By DON JERGLER
Valley Press Staff Writer

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PALMDALE - Palmdale is upping the acreage ante on the pitch to make the DreamWorks movie studio a real deal in the Antelope Valley.
Officials of this rapidly growing desert city drew up a proposal on Friday for DreamWorks SKG studios to build its studio in Palmdale, offering incentives that include 120 acres of land.

Lancaster opened the offer Thursday at 47 acres and a welcome letter from county Supervisor Michael D. Antonovich, who represents northern Los Angeles County.

Palmdale, ranked by the U.S. Census Bureau as the second-fastest growing city in California, is one of the few cities in Los Angeles County - and the nation - with a significant amount of open space.

In the Los Angeles Basin - the film capital of the world - space constraints and environmental flags are forcing studio executives to begin looking elsewhere.

Land offered by Lancaster is near Gen. William J. Fox Field Industrial Corridor on 50th Street West between avenues G and H. The city is in the process of purchasing the land from L.A. County for a reported $1.4 million.

The airfield was improved recently so that its runway is longer than Burbank Airport's.

According to DreamWorks officials, Santa Clarita and several other cities are also wooing studio execs after DreamWorks abandoned plans to build a new studio and headquarters in the $8 billion Playa Vista development.

Palmdale officials are asking DreamWorks executives to look at three sites within city limits, including open land next to Avenue M and 10th Street West, adjacent to Air Force Plant 42.

"We've got 120 acres at Avenue M and 10th West plus some other sites," said Palmdale City Manager Bob Toone. "It's a fairly substantial offer. It will probably involve some land and some fee waivers."

Neither Toone nor Palmdale Mayor Jim Ledford would openly say if they would charge DreamWorks for the land, but hinted they might give the studio the 120 acre parcel.

"I think that that's certainly in the works," was Ledford's response when asked if the city would hand over the property. The city purchased the land for $2.5 million.

According to Ledford, the city is making its offer through an insider at the DreamWorks - Rinaldo Veseliza.

Veseliza originally was hired by DreamWorks executives to build their planned Playa Del Vista facility, but when that project was put on hold, he became a freelance consultant, he said.

"Palmdale is what Burbank used to be to the Hollywood industry," said Veseliza, who claims his DreamWorks contacts are current.

Contacted about the offers from Palmdale and Lancaster, Andy Spahn, director of corporate communications for DreamWorks, said the studio has immediate plans to consolidate projects at their Glendale, Universal City and Beverly Hills locales.

"We'll take a look at the opportunity to expand the Glendale site," Spahn said. "In the near term, we will be moving to consolidate our operations to those three locations."

The Glendale animation campus is 14 acres. The studio has five buildings there, with room for a few more, Spahn said. That solution, Spahn said, is "creative enough to handle our existing needs."

But which offers, including the ones from Palmdale and Lancaster, would DreamWorks executives likely consider?

"We haven't set a timetable yet," Spahn said. "It would be premature to comment right now."

Palmdale raises ante

In the meantime, Palmdale officials say they plan to communicate their offer by way of Veseliza.

Veseliza believes Palmdale's offer is an attractive alternative to current locations DreamWorks uses, such as Universal Studios, which is being pushed out by the expansion of its large Southern California theme park.

According to Veseliza, one of Spielberg's major complaints - and the driving force behind the Playa Vista project - is that the filmmaker couldn't get enough production time on Universal soundstages.

The Valley is a prime place for sound stages, said Veseliza, who's been working with Palmdale for two years to lure production companies to the area.

Besides the property at Avenue M and 10th Street West, Palmdale's proposal includes economic incentives and two other properties, Boeing's Site 9 at Plant 42 and Ritter Ranch, both of which would likely be sold, not given, to the studio.

Ledford said the city is offering to help finance construction of the $200 million studio. Cities can borrow money quicker and cheaper, Ledford noted.

All properties are also in the Enterprise and Foreign Trade zones, adding to the economic incentives, Ledford added.

A major economic benefit for the studio would be not having to pay a 6% utility tax based on a company's utility bills.

"Compared to any city the studio would be talking to in the L.A. area, we'd come out very attractive," Ledford said.

