Developer in Talks to Buy Playa Vista Parcel

Los Angeles developer Robert Maguire has tentatively agreed to buy a prime chunk of the giant Playa Vista project near Marina del Rey for an estimated $90 million, according to people familiar with the negotiations.

The deal, which could take several months to complete, would allow Maguire to develop what could become one of Los Angeles’ largest commercial projects, totaling more than 2 million square feet. In addition, Maguire would own the hanger in which Howard Hughes built the famed Spruce Goose and the property on which DreamWorks SKG once planned to build a studio and headquarters.

“Negotiations are going extremely well,” said one person who has been tracking the discussions.

Maguire is expected in a few weeks to finalize an interim agreement to buy 114 acres at the eastern edge of Playa Vista from property owner Playa Capital Corp. He would then have until August to complete the purchase, or the sale would be canceled.

Officials at Maguire’s firm, MaguirePartners, declined to comment on the deal.

Playa Capital President Peter Denniston said in a statement that “Rob Maguire has had a long relationship with Playa Vista, and we are looking forward to it continuing. When we have some news, we will be announcing it jointly.”

Maguire’s pending agreement to purchase a significant portion of the roughly 1,000-acre development marks another major step in his return to prominence.

After spending several years shaping plans for the mostly undeveloped property, Maguire lost control of Playa Vista in late 1997 amid financial problems and a bitter feud with DreamWorks.

Maguire fought hard to retain a presence at Playa Vista after a powerful group of investors--including affiliates of Goldman Sachs, Oaktree Capital Management and Union Labor Life Insurance--emerged to buy the property and keep it from falling into bankruptcy. In the end, Maguire was left with a small ownership stake, and his involvement was limited to development of commercial property outside the proposed DreamWorks studio campus.

The tables turned in July 1999 when DreamWorks pulled out of the project, leaving Maguire with the right to oversee the development of the 114 acres on which DreamWorks and other tenants would be located. It is that same property--now earmarked for a giant corporate campus--that Maguire would own if the current deal is completed.

In another section of Playa Vista, Maguire late last year purchased a small parcel of land in partnership with Chicago-based Equity Office, the nation’s largest owner of office buildings. Maguire is pursuing plans to build a 426,000-square-foot office complex tentatively named Water’s Edge, pending city reviews and permits.

Equity Office has indicated it is interested in developing with Maguire more space in other portions of Playa Vista. But it is not clear what role, if any, Equity Office would play in Maguire’s pending agreement to buy more Playa Vista property.

Maguire also would continue to face challenges from environmentalists opposed to development at the site and would have to find construction financing and tenants.

Despite the region’s weakening economy, Maguire is confident that demand for new commercial space will pick up in the years it will take to complete the project. In addition, with much of coastal Los Angeles built out, Playa Vista is one of the few places where a project of such size and scope can be constructed.