Sears Moves to Beijing

Paying Sears to move is a bad deal for Illinois

Illinois Times

August 17, 1989

Another take on an issue I addressed several times. This time I treated the relocation incentives that eased Sears, Roebuck's move from its Loop skyscraper to a new suburban office campus as an Illinois issue rather than a Chicago one, as I did here. Turned out it didn't look any more attractive from that perspective either.

 

I don't remember ever having been in Hoffman Estates, but then how would I? It is a nondescript suburb of Chicago, actually an incorporated subdivision. It boasts none of the improvements that distinguish other suburbs from the mass, lacking a mall, an amusement park, or an international airport. It does apparently have a nice view of the traffic jams, and lots of land that doesn't have ugly buildings on it yet.

 

And Sears. In June, Sears, Roebuck & Co. announced that it would move its 5,500-employee Merchandise Group to Hoffman Estates when it vacates the Sears Tower in the Loop in 1992. Dozens of towns had vied to be chosen as the site; in addition to its considerable payroll, the group brings with it business travelers and support business worth millions a year more to a local economy. Charlotte and Dallas made advances, which apparently spurred the vigilant watchmen at DCCA [the Illinois Department of Commerce and Community Affairs] to redouble their efforts to see that Illinois did not have such a plum snatched from it by some Sunbelter.

 

Perhaps you recall the terms of the incentive package that Sears to stay. The state will spend $61 million, mainly to expand nearby roads. Such improvement should give Sears a badly needed edge in its retail wars with the likes of WalMart, since its executives will be able to linger at their desks for several minutes longer and still make their tee times.

 

The state also will pick up some job training costs. Hundreds of Sears' loyal clerical and other support staff are not to make the move to Hoffman Estates. The town is thirty miles from the Loop, far to commute to and too expensive to move to. (One employee complained that Hoffman Estates might as well be in Beijing; since the el doesn't go there, either.) Many of these workers are black, and some of them angrily alleged that Sears had, by its move, adopted the same approach to anti-discrimination laws that other U.S. firms have adopted toward child labor and worker's comp and job safety laws rules when they move their factories to the Third World.

 

The real incentive was not a grant of money, however, but of real estate. The state agreed to set up a tax increment financing district in Hoffman Estates that would finance the bonds needed to buy for Sears 786 acres of prime development property. Sears will use 200 acres of the site for its new group headquarters and develop the rest, which eventually could be worth as much as $1 billion. It was not immediately clear how giving Sears a leg up as a would improve the performance of its stumbling merchandise operations, but the boys and girls at DCCA wouldn't all drive BMWs if they weren't smarter than the rest of us. In any event, the real estate deal was the nicest profit the Merchandise Group has shown since the lawn mower market went soft.

 

Considered solely as an artifact, the deal the state struck for Sears is a nice piece of work. For one thing, the costs of it are substantially borne by Hoffman Estates taxing bodies and by the local development industry rather than state taxpayers; the relatively modest direct state investment will be recouped in increased tax receipts in only a few years.

 

Alas, the problem with people who can be bribed by you, as any Illinois politician ought to know, is that they can be bribed by someone else. DCCA extracted no guarantees from Sears about how long it will stay in Illinois, or how many jobs will stay here. Nor can one ever sure how the costs of such deals are computed. Responding to the recent audit of his agency, DCCA director Jay Hedges—reminds you of Dennis the Menace as trained at Harvard Business, don't you think?—said in effect that the state's investment in the Diamond-Star Motor plant in Normal was inflated to give Lee Iacocca something to brag about. I would suspect that DCCA did not calculate the cost in unemployment compensation for the workers Sears leaves behind, or of the ozone pollution that will result from the shift of so many commuting trips from public transit to cars. But even such a consummate egoist as Mr. Thompson would not want to brag how he had taken himself to the cleaners.

 

DCCA's misdemeanors on behalf of Sears were not fiscal. Especially egregious was the state's extension of tax increment financing authority, which previously had been used only in economically blighted areas. The legislature hurried to rewrite its TIF statute to include Sears-style relocations in suburbs like Hoffman Estates, which is disadvantaged only by the standards of its booming neighbors, since unlike them it does not yet boast its own Fortune 500 outpost.

