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Once upon a time, Chicago seemed to be the setting for movies and TV programs. For the last 18 months, however, the film and television industry here has been in a lull.

But while competition from Canada may have put a brake on the industry in recent months, it hasn’t stopped jackhammers from breaking ground Monday on one of two new production studios in Chicago.

And while money spent in the state has plunged more than half from 1993, industry insiders say motion picture and TV production here is far from dead.

In fact, industry insiders insist that the construction of the $10 million, 112,000-square-foot film-studio complex on the West Side signals a promising future for the city’s movie-making industy.

StudioWorks, at 2200 W. Madison St., near the Chicago Housing Authority’s Henry Horner homes, also could be a boon to development in the city’s West Side neighborhoods.

“We’re happy about the project,” said Greg Longhini, a spokesman for the city’s Department of Planning and Development. “The movie industry is important to the city of Chicago because it brings visibility and jobs to the city.”

The soundstages of StudioWorks, which are scheduled to be completed next April, will supplement facilities such as John Crededio’s Chicago Studio City on West Taylor Avenue, and Oprah Winfrey’s Harpo Studios on West Washington Boulevard.

Since 1990, the industry has pumped an estimated $400 million directly into the state and hired almost 100,000 locals, said Suzy Kellet, director of the State of Illinois Film Office, who works closely with the Chicago Film Office to pitch the city scenes to Hollywood.

But when it comes to Chicago, last year was a box-office bust, with direct spending on movie production dropping to a relatively meager $51 million.

Generally, however, it’s the city’s fabled skyline and blue-collar neighborhoods rather than the stages and indoor studios that attract filmmakers.

Chicago has played host to such major hits as “The Fugitive,” “Sleepless in Seattle,” “Ferris Bueller’s Day Off,” “Backdraft,” and “The Blues Brothers.”

And despite the recent dropoff, filmmakers are still coming to Chicago in droves. The “L” platform at the Merchandise Mart was made famous by Sandra Bullock’s character who worked as a ticket taker in this spring’s “While You Were Sleeping.”

The film industry, which had been on the rise for several years, peaked in 1993 when projects, including blockbuster “The Fugitive,” left $115 million in state and city coffers.

Expenditures from productions took a dive in 1994 after the TV series “The Untouchables” and “Missing Persons” were canceled, Kellet said.

With 150 film commissions in the United States and Canada, the Illinois Film Office has faced steep competition to bring Hollywood to Illinois’ doorsteps.

As filmmakers take advantage of favorable Canadian exchange rates, with Toronto as the main attraction, work in that country has surged dramatically.

Projects there brought in a record $360 million in 1994-a whopping 48 percent hike from the year before. Forty domestic and foreign projects are under way, according to Gail Thomson, an official with the Ontario Film Development Corp.

Are production companies getting bored with Chicago?

“I don’t think you can get `Chicago-ed’ out,” said Michael Voss, general manager of Victor Duncan Inc., an equipment rental firm that supplies cameras used in Illinois motion picture production.

“Chicago is a terribly diverse city,” said Voss, whose firm most recently rented equipment to the makers of “While You Were Sleeping.” “There are going to be films that want the skyline, the “L” the North Western station and the downtown Picasso sculpture.

“But we also have Greektown, Chinatown, and the neighborhoods offer any of kind of desirable architecture.”