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Lucas Strikes Back

The "Star Wars" creator's plan to build a digital-arts complex at the Presidio in San Francisco poses another challenge to L.A.'s entertainment industry.

July 11, 1999|Mike Clough | Mike Clough is a research associate at the Institute of International Studies at UC Berkeley

BERKELEY — San Francisco is about to bet its future on the power of "the force" and, if it wins, Southern California may be a big loser.

The bet is the decision last month by the Presidio Trust, an independent body created by Congress in 1993 to transform the former military base at the foot of the Golden Gate Bridge into a financially self-sufficient national park, to begin exclusive negotiations with filmmaker George Lucas to develop a digital-arts complex on the site. The "force" is the digital revolution, which is changing the ways films are made and distributed and creating new possibilities for a convergence of media and technology. The potential payoff is a substantial head start in the race to become the global capital of the new digital century.

A Lucas digital complex in San Francisco may be more bad news for Southern California's entertainment industry. Cost pressures were already pushing studio production overseas, most notably to Canada and Australia. Then, on July 1, DreamWorks SKG, the studio co-founded by filmmaker Steven Spielberg, former Disney executive Jeffrey Katzenberg and music mogul David Geffen, abandoned its much-heralded plan to build "the digital studio of the future" at Playa Vista. The DreamWorks team still may expand its facilities in Glendale and at Universal Studios, and Mayor Richard Riordan, a big booster of DreamWorks' Playa Vista plans, continues to hope that the site will be developed.

But no contingency plan will satisfy the great expectations the project raised. After a year in which 23,500 entertainment jobs and $2.8 billion in film production fled the United States, boosters had hoped the Playa Vista project would create 21,000 high-tech jobs over the next 30 years, as well as 8,000 construction jobs. The scent of money coming from the last remaining wetlands in Los Angeles County overcame the objections of environmentalists, but, in the end, even $35 million in tax breaks could not ease the DreamWorks founders' apprehensions about rising interest rates and higher construction costs associated with the planned studio. The DreamWorks decision, coming two weeks after the Presidio announcement and a week after the runaway-production figures were released, underscored Hollywood's halting momentum in the race to create a digital infrastructure.

Two decades ago, when Lucas moved Industrial Light & Magic, the special-effects company he established in 1975 to work on the original "Star Wars," from a warehouse in Van Nuys to San Rafael, nobody believed that the director from Modesto would be able to build a base from which to mount a serious challenge to Hollywood. But a combination of Lucas' ingenuity and drive, a financial boost flowing from his ownership of the sequel and merchandise-licensing rights to "Star Wars," and the geographic advantage of being near Silicon Valley--all have enabled Lucas to create a dense network of visual-effects, computer-graphics and animation companies that dominate the technical side of filmmaking. If Lucas realizes his plans for the Presidio, the convergence of the entertainment and technology industries will most likely be centered in San Francisco. As a result, more and more film production, creative and technical talent--and profits--will migrate north to the Bay Area, away from Los Angeles.

The proposed Letterman Digital Arts Center will house five Lucas-owned companies on the site of the former Letterman Army Hospital, including Industrial Light & Magic, the undisputed industry leader in visual effects and digital animation; the LucasArts Entertainment Company, a leader in the rapidly growing interactive-software entertainment industry; THX Group, which creates state-of-the-art theater-sound systems; Lucas Learning Ltd., an education-software developer; and Lucas OnLine, which focuses on e-commerce and the Internet. In addition, the Presidio site will be home to the George Lucas Educational Foundation, a planned Advanced Digital Training Institute, for individuals interested in a career in digital arts, and a visual-effects archive, open to both researchers and the public. The Lucasfilm company and Skywalker Sound studios will remain in San Rafael at Skywalker Ranch. Before the deal is finalized, the Presidio must complete an environmental-impact review and negotiate the specific terms of what will be a 99-year lease, expected to be completed by early fall.

Moving the technical core of the Lucas empire from Marin to the Presidio will give the digital entertainment revolution a center just as that revolution is transforming the art, technique and business of filmmaking. When Lucas made "Star Wars" in 1975, it was difficult to imagine that characters and scenes could be created and manipulated using computers. But that's exactly what Lucas and Industrial Light & Magic did with "Star Wars: Episode I The Phantom Menace," which includes nearly 2,000 digital-effects shots.

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