After months of warning it could leave Connecticut for a more business-friendly lower-tax home, General Electric Co. made it official Wednesday, announcing they’ll leave their Fairfield campus for a new world headquarters in Boston’s Seaport Innovation District.
The move means 800 new jobs for Boston, but is also a colossal symbolic victory for Boston's and Massachusetts' reputations internationally as business and innovation hubs. The number 8 company on the Fortune 500, with over 300,000 emlpoyees worldwide, is now calling Boston its global headquarters.
“This is a huge win for the city of Boston, a huge win for Massachusetts,’’ Governor Charlie Baker said Wednesday afternoon.
Boston Mayor Martin J. Walsh said: “I know we're talking a lot about Powerball here in the country, and certainly, we won Powerball today here in Boston by having GE come here.’’
Connecticut Governor Dannel Malloy said: “Of course, I am disappointed. 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.”
GE CEO Jeff Immelt said it came down to relocating to a place where the company thinks it has the best chance to recruit and connect with the kind of talent it needs as it continues its transformation from an old-line industrial conglomerate to an “Internet of things” giant with major operations in health care, life sciences, green energy, and other fields.
"Boston attracts a diverse, technologically-fluent workforce focused on solving challenges for the world,’’ Immelt said. “ We want to be at the center of an ecosystem that shares our aspirations."
Massachusetts is providing $120 million dollars in grants and incentives to support GE’s move, which Governor Baker called typical for supporting a company moving to or expanding in Massachusetts. “We offered pretty much the same sort of thing that we would make available -- and we do -- when companies either expand here or move here, which is a combination of incentives and grants but they're typically around infrastructure and capital support, but that's the kind of thing Massachusetts does under its existing authority.’’
Walsh’s chief economic development officer, John Barros, said the city is providing up to $25 million over 20 years in property tax breaks, but forecasts Boston alone will reap some $260 million worth of new economic activity and spinoff benefits during that same time period.
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GE has been headquartered in Fairfield since 1974, employing more than 800 people, including its top companywide executives. The company is the top taxpayer on Fairfield's grand list.
A statement GE released on Wednesday said that it will sell its offices in Fairfield and at 30 Rockefeller Plaza in New York City to offset the cost of the move to Boston's Seaport District
Employees will move to a temporary location in Boston this summer and will complete the move, in several steps, by 2018.
The company made clear its displeasure with Connecticut's tax and business climate in June during the General Assembly's Regular Session.
Democratic lawmakers had floated the idea of — and eventually passed — new corporate taxes, which GE officials had described as burdensome.
Even after a Special Session of the General Assembly in December, GE executives never changed their position that they would explore new locations for their future home.
Several candidate cities dropped out of the running early, according to multiple reports. Cities like Dallas and Atlanta had all made public overtures to the corporate giant, but all proved unsuccessful.
Malloy had met with GE officials on multiple occasions in recent months in efforts to keep the company in Connecticut.
He added that the state of Connecticut has won several fights to get companies from other states to move here, including from Massachusetts and New York.
"We've won a lot more than we've lost," Malloy said, adding he expects to make announcements in the not-so-distant future about companies coming to Connecticut.
But House Republican Leader Themis Klarides blasted Governor Malloy.
“Connecticut’s toxic business climate, combined with the Malloy administration’s failure to take seriously the threats that it posed to our corporate community, has led us to this day that many of us feared was inevitable. Any doubt about the effect of the punitive policies of ever higher taxes, hyper regulation and the uncertainties that they create for business have been erased because of GE’s apparent decision to move its corporate headquarters out of Connecticut," she said in a statement.
Connecticut's Speaker of the House Brendan Sharkey, D-Hamden, addressed the GE move in a statement.
“GE’s decision to relocate across the border to downtown Boston is certainly disappointing, yet we remain a favored location for companies to thrive. It appears, particularly from GE’s advertising, that their decision is not about taxes but more about rebranding into a high-tech company, and Boston is well known as a high-tech industry hub. Connecticut’s piece of the corporate pie remains strong, and our state’s ongoing commitment to work closely with business leaders to encourage future economic growth will ensure we continue to be a great place to live, work, and raise a family for years to come,” he said.
In Massachusetts, even as the mayor and business groups like Associated Industries of Massachusetts, the Greater Boston Chamber of Commerce, and the Massachusetts High-Technology Council all praised Baker and Walsh for winning GE, many wonder whether GE’s move could open the door to more big-name companies shifting headquarters here.
“Boston is open for business,’’ Walsh said. “We are willing to sit with anybody and talk about any potential opportunities. Do I think GE opened the door for other big opportunities? I absolutely think they did.’’
Baker said for companies that want to connect to universities, research, life sciences, venture capital, and a whole “ecosystem” of innovation, GE has just issued a major and influential stamp of approval. “We're honored to have them here. We believe they are going to be a tremendous part of the growing innovation economy that we have here in Massachusetts,’’ Baker said. “This is a great place to play, and I would expect and anticipate that you would see significant interest coming from others.’’