It’s a tremendous symbol . . . that Los Angeles is back,” said Joel Kotkin, senior fellow with the Pepperdine University Institute for Public Policy. “Los Angeles has been impossible to deal with for a lot of businesses. . . . This is going to create jobs. . . . It sends a signal to other businesses that the city of Los Angeles is going to cut deals.”

Kotkin’s optimism echoed the warm embrace given the package of incentives, worth at least $70 million, in council chambers, where Councilwoman Ruth Galanter introduced a motion Tuesday to launch the DreamWorks deal. The motion, which will be discussed and voted on by the council next week, encourages DreamWorks to work with the developers of Playa Vista and calls on a host of city staffers to present a detailed plan of economic incentives within 120 days.

“It’s an incredible opportunity,” Councilman Richard Alarcon said of the deal. “There is no industry that means more to L.A. than the entertainment industry. Theirs are the highest-paying jobs, and we’re talking about 10,000 of them. It will benefit every part of the city.”

Although the project would include the largest package of tax breaks and incentives in city history, council members said they will support it because the massive new movie studio could provide as much as $500 million in revenue to local, state and federal governments over the next 15 years and will probably spawn a bunch of spinoff businesses to support it.

They also noted that the incentives, such as reducing business license fees for five years for every new job created, would apply to all new companies, not just DreamWorks. “I’ve long been an advocate of giving incentives to people,” Councilman Hal Bernson said. “Ultimately, you have to make an investment to get a return.”

But Tuesday afternoon a new coalition of homeowners and environmentalists stormed City Hall to appeal a Planning Commission decision that will pave the way for DreamWorks to anchor the Playa Vista project, which one day could include as many housing units as the city of Hermosa Beach and as much office space as Century City. The council’s Planning and Land Use Management Committee voted unanimously to deny the appeal, but the environmentalists vowed to take their case directly to DreamWorks, starting with a protest this morning at the group’s temporary headquarters near Universal Studios.

“What we want to see is an adequate environmental review of the situation and to work with DreamWorks to do a responsible environmental plan,” said Celia Alario, who lives in Venice and is a member of the newly formed Citizens United to Save All of Ballona.

“It’s a bad deal for the Westside. It’s going to be huge amounts of traffic and build a huge city in one of the few places people can still breathe,” added Marcia Hanscom of the Wetlands Action Network, one of more than a dozen groups involved in the new coalition.

In contrast, dozens of the project’s supporters, ranging from the developer to homeowners and the operator of a job training program in Venice, also came to the committee hearing to praise the deal.

The outrage by homeowners and environmentalists represents the second wave of opposition to the Playa Vista project, following a lengthy court fight that resulted in a settlement calling for restoration of 191 acres of saltwater marsh and 51 acres of freshwater marsh. An additional 90 acres of bluffs and eight acres of coastal dunes would also be protected, with the developer, Maguire Thomas Partners, agreeing to spend $12.5 million for wetlands restoration.

Galanter, one of the council’s strongest environmentalists, shrugged off the latest round of criticism, saying the current version of the project will not further erode the environment.

“The land where the proposed developments take place is either land that is paved or used to be. If it ever was wetlands, it’s been filled, probably since before half of those appellants were born,” she said. “There’s no wildlife there except cats and dogs.”

Galanter suggested that the protesters are using environmental issues to mask their general opposition to Playa Vista, which is winning wide accolades from city officials and outside experts.

“I think Los Angeles is really waking up to economic realities,” said Patrick Sinclair, executive director of Progress L.A., a nonprofit group that is trying to overhaul the city’s building-permit process. “DreamWorks, from our point of view, is hopefully a harbinger of a new flexibility on the city’s part. My concern is that this be done equitably.”

But Marva Smith Battle-Bey of the Vermont-Slauson Economic Development Corp. called the proposed incentive package “outrageous” and unfair. “I realize that DreamWorks is going to be a boon to the city, but we really have to be more equitable about the distribution of this stuff,” she said. “If we could get one-tenth of that kind of subsidy for commercial projects, industrial projects, in the inner city, the impact would be phenomenal.”

* Times staff writer James Rainey contributed to this article.