Cinespace film studio returns $10 million state grant after Sun-Times investigation

Cinespace Chicago Film Studios returned a $10 million grant, plus interest, to the state of Illinois on Tuesday — a day after Gov. Bruce Rauner demanded repayment in the wake of a Chicago Sun-Times investigation that found the money wasn’t being used.

Cinespace was given the state grant a few weeks before Gov. Pat Quinn left office to help it buy seven industrial properties around its North Lawndale campus, where the hit series “Chicago Fire” and other TV shows and movies are filmed.

But in a letter to Rauner’s administration, Cinespace president Alex Pissios acknowledged Tuesday that six of the properties “have been sold or are under contract to other third parties” since the state sent Cinespace the grant check on Dec. 19.

The Sun-Times reported Sunday that Quinn’s administration awarded the grant without any appraisals to justify the projected purchase prices or any other documents to indicate that Cinespace had been in negotiations to buy the properties.

The newspaper also reported that two of the seven properties had been sold to other buyers, since the grant was approved Dec. 1. A manager of four other properties in the grant application said the owners had no plans to sell to Cinespace or anybody else.

On Monday, Rauner ordered the grant returned by May 7. A spokesman said the Rauner administration “has very serious concerns about the lack of supporting documentation and the failure of the Quinn administration to abide by normal procedures for issuing grants.”

Cinespace initially applied for a $15 million grant — to buy eight properties — on Nov. 13, less than two weeks after Quinn lost to Rauner. The grant was revised a day later to $10 million for seven properties, records show.

Besides the $10 million that’s now been returned, Cinespace had gotten four other state grants totaling $17.3 million from Quinn’s administration. Records show the state had suspended one of those grants in 2012 because the studio hadn’t turned in “project status reports” on time — an issue that wasn’t resolved until March 2014.