 

Economically, the case for helping Sears at all is dubious. True, if Sears left Illinois it would devastate the country club economy of the western suburbs of Chicago; a Republican governor would join Greenpeace before he'd let that happen. But Sears is an aging, perhaps even a doomed company. More than one critic in the business press suggested that the money Chicago was willing to spend to keep Sears (the city had offered 220 acres it owns at O'Hare Airport) would be better spent helping start-up firms or expanding existing ones. The only way the competitive advantage of Illinois is improved by helping Sears move to the suburbs is that it makes possible a quicker recovery of the men's ready-to-war apparel industry in the event of nuclear war.

 

As he has done many times in his too-long career, Governor Thompson did some astute politicking in a dubious cause. General Assembly cooperation was essential. On the face of it, the Sears deal would seem as savory to a lawmaker as a dead dog in August. Clem Balanoff, a representative from Chicago's southeast side, where unemployment runs 20 percent now that the steel mills have shut down, denounced the Sears package as "welfare for the wealthy." But Democratic legislators voted with Republicans anyway, as a result of the quid pro quo reached by Thompson and Richie Daley. Votes for the TIF rewrite were made in return for the governor's support for money to expand McCormick Place, to fix up Navy Pier, and to plan for a much-needed Loop trolley system. Making downtown Chicago safe for conventioneers, tourists, and big owners will stimulate the creation of thousands of jobs for Balanoff's steel workers as busboys, doormen, and strolling violinists.

 

Of course, the big steel companies, like Sears today, were themselves bloated and lazy, grown rich off a captive market during a boom they thought would last forever The problem with subsidies to Sears is not that they aren't extended to other firms, but that they were extended to Sears. State aid to jobs, or even to move them will always a poor investment when the need is to create jobs. Until the governor's deal-makers figure that out, the rest of us may take what satisfaction we can from the fact that Illinois is able to accommodate at least some of its homeless. ●

SITES

OF

INTEREST

John Hallwas

Essential for anyone interested in Illinois history and literature. Hallwas deservedly won the 2018 Lifetime Achievement Award from the Illinois State Historical Society.

Lee Sandlin Author

One of Illinois’s best, and least-known, writers of his generation. Take note in particular of The Distancers and Road to Nowhere.

Chicago Architecture Center

See Home Page/Learn/

Resources for a marvelous building database, architecture dictionary, even a city planning graphic novel. Handsome, useful—every Illinois culture website should be so good.

The Encyclopedia of Chicago

 

The online version of The Encyclopedia of Chicago. Crammed with thousands of topic entries, biographical sketches, maps and images, it is a reference work unmatched in Illinois.

Illinois Great Places

The Illinois chapter of the American Institute of Architects in 2018 selected 200 Great Places in Illinois that illustrate our  shared architectural culture across the entire period of human settlement in Illinois.

McLean County Museum

of History

A nationally accredited, award-winning project of the McLean County Historical Society whose holdings include more than 20,000 objects, more than 15,000 books on local history and genealogy, and boxes and boxes of historical papers and images.

Mr. Lincoln, Route 66, and Other Highlights of Lincoln, Illinois

 

Every Illinois town ought to have a chronicler like D. Leigh Henson, Ph.D. Not only Lincoln and the Mother road—the author’s curiosity ranges from cattle baron John Dean Gillett to novelist William Maxwell. An Illinois State Historical Society "Best Web Site of the Year."

Illinois Digital Archives

 

Created in 2000, the IDA is a repository for the digital collections of the Illinois State Library and other Illinois libraries and cultural institutions. The holdings include photographs, slides, and glass negatives, oral histories, newspapers, maps, and documents from manuscripts and letters to postcards,  posters, and videos.

The Illinois State Museum

 

The people's museum is a treasure house of science and the arts. A research institution of national reputation, the museum maintains four facilities across the state. Their collections in anthropology, fine and decorative arts, botany, zoology, geology, and  history are described here. A few museum publications can be obtained here.

