By JENNY HONTZ, Variety, August 20, 1998

David Lynch is producing and directing a feature film "The Straight Story" and a two-hour ABC telefilm/backdoor pilot "Mulholland Drive" with Imagine and Touchstone TV.

The two are the first projects to go into production at Picture Factory, which was formed by Lynch, writer/producer Mary Sweeney and producer Neal Edelstein.

"The Straight Story," the feature written by Sweeney and John Roach and produced by Edelstein and Sweeney, begins production next month. It's Lynch's first film since "Lost Highway." Set to shoot in Iowa and Wisconsin, it chronicles the six-week, 350-mile trip made by a 73-year-old man on his riding mower in order to mend his relationship with his older brother, who is ill. Pierre Edelman is executive producer, and the film is being financed by Les Films Alain Sarde and Studio Canal Plus.

TV project

"Mulholland Drive," which Lynch will write and direct, marks the filmmaker's first TV project since "Twin Peaks." Joyce Eliason will also write and produce the project, which will explore dreams, desires and fears of two women beset by a mystery in L.A.

If the vidpic does well for ABC, it could convert it into a series.

Picture Factory also has optioned several other novels, including "Amnesia Moon" by Jonathan Lethem, "Lighthouses at the End of the World" by Stephen Marlowe and "The Nig Blow" by Joe Lansdale.

Other films

"Amnesia Moon" is a sci-fi tale to be directed by Tim Hunter, exec produced by Lynch and produced by Edelstein and Sweeney.

"The Big Blow," exec produced by Lynch and produced by Sweeney and Edelstein, is the story of an interracial prize fight set against the backdrop of a hurricane that hits Galveston Island off the coast of Texas.

Lynch is repped by Endeavor.