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Commerical Real Estate

Developer May Sue Over DreamWorks

November 10, 1998|JESUS SANCHEZ

Developer Robert Maguire on Monday threatened to sue the city of Los Angeles over the government subsidies and tax cuts that will be given to DreamWorks SKG for building a headquarters and studio at the Playa Vista development.

In a letter sent to Mayor Richard Riordan, Maguire claims that Playa Capital--the partnership directing development of the 1,000-acre project--was forced into a "lopsided deal" with DreamWorks because of the massive government subsidies linked to bringing the entertainment company into Playa Vista.

Maguire claimed that Playa Capital--in which he retains a minority stake--will sell DreamWorks as much as $160 million worth of land and buildings for less than $15 million under "the looming threat that the city will use its regulatory power to kill the entire project."

A spokeswoman for Riordan said the mayor had not seen Maguire's letter and had no comment.

Maguire, who lost control of Playa Vista to a partnership of investment bankers and other groups, said he has assembled a legal team to pursue what he called "the largest claim" ever made against the city. Maguire has been feuding with the management and majority owners of Playa Capital over negotiations with DreamWorks.

David Herbst, public affairs director at Playa Capital, would not comment on Maguire's legal threat.

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