Illinois Public Media News

WILL - Illinois Public Media News - July 19, 2011

Borders Stores to Close by Late September

Borders says it plans to end its operations by the end of September.

The Ann Arbor-based company announced plans Monday to sell off its assets after not receiving any bids to stay in business. At its peak in 2003, Borders ran more than 1,200 stores, but by the time the company filed for bankruptcy protection in February, that number was cut in half.

Technology played a big role in the company's demise, according to Dilip Sarwate, a professor in business administration at the University of Illinois.

"It's certainly difficult to compete with the likes of Amazon," Sarwate said. "I'm not sure this could be completely avoided. Fewer and fewer people are visiting bookstores. They are going to their computers and buying books."

But Lisa Bayer, who is the marketing director for the University of Illinois Press, said while technology did play a role in Border's downfall, it could have been avoided. She said Borders simply was not prepared for the onslaught of digital reading devices.

"They didn't position themselves to take advantage of various changes," Bayer said. "Barnes and Noble has the NOOK. Amazon developed the Kindle. Borders did really nothing."

Borders did come out with an e-reader last year, known as a Kobo. Produced by an electronic company in Canada, the Kobo will still be available to people who use the software to purchase and read books.

Up until Monday, the University of Illinois Press was still doing business with Borders. Bayer said the publishing company has been distancing itself from the retail giant over the last five years for various reasons, including "very questionable" decisions by the company's management.

Bayer said the University of Illinois Press' involvement with Borders was so minimal that she does not think the bookstore's failure will have a huge impact on the publishing company.

"It's very likely they hadn't even ordered any of our books in a while," she said, noting that many of the University of Illinois Press' books are scholarly journals. "We're not as much of an interest to them as some other kinds of publishers."

Of the nearly 400 Borders bookstores slated to close, three are in Champaign, Mattoon and Peoria.

Mary Beth Nebel runs an independent retail bookstore in Peoria called "I Know You Like a Book." She said she does not think Border's demise is a sign that other retailers are destined to fail.

"I hate to see any bookstore close," she said, reflecting on Border's closure. "I think independent bookstore like I have is much different than a chain store. It's more of a community-based place. I think more people will enjoy that sort of atmosphere."

With Peoria's Borders expected to close and a Barnes and Noble still running, Nebel said she has no intention of changing the way she runs her five-year-old business.


WILL - Illinois Public Media News - July 19, 2011

Arbitrator: Quinn Must Give Pay Hikes to Workers

An arbitrator says Gov. Pat Quinn cannot cancel pay raises promised to state workers.

Arbitrator Edwin Benn on Tuesday ordered Quinn to start paying the 2 percent increase within 30 days with back pay. That's according to a copy of Benn's opinion provided by the American Federation of State, County and Municipal Employees.

"These are hard fiscal times for the State - no doubt. However, when the State did not pay the increase," Benn stated. "The State did not keep its promise."

While the ruling comes as a victory for AFSCME, the issue is far from settled. Roughly 30,000 state employees were affected by the administration's decision to cancel the raises.

Gov. Quinn has said he had no choice since the legislature just did not allocate enough money in the budget to pay employees in 14 state agencies.

AFSCME appealed that decision to the arbitrator who last year worked out a labor deal with the governor to issue 2 percent pay increases starting July first of this year.

The arbitrator noted he has power to interpret only the labor deal, and it is up to the courts to decide if the state has the authority under the law and constitution to cancel the raises because the legislature did not to fund them.

A spokesman for the Gov. Quinn said the administration will appeal the arbitrator's ruling.

"Funding these raises would mean that these agencies would not be able to make payroll for the entire year, disrupting core services for the people of Illinois, including children, the elderly and those with special needs," Quinn spokesman Grant Klinzman wrote.

In the fall, AFSCME supported the governor over his opponent, state Sen. Bill Brady (R-Bloomington). The union contributed more than $200,000 to Quinn's campaign.

Categories: Economics, Government, Politics

WILL - Illinois Public Media News - July 19, 2011

Urbana City Council Upholds Mayor’s Veto of CVB Funding

The Urbana City Council has narrowly upheld Mayor Laurel Prussing's veto of funding for the Champaign County Convention and Visitors Bureau. Council members voted 4-to-3 against overriding Prussing's veto of those funds.

Some council members say they wanted to find some funding for the agency, but also wanted more evidence of its performance. Members agreed the the department offers a valuable service, but not at a level of $72,000 a year. The mayor wants to use the money for two police positions instead.

