Incentives depend on DreamWorks presence
California state officials on Wednesday warned developers of Playa Vista that, without DreamWorks on the site, tax breaks and incentives for the project would likely vanish.
In a letter from Business, Transportation and Housing Secretary Dean Dunphy that was approved by Gov. Pete Wilson’s chief of staff, George Dunn, developer Playa Capital Co. was reminded that, based on DreamWorks’ participation in the project and on a promise to restore the wetlands nearby, the state had “provided significant state transportation funds to facilitate the transportation needs of this venture.”
If the deal with the studio unravels, as it is threatening to do, the state could withhold between $35 million and $45 million intended for new exit ramps on the San Diego Freeway and expansion of roads surrounding the proposed commercial and retail development north of Los Angeles Intl. Airport.
“The state of California recognizes the importance of the siting of DreamWorks’ studio in the city of Los Angeles,” Dunphy wrote in his letter, a copy of which was obtained by Daily Variety. “The administration of Gov. Wilson supports such ventures, as they provide significant contributions to the economic vitality of the region.”
The use of limited state transportation funds on such projects, Dunphy warned, “must rely on accurate and timely commitments by all parties involved.”
Relations between DreamWorks and Playa Capital have soured in recent months as negotiators struggle to reconcile the two sides’ divergent desires for the proposed Entertainment, Media & Technology campus on the 1,087 acre site. Playa Capital, which took over the project last October, wants control over a large portion of the studio lot, whereas DreamWorks insists it always intended to own and run the new studio by itself.
Two Wall Street representatives of the development’s owners — Owen Thomas of Morgan Stanley Dean Witter & Co. and Daniel Neidich of Goldman, Sachs & Co. — plan to be in Los Angeles Sept. 14-15 for talks with city officials. There are no plans at present for them to meet with anyone at DreamWorks.
Peter Denniston, president of Playa Capital, issued a statement Wednesday saying he and his partners are “unwavering in fulfilling the commitments and promises we have made to the community.”
“In 1993 and again in 1995, Playa Vista pledged to develop an environmentally sensitive community for the 21st century,” Denniston went on. “We embraced restoring the Ballona Wetlands and we agreed to build an innovative community where residents could live, work and play …
“The few who question our intentions know full well that we cannot deviate from the City Council-approved development plan without additional review and comment, as well as approval of the Los Angeles City Council.”
Denniston said he would not comment on negotiations with the studio except to say he was “happy to report that we have had a positive recent dialogue with DreamWorks, and we remain committed to finding a way to bring DreamWorks to Playa Vista.”