* Suburban Detroit has jumped into the grab a headquarters game…
A package of incentives worth at least $50 million is being offered to Sears to relocate its headquarters and some 5,000 jobs to the Detroit metropolitan area, two sources familiar with the talks said Friday.
Two potential sites in metro Detroit are being offered to Sears. One is Regent Court, a Ford Motor office building in Dearborn. The other is the former Blue Cross Blue Shield of Michigan complex in Southfield, which is on the market as BCBSM moves employees to downtown Detroit.
Both Wayne and Oakland counties, as well as the Michigan Economic Development Corp., are participating in the attempt to lure the Sears headquarters, the sources said. MEDC had no comment.
The incentives being offered are said to include a mix of tax breaks, relocation grants, housing incentives and more. […]
Kimberly Freely, a spokesperson for Sears Holdings Corp., issued a noncommittal statement Friday. “We do owe it to our associates and shareholders to consider options and alternatives and intend to be very thoughtful and thorough in our deliberations,” the statement said. “Speculation about whether Sears will remain in Hoffman Estates is not fair to our associates, particularly so early in this process.”
If Sears were to take Michigan up on its offer, it would mark a homecoming of sorts. Sears Roebuck & Co. bought Troy, Mich.-based Kmart Corp. in 2005 to form Sears Holdings.
Gov. Pat Quinn has said he would work with Sears to find a way to keep it from leaving Illinois.
The retailer is among 107 companies that will see tax breaks expire in the next three years, a situation that could lead to a number of defections.
* Jim Thompson was the father of Illinois corporate chasing tax breaks, and he reminisced recently with the Tribune’s Melissa Harris
“I think it would be fair to say, that 25 years later, Mitch Daniels next door has the attitude toward his job — as chief salesman for his state — that I did,” Thompson said. “It’s not just the laws of Indiana. It’s what’s the attitude of the state officials? And don’t leave out the legislature. They have as much responsibility for giving the governor the tools, as he does for using the tools.” […]
The Mitsubishi agreement was enormous, even by today’s standards, totaling an estimated $276.1 million when it was announced in 1985, or about $580 million in today’s dollars. The package included everything from $40 million for job training to $11 million for buying the land and $29.7 million in savings on federal import duties. The Tribune reported that Michigan bowed out of the competition the week before, calling the automaker’s requests “excessive.” But Illinois’ package for Sears in 1989 eclipsed it.
Thompson acknowledged it’s harder for Illinois to play offense today because of the state’s fiscal crisis and underfunded pensions. But he said Illinois can still put together a strong pitch based on its transportation infrastructure, universities, cultural attractions and workforce.
The rest, he said, comes down to personality and instinct — “knowing the people and judging their credibility.” Thompson said he couldn’t recall ever turning down a company threatening to leave; nor could he recall writing job-creation or retention requirements into an incentive agreement. Omitting job requirements is rare in the incentive business today.
* In other news, the Post-Dispatch looks at the costs and other drawbacks of smart grid technology…
Across the country, smart grid projects, especially those involving new digital smart meters, have sparked a backlash. In Texas, regulators were asked to investigate the accuracy of the new meters. In San Francisco, customers are worried about electromagnetic radiation. A few California cities have declared moratoriums on the new meters. Privacy advocates worry about what utilities will do with the data they collect on consumer energy use. […]
In Illinois, it’s the debate over the regulatory framework being proposed by utilities that’s raising second thoughts. David Kolata, executive director at Citizens Utility Board, a Chicago-based utility watchdog, said the group backs the bill’s smart grid provisions. What it objects to are more sweeping changes in the legislation that could expose consumers to higher rates. […]
But getting from here to there won’t be easy or cheap. The Electric Power Research Institute estimates implementation of a nationwide smart grid will require investment of as much as $476 billion. […]
Advancing the smart grid also requires consumers to buy in. And it has been a tough sell so far. Earlier this month, Kansas City-based Black & Veatch released results of an industry survey showing the main impediment to smart grid implementation is a lack of customer interest and knowledge.
Much of the controversy has focused on the new digital meters. Some consumer advocates, like John Coffman, an attorney for the Consumers Council of Missouri and AARP, worry the devices will prove too expensive and need replacement too quickly. Coffman also worries it could make it too easy for utilities to disconnect customers who fall behind on bills.
* 10 brands that won’t be around in 2012: The parent of Sears and Kmart — Sears Holdings — is in a lot of trouble. Total revenue dropped $341 million to $9.7 billion for the quarter which closed April 30, 2011. The company had a net loss of $170 million. Sears Holdings was created by a merger of the parents of the two chains on March 24, 2005. The operation has been a disaster ever since. The company has tried to run 4,000 stores which operate across the US and Canada. Neither Sears nor Kmart have done well recently, but Sears’ domestic locations same store numbers were off 5.2 percent in the first quarter and Kmart’s were down 1.6 percent. Last year domestic comparable store sales declined 1.6 percent in the total, with an increase at Kmart of .7 percent and a decline at Sears Domestic of 3.6 percent. New CEO Lou D’Ambrosio recently said of the last quarter that, “we also fell short on executing with excellence. We cannot control the weather or economy or government spending. But we can control how we execute and leverage the potent set of assets we have.” D’Ambrosio needs to pull a rabbit out of his hat soon. Sharex are down 55 percent during the last five years. D’Ambrosio only reasonable solution to the firm’s financial problems is to stop supporting two brands which compete with one another and larger rivals such as Walmart and Target. The cost to market two brands and maintain stores which overlap one another geographically must be in the hundreds of millions of dollars each year. Employee and supply chain costs are also gigantic. The path D’Ambrosio is likely to take is to consolidate two brand into one — keeping the better performing Kmart and shuttering Sears.
* Quinn to sign workers’ compensation reform Tuesday
* Tribune editorial: Conventional wisdom: Whatever it takes. Better union rules are only the beginning. To remain a world-class convention venue, Chicago needs to make sure exhibitors and attendees get good value at every turn. That means reining in operating costs unrelated to trade-union rules. It means improving the McCormick Place experience by tying together the convention floor with mobile applications and social-media innovations.
* Federal government takes over fund with ties to Daley’s son, Patrick
* CTA cuts 54 jobs, details $15M in savings
* Indiana Economy Stronger Than Others, but at a Cost
* Sears to spin off hardware chain Orchard Supply
* Motorola Mobility, RIM having a ragged day
* Emanuel announces plan to expand teacher training program - Academy for Urban School Leadership matches National-Louis graduate students with failing schools
* Chicago test scores up, but officials not satisfied - More kids meet standards on ISAT, but other tests show students are not prepared.
* Troubled West Side School Celebrates a Milestone