The advantage of Site 9 is that it's already been the location of a temporary studio, Ledford said. One of Boeing's monstrous hangars at Site 9 was used two years ago for the movie "Hard Rain." Filming on that picture took about a year.

Boeing owns the building, which is up for sale, and The Los Angeles Department of Airports controls the land, which it leases from the Air Force.

According to Ledford, the city could broker a deal between DreamWorks and the three entities. The other site Palmdale is proposing is within Ritter Ranch, between 30th Street West and Bouquet Canyon Road.

The 11,000-acre site is a master-planned community housing development, and the closest location to the rim of Hollywood - it's about 45 minutes from Universal City.

"I think that if DreamWorks was to come to the Antelope Valley, the best location would be Ritter Ranch," said Pat Smith, a location scout for the Antelope Valley and surrounding areas. "It's a beautiful, gorgeous area."

Smith was the one who brokered talks between Veseliza and Palmdale.

Since the 1930s, the Valley served as a Hollywood backlot, so having a major studio move here is a logical next step, and a major opportunity, Smith said.

"What did Warner do for Burbank and what did Disney do for Burbank?" Smith asked.

Besides availability of mass quantities of land, Smith said, the studio would have at its doorstep outdoor filming locations long preferred by producers.

The high desert has served as a backdrop in both "Terminator" films and "Lethal Weapon 3." Several films yet to be released had scenes filmed in the area during the past year.

"Locations locally can be duplicated, from Texas, Utah, Nevada," Smith said, adding, "It's a good deal, no matter where they go in the Antelope Valley."

Pauline East, Antelope Valley's film liaison, said offering incentives may not be enough to lure a studio like DreamWorks to the area.

"We have to be creative and look at our area and find the most exciting place for them," she said. "This business is not a science, it's an art."

Build it, they will come

It's just such an art that made San Rafael and surrounding Marin County the high-technology Mecca it is today. Marin County is 17 miles south of San Francisco.

When movie mogul George Lucas brought his Lucasfilms Ltd. to Marin County in the late 1970s, the area resembled the Antelope Valley in many ways.

Agriculture was still the dominant industry. Growth had yet to take hold.

While the population of Marin County hasn't quite exploded - 250,000 people live there - hightech businesses wishing to be near Lucas's field of dreams came in droves.

According to Elissa Giambastiani, president of the San Rafael Chamber of Commerce, the county now has more than 250 high-technology firms. Most of that growth has occurred in the last 10 years, she said.

"The Lucas companies, I think, were really the driving force for the creation of our high-tech industry in Marin County," Giambastiani said.

Lucas has four main complexes in Marin County: Lucas Digital, which is Industrial Light and Magic; Skywalker Sound; Lucas Entertainment, the makers of video games; and Lucas Leasing.

"Because of their presence here, they are drawing others, such as software companies and other entertainment companies," Giambastiani said. "Their impact on this county has been substantial."

According to a study conducted by Lucasfilms five years ago, the company pumped about $80 million per year into the local economy. The jobs created by Lucasfilms generate an additional $80 million per year, according to the study.

Evidently, getting those jobs is only half the battle.

Because Marin County maintains strict regulations on land use, 85% of its open space has been restricted from development, according to Giambastiani.

That restriction will cost the county about 1,500 high-paying jobs.

Lucas wanted to build another animation campus in Marin, but there was no more space to offer. So Lucas decided to build a campus in San Francisco, a project expected to be completed over the next few years.

Lancaster's piece of the action

Lancaster City Manager Jim Gilley, who brokered that city's offer, said he believes DreamWorks now faces five choices.

Do nothing. Expand close to Los Angeles. Choose to go anywhere in the county. Go into a more rural atmosphere, such as Lancaster or Palmdale. Or move into the Fox Field Industrial Complex, which has immediate access via aircraft.

"We're one of the five options that might make sense to them, and we'll just see how it plays out," Gilley said.

Even if DreamWorks chooses not to take the Valley offers, Smith the location scout said, getting the high desert in the headlines and letting people in Hollywood know that Valley officials and businesses are committed to rising from their backlot status.

"Action creates action," Smith said. "People are reading about it and getting to know that we are film friendly here. The exposure's good."