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Thick, moist air hangs heavy in the lean-to shed. Along the slanted walls, 12 waist-high beds of dirt resemble gurneys in a hospital ward. Except the contents of these beds undulate in a constant, slow motion.

Marty Badegian scoops a softball-sized handful of dirt from one of the beds and holds 5,000 or so worms and white threads of larvae in the heap. Not just any worms, these are red worms. And not just any red worms, but, according to Badegian, the largest red worms in Lake County.

Badegian and wife Lorraine own the Red Worm Ranch Bait Shop on U.S. Highway 12 between Wauconda and Volo. Folks on their way north to the Chain O`Lakes recognize the place by the giant red ”Bait” sign propped on the worn, gray-shingled roof. The shack, with its peeling white paint, has been on this spot for a long time.

”It`s been in my wife`s family for more than 40 years,” Badegian said.

”And we`ve had it for 13 years.”

The Red Worm Ranch, Chandler`s Bait & Tackle Inc., Bart`s Bait and Sport Shop and Berger`s Harbor are among a handful of old-time bait shops to survive ”progress” and continue to supply fishermen and fisherwomen on their way to the lakes to ”wet their lines” and ”jig for lunkers.”

They are the same as, yet different from, the 50-year-ago originals. Of course, they still sell bait, but today`s shops either have to specialize, diversify or phase out.

Badegian chose to specialize in red worms.

Last year at age 55, he retired from the federal government`s Guided Missile Control System project, where he had worked in the repair unit for 35 years. Badegian first worked with the missiles as a repairman, then as a manager and finally a supervisor. He was responsible for repairs at the 30 missile sites in the Milwaukee, Chicago and Gary Defense Area. Now he has retired to the bait shop, which had been his wife`s bailiwick during the week. They operated it together on weekends.

”I wasn`t going to get into the raising part,” he said about the worms, ”but when they started phasing out the missiles in the `70s, I looked for something else. Thirteen years ago, we started with a handful (that`s 5,000)

of red worms.”

Why red worms rather than night crawlers, those ubiquitous, slimy earthworms that gratuitously surface overnight in the garden?

”Because red worms survive in heat and can stay at room temperature,”

Badegian said. ”You don`t have to keep them refrigerated like night crawlers. They also stay red in the water. I sell almost as many red worms as night crawlers.”

Badegian attributes the super 3-inch-long size of his worms to a special food formula he has perfected over the years. He also provides role models for his crop: Tacked onto the walls above the worm beds are team posters of the Bears Super Bowl football team and several posters of Walter Payton.

”Walter lives in Barrington and buys bait here,” Badegian said with a shy grin. ”He`s come in for minnows.”

Inside the salesroom are side-by-side-by-side galvanized tanks stocked with large and small fat-hen minnows, medium and large roach minnows and other live enticements for hungry fish. Night crawlers from Canada await their fate in the refrigerator, one dozen to a foam container. Leeches keep the night crawlers company in the cooler. Wax worms and red worms, a dozen per cup, line up on the counter. A dry terrarium of bouncing, chirping crickets provides high-decibel accompaniment to the low whooshing sounds of running tank water. Shelves and display cases are snug with fishing doodads. And nets, rods, reels and racks teeming with hooks, lines, sinkers and lures obscure the walls.

Marty and Lorraine, 54, still love to fish.

”My wife is a crazy fisherman,” Marty said with a laugh. ”I go fishing with my grandson. We sit in the evening along the banks of Fox Lake behind the house. Lots of people are into catch-and-release. We`re out for fun and not for supper usually. Except if it`s walleye. Walleye and perch are my favorites.”

The Badegians close the Ranch during the off-season and travel to Florida or Arizona to visit some of their five children-and to fish.

Up a mile or so on Highway 12 is Chandler`s Bait & Tackle Inc. The inside of Chandler`s looks a bit spiffier than the Ranch, with fresh paint on walls that aren`t yet layered with merchandise. But give it time. Sam Calandra, 22, and his dad, Philip, 51,-they call each other ”Little Fish” and ”Big Fish”-bought the shop about a year ago and gradually are stocking it with new gear. Irene and Bill Chandler had owned the place for several decades. Irene sold out last year after the deaths of her husband and son. ”I bought my bait here since `84,” Sam said with the gentle swagger of an old-timer. ”The store has been here since the `40s. There`s a lot of history here, and it has an excellent reputation for good bait and ice-fishing tackle.”

Hoping to raise enough revenue to support them both, the Calandras enlarged the shop by opening up the back room, where they`ve added a full range of hunting and archery equipment. They also supply ice fishermen with augers and other necessities.

Because they have diversified from a bait-and-tackle shop to a fuller-range sport shop, the Calandras intend to stay open year-round. If things go well, they will build an outdoor archery range on the property this summer. Their other main task is to keep the bait tanks clean. Six built-in concrete tanks resembling bath tubs are part of an elaborate bait-storage system installed in the `40s.

”About eight more tanks are under the floor,” Sam said. ”One of the tanks is inscribed 4/22/49. I keep my tanks clean. I can keep my bait alive for over a month.”

Among the bait fish swimming in their tidy segregated pools are rosy-red minnows, small to extra-large golden roaches, chubs and water dogs, a type of salamander that looks like a prehistoric creature, is 3 to 10 inches long and lures muskies. In the cooler are night crawlers and leeches.

