DreamWorks Plans for Studio Complex in Glendale Advance : Business: The $50-million animation facility proposal goes before the City Council today. Issues include relocating a water treatment plant.

GLENDALE — DreamWorks SKG and the Glendale Redevelopment Agency completed details Monday on a preliminary agreement for the construction of a $50-million complex for the new motion picture studio’s feature animation division, which city officials hailed as a boon to the local economy.

The Glendale City Council will consider the deal today, in which DreamWorks would purchase 12 acres from the Los Angeles Department of Water and Power for about $5 million. A water treatment plant planned for the site under the federal Superfund program would be relocated at a cost of $2.8 million to Glendale’s Redevelopment Agency.

The deal paves the way for the first redevelopment project to be built in Glendale’s 750-acre San Fernando Road project area, adopted in 1992.

“Bringing in a business like DreamWorks will have a positive impact on the whole city, not just the redevelopment area,” said Jeanne Armstrong, director of redevelopment. “Not only will they be bringing in tax . . . revenue and a lot of jobs, but there will be a spinoff effect for all the small businesses in town that will be serving DreamWorks.”

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DreamWorks, the studio founded last year by entertainment titans Steven Spielberg, Jeffrey Katzenberg and David Geffen, plans to build a 500,000-square-foot office building, with a 1,000-space parking structure and an employee recreation area, on a 12-acre property adjacent to the Los Angeles River known as Crystal Springs.

The studio’s bid for the property was accepted last week by the DWP’s board of directors and is awaiting approval by the Los Angeles City Council. DreamWorks has also asked the Glendale Redevelopment Agency to expedite the required approvals so that a building permit is issued in three to four months. City officials said the studio wants the animation building ready to produce films by 1997.

The studio’s animation division, temporarily housed on the Universal Studios lot, has already begun production of its first animated movie, “Prince of Egypt.”

City redevelopment officials stressed that the current agreement between the agency and the studio merely outlines the goals of the project and protects the agency’s financial interests; a further agreement specifying the details of the development is expected to be negotiated in the coming months. So far, DreamWorks has surveyed the property but no architectural work has been done, said Angela Moreno, a project manager with the Redevelopment Agency.

Under the agreement, the Redevelopment Agency will pay none of the studio’s construction costs but will pay $1.6 million for design changes to relocate a ground-water filtration plant onto a portion of the city’s nearby Grayson Power Plant yard.

Another $1.2 million will be spent to prepare the new site for development of the treatment plant, modifications to a building at the city’s recycling center to allow it to house the treatment plant’s staff, and for environmental reviews required under CEQA legislation for the plant’s relocation.

“We’re not giving any money directly to the developer,” Armstrong said. “All the agency money will be spent on improvements to city property.”

Due to declining property values, the San Fernando corridor has attracted only two firms since its inception. Agency officials said they may have to borrow the $2.8 million from the city’s lucrative downtown redevelopment area to pay its portion of the DreamWorks deal.

Other portions of the agreement allow DreamWorks to build a helicopter landing pad on the site and construct buildings up to 75 feet high--double the height limit in the area. In the event that the deal is canceled, DreamWorks has agreed to reimburse the agency for any legal costs it incurs in drawing up the agreement.

David Clein, a spokesman for the studio, would not comment on the deal.

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About two dozen Glendale- and Burbank-area companies and landowners--including ITT Corp., Lockheed and the Walt Disney Co.--have committed $4 million to design the water treatment plant under an agreement reached last year with the U.S. Environmental Protection Agency. The companies and the EPA currently are negotiating a second agreement to construct and operate the plant to remove industrial solvents that had leaked into water underlying a large area of Glendale.

In addition to the $4-million design project, the companies began negotiating with the Los Angeles Department of Water and Power to lease the Crystal Springs property along the river as the site of the treatment plant. The plan envisioned the use of old DWP wells to extract tainted water, which would be treated and then piped to the city of Glendale for its municipal water supply. Under the new proposal, the companies would still extract water from wells on the Crystal Springs property and pipe it several hundred feet to the treatment plant on the Glendale side.

Mike Osinski, a project manager with the EPA’s western regional office in San Francisco, said any delays in the cleanup would be minimal, mostly caused by geotechnical surveys to ensure that the new site can accommodate the plant.

Ground-breaking for the plant is expected in 1996 or 1997. The treatment plant would be operated for at least 12 years. Total costs of design, construction and operation are estimated at up to $60 million.

The Glendale plant will be the third built to clean up chemically tainted ground water that has idled municipal wells in North Hollywood, Burbank and Glendale. Treatment plants are already operating in North Hollywood and Burbank.