Local Sears and Kmart Stores So Far Dodge the Ax

Did state lawmakers drop the ball on due diligence voting in favor of a tax-package to keep Sears Holdings in Illinois before it announced that it would close 120 Sears and Kmart stores?

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.

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.”

OakLawnGuy January 06, 2012 at 12:51 PM
Those who were charged with performing this due diligence are either liars or ignorant. There is no chance at all that Sears did NOT have the store closings and cutbacks on an agenda within the corporation, and went in knowing full well that if Christmas season was a bust, this would come to pass. The State is simply terrified of losing the business to another locale, but for the wrong reason: the legislators would also lose votes. Also, why does any representative have to hold his/her nose while casting a vote? If the bill stinks, question it, and fight it if necessary. That's what you're there for.
Sue N. January 06, 2012 at 03:00 PM
I have no problems with the state giving the tax break to SEARS to keep their headquaters in Illinois. The closing of the retail stores and keeping the headquarters in Illinois are 2 different situations in my books. While it is sad that many will be losing their jobs when the retail stores close, there are always way more retail jobs available, then there are corporate headquarter jobs. Its much much harder to find a corporate job at the same salary, when you're let go, then a retail job. And no offense to those working in retail. I've done the work myself. But it was much easier to find another retail job then it was to find a professional corporate job. Ask any of my friends and co-workers who having been looking for 2+ years now. But that's one of the biggest problems with our economy getting back on track. Companies are eliminating or outsourcing all their corporate salaried jobs. But our government thinks replacing those jobs with minumum wage paying retail store jobs is the same thing. But they are so wrong! Seriously, what person who was making $45-60K a year is going to be able to stay a float making only $22K a year now? So yes! Thanks to the lawmakers for doing something to keep some corporate paying jobs in Illinois! Hopefully Sears/Kmart will reciprocrate and continue to leave Il's stores off their closing lists too.
H. E. Kraeger January 06, 2012 at 05:21 PM
Morning business news reports were broadcasting Sears being relegated to Junk Bond status a couple weeks before they met with Illinois on tax exemption. I am sure legislatures were aware of this and had the choice of refusing Sears and allowing them to leave.
Pat F January 06, 2012 at 05:28 PM
Remember this next year when your taxes continue to escalate! Sears is not long for this world..They've already said they were eliminating 1/3 of its work force out there. Take away 120 stores..how many more employees will be eliminated because we already know the state won't take action against Sears if they break another agreement!


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