Alderwoman Diane Marlin said she regrets the council was being forced to choose, saying Urbana needed both economic development and public safety.

CVB President and CEO Jayne DeLuce said she is looking forward to engaging in additional dialogue with the city, and finding a funding level that leaders are comfortable with.

"I think for a long time, there has been some opportunities where maybe there hadn't been engagment in the past," DeLuce said. "And I'm all willing to do that. Because we have the documentation of what we do. We have great things that we're trying to move forward with. But we do truly need countywide support to be able to do that, because it's really hard to be able to look at say, 'how do you move forward without one of the major stakeholders in the picture?"

DeLuce said the CVB now needs to do a better job of reporting its value to stakeholders, something she says wasn't done well before she arrived 18 months ago.

Alderman Charlie Smyth said discussions will start with $20,000 dollars of unallocated funds to the CVB, and build from there over the next few weeks. But he said any agreement will include expectations in terms of performance.

"I think there's sentiment on the council to fund CVB at some level that we think is appropriate that we can afford," Smyth said. "And at the same time, there's a legitimate concern that we get our money's worth from them."

Aldermen Dennis Roberts, Robert Lewis, Diane Marlin and Charlie Smyth supported Prussing by voting against the override, while Brandon Bowersox, Eric Jakobsson, and Heather Stevenson voted to override. Smyth said he hopes to find about $50,000 by time talk on CVB funding wraps up, likely sometime in August.

Marlin also said she was happy to see the Champaign County Board is considering a funding level of its own for the CVB at its meeting on Thursday.

The city council has also finalized a 1-percent tax on package liquor, along with hiking Urbana's hotel-motel tax from 5 to 6 percent. It's expected to raise $270,000 and pay for raises for the city's AFSCME and police unions. Only Alderwoman Heather Stevenson voted down the fee hikes, saying she was never contacted by Prussing about them, and did not have time to gauge their impact from local businesses.

Categories: Economics, Government, Politics

WILL - Illinois Public Media News - July 18, 2011

Casino Opens In Des Plaines

After a decade of legal battles, Illinois 10th casino has finally opened.

Gamblers flocked to the Rivers Casino's grand opening in Des Plaines Monday. The license had long been dormant since originally being approved for the city of Rosemont in 1999.

In 1997, a gambling boat failed in East Dubuque, freeing up a 10th casino license. That began the saga of communities wrangling to sweep it up, with cities betting on a casino's ability to increase municipal revenues. For a time, Rosemont was going to be the spot, until fears of mob ties required a bidding redo. The Illinois Gaming Board finally awarded the coveted license to Des Plaines in 2008.

Gov. Pat Quinn says he respects that drawn-out process.

"I think that is a model that we need to keep an eye on," Quinn said. "It was a very competitive process and the gaming board, our Illinois Gaming Board, the regulators oversaw that process and ensured maximum competition."

The opening of the Des Plaines casino comes after lawmakers recently passed a measure that would massively expand gambling in the state for Chicago, Danville, Rockford, a south Chicago suburb, and Lake County.

The measure still has not been sent to Gov. Quinn, who has not indicated what action he will take on the bill when he gets it. Though, Quinn has been less enthusiastic about the plan, calling it "top heavy."

Gaming Board Chairman Aaron Jaffe has been highly critical of letting politicians decide casinos' locations.

It is expected Rivers Casino's success could be hampered by adding more casinos in and around Chicago.


AP - Illinois Public Media News - July 18, 2011

Borders Seeks Approval to Liquidate

There will be no storybook ending for Borders. The 40-year old book seller could start liquidating its 399 remaining stores as early as Friday.

The chain, which helped pioneer the big-box bookseller concept, is seeking court approval to liquidate its stores after it failed to receive any bids that would keep it in business. The move adds Borders to the list of retailers that failed to adapt to changing consumers' shopping habits and survive the recession, including Circuit City Stores Inc., Mervyn's and Linens `N Things.

Borders is expected to ask a judge to approve a sale to liquidators led by Hilco Merchant Resources and Gordon Brothers Group. Liquidation sales could start as soon as Friday if the U.S. Bankruptcy Court of the Southern District of New York approves the move at a scheduled hearing on Thursday. The company is expected to go out of business by the end of September.

Borders attempt to stay in business unraveled quickly last week, after a $215 million "white knight'' bid by private-equity firm Najafi Cos. dissolved under objections from creditors and lenders. They argued the chain, which has 399 stores and 10,700 employees, would be worth more if it liquidated immediately.

