It's on the right hand side of this image:From, erm, Towers Times
You can see some grass by a tower, and a bit of rough looking ground. This is all coaster corner from the back of CCL around here.
I don't know if the Merlin Studios were built on Coaster Corner or were always there?
If I remember correctly, this used to be the coach or car park back in the day :)
The problem with it (and you can see from this photo quite clearly) is that the valley falls sharply from this area. So any ride built there has the noise carry easily down to Alton village as there are less trees to absorb the sounds. I still find it hard to believe they'll re-use this area, but maybe they have clever tricks and cunning plans up their (wizards) sleeves :)