Leaders Cut to Chase in DreamWorks Plot

Less than 24 hours after DreamWorks SKG announced that it would not build a massive $250-million entertainment studio in Playa Vista, Glendale City Manager James Starbird was drafting a letter to DreamWorks executives.

The entertainment company’s animation division is already based in Glendale, and Starbird wanted executives to know that the city stands ready to help DreamWorks further develop that 14-acre property.

“We want to help DreamWorks meet their needs,” Starbird said Friday. “So we sent them a letter to let them know we’re here.”

DreamWorks’ decision to kill the Playa Vista project, announced Thursday, may prove to be a boon for the business community in the San Fernando Valley. Because of financial considerations, DreamWorks is choosing to shift its focus from building a studio from the ground up to expanding existing office space, the company said.

DreamWorks has 1,000 employees at its Mediterranean-style campus in Glendale and 500 workers at its live-action film and TV division based on the Universal Studios lot in Universal City.

Those two areas are the most likely places for the company to build or lease much-needed new office space, said Andy Spahn, head of DreamWorks’ corporate affairs.

DreamWorks had already received city approvals to add several buildings to its state-of-the-art animation division in Glendale, which is run by company co-founder Jeffrey Katzenberg.

The campus, completed in 1998, has room for an additional 150,000 square feet of office space.

DreamWorks may also rent more space from Universal Studios, which is planning its own million-square-foot expansion. The plan has been opposed by neighbors, however, and Universal executives would not comment Friday.

DreamWorks co-founder Steven Spielberg has long based his company, Amblin Entertainment, at Universal.

In addition, DreamWorks may expand office space in Beverly Hills, where its music division is based, Spahn said.

“In the short term, we will consolidate on those three locations,” Spahn said. “We do have expansion room at the Glendale campus, and we may opt to consolidate there and at Universal.”

Another option might be for DreamWorks to lease space in the planned North Hollywood Studio Project. The city of Los Angeles has given developer J. Allen Radford approval to build a $750-million, 10-sound stage complex next to the North Hollywood subway station on Vineland Avenue.

Radford could not be reached on Friday, but local chamber officials say DreamWorks would be a perfect tenant.

“They have connections to a lot of Valley companies, they’ve been at Universal Studios for years and they have a Valley employment base they can tap,” said Larry Applebaum, president of the Universal City/North Hollywood Chamber of Commerce.

Local boosters say the area sells itself. It has a subway link coming next year and is already a center of entertainment businesses, including specialists in animation, effects and makeup.

“The NoHo district is just burgeoning,” said Ivy Weiss, the chamber’s executive director. “And when I saw the headline about Playa Vista not working out, I thought, wow, we have a shot of keeping DreamWorks here.”

Weiss said her organization is also writing DreamWorks pitch letters.

In deciding against building at Playa Vista, DreamWorks cited rising interest rates and potentially higher construction costs. Though studio founders Spielberg, Katzenberg and music mogul David Geffen have always wanted to build their own studio, the company has settled on renting space at several locations in the short term, Spahn said.