Almost as exotic as the antique-looking water dogs are trendy packaged products such as Bio-Sound and Sparkl Scales Plus, which are displayed on dust-free shelves.

”When applied to bait,” Sam said enthusiastically, ”they bubble and pop like Alka Seltzer, attracting fish like walleye, catfish and panfish.”

He knows his fish, loves to fish-but can`t as often as he`d like-and knows what to do with them.

”Most people are into catch-and-release or selective harvest, where you take a few to eat and put the rest back. Sure, there are a lot of jet skiers and water skiers on the Chain, but most fishermen fish before the party people come out, usually from 3 a.m to 10 a.m.”

Al and Lorraine Scharlow have owned Bart`s Bait and Sport Shop in Fox Lake for 24 years. ”The previous owner had it for 22 years, and someone ran it before him,” Al said. The shop is practically a landmark. It`s located at the southern tip of town, where Highway 12 and Illinois Highway 59 diverge, a perfect spot to catch both local fishermen and out-of-towners.

But the Scharlows have seen the glory days of their shop slip away, and they`re beginning to reduce their time and commitment to it. ”The last 10 years business continually has gotten a little worse,” said Al, 61. ”We`re starting to retire. This fall, for the first time, we`ll close some weekends.”

Scharlow is disappointed that Fox Lake is no longer predominantly a resort area. ”It`s a bedroom community of Chicago,” he said. ”There`s better fishing now than there used to be, but access is limited. Boat rentals are gone because liability insurance is too expensive, and there`s no shore fishing because everything`s owned by somebody. You have to have your own boat to fish here.”

The Scharlows will use their holidays for ”running the dogs.” They breed and show English springer spaniels. ”We got into dogs and hunting after we bought the bait shop and had no time to fish anymore,” Lorraine said.

Dick Corey, manager of Spring Grove Hatchery, which stocks the Chain O`Lakes, agrees that fishing is better than ever. ”We had a record year for catching adult walleye in Lake Marie for breeding this year,” he said. ”We caught 817 compared to our previous record of 605. We got 16 million walleye fry (babies), which we`re stocking in the lakes at 1,000 per acre. There`s usually a 50-50 chance of survival. What we`re doing is working. Fishermen are even coming down from Wisconsin for walleye.

”I`ve been here for 15 years, and I see more fishermen and lots more talent on the water. Sure, folks have to use the water in shifts to accommodate everybody, but the police are out there to keep order,” he said. Where are some hot spots?

”Down at McHenry Dam they catch a lot of walleye,” Corey said. ”Fish go to Dunn`s Lake to get away from all the activity, and Lake Marie is one of the top lakes in the Chain for fishing.”

Fred Berger, 87, of Berger`s Harbor on Fox Lake doesn`t believe in giving fishing tips. ”You can`t tell a person how to fish like you can`t tell someone how to ride a bike,” he said with conviction from a lifetime of experience. ”Training wheels are the worst thing ever done to a bicycle. I`ve started four children and eight grandchildren on bikes. I just give `em a shove and let `em go-like fishing.”

Berger sells basic bait and has one of the few boat rentals left in the area. He has 14 aluminum fishing boats powered by 6-horsepower motors. ”Some guys go home with a boatful of catfish,” he said. ”But they ain`t very many good fishermen come here. Most folks just fish at it. Nope. No ski things. They`re a pain in the you-know-what.”

Eighteen years ago Berger and wife Alice retired to Fox Lake from Maywood. They used to fish, but not anymore. ”My wife`s gone blind and I have to stay around and do for her,” he said. ”But my grandson`s a good fisherman. He comes up on weekends. He doesn`t want the business, though.”

Rental business is flourishing at the Chain O`Lakes State Park. ”We have 40-50 boats to rent, and we rent every one of them several times over on a good weekend,” said Nick, the manager (Nick said he doesn`t use a last name because everyone knows him by his first.) ”Only 10 of our boats have motors, though. They`re gone the first 10 minutes to fishermen. The rest are row boats and canoes. Motors and insurance are too costly. Most fishermen have their own boats.”

He sells live minnows and night crawlers and some lures and lines.

Nick said he`s into the challenge of fishing whenever he has time. ”In 20 years I haven`t eaten my own catch,” Nick said. ”I strictly believe in catch-and-release. Except now we call it CPR: catch, photograph and release.” This way you can have your fish and release it, too.

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The Red Worm Ranch Bait Shop is two miles north of Illinois Highway 176 on U.S. Highway 12. Hours are 6 a.m.-3 p.m. Monday-Friday and 5 a.m.-3 p.m. Saturday-Sunday. 708-526-3270.

Chandler`s Bait & Tackle Inc. is 3.5 miles north of Wauconda on Highway 12. Hours are 5:30 a.m.-8 p.m. Monday-Friday, 5 a.m.-8 p.m. Saturday and 5 a.m.-5 p.m. Sunday. 708-526-8217.

Bart`s Bait and Sport Shop, 601 S. Highway 12, is open 6:30 a.m.-7 p.m. Monday-Friday and 6 a.m.-7 p.m. Saturday-Sunday. 708-587-0331.

Berger`s Harbor, 92 E. Grand Ave., Fox Lake, is open 6 a.m.-6 or 7 p.m. seven days a week. 708-587-0074.

Chain O`Lakes State Park Concession is on State Park Road in Spring Grove, three miles north of Fox Lake off Highway 12. It`s open sunrise to sunset seven days a week. 708-587-7165.