Algonquin-based Community Unit District 300 has filed a lawsuit against Sears Holdings Corp. to prevent it from receiving local property tax revenue as an economic incentive, officials said Friday.
The complaint, filed Wednesday in Cook County circuit court, aims to halt further distribution of property taxes to Sears from the Economic Development Area Tax Increment Allocation Act, or EDA. The money comes from taxing districts within an established economic development area.
District 300 officials said Sears no longer is qualified to receive $8.8 million in subsidies due in December because the company failed to keep its promise of maintaining a required number of jobs at its Hoffman Estates headquarters.
"District 300 believes that Sears has not maintained the 4,250 jobs as required by the EDA," Superintendent Fred Heid said.
Sears separately applied for and received tax credits under Illinois' Economic Development for a Growing Economy or EDGE program. Those credits were conditional upon Sears making capital investments within Illinois and retaining at least 4,250 employees at its Hoffman Estates headquarters and Loop office. The state suspended its agreement with Sears in 2017 after Sears eliminated 400 jobs.
In reply to the suit, a Sears spokesman released a statement: "As we have stated numerous times over the years, the EDGE and EDA tax incentives are governed by unique statutes and have unique job requirements. This complaint is without merit."
In 1990, Hoffman Estates and Sears entered into an agreement creating an economic development area to provide financial assistance for Sears to develop its corporate campus in Hoffman Estates. In 2012, Sears petitioned and was granted a 15-year extension of the EDA.
"District 300 fought to ensure that any extension of the existing EDA would include specific language and constraints to prevent any further tax revenue loss for our community," Heid said.
Neither the school district nor Hoffman Estates has received confirmation of exactly how many people Sears employs in the area, Heid said.
The school district believes Sears should refund area taxing districts $49 million in tax incentives, including the December disbursement should it go through, he said.
A hearing on the complaint is set for Tuesday.