This article was corrected on June 15, 2000.

Special effects powerhouse Industrial Light & Magic said Monday it plans to expand extensively into the animation business, creating a slate of computer-generated films and television shows as co-productions with major studios.

As part of the move, which follows similar pic production expansion announcements from f/x shops Digital Domain and Rhythm & Hues, ILM has upped Patty Blau to the newly created post of senior veep of production to head the effort and shepherd the projects to go through the yet-to-be-named division.

Already, ILM is in the midst of restructuring its f/x production resources for the new business venture, which will likely expand or contract its freelance staff depending on how much work is required by staffers for the pics of TV shows.

ILM has a staff of 1,000 creating effects for features that include the water-heavy “The Perfect Storm” for Warner Bros., U’s live-action and animated “The Adventures of Rocky and Bullwinkle” and Warners’ “Space Cowboys.” ILM is ramping up to take on f/x-heavy projects “Pearl Harbor,” Steven Spielberg’s “A.I.,” “Star Wars: Episode II,” “The Mummy 2” and “Jurassic Park 3.”The company has several projects internally in development, “but we’re talking to other studios about taking on their projects,” Blau said. “We’d still partner with studios even if we did produce our own inhouse projects. We feel there’s a lot of room to explore out there.”

Trying again

ILM had planned to step into the animation arena about three years ago with “Frankenstein,” a computer-generated co-venture with Universal. However, that project fell through due to creative differences.

“That’s when we first articulated the idea to break into animation,” Blau said. “Now we’re really putting our weight behind it. We want to produce projects that will showcase the depth of creativity in ways which have previously been unexplored. We’re disappointed ‘Frankenstein’ never went ahead.”

ILM’s entrance wouldn’t be a new one. F/x house Pacific Data Images has done well creating the animated “Antz,” as well as the upcoming “Shreck” for DreamWorks.

Move creates another revenue stream for ILM in what’s considered to be a tough business in which to remain profitable.

Blau was prexy of feature production and will continue to report to Jim Morris, prexy of Lucas Digital, the corporate parent of ILM.

“Patty’s years of experience at ILM and her keen production and artistic sensibilities make her the perfect choice to lead our animation efforts,” Morris said.

Additionally, ILM has upped Chrissie England to prexy of feature production and Jeff Mann to veep of creative operations, as part of the creation of the venture.

England will succeed Blau in marketing and oversee ILM’s f/x business, while Mann will oversee the company’s roster of visual effects and animation supervisors and the art department.

England will report directly to Blau, while Mann will work on projects overseen by both Blau and England.