Company Town : DreamWorks Plans Its Dream Factory
What’s more difficult, being a movie producer or a real estate developer?
That’s the question that DreamWorks partners Steven Spielberg, Jeffrey Katzenberg and David Geffen will be grappling with for several years as the entrepreneurial trio undertakes its ambitious plans to build the first Hollywood studio in nearly 60 years.
Not only do the partners have the monumental task of establishing the credibility of their 14-month-old company by putting movies, TV shows, records and multimedia products into the marketplace, they’re taking on the added role of real estate owners and developers in the process.
In order for DreamWorks to make possible its new “studio campus” home on 100 acres of a $7-billion mixed-use Playa Vista site near Marina del Rey, the company became a one-third partner in the entire 1,087-acre development with real estate firm Maguire Thomas Partners and landowner Howard Hughes Corp. The property will eventually contain about 13,000 homes as well as schools, stores, restaurants, parks and 260 acres of restored and preserved wetlands.
DreamWorks, which will be a limited partner in the venture as will Hughes, plans to raise an initial $200 million of equity and another $550 million in construction funds for the first phase of its part in the project. Katzenberg said the funds will come from DreamWorks and outside investors and will be a separate partnership from DreamWorks SKG.
With groundbreaking planned for June, the DreamWorks partners are hoping to be in their new digs within the next three years. Whether that’s realistic or wishful thinking, it’s going to be a long haul getting there.
The complexity associated with building a highly sophisticated all-digital “studio for the 21st century,” complete with an array of huge movie and TV stages, will surely bring the DreamWorks partners their fair share of mega-migraines.
There’s plenty of bureaucratic red tape left to cut through, and also the inevitable complaints from environmental opponents of the project.
Taking a long view, Katzenberg doesn’t deny that the “larger-than-life undertaking” of creating a studio from scratch “will be a distraction from the day-to-day of making movies and television, but we’re trying to build an enterprise that will be 10 years in the making.”
Geffen, the billionaire financial whiz of the trio, says he’ll probably spend the most time on the actual buildout of the studio, since his two partners’ time “will be better spent making product.” Geffen, who has the former Warner Bros. Records team of Mo Ostin and Lenny Waronker running the music side of the company, spearheaded the raising of about $2 billion to finance DreamWorks.
But it was Spielberg whose dream it was to create such a studio from scratch. Ask him if he’s daunted by such an undertaking and he’ll tell you it’s really no different from producing for the big screen.
“Building a studio and making a movie are the same thing,” Spielberg said in an interview Wednesday in the cavernous Spruce Goose hangar after DreamWorks’ official announcement that it would become the anchor tenant at Howard Hughes’ old aviation stomping ground.
“You start with a concept--an idea--then tell a story first with storyboards or, in the case of a studio, artists’ renderings. Then you go into production--the most laborious, trying and stressful period,” said the Oscar-winning director of such monumental productions as “Schindler’s List,” “Jurassic Park,” “Jaws” and “E.T.: The Extra-Terrestrial.”
He pointed out that the major difference is that when a production wraps, “you abandon the film,” and when construction is completed on a studio, “you move into your home . . . you live and work inside your idea.”
Spielberg has been intimately involved in creating the look and design of the Cape Cod-style studio campus, which will include a main headquarters with a movie theater and commissary, separate producer/talent bungalows built around an eight-acre man-made lake and 15 movie and television sound stages, among other things.
He said it was imperative that DreamWorks create its own studio.
“It’s our identity,” explained the filmmaker, who was the architect of his Southwestern-style Amblin Entertainment headquarters on the back lot of Universal Pictures. Spielberg said the 10-month process of building those production headquarters demanded that he spend three days a week on the property overseeing its creation. But at Playa Vista, “I’m not relying on myself to be the architect, so that will keep me away from being the day-to-day supervisor, and I can make my movies and television shows.”
Spielberg adds that over the course of the last 12 years, when he was running Amblin (not to mention directing movies), he also built three houses, two of which took 2 1/2 years each to complete--the same amount of time DreamWorks expects it will take to wrap up Phase 1 of its studio complex.
Katzenberg said that not only is managing partner Maguire Thomas “recognized as the single greatest developer” of this type of large-scale project--the firm also built the MGM Plaza in Santa Monica--”but there are a fleet of experts and technologists being brought in on this.”
Though Universal had offered DreamWorks a permanent home, Spielberg had always been intent on building his own studio.
“When we decided to form a movie studio, I realized we had to have a physical studio,” he said. “The legacy of Warner Bros., Universal, MGM, Paramount, Disney and Columbia has a direct connection with the real estate upon which rests their moniker,” he added, noting: “I’m old-fashioned and a traditionalist. . . . I can’t make movies in a 45-story office building in downtown Urbania.”
He says that though he and new MCA/Universal owner Edgar Bronfman Jr. have hit it off, “it’s still Edgar’s lot and we need our own identity--our own homeland.”
Geffen says of Spielberg, “Only a dreamer would want to create this from scratch,” to which Katzenberg adds, “It takes someone as visionary as Steven to want to do it and two lunatics like us to pull it off.”
