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updated: 11/30/2011 4:42 PM

Sears reassures workforce, looks at next steps

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  • After the Illinois legislature's failure to pass tax breaks for Sears Holdings in Hoffman Estates, the company is trying to reassure employees who are concerned the company might move.

       After the Illinois legislature's failure to pass tax breaks for Sears Holdings in Hoffman Estates, the company is trying to reassure employees who are concerned the company might move.
    Mark Welsh | Staff Photographer

 
 

Sears Holdings Wednesday issued an internal memo meant to reassure Hoffman Estates employees while still reiterating that the retail giant is committed to looking at all options after legislators failed to agree on tax breaks for the company.

While leaving the door open for a possible move out of state, Sears executives in the memo held out hope for eventual approval of the tax breaks the company is seeking and called the failure of the legislators to act on the issue Tuesday "another step in this process."

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Sears is seeking an extension of existing tax breaks with Hoffman Estates and says it has offers of tax incentives from other states. The company on Tuesday reiterated its intention to decide this year whether to leave Illinois. Lawmakers, meanwhile, are not scheduled to meet again until January.

Progress toward a deal broke down over tax breaks for the working poor that were included in the same legislative proposal.

"We received solid support for our portion of the legislation and are hopeful that the unrelated issues, including the earned income tax credit provision, will be resolved in short order by prudent leadership," Sears' memo to employees said.

"You should know that our portion of the bill was endorsed on the record by representatives of both Hoffman Estates and District 300. The fight is not over, and we continue to work toward a resolution," the memo said.

While the process continues, Sears said "a final decision has not yet been made. Our commitment to you remains the same: to be thorough in our review of all of our options."

District 300, which would get more property taxes from the Sears property if the tax breaks are allowed to expire, protested strongly at first but this week signed on to a House version of the tax break deal.

While hoping for a breakthrough in Springfield, Sears still must maintain stability in Hoffman Estates as it faces year-end holiday sales and struggles to keep its bottom line from bleeding further.

Sears maintains it has been wooed by at least 19 states, and The Columbus (Ohio) Dispatch reported Nov. 18 that Ohio Gov. John Kasich talked with Sears CEO Louis D'Ambrosio in an ongoing attempt to lure the company to move. But the story indicated that Kasich "doubts Sears will leave suburban Chicago." Kasich also alluded to his conversation with D'Ambrosio that indicates Texas and Ohio still are in the running with Illinois as the home of the headquarters.

The Ohio governor's deputy press secretary, Connie Wehrkamp, and Jobs Ohio economic development spokesman Marlon Cheatham both declined to comment. Texas governor Deputy Press Secretary Josh Havens also declined to comment.

The company now has to walk a fine line between its threat to move and its efforts to reassure its 6,100 Hoffman Estates-based employees, who might wonder if they'll have jobs as they face the end of the year in a tough economy.

"They're going to keep looking at their options, since it's obvious that Illinois is fading away," said John Melaniphy Sr., retail analyst and principal with Melaniphy & Associates in Chicago.

A possible scenario is relocating Sears' top executives and select department heads and moving them to a business-friendly state like Texas, said Melaniphy.

However, moving is costly, Melaniphy pointed out.

Besides severance packages for employees and substantial moving costs, the property in Hoffman Estates would become an economic drain, Melaniphy said.

"Who would take that space? There's no one standing in line for it," Melaniphy said.

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