Get documents about "Tax hike burdens buyers
Document Sample
SUNDAY, FEBRUARY 10, 2008 | SECTION 5
Phil Rosenthal Front and Center Your Money
The Capital Times in Wisconsin decides it’s Success of Central Station hasn’t quenched In a rough economy, stock market experts plot
time to radically change its format. PAGE 3 Jerry Fogelson’s thirst for development. PAGE 3 moves to become recession-ready. PAGE 5
Even as corporate headquarters have fled Chicago over the years,
the business climate has remained vibrant by its ability to adapt
Big-name flight, small plight
By Greg Burns players, as traditional stal- At Sears Holdings Corp.,
TRIBUNE CORRESPONDENT warts come under pressure another iconic Chicago com-
amid a slowing economy. Mo- pany, Chairman Edward
Motorola Corp. stood tall torola is far from the only sto- Lampert’s financial engi-
among Chicago’s most ad- ried local company feeling neering has spawned a turn-
mired companies over the the heat. around plan short on details
years, for a lot of sound rea- Tribune Co., owner of this and long on odds. Even at
sons: Its innovative engi- newspaper, is laboring under CME Group Inc., among the
neers. Its relationships in a punishing $13 billion in hottest local stocks in recent
China. The integrity of its debt after going private, while years, a government threat to
founding Galvin family. local rival Sun-Times Media bust up its alleged monopoly
Now, Motorola is sinking, Group Inc. seeks a buyer for on clearing and processing
its key cell phone business up its portfolio of struggling trades triggered a sharp sell-
for grabs, and its future inde- newspapers. Threatened by a off last week.
pendence by no means as- planned combination of com- What’s happening to corpo-
sured. It has become another peting carriers Delta Air rate Chicago?
also-ran, in a home city with Lines and Northwest Air- Nothing too alarming, local
no particular claim to fame as lines, United Airlines parent business observers say.
a technology center. UAL Corp. is said to be an- Whenever trouble strikes a Motorola photo
These are volatile times for gling for a merger with Conti- Former Motorola chief Paul Galvin (left) and his son, Bob, examine the circuitry of the firm’s
Chicago’s leading corporate nental Airlines. PLEASE SEE CORPORATE » PAGE 2 Roto-Tenna portable radio in 1955. Financial troubles could spur the sale of its cell phone unit.
A healthy
backlash
on benefits
incentives
Workers, employers
clashing over tough
wellness programs
By Barbara Rose
TRIBUNE REPORTER
Executives at an Indianapo-
lis health-care system, frus-
trated by rising benefit costs,
proposed a new program to get
employees fired up about stay-
ing healthy.
Rather than offering incen-
tives, Clarian Health Partners
would fine employees who
didn’t try to quit smoking or
lower their cholesterol or
blood pressure. The threat of
hiking their medical premi-
ums by as much as $30 per pay-
check surely would get their
attention, executives rea-
soned.
They were right, but the pro-
posal also generated so much
resentment that Clarian
Health never rolled out the
program.
“Some of them quite frankly
Tribune photos by Candice C. Cusic didn’t get the essence of what
Alicia Marie (right) looks through documents at a condominium that is for sale. She is accompanied by real estate agent Marki Lemons. Marie is we were trying to do,” said She-
hoping to find an eager seller who will help make up the cost difference brought about by the increase in the real estate transfer tax. riee Ladd, Clarian’s vice presi-
dent for human resources.
Tax hike burdens buyers
The clash between Clarian
and its 13,000 employees is an
example of the skirmishes that
loom as employers experiment
with tough get-healthy re-
gimes, despite legal gray areas
and little evidence that so-
A 40% increase in called sticks work better than
carrots, experts say.
the city’s real estate Upping the The conflicts playing out as
transfer tax may ante on April 1 employers try to contain sky-
rocketing medical costs mir-
The City Council on ror tensions in society’s views
force some to delay Wednesday approved a about privacy, personal re-
real-estate transfer tax sponsibility and shared risk.
closing their deals, increase that will help They reflect growing intoler-
fund the CTA. ance for smokers and the
adding more pain obese. And they signal an ero-
sion of a belief that once stood
to a glutted market
$7.50 at the bedrock of employer
health plans: costs ought to be
By Mary Umberger The transfer tax per shared equally regardless of
TRIBUNE REPORTER $1,000 of sale price health history or habits.
