DETROIT -- A plan to make movie magic in downtown Detroit has disappeared.

According to a report on Local 4 News, Wonderstruck Films has scrapped its plan to open a studio in the old MGM Grand Detroit Casino building located at Michigan Avenue and Third Street.

The 75,000-square foot structure was supposed to be transformed into a state of the art animation studio.

"We're going to make a lot of jobs and spend a lot of money," Wonderstruck CEO and President Michele Richards said in February 2009, when the deal was first announced.

During the February 2009 announcement, Richards said the estimated $86 million studio deal would bring over 400 jobs to downtown Detroit and nearly 300 more jobs to the surrounding communities. Richards said the building would be called Detroit Center Studios and house editing suites, sound stages, and executive offices.

According to sources quoted in the Local 4 News report Tuesday, the plan was scrapped because some investors have pulled out of the deal and because of Michigan's slumping economy.

Richards, who is a St. Clair Shores native, said she feels like Michigan is where she belongs because her family is still here.

"This is really home. I have just been visiting L.A. for a lot of years," she said back in February.

Wonderstruck specializes in animation and special effects. The company has produced animated films such as the "Lion King" and video games such as Guitar Hero.

Richards has said she is especially interested in hiring former automotive engineers that have Computer Aided Design (CAD) experience.

"I know the technical brilliance we have in Michigan and with the automotive industry experiencing attrition right now, we see an opportunity to retrain this brilliants talent to use 3-D software," said Richards.

Earlier this year, Richards said she expected the company to see a lot of growth in the animation industry because the Chinese film animation market has seen a 200 percent increase in the past year.

According to sources, Richards is still committed to opening a studio in the Detroit area and is looking for a smaller location and additional investors.

Since the state started new tax incentives to lure in filmmakers, 71 movie projects have been approved, 37 films have been completed and at least 3,000 jobs have been created.

However, state lawmakers are now debating whether to continue with the film tax incentive, and sources said the uncertainty is making it harder to attract investors to new projects like Wonderstruck.

Find out more about film industry training by visiting S3 Entertainment Group LLC.

Watch:Film Classes Offered By Metro Detroit Business