Boston Bound: GE Makes Its Decision

In announcing the long-awaited relocation decision that General Electric was leaving its Fairfield headquarters after 42 years and moving to Boston, CEO Jeff Immelt said the company wanted to be at the center of an “ecosystem that shares our aspirations.”

“GE aspires to be the most competitive company in the world,” Immelt said in a statement. “Today, GE is a $130 billion high-tech global industrial company, one that is leading the digital transformation of industry. We want to be at the center of an ecosystem that shares our aspirations. Greater Boston is home to 55 colleges and universities. Massachusetts spends more on research & development than any other region in the world, and Boston attracts a diverse, technologically-fluent workforce focused on solving challenges for the world. We are excited to bring our headquarters to this dynamic and creative city.”

Related:

• Malloy: GE’s Move to Boston ‘Hurts’
• Tetreau: More Questions Than Answers Following GE’s Decision To Leave

GE also released the following information in its statement:

GE has been considering the composition and location of its headquarters for more than three years. The Company began its formal review in June 2015, with a list of 40 potential locations. Boston was selected after a careful evaluation of the business ecosystem, talent, long-term costs, quality of life for employees, connections with the world and proximity to other important company assets.

There is no material financial impact to GE related to the cost of the move. Working with GE, Massachusetts and the City of Boston structured a package of incentives that provides benefits to the State and City, while also helping offset the costs of the relocation to GE. GE will sell its offices in Fairfield and at 30 Rockefeller Plaza in New York City to further offset the cost of the move.

The content of GE’s headquarters will also change, with more emphasis on innovation. In Boston, GE will have roughly 800 people; 200 from corporate staff and 600 digital industrial product managers, designers and developers split between GE Digital, Current, robotics and Life Sciences. A GE Digital Foundry will be created for co-creation, incubation and product development with customers, startups and partners. The remainder of administration will be placed in shared service operations throughout the Company.

GE has a significant existing presence in Massachusetts, with nearly 5,000 employees across the state in businesses including Aviation, Oil & Gas and Energy Management. In 2014, GE moved its Life Sciences headquarters to Marlborough, and in 2015 GE announced its energy services start-up, Current, would also be headquartered in Boston.

The headquarters will be located in the Seaport District of Boston. Employees will move to a temporary location in Boston starting in the summer of 2016, with a full move completed in several steps by 2018. GE will host a public briefing in Boston with government officials, and business and community leaders, on February 18, 2016.

Fairfield and the rest of the state has been anxiously awaiting GE’s decision ever since it announced last June that it would be exploring relocation options.

Recent signs pointed to the company’s exit from Fairfield and Boston emerged as the leader. New York was also a finalist, according to reports.

GE has about 800 employees at the Fairfield headquarters, where it has called home for the last 42 years. GE has been Fairfield’s largest taxpayer for years and its property was valued at $76,541,780 in 2014, according to the Connecticut Post.

The Boston Globe reports that some GE executives are expected to relocate to temporary space in Boston later this year but the full move from Fairfield will take place over the next few years.

The location of the new headquarters hasn’t been identified, but sources close to the process told the Globe that Boston is prepared to offer as much as $20 million in property tax relief over 20 years and the state package could be valued as high as $120 million and include a variety of benefits, such as help with real estate acquisition costs, infrastructure improvements, and tax incentives.

Related stories:

• Malloy Fails to Impress GE in Last-Ditch Effort: Report
• Signs Point to GE’s Exit: Reports
• GE Eyes Boston’s Seaport District for Potential HQ: Report
• Malloy Engineered ‘Huge’ Tax Favor For GE: Report
• CEO Says GE Will Always Have ‘Big Presence’ In CT As HQ Search Continues: Report

GE has been weighing its options about relocating from its Fairfield headquarters ever since Immelt expressed frustration over Connecticut’s new business tax increases in June and notified employees that he assembled an “exploratory team to look into the company’s options to relocate corporate HQ to another state with a more pro-business environment.”

Connecticut’s General Assembly passed a bill in a special session that rolled back some of the changes that alarmed businesses.

There were reports that the decision wouldn’t be based solely on taxes and incentives.

Boston emerged as a favorite as the city’s Seaport District is becoming defined by its “innovation economy” and would be ideal for GE as it transforms its portfolio into a premier digital industrial company.

Also, Bloomberg Business recently named Massachusetts as the most innovative in the country. Connecticut was fifth on the list and another reported finalist New York was No. 17.

Immelt recently said in Stamford after receiving a business leadership award that GE is a company that “doesn’t look for special deals, but we need an ecosystem that’s forward-looking, that’s future-looking; that’s willing to fight hard to be competitive and enduring for the future,” according to the Connecticut Post.

Immelt also said that’s “why we’re looking not just here but other places for where the eventual headquarters of the company will be. We will always have a big presence in Connecticut, but we think the power of an ecosystem is important.”