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Sears Store Closures: Illinois Lawmaker Says He Feels 'Betrayed' After Tax Break Deal (VIDEO)

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First Posted: 12/27/11 04:56 PM ET Updated: 12/29/11 05:00 PM ET

Updated story

Just weeks after signing a bill that gave Sears millions of dollars in tax incentives to stay in Illinois, Governor Pat Quinn reacted to the news that the company plans to close up to 120 stores across the country due to poor holiday sales.

"I'm never happy to hear that a company isn't doing well," Quinn said Tuesday, according to NBC Chicago. "This is a nationwide story. Those stores are not all in Illinois. I hope not too many of them are Illinois, but their headquarters is in our state and we're happy about that."

For years, Sears has been threatening to move its Hoffman Estates-based headquarters elsewhere, and lawmakers in Springfield have consistently gone out of their way to make them stay. The latest package was criticized by the Occupy Chicago movement, along with other Illinois residents who called the $330 million package corporate welfare.

"You have to defend yourself. If Ohio is offering $400 million to Sears, a company that has thousands of employees in Illinois, we will defend ourselves with a reasonable, adequate, approach," Quinn said in early December, according to the Associated Press. "That's what you have to do in 21st Century America to make sure your state and your businesses have support."

Sears, along with the Chicago Mercantile Exchange, said they would leave the state if Illinois lawmakers did not pass the tax break package that was approved on Dec. 12 and 13. The package gives Sears a $15 million tax break over the next 10 years. While Quinn hoped news of the Sears store closures would not hurt Illinois, one Illinois lawmaker said he felt "betrayed" by the Sears announcement, and said the company should have been honest with the state while the tax package was being considered.

“It wasn’t a good Christmas or Hanukkah gift for the people of the state of Illinois,” State Sen. Ira Silverstein (D-Chicago) told the Chicago Sun-Times. “We gave them a very nice package and then for them to pull this off two days after Christmas — people are, you know, in holiday mode. It’s really upsetting and I think some questions have to be answered whether they knew they were going to do this at the time we voted on it several weeks ago."

While Quinn defended the practice of offering tax incentives to keep businesses in the state, some experts say it doesn't do much in terms of generating jobs or retaining existing positions. If Sears did decide to leave, Illinois would lose about 6,000 jobs, the AP reports. But whether keeping the company here will help in the long-term is unclear.

"One of the unintended consequences of this whole thing is you are going to see a lot more midsize businesses feeling like they're getting screwed by the state," site-selection consultant Brent Pollina told the AP. "They're carrying the tax burden. The state doesn't care about them at all."

Illinois officials have also acknowledged that the tax-relief package will lead other businesses to ask for the same deal. "What's going to stop the next big company from putting a gun to our head with the same type of threat?" Rep. Mary Flowers said after the House rejected the original tax break deal.

Silverstein told the Sun-Times that the whole thing has taught lawmakers a lesson about tax incentives.

“Hindsight’s 20-20 — you’re 100 percent right,” Sliverstein told reporters. “We don’t have that much control. But when we give a package of incentives like this to try and keep a corporation here in Illinois they should at least tell us what they’re going to do — not so much in the far future, but in the near future. We passed this package . . . two weeks ago and all the sudden, they pull this on us."

Sears initially did not announce which stores would be closed, though it reportedly expected to generate $140 million-$170 million in sold inventory and building sales. The company is confident it can bounce back, but some retail experts aren't so sure.

"There's no reason to go to Sears," New York-based independent retail analyst Brian Sozzi told the AP. "It offers a depressing shopping experience and uncompetitive prices."

On Thursday, the retailer announced 79 of the 100 to 120 stores it plans to close, none of which are located in Illinois, though three are located in Indiana, the Chicago Tribune reports.

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Filed by Jen Sabella  |