GE Scales Back Heralded Boston Headquarters Project

BOSTON—The luster of the relocation of GE’s corporate headquarters from Connecticut to Fort Point Channel in Boston got a little duller yesterday.

The relocation of the firm’s corporate headquarters from Fairfield, CT announced in early 2016 promised a total of 800 jobs to be added to the Seaport. In a deal reached between MassDevelopmnent and GE, the two Neco-brick buildings totaling 95,000 square feet owned by the state and an adjacent parcel owned by GE will be put on the market for sale.

GE will take occupancy of the two existing Neco brick buildings as a tenant, but will now have its new Boston headquarters house GE’s senior executive team and approximately 250 GE employees. No longer part of the headquarters project is GE’s planned 12-story office building that is permitted for approximately 297,000 square feet of space.

The agreement also calls for GE to reimburse MassDevelopment approximately $87.4 million, which include the purchase the two brick buildings and land as well as construction and other financing costs. GE will complete the planned public spaces, including the Harborwalk and public dock, and will renovate the “green bridge.”

Ann R. Klee, VP, Boston Development & Operations for GE, says, “We are looking forward to moving into our permanent headquarters space in the refurbished Necco brick buildings later this year. While changes in the company’s portfolio and operating model will lead to a smaller corporate headquarters, we are fully committed to Boston and proud to call it home.”

GE is a much different company than when it announced the relocation deal to Boston under then chairman and CEO Jeff Immelt, who cited Connecticut’s escalating taxes as the chief reason for the move. Immelt retired in October 2017.

The company has been struggling for some time and divesting portions of its business. Last October, the company replaced John Flannery as Chairman and CEO with H. Lawrence Culp, Jr.

In late January, the company in announcing its fourth quarter results, reported its continued deleveraging strategy that included reducing its quarterly dividend. The company reported that its GE Industrial segment has signed or completed substantially all of the $20-billion asset disposition program. GE Capital completed $8-billion of asset sales and other actions in the fourth quarter, bringing total dispositions to $15 billion in 2018. GE Capital paid down external debt by $21 billion in 2018.

CEO Culp Jr. said at the time, “Our strategy is clear: de-leverage our balance sheet and strengthen our businesses, starting with Power. To do this, we are improving execution, customer focus, and how we set priorities across GE. I’m confident in our team, technology, and the global reach of GE’s brand and relationships. We have more work to do, but I’m encouraged by the changes we’re making to strengthen GE and create value for our shareholders, customers, and employees.”

The decision by GE in 2016 to relocate its headquarters to Boston is a significant victory for both Boston Mayor Martin Walsh and Massachusetts Gov. Charles Baker who lobbied hard to secure the deal and bested proposals by a host of other states including New York, Rhode Island, Texas and Georgia who reportedly vied for the GE headquarters deal.

“The Baker-Polito Administration is proud that General Electric chose to relocate the company’s world headquarters to Massachusetts and looks forward to GE’s ongoing contribution to the growing innovation economy,” says Lizzy Guyton, communications director for Gov. Baker. “The administration together with MassDevelopment reached an agreement with GE for the company to fully reimburse the Commonwealth for the cost and expenses associated with the Necco Street project and the administration looks forward to working with GE as the company grows its world headquarters here in Boston.”

GE employs nearly 5,000 workers in Massachusetts. The company retains its commitment for $50 million in charitable contributions in the Boston area.