The Deal at 30: Hoffman Estates mayor says Sears agreement as 'good basically for everybody'
Hoffman Estates Mayor Bill McLeod has been both an observer and a participant through all the years since the possibility of a state and local tax deal to bring Sears' headquarters to the suburbs first was raised.
As a trustee on the village board, he voted for the original agreement in 1989 to lure Sears to Hoffman Estates when it opted to leave the Sears Tower in Chicago, and later, as mayor, he shepherded an extended agreement when Sears threatened in 2011 to leave town.
While he acknowledges that the incentive package hasn't fulfilled all of its original promise, he says that overall, it still benefited Hoffman Estates: "It's been good basically for everybody."
In this edited transcript, he outlines his perspective in an interview with members of the Daily Herald Editorial Board.
Q. How do you assess the Sears deal and what do you foresee for the next couple of years?
A. This wasn't really a Hoffman Estates deal. This was the state trying to keep Sears within the state of Illinois. Sears was the largest employer in the state at that time. And I believe they had 45,000 people working in Sears in the state of Illinois.
Sears wanted to leave downtown; they wanted to have a campus-type setting. And we had one of the largest tracts of open land in Cook County, about 780 acres. It was vacant farmland.
I don't believe it would be developed to this day had the state not crafted this deal.
It's worked well for the village. We have a nice office park out there. We have housing around there. We still have hundreds of acres of undeveloped land.
And we have a large shopping center, 400,000 square feet. You could also argue that The Arboretum wouldn't be as successful without the influx of the business that Sears brought and the housing and the people that Sears brought.
So I think it's been good basically for everybody. The village did receive money, we did get this infrastructure, Sears did pay for police and fire and public works services out there until the Economic Development Area was established and money started coming in once their campus was built.
(Algonquin-based Community Unit) District 300 has been the major (detractor). In fact, they're suing us over this. They've gotten I believe, $58 million as of 2018, and if that was just farmland, they would be would be making squat from this. And the village of Hoffman Estates sends absolutely no students to District 300.
Q. What do you think it's going to look like in the next couple of years?
A. We'll see what ultimately happened with TransformCo, the new company that took over Sears headquarters. But you can't underestimate the value of all that infrastructure.
And, you know, the Sears campus is a beautiful building. Their buildings are beautiful. I'm sure there'll be some use made of it. It's not uncommon as time goes by that trends in business change dramatically.
(The former) AT&T (headquarters) is being restructured. That's being redeveloped. We're very excited about the "metroburb" there. Someone will come in with an idea. And those buildings will be utilized.
Q. You were on the board at the time (of the original Sears deal). Do you remember how this came up?
A. There had been proposals on this (land) before. The Expo Park. One guy wanted to build a baseball stadium with a hotel in it sort of like the Toronto Blue Jays have. None of these things panned out.
(Then-Mayor) Mike (O'Malley) came to the board and said Sears is looking at relocating. One of the things that was fortunate for Hoffman Estates was Jay Hedges was the deputy director of (the Illinois Department of Commerce and Community Affairs) and he had been assistant village manager of Hoffman Estates and he was familiar with the property. I don't know if that played any role, but it's hard to find 780 acres of open land in Cook County.
Q. What role did former Mayor O'Malley play?
A. O'Malley certainly played a role in that, but the state was the overwhelming instigator of this whole thing. We couldn't have arranged to afford all that infrastructure. The village never could have spent $114 million on that infrastructure. We couldn't have widened state roads. We couldn't have put a full interchange at Route 59 and I-90.
You know Mike O'Malley. That guy was so affable, so personable, and certainly he played a role in helping to craft how it exactly was done, but the state was a major player in this. I supported it and the village supported it, obviously, but they were the major players in getting that through.
Q. Why didn't Chicago Mayor Richard M. Daley fight the deal?
A. I don't know all the details on that, but I think Sears wanted ... they were at the tail end of the trend of all these large corporations wanting a corporate setting in the suburbs.
Q. (At the time, Sears presumably was being wooed by North Carolina.) How convinced are you that Sears would be in North Carolina now if the state hadn't come through with this package?
A. I remember talking to Mayor O'Malley who said you know, (former Sears CEO Edward) Brennan lives is Burr Ridge, and the second guy in Sears lives in the Barrington area. Do these guys really want to move to North Carolina? Their grandkids are probably around here.
I didn't quite buy the North Carolina thing, but depending how good the deal was, they might have taken it.
Q. What would have happened if Hoffman Estates and Illinois would have called their bluff?
A. I tend to think they wouldn't be in Hoffman Estates.
Q. Say Sears hadn't come there. Wouldn't there have been other people coming with proposals?
A. Possibly, but we don't know that. And again, the cost of all the infrastructure. That's an awful lot of money.
And what all this infrastructure did was be able to give us 2,700 acres of land that could be developed, which is way more than the actual Sears property. (Now,) you've got the water mains, you've got the sewer mains. And we still have all this vacant land out there.
Q. The tax breaks were re-upped in 2012. Has that been working out as you'd hoped?
A. The arrangement with the state was that we would get $5 million off the top of the increments. We do not get a share of any of the property taxes that are generated in the EDA (Economic Development Area).
Q. What do you say to critics not so much of the first deal but the second deal who might say that by 2011, Sears really didn't have too many options?
A. Sears wanted an extension on it, and the village was happy with the EDA arrangements. Sears still had thousands and thousands of employees at that point. It's only been like the last three, four years that Sears has totally plummeted.
At that time, they're still a very viable company. And it still actually had the required number of employees that was in that agreement.
Q. The school district is suing, saying Sears is playing games with the employment numbers.
A. The state put that requirement in. I have no mechanism to measure how many people are in those buildings. We just follow the law that the legislature passed.
The legislature put that requirement in. So the state should have been the one monitoring how many employees are in there not the village. We don't have the capacity to do that.
Q. One of the other outgrowths of all this has been a Sears Centre Arena. Is that working out?
A. I think it is working out successfully. We did hire a professional management company. Spector, formerly Global Spectrum, is running the arena. We got a good general manager there. We've got the Windy City Bulls.
(Without the arena) I don't think Cabela's would have come, I don't think Main Event would have come. When the Sears Centre does have events, the restaurants in the Target shopping center at routes 59 and 72 are loaded. Sears to this day is still paying the naming rights; they're current on it.
Q. What might you do differently if you had it to do over again with Sears?
A. A lot of this stuff was beyond the control of the village. I don't know really what I could have done in relation to that agreement.
I voted against several things in (the agreement) but got overridden by the board. The original fire station in the Sears business park made no sense because it wasn't centrally located for the population growth, so we had to move that fire station.
The major facets of the deal were put together by the state, negotiating with Sears. We just had the land.
Q. What would you expect to eventually happen out there?
A. I'd be a successful business person if I knew the future.
Plans change all the time. Those big suburban campuses, everybody knows the young kids all want to be in the city.
That can change again, because there was an era when all the kids moved to the suburbs. Nothing is forever.
We've got to be open to the changes that are going about. That's one of the things they're going to be doing on the AT&T site, doing some housing, but they're looking at mainly smaller units, one-bedrooms, studios. There's a lot of folks that really don't want a big house.
I don't really know exactly what's gonna happen in the future, but it's nice to have the land. Nice to have infrastructure that's right there. We built an entire city out there.