General Electric (GE) has announced that it is moving its headquarters to Boston.
GE is a $130 billion high tech global industrial company, one that is transforming industry with software-defined machines and solutions. While corporate taxes have been the main focal point of discussion over the last six months, GE has been considering both the location and composition of its headquarters for more than three years.
GE’s stated goal has been that it wants to be at the center of the ecosystem that shares its aspiration. Relocating its headquarters from Boston fulfills this aspiration. GE will also be modifying the composition of the employees at its new headquarters. The current headquarters has 800 employees – both corporate and administrative. Only 200 of the corporate staff will be moving to Boston. The remaining 600 administrative personnel will be placed in operations throughout the company. GE will be adding 600 digital industrial product managers, designers and developers to its new Boston headquarters.
GE’s intended target date to complete its move from the Fairfield campus is 2018. In order to facilitate and offset the cost of the move, GE will be selling its offices in Fairfield Connecticut and at Rockefeller Center. GE has announced that some employees will begin being relocated to Boston this summer.
The GE announcement understandably raises concerns with residents and businesses in our Town. The primary concern I hear is the effect of GE’s move on property taxes. Residents should note that GE is scheduled to pay the Town $1.6 million in property taxes in fiscal year 2016-17. This amount will not change in the short or mid-term. This payment is due regardless of whether GE or someone else owns the property. The total amount of property taxes collected in Town does not change this move. This will not change the amount other taxpayers owe.
A second concern I hear is the effect on the local real estate market. GE’s 800 Fairfield employees reside throughout Fairfield County. The Town does not know the exact number of employees who live in Fairfield. While the 200 employees being relocated to Boston will most likely be selling their homes in the near future, we do not know the decisions for the remaining 600 employees. The phasing of the move should help minimize the impact on Fairfield’s local real estate market and the Fairfield County real estate market overall.
A third concern I hear is the effect on local businesses. While the departure in the near term of the 200 employees is disappointing, the 68 acre Fairfield campus was built for more than 800 employees. The long term effect on the local economy could be positive should a company with more employees occupy the site.
I have met with state and regional economic development groups as well as our local economic development team. We are exploring options and preparing plans for moving forward. I am planning to meet with GE next week to follow-up on details and discuss how we can work together to minimize the impact on Fairfield.
Fairfield is in the best financial shape in our history. We have a Triple A rating, our pension fund is fully funded, we have strong reserves, a 95% commercial business occupancy rate, an award-winning school district and significant economic development underway. Fairfield’s Strategic Plan which is soon to been initiated for the Town will help us plan for the years ahead. The 68-acre campus, along with all of Fairfield’s charm and amenities and the site’s proximity to major transportation hubs, makes the property an ideal location for another company or developer.
There are many more questions to be answered. I will keep everyone updated as we move forward together.