DEVELOPER SAYS CITY CHEATING HIM.

Byline: Patrick McGreevy Daily News Staff Writer

A developer of the Playa Vista property that is proposed for the DreamWorks SKG studio formed by Steven Spielberg, David Geffen and Jeffrey Katzenberg said Monday the city is pressuring him to sell the land for less than it is worth.

In a letter to Mayor Richard Riordan, Robert Maguire III said the city wants him to accept an unreasonable deal in which the studio would pay only $15 million for improved land and buildings worth an estimated $160 million.

Maguire also threatened to block the deal through legal action, but a representative of DreamWorks said he did not believe Maguire will be able to stop the long-stalled project.

``I cannot allow the city to take substantial property rights away from us to give them to DreamWorks as the price for the project,'' Maguire wrote. ``I can, and I will, fight such an inequitable deal.''

Riordan's spokeswoman Noelia Rodriguez said he had not had a chance to read the Maguire letter and declined to comment.

``The parties involved continue to negotiate in good faith,'' Rodriguez said. ``The mayor continues to believe this can be a win-win situation.''

DreamWorks spokesman Andy Spahn denied Maguire's allegation that the studio is paying too little for the property.

``We are continuing to negotiate in good faith with Playa Capital. This is a deal that's good for Playa Capital, good for DreamWorks and good for the city of Los Angeles,'' he said.

``It's hard to imagine that Playa Capital, which is made of firms like Goldman Sachs and Morgan Stanley, would participate in a deal that was not in their financial interest,'' he said.

Spahn also said Maguire's threat does not make him any less confident that DreamWorks will be able to complete the deal. ``We're continuing to try and complete the definitive agreements of our deal. We hope to do so shortly,'' he said.

Spahn said he was not surprised at Maguire's latest effort to block the project. ``He's been a vocal opponent of the project ever since he lost control,'' he added.

Maguire does not own the property outright. A group of investment bankers took over the property in October 1997 by purchasing the bank debt on the land. That forced Maguire into a secondary role, but Maguire believes he has substantial equity in the property and financial interest as the original proposer of the studio development.

``While I have always regarded the city as a partner, I have now concluded with the greatest reluctance that the time has now come for us to part ways,'' Maguire wrote.

Maguire said $50 million in city subsidies for the project amount to ``corporate welfare,'' and he believes the city wants the land thrown in by its owners as a gift.

Delays at Playa Vista have forced 4-year-old DreamWorks to maintain temporary headquarters at Universal Studios.