Background modeling constitutes the building block of many computer-vision tasks. Traditional schemes model the background as a low rank matrix with corrupted entries. These schemes operate in batch mode and do not scale well with the data size. Moreover, without enforcing spatiotemporal information in the low-rank component, and because of occlusions by foreground objects and redundancy in video data, the design of a background initialization method robust against outliers is very challenging. To overcome these limitations, this paper presents a spatiotemporal low-rank modeling method on dynamic video clips for estimating the robust background model. The proposed method encodes spatiotemporal constraints by regularizing spectral graphs. Initially a motion-compensated binary matrix is generated using optical flow information to remove redundant data and to create a set of dynamic frames from the input video sequence. Then two graphs are constructed, one between frames for temporal consistency and the other between features for spatial consistency, to encode the local structure for continuously promoting the intrinsic behavior of the low-rank model against outliers. These two terms are then incorporated in the iterative matrix completion framework for improved segmentation of background. Rigorous evaluation on severely occluded and dynamic background sequences, demonstrates the superior performance of the proposed method over state-of-theart approaches.