The deal to bring General Electric’s headquarters to Boston involves a package of city tax breaks and state grants, which increased significantly in size while courting the company north from Connecticut. There’s also the likelihood of a tricky public-private real estate structure that officials have not yet fully explained because they remain in negotiations with the company.
It’s complex and still fairly unclear. But here’s what we know so far about the deal that helped lead GE to pick Boston in January, and the Seaport District property it chose to make its new home in March:
- The city offered GE $25 million over 20 years in a property tax break, and the state offered $120 million in grants that could be put toward public works to support the new headquarters.
- Gov. Charlie Baker’s administration said in January that the state grants could go toward projects on public property including new roads and highway ramps, water and sewer infrastructure, public parking facilities, utility work, or site demolition and remediation.
- City documents released Thursday, and first uncovered by The Boston Globe and WCVB, show that the city and state started negotiations by offering a much smaller incentive package. The city at first considered a property tax break of $8 million to $12 million, and the state had considered a package worth less than it wound up offering as well.
- In March, GE announced it had found its site: It would buy a chunk of generally unused land owned by Procter & Gamble, at the edge of its Gillette headquarters. The 2.5 acres of land include two buildings once used by Necco and an expanse of asphalt.
- In the face of activist opposition, Boston Mayor Marty Walsh has argued that even with the tax break, GE’s new headquarters will generate more in property tax revenue than the site would otherwise if it sat undeveloped.
- The property could generate $48 million over the 20 years of the tax break, meaning the city could still pocket about $23 million, according to the Globe. Meanwhile, The Boston Business Journal says the property could generate $35 million in gross tax revenue over that period.
- It’s difficult to say what the lot generates in taxes now, since it is just a portion of a larger parcel owned by P&G. But P&G pays less annually for the full parcel than GE would for its proposed property, the Globe reports.
- GE plans to occupy the two Necco buildings and build a new third facility. The two existing buildings account for about 100,000 square feet of space between them, and GE CEO Jeff Immelt pegs the total headquarters size at 300,000 square feet.
- Immelt has said that he expects the headquarters project to cost between $80 million and $100 million.
- The headquarters will employ about 800 people — 200 corporate types, plus 600 developers and project managers split between different GE divisions.
- Here’s where things get complicated. The Boston Redevelopment Authority could wind up taking ownership of the Necco buildings with GE leasing them, the Globe reported last month.
- Details remain scarce about how that would work, because GE and city officials say the arrangement remains under negotiation. But per the terms of the city’s agreement with the company, GE would be responsible for the operation and renovation costs of the Necco buildings. It would not have to pay rent to the BRA.
- BRA spokesman Nick Martin would not comment on the GE deal specifically, but said that when a private company occupies city-owned land it doesn’t mean the company won’t pay taxes on the land. And the Globe reported that John Barros, Walsh’s economic development head, said GE would still be taxed based on those buildings.
- How the BRA would take ownership after GE purchases the land from P&G is unclear. Globe reporter Jon Chesto tweeted that one form of the plan under consideration would see GE own the new building, while giving the two existing buildings to the BRA for free.
- Barros said that is one possibility. But he also outlined another this week: The $120 million in state grant money used to lure GE to Boston could actually be used to finance the BRA’s purchase of the land from P&G.
- If the BRA owns the property, the state grant money could also be used to rehab the Necco buildings, because those buildings would be public property. “If GE owned the buildings itself, it would be unable to utilize a bulk of those incentives on what would be essentially private property,” the BBJ reported last week.
- GE plans to complete the move by the end of 2018. Executives will begin occupying temporary headquarters this summer.