SPRINGFIELD -- Officials trying to craft a final deal over what kind of tax breaks Sears Holdings Corp. should be given -- and at whose expense -- have reached a "tentative agreement," but the stakeholders are cautioning that a lot can still change.
According to the basics of the agreement obtained by the Daily Herald, a plan to extend Sears' property tax breaks in Hoffman Estates would mean about $11.5 million a year for Sears. Carpentersville-based Community Unit District 300 would get $5.9 million a year -- a significant increase from what it currently collects from Sears -- and Hoffman Estates would get $5 million, the same as what it collects now.
Both the company and other local governments in the Economic Development Area that gave Sears the tax break in the first place nearly two decades ago could get more if property values rise.
About $6 million is a far cry from the $17 million District 300 officials had hoped for, but Superintendent Michael Bregy, a chief critic of talks up until this week, said compromise now is possible.
"So we're very pleased about that," Bregy said. "I would have liked to have seen more money to the school district."
The district now gets about $2.9 million a year from the Sears tax deal, which is set to expire in about a year.
The company has threatened to decide by the end of next month whether to leave Hoffman Estates if it doesn't get a good tax deal from Illinois.
In the tentative proposal, the company would collect the tax break until it recoups $125 million in costs it has paid over the last 20 years building roads and bridges near the company's headquarters. Sears also could get another $45 million if it wins a Cook County property tax appeal. When the $125 million figure is reached, the tax deal could expire, a development that would send even more money to local schools and governments.
Still, negotiators emphasized that the deal isn't done yet and details could change in the coming days, before legislation is written next week.
"There's still a lot of work to be done," Sears spokesman Chris Brathwaite said.
At a public hearing Friday, state Rep. John Bradley, a Democrat from downstate Marion, announced the groups had reached a "tentative agreement." State Rep. David Harris, an Arlington Heights Republican, agreed, with some reservations.
"I think, regarding Sears, it's going very well," Harris said. "There may be some details to be worked out."
The details obtained Friday also reflect the school district's request that Hoffman Estates not be allowed to use any money from the property tax deal to operate the Sears Centre. And village officials have asked for a guarantee that District 300 not sue them over the overall agreement.
Like other officials, Hoffman Estates Mayor William McLeod on Friday declined to comment on specifics, saying details are constantly changing.
"I can't agree to something if I don't know what's in it," McLeod said.
An agreement between Sears, Hoffman Estates and District 300 could go a long way toward easing lawmakers' concerns over the deal, as many are hesitant to grant a local property tax break when some affected local officials loudly protest.
But the difficulties extend beyond simply approval among the local parties involved in the Sears deal; the deal itself is tied politically to several other big tax-incentive proposals that could end up costing the state as much as $850 million a year. Those include tax breaks for financial exchange CME Group, research and development credits for businesses, and tax breaks for the working poor.
If the final plan is scaled back, supporters of any particular component that is reduced or eliminated could withdraw support, endangering the greater package.
A final plan might be drafted next week.
"We obviously don't know what will be in that proposal," Bradley said.
So even if local officials agree to a Sears solution, lawmakers concerned about an already stressed state budget might balk at handing out big tax breaks to the retail giant and others.
"This is not the endgame in itself," said Rep. Fred Crespo, a Hoffman Estates Democrat. "We still have other components."
Among those other components, in fact, is a separate Sears request for millions of dollars in income tax credits similar to what have been awarded to Motorola Mobility in Libertyville and Navistar in Warrenville -- two other large companies that threatened to leave Illinois but that Gov. Pat Quinn enticed to stay with tax breaks.
The lawmakers who attended Friday's hearing left Springfield knowing that Thanksgiving week could be critical to making the deal happen.
Lawmakers return to Springfield Nov. 29 to possibly vote on the matter. The deadline for finishing negotiations already has been extended once; with Sears threatening to make a decision by the end of the year, there wouldn't be much time to extend it again.
"It is very difficult," Harris said about finding a proposal enough lawmakers will agree to approve in such short order.
"If," he added, "anything gets done."
• Daily Herald staff writer Eric Peterson contributed to this report.