“What I see happening is
The cost of Mario Greco’s that employers increasingly
new home just went up by
$7,000.
$10.50 are trying to place the burden
of a broken health-care system
That’s his estimate of The transfer tax per on their own employees, either
how much additional cash $1,000 of sale price financially or medically,” said
he’ll have to bring to the beginning April 1 Massachusetts attorney Har-
closing table when his fami- vey A. Schwartz, who repre-
ly’s Northwest Side house sents a smoker who was fired
is completed in November,
now that Chicago aldermen
Maurice Edwards, a friend of Alicia Marie, inspects closet space at a condominium for
sale on South Indiana Avenue.
$900 after testing positive for nico-
tine. The case is pending.
have bumped up the city’s The resulting differ- Few would argue it’s OK for
real-estate transfer tax 40 highest such taxes in the The tax increase is aimed “The home buyer has a ence a buyer faces for employers to dictate workers’
percent. country. at stanching the fiscal new burden,” said David a $300,000 home lifestyles outside work, yet it’s
The change, voted last The Chicago Association bleeding at the Chicago Hanna, president-elect of no longer uncommon for an
Wednesday, raises the tax of Realtors expects the law, Transit Authority by the Realtors’ group in Chi- employer’s health plan to ask
paid by most buyers from as it stands, to add $825 to an putting the extra revenue cago, which campaigned People 65 and older about smoking, eating, drink-
$7.50 per $1,000 of a home’s average condominium and into its employee pension against the change. “This who buy a home priced ing and exercise habits when
sale price to $10.50. The $732 to an average single- fund, a move brokered by isn’t something you can fi- at $250,000 or less employees sign up for insur-
higher tax applies to buyers family home. People 65 or state legislators last month. nance. You need 100 percent and attest that they will ance.
whose transactions close older who buy homes for While the tax hike may be a of these dollars, and you live in it for at least a Some employers charge at-
on or after April 1, unless $250,000 or less and agree to lifeline for transit, what it have to have them at clos- year can get a refund of risk workers more for health
the council passes a propos- live there for at least a year does to the city’s ailing real ing.” the increase, but they coverage, as Clarian proposed.
al to shift some of the cost to will get cash refunds equal estate market may be an- must apply to get it.
sellers. It will be one of the to the tax increase. other matter. PLEASE SEE TAX » PAGE 11 PLEASE SEE HEALTH » PAGE 4
2 CHICAGO TRIBUNE Ô BUSINESS Ô SECTION 5 Ô SUNDAY, FEBRUARY 10, 2008
» CORPORATE
CONTINUED FROM PAGE 1
city, at least in the short term.
Yet losing headquarters
had less of an impact than
major Chicago-based com- many expected. Over the pe-
pany, red flags fly among civic riod Chicago was shedding
boosters. Yet the concerns them in droves, the nature of
raised about corporate head- corporate home bases
quarters leaving the city over evolved, and they’re not as
the years have never fully ma- important as they used to be.
terialized. Some losses hurt At many global companies,
substantially: Chicago still headquarters downsized as
misses Amoco Corp.’s thou- central control gave way to
sands of headquarters jobs, farther-flung decision-mak-
for instance, and local owner- ing. Increasingly, production
ship of its leading banks. Yet occurs in separate locations
the overall commercial cli- from management oversight,
mate has taken in stride the as in the case of Boeing Corp.,
departures of top companies. which seven years ago moved
Jack Wing, former chief its headquarters to Chicago
executive of investment firm from the aerospace manufac-
Chicago Corp., believes the turing center of Seattle.
