COMMERCIAL REAL ESTATE : At Playa Vista, Plot Takes a New Turn : Since DreamWorks withdrew, project execs have come up with a different cast--new-media firms--and given a bigger role to L.A. developer.

Playa Vista--which ranks as one of the longest-running shows in Los Angeles real estate development--is taking yet another plot twist with a new cast of characters and the return of a key player.

Executives have been scrambling to rethink the commercial section of the project since DreamWorks SKG canceled plans in July to build a studio headquarters at Playa Vista. As a result, DreamWorks’ walled compound and Steven Spielberg’s 8-acre lake have been eliminated from blueprints. Instead of serving as home to a major Hollywood studio, Playa Vista is being touted as a future center for new-media companies.

“Playa Vista . . . has more control over its destiny [without DreamWorks],” said Peter B. Denniston, president of Playa Capital Co. In fact, he said, many other potential tenants “didn’t want to be in DreamWorks’ shadow.”

The change in direction also heralds a bigger role for Los Angeles developer Robert Maguire. After losing control of Playa Vista amid a bitter dispute with DreamWorks, the silver-haired Maguire, president of Los Angeles-based Maguire Partners, has emerged as the chief deal maker for Playa Vista’s commercial space. He is in charge of developing a 114-acre office campus--including the large chunk of land DreamWorks returned to Playa Vista after abandoning its bid to build a new studio.

“I didn’t like the DreamWorks experience, particularly,” said Maguire in deadpan fashion. “I wasn’t opposed to DreamWorks. I was very opposed to the deal as it developed. Moreover, I was right.”

No one can say how much money the DreamWorks fiasco has cost Playa Vista, which has yet to earn a dime on real estate development after more than two decades of planning. Yet despite the ownership battles, environmental challenges and false starts, the nearly 1,000-acre project south of Marina del Rey continues to attract widespread attention in the real estate community. In fact, Denniston said, offers have been made--and rejected--to buy the development from the current owners.

“It’s still an exciting project, and there still seems to be demand for space on the Westside,” said Paul Brindley, senior director at Holliday, Fenoglio, Fowler, a real estate finance firm. “Most people are confident that something is going to happen.”

In its current version, Maguire and Denniston see a vast corporate low-rise campus populated by various companies and by some key entertainment tenants that will make use of new and existing sound stages. In addition, Playa Vista will be the site of 13,000 apartments and condominiums.

Housing Could Attract Corporate Tenants

The housing portion--often overshadowed by its flashy commercial section--is actually expected to break ground first, with about 800 units scheduled to open by early 2001. The housing might actually work in favor of selling Playa Vista to potential corporate tenants, real estate observers say.

Preliminary negotiations are underway with four entertainment firms interested in leasing space at the project, according to Denniston. But Hollywood will play a smaller role in the post-DreamWorks era at Playa Vista.

In the nearly 10 weeks since DreamWorks withdrew from the project, Playa Vista and Maguire executives have essentially dusted off and updated previous plans for an integrated corporate office park. Instead of high-profile entertainment firms, a cluster of so-called new-media companies--including everything from computer game designers to telecommunications firms--is expected to lease the majority of the space.

The project can still generate a profit even without the millions of dollars in government tax breaks that were lost when DreamWorks pulled out of Playa Vista, Maguire said. The city of Los Angeles, for example, had pledged $35 million in tax credits linked to the opening of a new studio. “It’s absolutely inconsequential,” he said.

Maguire said the development would be attractive to large European technology companies interested in establishing a foothold in Southern California’s multimedia industry.

“We’ve broadened the scope beyond the entertainment focus,” Maguire said. The campus “will be tipped substantially toward new-media.”

Still, in the four years Playa Vista devoted to chasing DreamWorks, several other major real estate projects in nearby Santa Monica, Westchester and El Segundo have broken ground or have been completed. Although vacancy rates on Los Angeles’ Westside are relatively low, the new projects will certainly intensify competition in the area as Playa Vista prepares to finally build its corporate campus.

“It’s apparent to most people that . . . Playa Vista needs a very prominent large anchor tenant to attract other tenants,” said Stephen L. Bay, co-manager of the Los Angeles brokerage office of Insignia/ESG. “There are other [developers] . . . that are further along.”

Playa Vista officials counter by saying that no other project will come close in size or sophistication. But, once again, much of the outcome will depend on Maguire, whose firm has been involved in the project since 1989. Despite having lost ownership control of Playa Vista, Maguire has retained a loyal following in real estate circles, and his firm maintains strong ties with major tenants.

“He certainly has a good reputation, and he’s done a lot of major development,” said Jim Biondi, senior vice president in the South Bay office of broker Grubb & Ellis. “He has the following and credibility to pull it off.”

In addition to revising blueprints, Maguire and Playa Capital, the partnership that controls the project, have also been busy rebuilding a working relationship that was strained during the battles over DreamWorks. As recently as late last year, Maguire, who has a minor stake in the ownership group, openly criticized Playa Capital during its negotiations with DreamWorks.

Now, Maguire Partners and Playa Capital share offices in the same office building near Marina del Rey, and Maguire and Denniston meet at least once a week.

“If we all benefit . . , then it makes sense to work together,” Denniston said.

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Playa Vista Plot Development

* January 1978: Summa Corp. begins working out Playa Vista plans with government officials.

* 1980: Summa starts promoting a Playa Vista master plan with 7,600 homes, a 600-boat-slip marina, a 20-story hotel and 4.5 million square feet of office and industrial space.

* 1984: One of the first of many environmental lawsuits is filed over Playa Vista. The Friends of Ballona alleges that Summa’s plans would not preserve enough coastal wetlands.

* November 1985: Los Angeles City Council votes to annex 800 acres of Playa Vista to provide sewer, road and police service.

* June 1987: Slow-growth advocate Ruth Galanter elected to City Council; she says she may seek substantial changes at Playa Vista.

* February 1989: Maguire Thomas Partners succeeds Summa as general managing partner; Maguire soon reduces amount of commercial space in response to neighborhood opposition.

* September 1993: Los Angeles City Council approves Maguire’s plans.

* June 1994: Playa Vista says it has been talking to several entertainment firms about building a new studio complex.

* December 1995: DreamWorks SKG unveils plans to build studio at Playa Vista. Groundbreaking is set for summer 1996.

* Summer 1996: Groundbreaking is postponed as Maguire and DreamWorks battle over terms and control issues.

* March 1997: Chase Manhattan Bank takes first step toward foreclosure after filing a notice of default on $150-million loan.

* October 1997: Goldman Sachs & Co., Morgan Stanley & Co. and other partners agree to buy control of Playa Vista.

* November 1998: DreamWorks signs definitive agreement to build a $250-million studio and headquarters at Playa Vista.

* July 1999: DreamWorks drops plan to build studio at Playa Vista.