DREAMWORKS FOES TRY TO SAVE WETLANDS.

Byline: Dave McNary Daily News Staff Writer

Opponents of DreamWorks SKG's studio issued a surprise proposal Thursday to preserve most of the marshlands surrounding the long-stalled project while still allowing for construction of a studio headquarters.

The proposal, drafted by the Ballona Wetlands Land Trust, calls for DreamWorks to buy the entire 1,087 acres between Westchester and Marina Del Rey from its current owners - troubled developer Maguire Thomas Partners and Rouse Co. - and set aside about 90 percent of the land as a wildlife refuge.

DreamWorks officials were noncommittal about the proposal.

According to the proposal, DreamWorks could eventually recoup the purchase price through tax credits and build its studio on the 60-acre Hughes Aircraft plant site, where Howard Hughes constructed the legendary Spruce Goose.

Maguire Thomas, which is facing foreclosure on the property, plans to use the studio as the centerpiece of an $8 billion development that would include 5 million square feet of shops and offices, 13,000 condos, two hotels and a marina. Environmentalists have argued that the project in its current form will destroy the county's last remaining major wetlands complex and hundreds of species of birds and plants.

``DreamWorks has the opportunity to set a precedent,'' said Michelle Sypert, president of the trust. ``The Ballona Wetlands ecosystem can be truly preserved and restored through cooperation between all parties to create a win-win (situation) for the planet.''

Sypert said the property could be subject to sale if Maguire Thomas does not pay its bankers $195 million within 100 days. The proposal calls for use of a ``conservation easement'' to designate the space for conservation purposes, enabling DreamWorks to deduct as a charitable donation the difference in the value of the land with the conservation restrictions in place and its value with no development restrictions.

Sypert admitted the price tag on the property could be as high as $1 billion but stressed that the tax deductions would be large because of the highly restrictive nature of the easement.

The idea was presented at a meeting in Universal City between DreamWorks co-founder Jeffrey Katzenberg and a dozen environmental groups, many of which back the project because it includes provisions for preservation of about 30 percent of the property.

A DreamWorks spokesman said the company had no immediate comment about the alternative plan because it has not reviewed it. Backers said Katzenberg was noncommittal at the meeting, indicating that his company is awaiting completion of a revamped financing plan for Playa Vista that would shift control away from Maguire Thomas to Pacific Capital Group Inc.

The project has been a major headache for DreamWorks, formed by Steven Spielberg, Katzenberg and David Geffen in 1994 as the first new major entertainment company in decades. Besides being painted as an environmental villain, it also has seen its plans to occupy Playa Vista next year go down the tubes, forcing its 1,500 employees to remain scattered in six locations.

DreamWorks' participation in Playa Vista was a key element in the city of Los Angeles agreeing to grant the developers $70 million in incentives. City officials have indicated those incentives would vanish if DreamWorks drops out.

Katzenberg has been vocal about his frustration with Maguire Thomas, and real estate experts have said an alternative home could be found somewhere in the San Fernando Valley.

During a news conference following the meeting, opponents of Playa Vista accused Katzenberg of misrepresenting DreamWorks' role as a passive participant in the project, noting DreamWorks will become an equity participant if the new financing plan goes through. They also argued that the proposal represents a workable compromise since more than 90 percent of the state's wetlands have been destroyed.

``We wish DreamWorks all the best in their quest to entertain and delight the world,'' said Melanie Hanscom, executive director of the Wetlands Action Network. ``As a compromise, a conservation easement will bring the benefits of a new movie studio to Los Angeles, let DreamWorks make movies and spare the undeveloped portions of the Ballona Valley the fate of nearly all the rest of the California's wetlands ecosystems.''

About three dozen protesters picketed outside Universal Studios before the news conference and criticized not just the project but also other environmental groups for not opposing Playa Vista and being invited to the meeting with Katzenberg. ``Spielberg: Phone Home and Stop This Project,'' read one sign, referring to the most famous line of his ``E.T.'' character.