L.A. Officials Wooing a DreamWorks Studio

When it comes to DreamWorks SKG, Los Angeles city politicians won’t take no for an answer.

Despite a clear message from the entertainment company that it is not interested in constructing a new studio, Los Angeles City Council President John Ferraro and Councilman Joel Wachs said Wednesday they want to entice DreamWorks into building a studio in North Hollywood.

Ferraro and Wachs were not discouraged by an initial chilly response to their proposal from representatives of DreamWorks, founded by entertainment giants Steven Spielberg, David Geffen and Jeffrey Katzenberg.

“We’ve got an amazing site in North Hollywood,” Wachs told reporters at City Hall. “We have a subway stop on site and it is in an area that has a concentration of other studios and entertainment businesses.”

DreamWorks, however, has said that it does not make sense financially for the company to build a studio from the ground up. The company scrapped its $250-million Playa Vista project July 1 because of financial considerations and a change in corporate strategy. After they pulled out of Playa Vista, company executives said DreamWorks would be able to rent sound-stage space at a lower cost than building a new production center. The company also said it had shifted its focus from a master campus to expanding existing office space on the Universal Studios lot and at its animation studio in Glendale.

“We’d be happy to sit down with city officials and listen to any proposal they wish to present,” said Andy Spahn, head of DreamWorks’ corporate affairs. “But at this point, we are not currently looking for additional space and plan to consolidate our operations at the three sites where we already have offices.”

DreamWorks runs its live action division from a back lot at Universal Studios, its music business out of Beverly Hills, and animation out of its state-of-the-art campus in Glendale, where it is already entitled to develop several thousand more square feet of office space.

On Wednesday, Ferraro and Wachs submitted a motion to the City Council directing top city managers to approach DreamWorks with a sweetened financial incentive package to become a partner in the proposed North Hollywood studio project.

In addition to the $35 million in tax incentives offered on the Playa Vista project, Wachs said there is another $17.3 million in federal grants and loans available for the North Hollywood site, which is in a redevelopment area. The motion is to be taken up by the City Council on July 20.

The Community Redevelopment Agency already has begun negotiating with developer J. Allen Radford for the construction of a $400-million complex of film sound stages and office towers to be called the Hollywood Studio Complex.

The Radford project is proposed for 30 acres near the Red Line subway station that is to open next year in North Hollywood on Lankershim Boulevard.

Radford confirmed Wednesday that he has already contacted DreamWorks about being part of his project. DreamWorks, though, said it was not interested.

“We told him that we’re not seriously considering any alternative sites today,” Spahn said.

Radford, though, is not discouraged and said that he will be able to find other tenants for the new studio.

The CRA has obtained approval of federal funds to assist with Radford’s project, including a $14-million, low-interest loan to buy properties, demolish existing structures and prepare the site. Another roughly $3 million in federal grants have been secured to make public improvements, including street and sidewalk work.

Mayor Richard Riordan also supports approaching DreamWorks about the North Hollywood site.

Wachs, who represents part of the area, said he has asked for a meeting with DreamWorks representatives. He said Katzenberg and Geffen are friends of his.

A DreamWorks studio would also squarely fit North Hollywood’s emerging emphasis on entertainment businesses and would help revitalize a section of the San Fernando Valley that became run-down in the 1960s and ‘70s, city officials said.

“North Hollywood would be an ideal site and certainly it’s worthwhile for us to try to encourage DreamWorks to give North Hollywood serious consideration,” Ferraro said.

North Hollywood has competition, though, some of it nearby. The city managers for Burbank and Glendale have already sent proposals to DreamWorks outlining how their city governments could help DreamWorks build a corporate headquarters.