Chronicling Illinois

“Chronicling Illinois” showcases some of the collections—mostly some 6,000 photographs—from the Illinois history holdings of the Abraham Lincoln Presidential Library.

Chicagology

I will leave it to the authors of this interesting site to describe it. "Chicagology is a study of Chicago history with a focus on the period prior to the Second World War. The purpose of the site is to document common and not so common stories about the City of Chicago as they are discovered." 

Illinois Labor History Society

The Illinois Labor History Society seeks to encourage the preservation and study of labor history materials of the Illinois region, and to arouse public interest in the profound significance of the past to the present. Offers books reviews, podcasts, research guides, and the like. 

Illinois Migration History 1850-2017

The University of Washington’s America’s Great Migrations Project has compiled migration histories  (mostly from the published and unpublished work by UW Professor of History James Gregory) for several states, including Illinois. The site also includes maps and charts and essays about the Great Migration of African Americans to the north, in which Illinois figured importantly. 

History on the Fox

An interesting resource about the history of one of Illinois’s more interesting places, the Fox Valley of Kendall County. History on the Fox is the work of Roger Matile, an amateur historian of the best sort. Matile’s site is a couple of cuts above the typical buff’s blog. (An entry on the French attempt to cash in on the trade in bison pelts runs more than

2,000 words.)

BOOKS

 OF INTEREST

Southern Illinois University Press 2017

A work of solid history, entertainingly told.

Michael Burlingame,

author of Abraham 

Lincoln: A Life 

One of the ten best books on Illinois history I have read in a decade.

Superior Achievement Award citation, ISHS Awards, 2018

A lively and engaging study . . .  an enthralling narrative.

James Edstrom

The Annals of Iowa

A book that merits the attention of all Illinois historians

as well as local historians generally.

John Hoffman

Journal of Illinois HIstory

A model for the kind of detailed and honest history other states and regions could use.

Harold Henderson 

Midwestern Microhistory

A fine example of a resurgence of Midwest historical scholarship.

Greg Hall

Journal of the Illinois

State Historical Society

Click  here 

to read about

the book 

Click  here 

to buy the book 

Southern Illinois University Press

SIU Press is one of the four major university publishing houses in Illinois. Its catalog offers much of local interest, including biographies of Illinois political figures, the history (human and natural) and folklore of southern Illinois, the Civil War and Lincoln, and quality reprints in the Shawnee Classics series.

University of

Illinois Press

The U of I Press was founded in 1918. A search of the online catalog  (Books/Browse by subject/Illinois) will reveal more than 150 Illinois titles, books on history mostly but also butteflies, nature , painting, poetry and fiction, and more.  Of particular note are its Prairie State Books,  quality new paperback editions of worthy titles about all parts of Illinois, augmented with scholarly introductions.

University of

Chicago Press

The U of C publishing operation is the oldest (1891) and largest university press in Illinois. Its reach is international, but it has not neglected its own neighborhood. Any good Illinois library will include dozens of titles about Chicago and Illinois from Fort Dearborn to

Vivian Maier.

Northern Illinois University Press

The newest (1965) and the smallest of the university presses with an interest in Illinois, Northern Illinois University Press gave us important titles such as the standard one-volume history of the state (Biles' Illinois:
A History of the Land and Its People) and contributions to the history of Chicago, Illinois transportation, and the Civil War. Now an imprint of Cornell University Press.

Reviews and significant mentions by James Krohe Jr. of more than 50 Illinois books, arranged in alphabetical order

by book title. 

Illinois Center for the Book

Run by the Illinois State Library, The Center promotes reading, writing and author programs meant to honor the state's rich literary heritage. An affiliate of the Library of Congress’s Center for the Book, the site offers award competitions, a directory of Illinois authors, literary landmarks, and reading programs.

Contact James Krohe Jr. at CornLatitudes@outlook.com

All material Copyright © by James Krohe Jr. unless otherwise indicated