General Electric has announced that it is taking its world headquarters from Fairfield, Connecticut to Boston after word of a move swirled for months.
GE made it official Wednesday as CEO Jeff Immelt says Massachusetts’ capital was chosen based on talent, long-term costs and quality of life for its employees, noting the area’s 55 colleges and universities. Massachusetts Governor Charlie Baker says the state offered the company $120 million in incentives while the city of Boston put up $25 million in potential property tax relief. The Republican spoke with WBUR in Boston.
“The message is that Boston and Massachusetts is a great place to be for the next generation,” Baker said. “I would expect a lot of folks will take a look at us who might not have looked before because of this.”
GE plans to move some of its 800 workers in Fairfield, Connecticut to a temporary location in Boston this summer. A full transition to the city’s Seaport District is expected in 2018. The $130 billion company has been looking at the location of its headquarters for more than three years, according to its statement Wednesday.
Last year, GE along with other companies like Aetna and Travelers balked at proposed corporate tax hikes in Connecticut. Lawmakers responded by scaling back some increases, but still passed the second largest tax hike in state history. The company says it began a formal review in June with 40 potential locations. New York was also floated as a possible new site.
Governor Dannel Malloy held a press conference at one of GE’s suppliers to address the news, which was carried by WFSB.
“Of course I’m disappointed,” Malloy said. “I know many in Connecticut share the disappointment and frustration. Today’s decision is a clear signal that Connecticut must continue to adapt to a changing business climate.”
Malloy said he spoke with GE’s CEO, who assured him the company will keep many workers in Connecticut and continue to use in-state suppliers. GE employs about 5,000 workers elsewhere in Connecticut. The Democrat says now is the time to reform the state’s budget to make it more predictable and pay down pensions as well as invest in education and transportation, calling them important factors when companies are deciding where to go. He said more than 19,900 new jobs have been created over the past five years in the state.
“You win some and you lose some,” Malloy said. “Luckily we’ve won more than we’ve lost, but this hurts.”
GE has been in Fairfield since 1974 where it pays $1.6 million in annual property taxes to the town of roughly 60,000, according to The Courant. The company is selling its Fairfield campus and its offices at Rockefeller Plaza in Manhattan. The Connecticut GOP has sounded off about the announcement, placing blame on Democrats. Senate Minority Leader Len Fasano says GE’s CEO Jeff Immelt choose to leave because of the taxes.
“He left this state because the unpredictable nature of our budgeting, the amount of deficits we have year-in and year-out and we don’t have control,” Fasano said. “That’s why he left. There’s not a doubt in mind and I know this because I met with the CEOs at GE and they told me that.”
Fasano says the Democratic-controlled legislature did not take GE’s tax concerns seriously and brushed off the idea of restructuring the state budget.
“Governor Malloy even thought it was a good idea,” Fasano said. “I would argue Governor Malloy sort of suggested that’s the direction we should go and the Democratic leadership said ‘No. We’re not doing it.’ And that’s why we couldn’t come to an agreement.”
Democratic Senate President Martin Looney said in a statement that GE’s decision has nothing to do with taxes or business costs.
GE is also adding 100 high-tech jobs at its Global Research Center in Niskayuna, New York and is considering moving positions to Rhode Island. The company will hold a public briefing in Boston on February 18th.