HOFFMAN ESTATES — In more bad news for Sears, a suburban school district is suing the once-mighty retail giant, saying the schools should get back some of the millions of dollars in diverted tax money because Sears has violated the agreement that brought its headquarters to Hoffman Estates.
Nearly 30 years ago, to lure Sears' home base from Sears Tower in Chicago and keep it in Illinois, the retailer received nearly $250 million in tax breaks and incentives to move to its sprawling Hoffman Estates headquarters.
With that deal, much of the property tax revenue generated by Sears' head offices in Hoffman Estates went back into the development of the surrounding Prairie Stone Business Park, near the Jane Addams Tollway at Illinois Route 59.
When the deal was to expire in 2012, local taxing districts like Community Unit School District 300 were supposed to see the full benefit of the increased tax base, but instead Sears landed an extended deal with the renewed threat of leaving the state.
"Sears again started scaring lawmakers with the possibility of large scale job losses in the area by threatening to move its headquarters out of Illinois," District 300 contends in the suit it filed against Sears and the village of Hoffman Estates.
The lawsuit says Sears and the village assured the school system that it would "experience substantial benefits with Sears' property in the village fully back on the tax rolls."
"Those assurances never materialized," the suit states.
In fact, the lawsuit contends, Sears has broken its part of the bargain because, after a series of layoffs and store closings, the Hoffman Estates headquarters is now providing fewer than the 4,250 jobs required by the economic development agreement.
District 300, with 21,000 students mostly in Algonquin and Carpentersville, filed suit Wednesday in Cook County.
Media reports indicated that Sears laid off 220 employees at its headquarters in January. The suit cites a statement from the Illinois Department of Commerce and Economic Opportunity that Sears fell below the jobs threshold required to qualify for the tax breaks. It also quotes a Sears spokesman saying the company fell below the jobs floor.
The suit does not specify the amount of money it seeks from Sears but indicates it may be as much as all the tax breaks the company has received this year.
Sears spokesman Howard Riefs issued a brief statement about the suit and two of the tax break deals it references: "As we have stated numerous times over the years, the ... tax incentives are governed by unique statutes and have unique job requirements. This complaint is without merit."
A representative for the village could not immediately be reached.
Sears threatened legal action of its own when it battled the state last year over $14.8 million in tax credits the retailer claimed it was owed in 2016 before it fell short of employee minimum to be eligible for the incentive. That dispute was settled late last year with Sears getting the credits but agreeing not to seek them for 2017.
But Sears' woes have only deepened since, with a possible bankruptcy filing imminent.