DreamWorks Spends $85 million in Upgrades for 3-D

DreamWorks Animation SKG Inc. has embarked on an expansion project at its Glendale campus to modernize its production studio for the transition to 3-D animated films. The renovation and addition to the Lakeside Building adds 100,000 square feet and makes the structure the production hub for the studio best known for the “Shrek” franchise. The $85 million project that started this year is about creating the best possible environment for the artists, said John Batter, president of production. “It will house our entire production department with all the specialty spaces they need and will be the ideal space to be,” Batter said. The expansion will update a studio that had originally been built in the 1990s for 2-D animation and modernize it for 3-D work and other projects related to movie work, DreamWorks Animation CEO Jeffrey Katzenberg said in a conference call with analysts in late July. “So whether it’s the live theater group or the work we’re doing for Nickelodeon, we’re sort of bursting at the seams,” Katzenberg said. The DreamWorks campus is located within a redevelopment zone that also takes in the Grand Central Creative campus of The Walt Disney Co. The city’s plan is to revitalize the area with new industry, preferably with the high-paying jobs entertainment companies bring. The city and the animation studio signed a development agreement in 1996 that sets limits on the square footage that can be built. Most of the 495,000-square foot entitlement was built in the first phase. With the expansion, the annual tax increment for the San Fernando Road Corridor Redevelopment Project will be $410,000 that gets divided up between Glendale, Los Angeles County, and the Glendale Unified School District. When the redevelopment area is completely built out in two to three decades, the city expects the businesses located there to create about 7,000 jobs, said Glendale Development Services Director Phil Lanzafame. DreamWorks expects to add about 500 full-time employees to the campus over the next several years. The company employs about 1,200 in Glendale and has another production studio in Northern California. Growth mode The timing of the expansion was precipitated by the growth curve the company finds itself in with an increase in film budgets. “We also expanded our pipeline of movies,” Batter said. “So we have more things in various stages of production and that requires more people.” But a major driver in needing more space is the transition to an all-3-D film format starting next year with “Monsters Vs. Aliens.” Movies in 3-D are starting to gain traction in Hollywood as the technology has improved and more theaters install digital equipment that can screen the films. Releases this year include “Journey to the Center of the Earth,” and concert films from Irish rockers U2 and Disney pop singer Mylie Cyrus. An anticipated release in 2009 will be “Avatar” from director James Cameron. That DreamWorks Animation has committed itself to 3-D is evidence that major studios don’t consider the format as a novelty but instead as a way to bring audiences back to the theater with something that cannot be viewed at home. Other 3D firms The greater Valley region has its share of companies working in the 3-D space. 3eality Digital Systems in Burbank shot the U2 film while StereoVision Entertainment in Van Nuys makes low budget 3-D films using cameras co-developed by Burbank inventor Vince Pace. In-Three in Westlake Village has developed a method to convert 2-D films into 3-D. Meanwhile, Stereoscope in Burbank and Provision Interactive Technologies in Chatsworth use the technology for the next generation of advertising. In June, DreamWorks Animation announced an alliance with chipmaker Intel to get its 3-D initiative off the ground. In the conference call with analysts, Katzenberg said that while conversion to digital equipment is not moving ahead as quickly as he would like he remains hopeful that 2,500 to 3,000 screens will be equipped to show “Monsters vs. Aliens” when it comes out March 27.