Wildlife is the loser in war for LA's last piece of open land

Amid the din of bulldozers, construction work and the incessant traffic from two of west Los Angeles' busiest thoroughfares, the soothing corporate voices of the Playa Vista visitor centre would have you believe you have just stepped into the paradise of the future.

Amid the din of bulldozers, construction work and the incessant traffic from two of west Los Angeles' busiest thoroughfares, the soothing corporate voices of the Playa Vista visitor centre would have you believe you have just stepped into the paradise of the future.

"In the city, next to nature, by the beach," announce the loudspeakers embedded in the ceiling. Who could resist the allure of that seductive combination? A spotlight roams the snooker-table sized model of LA's most ambitious property development in a century and picks out its unique features: custom-built lofts, art deco apartment buildings with ocean views, state-of-the-art computer hardwiring, parks, paths and waterways, "green" open-air business meeting places, cool cafés and restaurants, and even a tramline to remind would-be residents of a more innocent time in Los Angeles' history, before the freeways dehumanised everything and reduced the city to a giant, faceless sprawl.

Ambitious the Playa Vista project may be: it is not so much a development as a mini-city being plopped down between the beaches of Santa Monica and Venice and the Los Angeles international airport, with space for at least 8,600 homes and 5.6 million square feet of offices. What the multimedia show at the newly opened visitor centre won't tell you, though, is that it is also the most contentious piece of land speculation in Los Angeles since the robber barons of the early 20th century siphoned the water supply of the farmers of central California and concreted over the San Fernando Valley.

The brave new city is not merely being planned on the last significant piece of open space left in Los Angeles. It is also encroaching heavily on the delicate ecosystem of the Ballona Wetlands, one of the last coastal habitats left in California for egrets, blue herons and a host of other wildlife, most of which has already disappeared following years of bitter wrangling between the developers and environmental activists.

This is a project that has already claimed many victims. Developers have come, lost money, fought multiple lawsuits, and gone again. (The current consortium is mostly owned by Goldman Sachs and Morgan Stanley Dean Witter, the Wall Street financiers.) Steven Spielberg was all set to move his DreamWorks studio to Playa Vista, only to pull out two years ago when it became clear the economic benefits were not great enough to justify the public opprobrium. More recently, LA's most famous architect, Frank Gehry, has been picketed at his Santa Monica offices for agreeing to help design about 60 office buildings towards the back of the project, well away from the wetlands area. And yet Playa Vista still seems to be going ahead.

The first phase of building began a few months ago and is due to be completed early next year. Los Angeles' new mayor, James Hahn, has repeatedly voiced his support. The city council that ended its term in June chose, as one of its last acts, to approve $168m (£116m) in public subsidies for Playa Vista, most of it to provide infrastructure and the rest grants for affordable housing units. Depending who you believe, several hundred million more dollars in subsidies are likely to be on their way.

The politicians' enthusiasm is hardly shared by the public. Those who can muster little pity for the fate of the blue heron are still heavily exercised by the prospect of up to 200,000 more car journeys per day in a part of Los Angeles already close to paralysis at peak traffic hours. (One representative recent letter to the Los Angeles Times suggested that the quickest way to get to the airport in future will be to drive to Las Vegas, 250 miles across the Mojave desert, and fly there.) They wonder why a private, for-profit venture should enjoy so much public underwriting when the cheapest "affordable" studio apartment in Playa Vista is likely to cost at least $200,000. And, increasingly, they are questioning the wisdom of building on soft, wet land directly above a major earthquake fault, in an area where past oil exploration has left pockets of potentially lethal methane gas.

The reason such deep public misgivings are being ignored is simple: money.

Playa Capital spent almost $800,000 last year on political lobbying, and the expenditure appears to have paid off. But, unlike the great land scams of Los Angeles' past, this is not a story about fat cats sitting back waiting to rake it all in. Playa Vista has in fact teetered on the brink of financial collapse for years, and the money games smack not so much of power-mongering as desperation.

To appease their opponents, the developers have gone out of their way to produce something appealing, even environmentally friendly. Although they are essentially destroying the wetlands, they claim they are in fact "saving" them by setting aside a 340-acre (138-hectare) path for restoration. They are also seriously considering selling off another 193 acres to a land preservation body called the Trust for Public Land. TPL has a year to come up with the money – presumably from public sources – and settle on a price; the success of the deal almost certainly depends on economic conditions, initial sales at Playa Vista, and the amount of political juice both sides can muster in the interim.

If you believe the disaster scenarios – and LA has a weakness for such things – Playa Vista will milk more and more millions from the public purse before going bankrupt, all civilisation in west Los Angeles will grind to a halt from traffic overload and methane explosions will force mass evacuations from the new property development, leaving a major mess for the city and its tax-payers to clean up.

If you believe the corporate schmoozers, nature and humanity will henceforth and forever live in perfect harmony on LA's Westside. Somehow, neither extreme seems entirely believable, suggesting some sort of messy compromise that will give each side plenty of ammunition to assail the other for years to come. And, in the meantime, LA's last major open space will be gone for ever.