Within the space of a few hours Thursday, General Electric and Amazon announced big changes to their headquarters plans — a strange coincidence that could have ramifications for Boston.
The GE impact is more direct. The company decided to fold on a fancy new 12-story tower in Fort Point as part of its massive retrenchment that includes job cuts and business-line divestitures. GE will instead occupy a smaller headquarters in two renovated warehouses currently owned by MassDevelopment this summer, with about 250 employees, not the 800 as originally promised.
And after bailing on New York for its second headquarters after its $3 billion subsidy package generated outrage, Amazon will stick to one new additional headquarters, in Virginia. Instead, the company indicated it will expand existing tech hubs, a group that includes Boston, at a more aggressive pace.
What will happen with the land where GE wanted to put up that 12-story building?
GE and MassDevelopment will jointly market the empty one-acre parcel, along with the two brick buildings next door — to repay the $87 million in state funds sunk into the project. (GE is also canceling its tax breaks with the city.) Land prices in the Seaport and Fort Point are through the roof, especially for a parcel such as this one that is permitted for a big office building.
Could the state make a profit on the sale of the Fort Point property?
It’s hard to say. The fact the site is permitted makes it more valuable. But first, GE will use the proceeds to pay back the $87 million in state subsidies, then its renovation costs, which it hasn’t disclosed. If there is any money left over, GE and the state will split up the winnings.
Would Amazon be interested in the GE site?
Amazon already employs thousands of well-paid tech workers in Kendall Square, Back Bay — and Fort Point, next door to where GE is going. But its future ambitions for Boston will likely focus instead on Seaport Square, part of the South Boston waterfront, where it has signed a lease to anchor a 17-story office building on Seaport Boulevard.
The Seattle-based e-commerce giant has already pledged to bring 2,000 jobs there, in return for $5 million in Boston property tax breaks. If Amazon needs to expand, it has an option to lease additional space in Seaport Square and the promise of more tax breaks there.
Does this make it more likely that GE could leave Boston?
Not really. GE is likely to include a requirement for a 10-year lease in the warehouse buildings as part of the property deal. GE also pledged to uphold its offer of $50 million in donations to local charities, primarily school- and health-related, though these gifts could take longer to roll out. GE vice president Ann Klee sent a memo to employees on Thursday, saying: “We are proud to call Boston home and plan to be here for a long time.”
What about the amenities that GE promised as part of its project?
The company will still pay for landscape improvements to the Harborwalk and a dock in Fort Point Channel, as well as renovations to a green pedestrian bridge left over from the property’s candy factory days, a beloved fixture in the neighborhood. But the museum that GE planned to go in the new building; there’s no room for it in the scaled-down headquarters.