Boston Rolls Out the Red Carpet for GE
You know something’s up in Boston if Robert Kraft shows up. So that must mean that General Electric’s headquarters move to the city is the real deal.
Kraft, the chairman and CEO of the Kraft Group (aka the owner of the New England Patriots) is pretty much as close to royalty (after his quarterback) as anyone in this city. And he attended a GE event Monday along with Boston Mayor Martin Walsh, Massachusetts Gov. Charlie Baker, Lt. Gov. Karyn Polito, Attorney General Maura Healey, and a good chunk of the state legislature and Boston city council.
But it’s safe to say Kraft caused the biggest kerfuffle.
GE CEO Jeffrey Immelt and other execs were all on hand at a Boston skyscraper Monday afternoon to talk about the deal that is bringing the company’s headquarters to South Boston’s Fort Point Channel. Thirty-three floors down, out in the snow and slush, a couple dozen people protested what they call a city and state giveaway to the Fortune 500 giant.
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In response to questions about that, Immelt said the company will do its best to contribute to the well-being of Greater Boston. He touted the company’s volunteerist culture and $25 million in funding for Boston public schools over five years announced earlier in the day.
GE has already invested about $100 million in the headquarters, and he said he expects to see more than $1 billion in economic activity ‘injected” into Boston over time as a result the move.
Still, not everyone had the story straight on exactly what’s going on with the 2.5-acre parcel of land in South Boston’s Fort Point Channel that will be home to the three buildings that will make up the new headquarters.
On stage, Walsh said Boston owned the land where GE will relocate. That contradicted John Barros, his economic development chief, who said over the weekend that GE bought the land from Boston.
Barros subsequently said Walsh misspoke. The parcel will end up with the Boston Redevelopment Authority with GE paying for operational costs and improvements, he said.
Read more: Will GE's Boston Rent be Too Damn Low?
Eventually that story will be straightened out, one hopes. In the meantime, Walsh said that Madison Park High School, the city’s troubled vocational tech school, would be a special focus for GE’s education funding.
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The Boston area remains stung by the fact that it churns out tens of thousands of high-quality college graduates every year, but that most of them leave for jobs. In some cases, they drop out even before graduation as was the case of two famous Harvard dropouts: Facebook co-founder Mark Zuckerberg and Microsoft co-founder Bill Gates.
“We want to keep our talent in Boston,” Walsh said. “About 10% of our graduate students stick around; 90% leave. This new campus will have a huge impact on business recruitment, public space, and particularly on city revenue.”
That last point is still up for debate. It’s true that the land GE will occupy is now basically derelict buildings and nets the city just “six figures” in annual property taxes. But that land is located in the city’s hottest up-and-coming area where tech companies are fighting for really expensive office space.
Critics say the city could have found great tenants and buyers without giving up $145 million in incentives. That’s the opportunity cost of this deal, they say.
One local economist who did not want to be named because of his relationship with the politicians involved said he is skeptical of GE’s promised economic impact.
“Look it’s nice that GE came here. But these officials should know that it’s new, small companies that generate growth, not big old companies.”
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