Spielberg ditches plan to build new Hollywood studio

DREAMWORKS, THE film company spearheaded by Steven Spielberg, has abandoned its ambitions to build the first new studio complex in Hollywood in 60 years. The halt to four years of planning the so-called Playa Vista project is because of the cost of the operation.

The 47-acre site, on the last big piece of open land in Los Angeles, would have included sound stages, production facilities and offices much like the fabled back lots of the 1930s at Warner Brothers, MGM and Twentieth Century Fox.

It would also have been the cornerstone of a new urban development, bringing homes and offices for 70,000 residents to the site of the last coastal wetland left in southern California.

But after protracted negotiations, punctuated by loud protests from environmentalists and repeated financial crises dogging the developers, DreamWorks - backed by Spielberg, David Geffen and Jeffrey Katzenberg - decided to pull the plug.

"We have always maintained we would move forward with Playa Vista only if the financial terms of the deal made good business sense for DreamWorks," Mr Katzenberg said. "We have learnt a great deal during the past four years, and it is clear that this move is no longer in DreamWorks' best interest. It was simply not meant to be."

The decision came as a major blow to the prestige of the company, raising questions about how thinly its considerable resources are being stretched, and also knocked the stuffing out of the biggest construction project Los Angeles has contemplated in decades.

City officials and developers appeared stunned and confused because they had offered DreamWorks the best possible terms for the land and construction costs. The land was sold for $20m (pounds 12m)- a snip for west Los Angeles - and the city offered a further $35m in tax breaks.

Ostensibly, the reason for the pull-out was the high cost of borrowing construction funds. The DreamWorks principals had hoped to spend no more than $250m, but were concerned that rising interest rates and repayment terms might push the total above $300m.

It is not clear why the extra $50m - small change for any of the three of them - should have been such a problem.

One possible sticking point is that government officials, DreamWorks and environmentalists have all complained of difficulties in negotiating with the developers, accusing them of reneging on important promises.

Another concern is the long-term financial viability of a company such as DreamWorks, which aspires to finance its own movies, television series and records without the backing of a big media conglomerate. Movies have become so expensive to make and market that they have in effect become loss leaders for other media products and merchandising - outlets that DreamWorks does not have.

Another factor is that other parts of the United States, and Canada and Australia, offer first-rate facilities and crews at far lower cost. Even the weather is no longer vital, because of advances in film technology.

For now, DreamWorks has decided to expand its facilities on the Universal Studios lot and may build on to its recently complete state-of-the-art animation facility in Glendale.

Steven Spielberg did not rule out fulfilling his dream of a new studio at some time in the future. "I am committed first and foremost to doing what is best for our company, and look forward to exploring other options for our permanent home," he said.

The Moguls

FRANCIS FORD COPPOLA dreamt of turning his production company, American Zoetrope, into a fully fledged studio and bought a 10.5-acre lot in Hollywood in 1980 for $6.7m. His ambitions foundered at the first hurdle as his own film One From The Heart ran out of budgetary control and then flopped at the box office. `One Through The Heart', as it became known, forced Coppola to file for bankruptcy in 1982.

GEORGE LUCAS

Ever since he retained the sequel and merchandising rights to the original Star Wars film, Lucas has in effect been a one-man studio, not only financing his own projects himself but building an empire of hi-tech film facilities, including the special-effects unit Industrial Light and Magic. Based in Marin County, north of San Francisco, he has his corporate headquarters on a campus known as Skywalker Ranch.

HARVEY WEINSTEIN

Weinstein, head of the New York-based production company Miramax, is hoping to build new sound stages at the abandoned Brooklyn naval dockyards. The project has got the go-ahead from city officials but some details still need to be ironed out over the financing of a project that will cost more than $100m. Miramax, which bankrolled Shakespeare in Love, started out as an independent but is now owned by Disney.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Sport
Kim Sears is reported to have directed abuse at Berdych
tennis
Arts and Entertainment
Cold case: Aaron McCusker and Christopher Eccleston in ‘Fortitude’
tvReview: Sky Atlantic's ambitious new series Fortitude has begun with a feature-length special
Voices
Three people wearing masks depicting Ed Miliband, David Cameron and Nick Clegg
voicesPolitics is in the gutter – but there is an alternative, says Nigel Farage
Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
News
i100
News
people
Sport
Chelsea manager Jose Mourinho
footballThe more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Life and Style
Vote green: Benoit Berenger at The Duke of Cambridge in London's Islington
food + drinkBanishes thoughts of soggy school dinners and turn over a new leaf
News
Joel Grey (left) poses next to a poster featuring his character in the film
peopleActor Joel Grey comes out at 82
News
i100
News
business
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Marketing & Sales Manager

£40000 per annum: Ashdown Group: A reputable organisation within the leisure i...

Tradewind Recruitment: Science Teacher

£90 - £140 per day: Tradewind Recruitment: I am currently working in partnersh...

Recruitment Genius: Doctors - Dubai - High "Tax Free" Earnings

£96000 - £200000 per annum: Recruitment Genius: Looking for a better earning p...

Recruitment Genius: PHP Developer

£32000 - £36000 per annum: Recruitment Genius: A rapidly expanding company in ...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee