The Cannon Group, Inc. agreed to finance this film as a pet project of Christopher Reeve, on the condition that he appear in at least one more Superman film, to which they had recently acquired the rights. The result was this, and Superman IV: The Quest for Peace (1987).
Christopher Reeve had the script in his possession for a long time, before he agreed to make it. Reeve had read a few pages, and felt it wasn't for him, before dumping the script on a pile of other screenplays in his bedroom. A few weeks later, he picked it up and decided to try again, and instantly liked the script. He made the material his next project.
The Cannon Group, Inc. effectively dumped the film after its completion, and gave it a small release, limited to less than three hundred screens.
Director Jerry Schatzberg and Christopher Reeve wanted to shoot the film in New York City, where it is set, but The Cannon Group, Inc. insisted the picture be shot in Montreal, Quebec. The move ended up saving the movie between one and two million dollars.
One of the locations used was the old Seville Theater, in a rundown section of St. Catherine Street, near the old Montreal Forum. By that time, the theater had been closed for quite a while, and they redressed it as an adult movie theater on New York City's 42nd Street, leaving many to believe that the Seville Theater was being turned in a porno palace. After filming was done, everything was taken down, and the theater still remains closed to this day (December 2006), but is basically a shell, as the owners have let it fall into disrepair. However, the city has deemed the front of the building "historically important architecture", and will not allow the building to be torn down, unless they incorporate the front of the building into a new project.
Originally advertised in the Filmways Pictures 1980/1981 trade brochure as due for production in spring 1981, with Sydney Pollack attached as producer under the title of "Streets of New York".
The set was visited by protesting groups of Union-affiliated crewmen who were angry that a non-Union crew were being used to cut costs.