The City Hopes Its Dream Works : L.A. officials unite in offering incentives to studio

If all goes as planned today, Mayor Richard Riordan and the City Council will use the Hollywood triumvirate of Steven Spielberg, Jeffrey Katzenberg and David Geffen to put a much needed business-friendly face on Los Angeles. The three want to build a high-tech studio and corporate headquarters for their DreamWorks SKG entertainment company on 100 vacant acres near Marina Del Rey.

Los Angeles has had the rap--all too true--that red tape and high costs often impede setting up shop here. The proposed DreamWorks facility, which would be the first new studio built in Southern California in more than 50 years, would jump-start the stalled Playa Vista development project, now recast to make DreamWorks the anchor for a high-technology community. By forging a path for DreamWorks, the city can send a powerful message that it wants clean, good, job-producing businesses.

The City Council should approve a preliminary declaration of support that would clear the way for a definitive study of the project proposal, which includes about $70 million in tax breaks, fee reductions and other incentives.

The total incentive package is the largest ever offered by the city. But the goals behind the incentives go beyond DreamWorks. The tax breaks and reduced sewer charges, for example, will become available to start-up enterprises citywide. In the long term, Los Angeles stands to gain.

The DreamWorks facility and other possible entertainment properties at the site would have an assessed value of $600 million to $700 million, which would generate $6 million to $7 million in property taxes annually. From 1998, when the entertainment “campus” is completed, to 2011, it would generate $1.3 billion in pubic revenues: $300 million for the city, $265 million for the county and $722 million for the state.

The sheer scope of the $5-billion Playa Vista project requires that public officials keep their eyes open to ensure there is affordable housing and to prevent taxpayers from bearing an undue burden in funding road, sewer and other infrastructure work, projected at $700 million.

Traffic congestion is expected to be less than the level that would have been caused by the original project. Space originally proposed for offices will now be turned into studio and production facilities. That will attract other entertainment businesses. More than 7,000 people could eventually work in the project area, but entertainment workers do not typically follow structured, 9-to-5 schedules, so the traffic pressure during normal commuting hours should be mitigated.

For once, it appears that the mayor and the City Council are working in sync. Good. Mayor and council, take note. This cooperation could actually become a habit.