So far local Sears and Kmart stores have escaped the ax in the wake of an announcement by Sears Holdings Co. that it would close 120 retail stores nationwide because of poor holiday sales.
Sears Holdings Corp.’s announcement to close retail stores on Dec. 29 came on the heels of a vote by the Illinois General Assembly guaranteeing the company $15 million in tax breaks to keep Sears’ headquarters in Hoffman Estates as reported by the Chicago Tribune.
State house and senate members passed the tax break package earlier last month that was aimed to keep Sears as well as the Chicago Mercantile Exchange from moving out of Illinois. Gov. Pat Quinn signed the legislation into law. Combined,
Some state lawmakers, such as Sen. Ira Silverstein of Chicago’s Far North Side, who voted in favor the measure, expressed anger that Sears’ representatives gave no indication the company was considering closing stores.
Which begs the question: did state lawmakers drop the ball on due diligence before voting to spend taxpayers’ money?
Part of the legislation required Sears to keep up a workforce of 4,000 at its Hoffman Estates headquarters.
Rep. Kelly Burke (36th District) said the possibility of closing stores “would have been a helpful piece of information to have” despite voting present from the state house floor.
“It was a conflict of interest. Seven (house members) voted present. I imagine other people had conflicts of interest,” Burke said. “My husband is employed [at CME]. I couldn’t vote on it.”
Rep. Bill Cunningham (35th District) told Patch that “I held my nose” when voting for the tax break-package because he had suspicions about some of the bill’s language pertaining to Sears.
“All that the bill required was that Sears maintain roughly 4,000 of its current 6,000 jobs at the Hoffman Estates headquarters,” Cunningham said. “I don’t think we should giving big incentives to any companies that are planning on reducing their work force.”
The fact the bill included language allowing Sears to eliminate one-third of its workforce in Hoffman Estates should have been a harbinger of things to come..
“Had it been a stand-alone bill for Sears I would have voted against it,” he said. “But the CME part was important. It would been very easy for them to move to Indiana.”
Losing CME could have cost the state $27 million in corporate tax revenue, Cunningham said.
The four-part bill also included tax incentives for technology and pharmaceutical corporations for research and development. Small businesses can write off up to $100,000 in losses over the past three years since the economic recession took hold.
As of Dec. 30, none of the 79 Sears and Kmart stores appear on the closing list published by Sears Holdings.
Cunningham said it wasn’t likely that any would either. Speculation is that governor pressured Sears into not closing any Illinois stores.
“I know Gov. Quinn has been in discussion with them,” he said. “[The governor’s staff] hasn’t confirmed that Sears agreed not to close stores.”