NEW YORK — Producer David Friendly and financier Marc Turtletaub have formed a production company staked with $25 million they’ll spend on development and overhead over the next three years

The money comes from the coffers of Turtletaub, a Hollywood newcomer who reaped a windfall after he took his father’s money-lending business, the Money Store, public and then sold it two years ago. While the first batch of projects from the new venture will be taken to studios for production financing, the duo hopes eventually to finance production as well.

The pair haven’t chosen a name for the venture and start from scratch in terms of product. Given their ability to cut a check right away, they promise to be an aggressive buyer of books, scripts and pitches.

Key to the venture is the 54-year old lawyer-turned-financier Turtletaub, who’s willing to use his own funds. After becoming prexy of the Money Store, Turtletaub expanded the company, went public in 1991, then brokered a $2.1 billion deal in 1998 to First Union Bank of Charlotte, N.C.

Though First Union, which had overexpanded, closed Money Store this summer, Turtletaub’s stock was worth in the neighborhood of $700 million. A longtime L.A. resident and movie buff, he decided about a year ago to get into the film business. Since then, he has met with most of the major players, and talked with dozens of aspiring partners before bonding with Friendly after a meeting arranged by Skip Brittenham and David Nochimson, the lawyers at Ziffren Brittenham Branca Fischer.

The son of the broadcast journalism legend Fred Friendly, David Friendly left a writing job at the L.A. Times to work for Brian Grazer at Imagine, rising to president before moving on to produce films for John Davis, where his credits include “Dr. Dolittle,” “Courage Under Fire” and “Daylight.” He then got his own Fox deal, which led to “Here on Earth” and most recently, “Big Momma’s House.” After being a producer of five films in six years at Fox, Friendly was ending his studio deal when he met Turtletaub. Unlike the many megabuck offshore production deals triggered only when the financing parties agree to greenlight specific films, the duo decided to structure a company that uses Turtletaub’s resources specifically to develop. They feel that will give them the chance to make stronger deals with studios with properties ready to go into production.

“There’s a great saying in Hollywood that the best way to make $1 million here is to come with $10 million in your pocket,” said Turtletaub. “I have always had a passion for film, good writing and literature, and now I can combine my passion with my resources. I teamed with David because he has a strong track record and production experience. I intend to be here for a long time, and to build a larger business with David.”

For Friendly, who has always worked under a system in which a studio decides whether money will be spent, the venture is liberating.

“This allows Marc and I to pursue our instincts, rather than develop by committee, which brings a level of purity to producing,” said Friendly. “The hardest money to find is development funding, but it’s the most important. We’ll live and die by our own instincts. There’s money in a warchest to buy material, and when it’s ready, we’ll take it to studios. We’ll make movies in a lot of different places.”

Friendly will continue to shepherd his Fox projects, including “Stacked,” the comedy based on the true story of a man who got breast implants to win a bet, and a feature on the Challenger shuttle disaster scripted by Graham Yost (“Speed”). Friendly and Turtletaub will bring aboard David Higgins, who was Friendly’s senior exec, and creative exec Michael McGahey, and will hire several other execs to ramp up development. They expect to close several material deals quickly as well.

RAINING PROJECTS: All studios are putting together pre-strike projects at record paces, and New Line’s got a bunch of pics angling for talent.

The studio’s courting Sean Penn and director Jesse Nelson for “Sam I Am,” a “Rain Man”-type pic in which Penn would play a mentally disabled man suing to keep custody of his daughter. Ed Zwick produces. New Line’s also courting Renny Harlin to join Jackie Chan in the action comedy “Nosebleed,” a Stu Zicherman and Raven Metzner script about a World Trade Center window washer who pairs with a bartender and waitress to thwart what they fear is another terrorist attack on the building. Joe Dante’s being courted to direct “Westward,” which follows a woman, recently acquitted for murder, driving cross-country and being terrorized by the actual killer, with script by Anthony Jaswinski.

Tom Green’s being wooed to star in “Manchild,” a comedy in which a 35-year-old midget poses as a 12-year-old, and New Line’s eyeing a greenlight for “Zig Zag,” a pic David Goyer wrote and will direct about a 15-year-old retarded boy who steals $9,000 from his boss, to give to his abusive father. Neighborhood types try to help him get the money back before the boss notices. Wesley Snipes is being sought to play the abusive father, with John Leguizamo and Anna Paquin courted for key roles.

Add that to a “Rush Hour” sequel, a possible Paul Thomas Anderson-directed comedy with Adam Sandler and Emily Watson, and the hope that Jack Nicholson will topline the Alexander Payne-directed “About Schmidt” and New Line could have a formidable lineup.

GAY PIC UP FOR GRABS: The saga of “The Dreyfuss Affair” continues. The Peter Lefcourt novel, about a second baseman and shortstop of a Major League team who have an affair, has come loose from New Line, where it had been developed over the past year as a directing vehicle for Betty Thomas, who’ll produce with partner Jenno Topping.

That puts back on the block a property that had been set up at Disney (twice), then Fox, before moving to New Line, a studio which, according to Lefcourt’s manager, Ken Gross, would only say “Play ball” if Ben Affleck committed to star. “In the last six weeks, John Cusack, Owen Wilson, Don Cheadle and a bunch of other A-list actors have circled the project, but Ben couldn’t commit at the time. But we’ve got a world-class director, a script in great shape and New Line’s ready to come back if we go the foreign investor route.” Gross is shopping it again and said, despite the years of activity, the project only has about $1.2 million of development against it.