business community has a Given the diversity of cor-
knack for adjusting to chal- porate organization, head-
lenging conditions. quarters have become harder
“It’s a different kind of in- to compare, noted Bill Testa,
novation than on the West economist at the Federal Re-
Coast,” he said. “It’s more ad- serve Bank of Chicago.
aptation than creating the While the presence of mar-
next new thing. Chicago con- quee names “characterizes
stantly changes itself enough Chicago as a good place to be
to be successful.” for business,” he said, “the ac-
Rather than targeting spe- tual, name-brand head-
cific companies or industries quarters is so different from
with tax breaks and other in- company to company. Big
dividual incentives, Chicago companies here are so di-
has sought to attract business verse. Some are virtual. It’s so
of all kinds by building a rich mercurial.”
urban environment, from Indeed, one consequence of Tribune file photo by E. Jason Wambsgans
schools and parks to trans- scaling down headquarters Tribune Co. was taken private last year in a transaction that saddled the media company with $13 billion in debt.
portation and culture. has been a boom in the out-
“You would like to have big sourcing of back offices and
global headquarters, but in other business services, spell- Illinois’ big businesses, then and now
the end the score card is ing opportunity for Chicago’s Largest companies in state, by market capitalization, in billions
based on the quality of the law, accounting, consulting 1998 2008
jobs,” said Edward Snyder, and risk-management firms.
dean at the University of Chi- Growth has been especially 1. Abbott Laboratories $56.57 1. Abbott Laboratories $87.77
cago’s Graduate School of strong among top corporate 2. Ameritech 48.29 2. McDonald's 65.81
Business and a director of the law firms, as national players 3. McDonald’s 42.48 3. Boeing 61.49
World Business Chicago civic have expanded into Chicago
group. “We’re going to focus and homegrown competitors 4. Allstate 41.43 4. Exelon 50.17
on a mix of companies and have sought national and 5. Amoco 40.56 5. Kraft Foods 44.57
getting pieces of companies to international reach. 6. Motorola 33.57 6. Caterpillar 43.25
move here, and not let the The growth in professional
7. Sara Lee 29.16 7. Baxter Intl. 38.46
landscape be defined by a services is set to continue,
small number of top compa- said Rita Athas, executive di- 8. First Chicago NBD 27.85 8. Deere 36.12
nies.” rector at World Business Chi- Tribune file photo by Charles Osgood 9. Sears 22.91 9. Walgreen 34.78
The changing nature of cor- cago. “I don’t think that’s Sears boss Edward Lampert is trying to turn around the re- 10. Walgreen 16.92 10. CME Group 27.53
porate headquarters plays a done.” tailer’s sagging fortunes, but his plan is short of details.
role, too, in softening the blow Whatever happens to Chi- 11. Illinois Tool Works 16.10 11. ADM 26.62
from high-profile turnover. cago’s shakier movers and tering a period of greater un- slowing business cycle, Testa 12. Waste Management 15.93 12. Illinois Tool Works 26.39
During the years leading shakers in the coming year certainty.” said. 13. Baxter Intl. 14.87 13. Allstate 26.22
up to the recession earlier will be influenced by difficult Chicago is sandwiched be- At least in one area, busi-
this decade, consolidation economic times. So far, the tween a flagging regional ness remains strong: demand 14. Household Intl. 14.57 14. Motorola 25.72
and business reversals cost Chicago economy has not economy in the eastern Mid- for U. of C. MBAs. Although 15. Tellabs 12.45 15. Northern Trust 15.56
the city a slew of prominent slowed dramatically, with its west, characterized by high evidence of “general weak- 16. Aon 11.33 16. Wrigley 15.07
companies, from Quaker employment rate holding unemployment and real es- ness” in the local economy is
17. Fort James 10.85 17. Sears Holdings 13.57
Oats to Dean Foods, Com- ground and its real estate tate foreclosures, while con- building, recruiting efforts
disco to True North, Ameri- market less troubled than in ditions remain stronger to for his elite students continue 18. CNA Financial 9.69 18. Aon 12.22
tech to Waste Management. the manufacturing-bust cit- the north and west. Iowa, unabated, said Snyder. Place- 19. Wrigley 9.39 19. Equity Residential 10.08
The losses prompted ies of Ohio and Michigan. Minnesota, Wisconsin and ment is running ahead of last 20. Northern Trust 8.63 20. Fortune Brands 9.97
doubts about the quality of At Wayne Hummer Invest- other close neighbors contin- year, he said.
