Sears weighing offers from Texas, Ohio
Sears Holdings Inc. executives soon may stop their shopping spree for a new headquarters after receiving offers of financial incentives from Austin, Texas, and Columbus, Ohio, while continuing negotiations for tax breaks to stay in Hoffman Estates.
Company sources said the sites and offers in those two cities will compete with Sears' current headquarters in Hoffman Estates, with a decision likely by the end of the year.
Officials in Texas and Ohio would not release details of any competing offers.
“Our commitment to our associates and shareholders is to be thorough in our review of our opportunities in the hopes of resolving this matter in the near future,” Sears spokesman Chris Braithwaite said in a statement. “We have received offers from a number of states and recently conducted site visits and facility tours at a pair of them. We also look forward to continuing our productive and positive discussions with officials here in Illinois.”
The news was released as parents and officials at Community Unit District 300 in Carpentersville are in the middle of an aggressive campaign to end the tax breaks for Sears to draw property taxes from the company to their schools.
Lawmakers are scheduled to return to Springfield later this month and possibly consider votes on development packages to try to keep Sears in Illinois. If Sears appears close to a deal with another state, state lawmakers here might be persuaded to raise their offer. Among the ideas being considered is extension of the company's current tax-incentive deal, which runs out next year.
“Sears plays an important role in our state's economy, which is why the governor and his administration are continuing extensive talks with the company,” said Annie Thompson, a spokeswoman for Gov. Pat Quinn. “The governor's door is always open to business leaders to continue discussing other ways we can improve Illinois' business climate to create more jobs and expand the economy.”
In Texas, a spokeswoman for Gov. Rick Perry's office declined to comment.
“We, as a rule, don't comment on any negotiations,” said spokeswoman Lucy Nashed.
Ohio officials were similarly quiet.
“Unless something is officially announced or filed we are not in a position to discuss exchanges between companies and the department,” said Ohio Department of Development spokeswoman Katie Sabatino. “We have a responsibility to honor our confidentiality commitments to those companies and their representatives until such time as it is appropriate to make announcements or filings.”
In May, the Daily Herald reported that Sears, the beleaguered parent to Sears Domestic, Sears Canada and Kmart, had been talking with officials in North Carolina, Texas, Tennessee and New Jersey. Washington, D.C., later came up as another possible site.
Sears, which merged with Kmart in 2005, has since posted eroding profits and has fended off criticism from Wall Street and consumers by regularly overhauling its product lineup. Now with a new chief executive at the helm, the corporation is seeking ways to save money and develop new revenue streams.
Sears executives have met twice with Hoffman Estates officials in recent months. But both sides have left empty-handed, said Arthur Janura, attorney for the village.
“After the last meeting, they said they would get back to us to work on some middle ground,” Janura said. “But they haven't gotten back to us yet.”
He said Hoffman Estates officials remain hopeful a decision will come soon.
“When Sears merged with Kmart, they closed Kmart's headquarters in Michigan and moved everyone down here,” said Janura. “They could have closed Hoffman Estates instead, but they didn't, and we have them today because of that economic development area agreement. That's how important that is.”
The village intends to step up its efforts to get Sears to agree to stay, Janura said.
“State legislators know that the economic health of this state and this region depends on retention of jobs here,” Janura said.
One of those legislators, Democratic state Rep. Fred Crespo of Hoffman Estates, said talks will continue with an effort to get a deal lawmakers can vote on later this fall.
But, he argued, Sears' shopping for a new site is a symptom of Illinois' overall tax atmosphere.
“It shouldn't come as a surprise to anyone,” Crespo said of Sears' talks with other states. “Sears is a corporation, a business.”
Some analysts believe that Sears is using offers from other states as a negotiating tool with Hoffman Estates. After all, it's expensive to move thousands of workers to another location. So what will it take to get Sears' attention?
“Money,” said John Melaniphy, president of retail research firm Melaniphy & Associates in Chicago. “It's as simple as that.”
Operating expenses and taxes are higher in Illinois for businesses and Sears is looking to get the best deal, Melaniphy said.
“A lot of issues need to be addressed,” Melaniphy said. “And Sears' chairman (Edward Lampert) is hard to forecast, but he's a money man. He wants to know what Sears will get out of the deal. And it would have to be a really good deal.”