"We were all working hard towards a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, eReader revolution, and turbulent economy, have brought us to where we are now,'' said Borders Group President Mike Edwards in a statement.

Simba Information senior trade analyst Michael Norris said a Borders liquidation could have far-reaching effects, putting thousands of people out of work at a time of high unemployment, even possibly cause sales of electronic books to fall.

"Bookstore employees don't just sell books, they sell the activity of reading, and this decision throws thousands of them out of work,'' said Simba Information senior trade analyst Michael Norris. "This industry is going to slowly figure out that a lot of e-book readers still use bookstores all the time to discover what's new before heading home to buy it for their e-reading device.''

Borders entered the electronic book market with Canada's Kobo Inc. last year. Owners of the Kobo e-reader will still be able use Kobo software to buy and read books. A Borders spokesperson declined to comment about what would happened to e-books bought from Borders.com

It has been a long fall for Borders since Tom and Louis Borders opened their first store in 1971, selling used books in Ann Arbor. At the time, the brothers were mostly interested in offering other bookstores a system they developed for managing inventory.

But in 1973, the store moved to a larger location and shifted its focus to selling new books and expanding, helping pioneer the big-box bookstore concept along with Barnes & Noble Inc. At the time, Waldenbooks and B. Dalton mall chains, with small stores and 20,000 to 50,000 titles, were growing rapidly. The new superstores, by contrast, offered between 100,000 and 200,000 titles, as well as enticements to linger like comfortable chairs and attractive lighting.

Kmart Corp. saw the potential and acquired Borders in 1992, forming a book unit with Waldenbooks. It then spun the bookstores off as a separate company in 1995, the same year Amazon started selling books online.

Borders was slow to adapt to the changing industry and lost book, music and video sales to the Internet and other competition. Sales sales began to fall, leading to a revolving door of CEOs. By the time Borders' current CEO, financier Bennett LeBow, came aboard in May 2010 after investing $25 million in the company, bankruptcy was already looking like a strong possibility.

Borders filed for bankruptcy protection in February after being hurt by tough competition from online booksellers and discounters. It hoped to successfully emerge from bankruptcy protection by the fall as a smaller and more profitable company, but pressure from creditors and lenders eventually led the chain to put itself up for sale and finally, seek approval to liquidate.

At its peak, in 2003, Borders operated 1,249 Borders and Waldenbooks, but by the time it filed for bankruptcy protection in February that had fallen to 642 stores and 19,500 employees. Since then, Borders has shuttered more stores and laid off thousands.

Borders says it expects to be able to pay vendors for all expenses incurred during the bankruptcy cases.

(AP Photo/Carlos Osorio, file)

Categories: Business, Economics

AP - Illinois Public Media News - July 15, 2011

Chicago Mayor Laying Off Up to 625 Workers

Chicago Mayor Rahm Emanuel announced Friday he is laying off up to 625 city workers, after labor leaders blew a Friday deadline to come up with a list of cost-saving measures in order to avoid pink slips.

"I took the steps because I cannot wish away this budget shortfall," Emanuel said.

The layoffs will hit the city's water department call center, city custodians, and the office that manages health benefits for city workers. His plan will also lead to a 75 percent force reduction of the seasonal workforce at the Department of Transportation, which would mean fewer street and sidewalk improvements this year.

Layoff notices will begin going out next week, said a mayoral spokeswoman.

The mayor also used his remarks to slam union leaders for not agreeing to a menu of of compensation and work rule changes he said would have precluded pink slips. His proposal, outlined to the public in its entirety for the first time Friday, would eliminate sick pay for city trade workers, lengthen the work week, and reduce pay for overtime, among other changes.

The mayor said his administration would meet with labor leaders on Monday, but he would not say whether he would cancel the layoffs if union workers agree to the work rule changes he had pushed.

Chicago Federation of Labor President Jorge Ramirez responded to the mayor's decision on Friday afternoon. Ramirez said he was unaware of the deadline and that he and other leaders would continue to work on their own cost-saving plan. He said the CFL has hired an outside consultant to help come up with a proposal.

Ramirez said the unions were left in the dark about Emanuel's proposed work rule changes.

"They have never been formerly presented with anything, they haven't been asked to sit down in a formal way, and this is something shouldn't have caught the city by surprise," Ramirez said. "We told them there was a process from the very first meeting that we had. We suggested to them that they engage it if they intend to do anything like that, and they just chose not to."

