OK, since this is being discussed on multiple sites, I thought I should just start a thread.
And here is how I heard that it played out. Universal asked Warner Bros. to approach the Tolkien family since the Tolkien's trust WB with the success of the LOTR series. WB described how Universal was willing to work with JK Rowling and how the 2 of them (WB and JK) held Universal's feet to the fire to uphold Rowling's vision of the IP. And I believe that the Tolkien's may have actually talked to JK Rowling. This was before Universal said a word to the Tolkien's. So after WB stoked the fire, Universal entered the picture with an impressive plan.
As of now there is a lot of hammering out to go, but Universal has gotten a lot farther than Disney ever did.
I put this in the general/misc. Universal thread because no one knows where/which park this would go into. But given the scope, I don't believe that the remaining LC would be large enough. If I had to guess, I would say the half of the cast parking lot closest to USF. with the back half becoming a cast member parking garage.