For a long time, it was known only by its code name: Project Plum. The potential deal was a blockbuster. Governor Charlie Baker, Boston Mayor Martin J. Walsh, and a few top aides treated it like a state secret: General Electric Co. was considering moving its headquarters to Massachusetts.
The industrial giant, based for four decades in Fairfield, Connecticut, demanded confidentiality as it searched for a new home. The Walsh and Baker administrations took that to heart, working furiously but discreetly to entice the company to Boston. As GE zeroed in on the Seaport District, city and state officials put the finishing touches on what is believed to be the richest relocation package Massachusetts has ever offered a company.
When GE announced in January that Boston had won — beating out New York, which had put in a competing bid — it was the economic equivalent of the Red Sox reversing the curse and winning the World Series. Sure, the company would bring 800 high-paying jobs. But the real payoff, city and state leaders thought, would come from having a world-renowned brand make Boston its home. GE would spawn new local ventures and serve as a beacon to other companies that Massachusetts is a good place to do business. Just like that, Boston would shed its underdog status. Watch out, Manhattan and Silicon Valley.
Behind the whirlwind seven-month courtship of GE was a bipartisan bromance between Baker and Walsh, which proved a big selling point to a company that values good government. The two administrations worked hand in hand, with the state economic development secretary, Jay Ash, and Boston’s economic development chief, John Barros, serving as the initial leads on the project. Steve Kadish, Baker’s chief of staff, and Dan Koh, Walsh’s chief of staff, then helped cement the deal.
In the end, the state offered a relocation package worth as much as $125 million while the city agreed to give GE a $25 million break on property taxes. Critics questioned why GE, a company with a stock market value of roughly $280 billion, needed any taxpayer help at all. Ash stresses that this is not your typical corporate incentive deal. Most of the taxpayer money will go toward the purchase of land and the rehab of two buildings that the state will own and lease back to GE. In other words, in the unlikely event that GE goes belly up or leaves town, the state would hold onto two valuable real estate assets. GE moved into temporary headquarters in the Seaport in August as it prepares to open, in 2018, a three-building complex anchored by a striking 12-story glass tower on Fort Point Channel.
From the city’s perspective, Barros believes Boston’s 20-year tax break to GE has already paid for itself. The company in April committed $25 million to Boston Public Schools to bolster science and technology education. “It’s pretty good math,” Barros says.
Beyond giving to Boston schools, GE has pledged $15 million to area community health centers, in part to fight the opioid epidemic, and another $10 million to job training and development programs outside metro Boston. Over the summer, GE unveiled partnerships with MIT on an energy initiative and with Northeastern University to promote advanced manufacturing degrees. Starting next year in Boston, the company will also, for the first time, offer internships to Massachusetts high school students. And it has joined with Boston Children’s Hospital to develop software for doctors to analyze brain scans of young patients.
Company executives, meanwhile, are trying to live up to all the hype. They have already inserted themselves into the fabric of the community, most notably Ann Klee, who led GE’s search for a new headquarters. In addition to overseeing environmental health and safety for the company, she now heads the relocation process and the GE Foundation. Other executives have joined various nonprofit and business group boards.
GE chairman and CEO Jeff Immelt — who spends half of his time traveling — has been a fixture on the local speaking circuit, from the Boston College Chief Executives Club to Dana-Farber Cancer Institute. Immelt will also chair the John F. Kennedy Library Foundation’s 2017 fund-raising gala, which will mark the centennial celebration of the birth of the nation’s 35th president. “The surprise for me was how quickly after the decision they became a part of the Boston community,” Barros says. “It’s far exceeded any expectation.”
GE moved to Boston, Immelt has said, because he had tired of seeing deer outside his suburban office in Connecticut. He wanted to work in a place where he could immerse himself in new ideas just by stepping outside. That kind of environment is critical as Immelt repositions GE from an old-school industrial manufacturer of light bulbs and engines into a high-tech company. “Their embrace of the innovation culture that exists here in Greater Boston — it was something I thought they were paying lip service to,” Ash says. “They are truly excited about it. They get more excited in meetings about innovation and incubation that can happen in Fort Point than I do.”
For Immelt, the move is not only a chance for GE to write a new chapter but also for Boston to write its own. The CEO often tells the story of his early GE career, in the 1980s, when he was in the plastics division and spent time in Northern California. He saw back then how Hewlett-Packard played an outsize role in shaping Silicon Valley.
Immelt has said he hopes that GE can help Boston be that “centrifugal force” to build out the region’s innovation economy and persuade more students to stay after going to school here. “There is so much talent in this town, there are so many great schools, there are so many great talented researchers. Too much of it gets away,” Immelt recently told an audience at the Seaport Hotel. “The ecosystem hasn’t been formed here in the way I’ve seen in other parts of the world. I would be disappointed if GE couldn’t add to that.”