Was the multimillion dollar deal to keep Sears in Illinois worth it? An economic study commissioned by ProPublica and the Daily Herald suggests it wasn’t. Here’s why.
Over the course of 30 years, the taxpayers of Illinois gave Sears the equivalent of more than a half-billion dollars in tax breaks and incentives to locate its headquarters in Hoffman Estates. In return, the retailer agreed to provide good-paying corporate jobs and return millions of dollars in tax payments.
Now, as Sears is struggling to survive, the question is whether the deal was worth it.
To find out, ProPublica and the Daily Herald commissioned a study of 40 years of economic data by the Center for Tax and Budget Accountability, or CTBA, a Chicago-based, bipartisan research and advocacy organization focused on social and economic justice.
The results were persuasive: the CTBA study found no evidence that the massive package of tax incentives made a long-term difference to the economic well-being of Hoffman Estates compared to that of other similar nearby suburbs that did not make such corporate deals.
Instead, the study found that nearby towns that were economically similar to Hoffman Estates before the Sears tax breaks, which began in the 1990s, remained pretty similar to Hoffman Estates today.
Measured by economic indicators such as property values and employment, Arlington Heights, Downers Grove, Elgin, Palatine, Schaumburg and Wheaton all grew at roughly the same rate as Hoffman Estates.
The study also found no evidence of a lasting impact on Hoffman Estates. A short-term spike in property values did not endure beyond the initial 10 years of the project. Sears’ effect on Hoffman Estates’ labor force was negligible, despite predictions that the company’s arrival would prompt a massive influx of new jobs.
Simply put, the study found that the Sears deal was the economic equivalent of an energy drink: It provided a jolt of caffeine and sugar that quickly wore off.
“For as large of a deal as the Sears deal was, the impact was very short-lived,” said Drazzel Feliu, CTBA’s research director. “It was a nice bump, but it wasn’t sustainable. We don’t have any proof that the (Sears deal) changed growth.”
The complete study, and its methodology, are available online here.
Presented with the study’s findings, Hoffman Estates Mayor William McLeod and Arthur Janura Jr., the village’s corporation counsel, said that statistics didn’t tell the full story.
Without the tax incentives, Sears would have never come to Hoffman Estates in the first place, they said. They pointed to the overall growth of the value of the land where Sears built its corporate campus and developed a business park and entertainment district. In 1989, the property value of the land around Sears was $6.4 million. By 2018, the figure was slightly under $242 million.
“That’s an awful lot of money,” said McLeod, who noted that the growth funded infrastructure which allowed potential development on thousands of acres of land in and around the Sears campus. “You’ve [ … ]
The post The Sears Headquarters Deal Cost Taxpayers $500 Million. 30 Years Later, There’s Little to Show for It. appeared first on NewsCetera.
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