Emanuel's administration inherited the labor dispute from former Mayor Richard Daley. The Daley administration balanced its 2011 budget, in part, by squeezing concessions and furlough days from unions. But that labor agreement expired last month, leaving the Emanuel administration to come up with about $31 million in savings to close out the budget year.

Emanuel has said he is against imposing more furlough days on city workers and he previously ordered a partial hiring freeze. He also said seven city-run health clinics will turn over primary care services to federally funded clinics. Emanuel said the measures would save $20 million.

(AP Photo/M. Spencer Green)

Categories: Economics, Government, Politics

AP - Illinois Public Media News - July 14, 2011

Indiana Ends Budget Year with $1.2B Surplus

Indiana closed its budget books Thursday with $1.2 billion in extra cash, built on a series of deep cuts to education and healthcare services and improved tax collections.

State Auditor Tim Berry called the state workers who bore most of those budget cuts via greater workloads, "heroes."

"The surplus was built on the backs of state employees," said Berry, after he thanked them for tightening their belts.

Gov. Mitch Daniels has already said he plans to keep that money in savings rather than restore cuts made in recent years.

The Daniels administration set a target of cutting $597 million from the budget last July, just before state tax collections improved. Although tax collections improved dramatically over the last year, the administration cut deeper as the year went on, ultimately cutting roughly $460 million more than what they planned for last July.

"More money in Hoosiers' incomes and a terrific job of cost control by state employees working together combined to produce an even stronger result than we expected at budget time," Daniels said in a statement Thursday. He planned a Friday morning press conference to discuss the budget.

But talk of the massive state surplus glossed over how the administration achieved it, largely through cuts to education and children's healthcare, House Minority Leader Pat Bauer said Thursday.

"This is a gimmicky report; which has not been unusual for this administration," said Bauer, D-South Bend.

The state school system bore much of the brunt over the last year, returning $325 million from the $6.9 billion that it was allotted in the previous budget. The cuts were more pronounced for state agencies with smaller budgets such as the Department of Child Services, which had its budget slashed by $104 million.

The other half of the state's budget equation, tax collections, improved significantly over the last year, and the state collected $204 million more than it had projected. Most of that money, $195 million, came from income taxes.

The budget surplus should help the state replenish its emergency spending fund, the Rainy Day Fund, which is monitored closely by bond-rating agencies as they set interest rates for the state on its outstanding debt.

The $1.2 billion also fell just short of the amount needed to trigger automatic tax refunds for Hoosiers. The automatic tax refunds kick in when the state has a surplus equal to 10 percent or more of general spending. The $1.2 billion figure amounted to 9.1 percent of spending.

Categories: Economics, Government, Politics

WILL - Illinois Public Media News - July 14, 2011

Parkland College Secures Remaining Funding for Expansion

Parkland College in Champaign now has the funding it needs to move forward with a large expansion.

About $31 billion in construction funds were released earlier this week by the state, and $24.6 million of that money will support construction of the Student Services Center and Applied Technology Building at Parkland.

Lieutenant Gov. Sheila Simon, who was at Parkland Thursday morning as part of a statewide tour of community colleges, said the construction program will improve access to education in an already crowded school.

"They're filled to the gills here," Simon said. "Their offices, their classrooms, are totally loaded with students. We heard about students going out to their cars to study in between classes. So, to have more space to do their good work here is going to be a big improvement for everyone."

Parkland College President Tom Ramage estimates that once construction of the two buildings wraps up, the college will be able to accept up to 5,000 additional students over the next 20 years.

"We've experienced huge enrollment growth over the last four or five years," Ramage said. "When we're out of classroom space and out of office space, it limits the sort of offerings we can put out for our students."

Parkland has already raised an additional $67 million for its so-called "Master Plan," which includes the two buildings, the addition of a Fine and Applied Arts Center, and remodeling on campus.

State officials say these projects are expected to employ hundreds of construction workers.

(Photo by Sean Powers/WILL)


WILL - Illinois Public Media News - July 14, 2011

U of Trustees Will Vote to Close Aviation Next Week

University of Illinois Interim Chancellor Robert Easter confirms the university's Board of Trustees will vote next week during a meeting in Chicago to close its Institute of Aviation.

A panel of administrators and faculty made the recommendation in February as part of a series of cost-cutting measures known as "Stewarding Excellence." But members of the Institute's Alumni Advisory Board say the trustees are ignoring a vote by the U of I's Faculty Senate to keep the facility open. Even though the proposal to close the Institute failed by three votes, Easter calls that tally 'essentially a tie".

