Not a clean sweep
D'Works may be liable for Playa toxins, waste
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It didn't quite work out that way.
Board members declined to release DreamWorks from liability for the contamination -- much of it residue of the site's former life as an aircraft factory -- pending a ruling from the state attorney general.
At issue was a proposed agreement between DreamWorks and developer Playa Capital Co., which handed over the 47-acre parcel to the studio late last week. Under the agreement, the developer would retain liability for removing hazardous waste from the area. But the pact, legally titled the Prospective Purchaser Agreement and Covenant Not to Sue, should have been finalized and approved by the water board before the close of escrow.
Now that DreamWorks is officially the land's owner, the water board may not be able to retroactively assign cleanup responsibility to Playa Capital, said Jorge Leon, the board's staff attorney.
Leon told water board members at a meeting in Camarillo that the board does not have the authority "to release liability for someone who legally has that liability." If the attorney general agrees with him, DreamWorks could be stuck with taking over the cleanup of the site, an activity that, in any case, has been going on for years.
The agreement contemplated between DreamWorks and the developer, first proposed on Dec. 8, says that substances found in soil at the site include volatile organic compounds, petroleum hydrocarbons, tar, pesticides, metals and PCBs (polychlorinated biphenyls).
A cleanup and abatement order issued by the water board on Dec. 22 last year said that in the late 1980s thousands of cubic yards of soil containing volatile organic compounds and petroleum hydrocarbons were removed from a burn pit and a salvage yard on the site.
The 1,087-acre Playa Vista property, of which DreamWorks now owns a small portion, was developed in the early 1940s by Howard Hughes as an industrial site, primarily to build aircraft, including the notorious Spruce Goose and military helicopters. Later, it was operated by McDonnell Douglas.
DreamWorks attorney Maria Hoye told the board that, regardless of ownership, Playa Capital had agreed to continue the waste remediation on its own and that DreamWorks should not be responsible.
On Wednesday, DreamWorks corporate affairs chief Andy Spahn told Daily Variety that the studio had "worked out a complex indemnity agreement" with Playa Capital that gave the studio "almost complete" freedom from liability for the toxins.
"We got enough satisfaction to make the deal," Spahn said, referring to closing escrow. The cleanup, he said, "is up to Playa Capital."
Playa spokesman David Herbst agreed. "DreamWorks bought the property and they're not responsible for any pre-existing condition," he said. "It doesn't affect the deal."
Herbst said Playa Capital had agreements with prior owners, such as McDonnell Douglas, to help get rid of the hazardous wastes. He said also that any ongoing remediation would not preclude DreamWorks from building its studio.