business leadership, the will- ments, chief economist Bill ue to benefit from strong com- “We turn out a lot of people, 21. Tribune 8.52 21. Sara Lee 9.72
ingness of the corporate elite Hummer foresees “what used modity prices and demand and Chicago is our No. 1 city 22. Quaker Oats 7.62 22. CNA Financial 8.76
to fund expansion and the to be called a rolling readjust- for equipment and machin- where graduates go,” he said. 23. Unicom 7.44 23. General Growth Prop. 8.50
dearth of hot new innovators. ment,” he said. “In the days of ery, noted the Fed’s Testa. “There will be ups and downs,
Local CEOs voiced concern a more cyclical economy, it “It’s kind of a mix,” he said. but I like the focus on build- 24. Equity Office Prop. 7.17 24. Discover Fin. Services 7.46
that the loss of so many public would take some companies “Chicago is between the east ing a diverse local economy.” 25. R.R. Donnelley & Sons 6.62 25. Navteq 7.35
companies would diminish down and boost others. We’re and west.” That mix may well
SOURCES: Bloomberg, Tribune reports TRIBUNE GRAPHIC
Chicago’s status as a global revisiting that now. We’re en- moderate the impact of a gburns@tribune.com
Business
Marketplace
FRANCHISE
& REAL ESTATE
OPPORTUNITIES
Chicago Metro Area
ampm Franchise Stores with
BP Branded Gasoline Stations
BP Branded Gasoline Stations &
Gas Station Redevelopment Sites
AUCTION MART
BP Franchise & How-to-Bid Advertise in Monday,Wednesday
Seminar: 3/4/08 & 3/5/08 & Sunday Business
Offer Due Date: 4/8/08 Sunday & Monday space deadline: Thursday, 3PM
Material deadline: Thursday, 3:30PM
800.747.3342 ext. 803
www.nrc.com/803a Wednesday space deadline: Monday, noon
This advertisement does not constitute an offer of an ampm franchise
Material deadline: Monday, 4PM
which can only be made with a UNIFORM FRANCHISE OFFERING CIR-
CULAR provided by BP. In addition, in NY an offering can only be made
by a prospectus filed first with the Department of Law of the State of For more information or to place an ad,
New York. Such filing does not constitute approval by the Department
of Law. No ampm franchise will be offered or sold in any state where call 312.222.4089.
registration is required until the offer has been registered by applicable
law. This information is not directed to anyone, and no franchise offer-
ing is available, in the states of CA, HI, MN, ND, SD, WA, MD, VA or RI.
Properties may be withdrawn at any time without notice. Sale is sub-
ject to the Terms and Conditions contained in the brochure and Prop-
erty Specific Packages. Sale of properties is conducted in conjunction
with IN licensed broker - Rich Correll of Correll Commercial Real Estate
Services and WI licensed broker - Fred Hofstede of Hofstede Realty,
license # 11007.
Search smarter, interview better. chicagotribune.com/careerbuilder
TT2273•bb•10/10/02
Business
Deposit Your Remote
Business Checks without Deposit We Do What It Takes.
Leaving Your Desk! For more information, call
Joyce Latkowski, Vice President, at
emarquettebank.com
708-364-9024
Member FDIC Equal Opportunity Lender
CHICAGO • AURORA • BOLINGBROOK • BRIDGEVIEW • EVERGREEN PARK • HICKORY HILLS • LEMONT • NEW LENOX • OAK FOREST • OAK LAWN • ORLAND PARK • ROMEOVILLE • SUMMIT