"We have other bodies, the Stewarding Excellence process, the Faculty Committee on courses and curriculum, they have supported the decision," he said. "We had to arrive at some decision, so we decided to move it forward."

Easter notes that the Institute's degree program was only established in the late 90's, while the U of I has been teaching people to fly since the 1940's. Easter said the U of I still wants to find a way to offer pilot training, and it is working with a local community college to provide those courses. He would not say whether that school is Parkland College. Easter also said the closure date for Aviation would be 'several years' away.

"We have a very real obligation and commitment to continue to operate the educational program until the students have had a reasonable opportunity to complete their degrees." he said.

Karen Koenig with the Institute's alumni panel said there has been an effort to merge the Institute with another unnamed college. But Easter said any progress at a meeting between the two parties scheduled for Wednesday will likely be too late to change the outcome of the Board of Trustees vote next week.

Koenig said the powers that be are ignoring the actions of others, and not giving Aviation enough time to respond, since the Institute's alumni panel only learned of administrators' plans on Tuesday.

"The original proposal made by (Easter) to close the institute is the one being sent to the trustees, and that totally circumnavigates the votes that were made by the University Senate, the Student Senate, the Faculty-Student Senate, and the Educational Policy Committee," Koenig said. "Those are not being considered."

Dana Dann-Messier is President of Koening's advisory group. He says the university's efforts to shut down aviation started in 2005, when instructor and director positions started becoming vacant and weren't refilled. Dann-Messier says those actions are hurting the business.

"It's apocolyptic," he said. "Those are the words the industry is using for the pilot shortage on the horizon. And for the administration to be engaging in these kinds of games when the future of air transportation is at stake, and we can be a leader in that future, it's mind boggling. That's all I can say."

Staff and alumni from the Institute of Aviation plan to rally Thursday morning before the Board of Trustees meeting.


WILL - Illinois Public Media News - July 12, 2011

Vermilion County Board Approves Wind Turbine Ordinance

The Vermilion County Board overwhelmingly approved a measure Tuesday night by a vote of 22-1 to issue a land permit to an energy company that wants to construct a large wind farm in Vermilion and Champaign Counties.

The lone dissenting vote came from board member Terry Stal.

Chicago-based Invenergy is looking to build 104 wind turbines in Vermilion County starting northeast of Kickapoo State Park. The company is willing to pay the county up to $90,000 a year in property taxes and an additional $150,000 in building permit fees.

Vermilion County Board Chairman Jim McMahon supports the plan, touting its economic advantages for the community.

"Land owners get anywhere between $4,000 and $8,000 a year for leasing a piece of their land for the wind turbine," McMahon said. "So, you get the economic boost of people getting money because of the wind."

Darrell Cambron of rural Rankin has opposed the project from the start. Cambron said that the Vermilon County wind ordinance, which allows the wind turbines within 1,000 feet of a home is simply too close. He is urging county officials to give the plan a second look.

"It seems like they keep getting bigger all the time," Cambron said. "I've talked to other people who have had them around their homes, and they have problems with them."

Each wind turbine would be 492 feet tall, and have the capacity of producing 1.6 megawatts. Cambron said he is concerned that the large wind turbines would create too much noise and shadow flicker. However, McMahon said those concerns could only be addressed if Vermilion County had a zoning ordinance, but he said county simply does not have one on the books.

"I have no jurisdiction to look at those issues when it's a building permit," McMahon explained. "If you were going to build a building, and you needed a permit for that building, you have to produce that that building is a sound building, and it's not going to fall over or somebody get hurt."

The wind farm would stretch to Champaign County, where there would be 30 additional turbines north of Royal and just south of Gifford.

Champaign County Board member Alan Kurtz, a Democrat, said the county's wind farm ordinance, which took three years to develop, will allow the county to reap the benefits, including hundreds of jobs.

"I was able to put together a coalition of Republicans and Democrats, and we passed a wind farm ordinance by a supermajority of 25 out of the 27 votes on the county board," Kurtz explained. "It's obvious that there was a consensus for wind farms here in Champaign County and the revenues that it will bring to us."

The Champaign County Planning and Zoning Department received its application this week to build the wind farm. A set of public hearings on the project is scheduled Aug. 25, and Sept. 1, 8 and 29 at the Champaign County Zoning Board of Appeals.

"I don't know if the county board is going to want to do a study session," county zoning director John Hall said. "They are all pretty familiar with the wind farm requirements since it was such a relatively recent amendment, so I never presumed that they would want a study session...there are no plans for a study session at this time."

The Champaign County Board could vote on the application as early as Oct. 20.


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