Editorial: Thumbs down on movie studio grant

In the waning days of Gov. Pat Quinn’s administration, the state wrote a check for $10 million to a Chicago film studio to be used to buy up land around its West Side campus.

Three problems with that:

* The deal was done suspiciously fast. Just 19 days. It begs for a review to determine whether the Quinn administration complied with all rules. Cinespace Chicago Film Studios applied for the $10 million grant to buy seven properties on Nov. 13 — less than two weeks after Quinn lost the governor’s race — and the state approved it on Dec. 1. It looks likely that Quinn, or somebody who answered to him, rushed the deal through to spare it from incoming Gov. Bruce Rauner’s budget ax.

* Illinois is broke. Spending must be slashed and the pain must be shared. While a growing film industry is undoubtedly a plus for Chicago and Illinois, who’s to say that $10 million could not have been better spent on schools, drug counseling services, wheelchairs or, for that matter, to chip away at the state’s enormous pension debt?

* The state put the cart before the horse, cutting the check before options on the seven properties were secured or appraisals made. In many cases, owners of the land say they had no plans to sell.

It had to be an easy call for Rauner last week when he ordered Cinespace to return the money. Sun-Times stories by investigative reporters Chris Fusco and Tim Novak had raised too many troubling questions. But we’re still trying to understand whether the Quinn administration blew right through the grant-vetting process or whether the process itself is too loose and goosey.

When the state hands a private business $10 million, even with a requirement that the funds be matched by private funds, the incentive to spend the money carefully, driving hard bargains, is diminished. Illinois gave Cinespace $10 million without requiring land appraisals to justify the estimated purchase prices listed on the studio’s application. The studio had no pending contracts to buy the properties, and did not indicate it had even begun negotiations with the property owners.

The grant included a June 30 expiration date, at which time Cinespace would have had to repay any money it had not spent.

In principle, government subsidies to growing industries can be a smart investment. And a growing film industry here has been good for Chicago and the state. The industry, according to the state, generated $358 million in local spending in 2013 and created 4,400 jobs. Figures for 2014 will be released next month.

But the curious way in which this $10 million grant to Cinespace was shoved out the door would be hard to stomach even in good times.