Lawsuit: State unfairly gave Chicago TV/film studio leg up over competitor

Chicago-based production studio has filed a federal lawsuit claiming the state wrongfully issued tax credits and steered projects such as “Chicago Fire” to its competitor, according to court documents.

Two companies, known collectively as Chicago Studio City, allege in a federal lawsuit filed last week in Illinois that the state Department of Commerce and Economic Opportunity and two of its former officials did not afford them the chance to bid for production opportunities.

Instead, the lawsuit claims, the department and former officials have shown preferential treatment to Cinespace Chicago for the past four years. Former department managing directors Adam Pollet and Betsy Steinberg are named as defendants as well.

A spokeswoman for the department declined to comment on the lawsuit.

Though Cinespace and its CEO, Alex Pissios, are not defendants in the lawsuit, the document alleges that the company and department “conspired to monopolize” Chicago’s film production market.”

“For many years Chicago Studio City successfully competed in the Chicago Film Production Market, receiving repeat business from Hollywood studios and other Chicago-oriented producers for dozens of productions,” the lawsuit said. “As a result of the defendants actions, business has declined precipitously, to the point that it is in danger of going out of business.”

Chicago Studio City, based on the West Side, has operated film and television production studio facilities and loaned equipment in Chicago to film producers since 1979.

Rival Cinespace, founded in 2010, currently operates on the Near West Side and has amassed a lengthy list of credits including TV shows “Chicago Fire,” “Chicago P.D.” and “Empire” in addition to the two most recent “Transformers” movies and upcoming film “Batman v Superman: Dawn of Justice.”

The suit also contends Cinespace has received millions of dollars in state grant funds “through political and labor union influence.” According to the suit, Cinespace applied for $10 million in grant funding to purchase seven properties two weeks after then-Gov. Pat Quinn lost to Bruce Rauner. An ensuing investigation yielded that the land was not for sale and “the Quinn administration awarded the $10 million without any appraisals to justify the projected purchase prices listed by the studio’s owners.”

Rauner subsequently ordered the funds returned, which Cinespace repaid on March 24.

Chicago Studio City is seeking damages and reimbursement for attorney and litigation costs.


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