Universal ended up eating $30 million, including pay-or-play fees to leads Denzel Washington and Benicio Del Toro. Washington, who was to play Lucas, pocketed $20 million alone for his trouble.
But "American Gangster" dusted off the ashes from that early disaster and arrives in theaters today, looking primed for at least a measure of commercial and critical success.
"I don't know of a movie that has been shut down and accrued some serious, substantial costs and then got restarted," Grazer said.
Added writer Steven Zaillian: "It was a long, crooked road that ended up back where we started. Something like this never happens. I mean never happens."
"Gangster" began its long odyssey to the screen seven years ago, when Grazer bought the rights to a New York magazine article about Lucas.
Grazer saw Lucas as a hard-core Horatio Alger, a North Carolina country kid who moved to Harlem, learned the ways of the street from gangster folk hero Bumpy Johnson and ended up selling more than $1 million in heroin a day.
Unlike the high-profile Harlem drug dealer Nicky Barnes, Lucas preferred to remain out of the spotlight. His biggest claim to infamy came after he was busted and it was learned that he sometimes smuggled heroin inside the coffins of American soldiers returning from Vietnam.
The movie follows Lucas' rise and eventual fall, which was hastened by the dogged efforts of Detective Richie Roberts (played by Russell Crowe). Zaillian's screenplay contrasts Lucas, a drug dealer with an exemplary family life (though the film seems to exaggerate this), with Roberts, an honest cop who cheated repeatedly on his wife.
"There's not a clear, singular morality," Crowe said. "And that's nothing more than reality as humanity exists."
Washington was more than happy to revisit Lucas' duality - and collect another paycheck - once he learned Grazer and Universal had signed Ridley Scott to direct.