GE: How it connected with Fairfield, what its HQ loss means

Connecticut Post, Friday, January 15, 2016

By Genevieve Reilly

 

With General Electric’s decision this week to move its corporate headquarters from Fairfield — its home for more than four decades — the immediate political finger-pointing over loss of the town’s largest taxpayer mingled with uncertainty over the future of the 68-acre Easton Turnpike property.

News of GE’s decision to move to Boston was leaked Wednesday morning by the Boston Globe, before GE apparently had even notified employees at the corporate headquarters. First Selectman Michael Tetreau said he’d spoken with GE executives earlier that morning, and planned to talk with them later in the afternoon, as well as meet with them early next week, to discuss future options.

Tetreau said quantifying the GE move’s impact on the town will be difficult until many questions are answered, including what will happen to property, how many employees will be relocated and how many of those employees live in Fairfield. According to its press release on the relocation, GE said that about 200 headquarters staff will relocate and another 600 workers will be based at the new headquarters in the South Boston waterfront neighborhood.

The company said it would move some workers into a temporary office this summer and complete the headquarters move by 2018. Related Stories GE to sell appliance unit for $5.4 billion Local Conn. charities to feel loss of GE, employees Fairfield politicians point fingers over GE loss Boston lands GE headquarters There are about 800 employees at the Fairfield campus. Town can sustain the loss ... for now “Purely from a town standpoint, we’re probably in the strongest financial or fiscal shape we’ve ever been in,”

Tetreau said of the town’s ability to weather the loss. “We have a triple-A bond rating, our long-term liabilities are fully funded, we have a 95 percent commercial occupancy rate with a vibrant downtown and a vibrant local economy.” As long as GE owns the Easton Turnpike property, it will have to pay the annual real estate tax bill of $1.63 million. It currently has a $240,793 personal property tax bill for equipment on the site, for a total local tax bill of $1.88 million.

The property has two office buildings and a “guest house,” according to a court appeal filed in 2005 over its property assessment. The buildings house a medical center, cafeteria, fitness center, production studio and an employee store, while the guest house has 28 rooms and conference and dining facilities. GE reported overall coprorate revenue of nearly $150 billion last year. Although there has been no indication from GE that it plans to donate the 68 acres to a nonprofit entity, some politicians have floated the “what-if” scenario about the campus being donated to nearby Sacred Heart University.

A spokesman for SHU recently denied any knowledge of that possibility. But should that happen, instead of the tax revenue, the town would receive a PILOT — Payment in Lieu of Taxes — from the state to cover part of that levy. Assessor Donald Ross said Wednesday it was not possible to speculate at this time how much that payment might be. According to the GE statement, it plans to “sell” both the Fairfield property and its offices at 30 Rockefeller Plaza in New York City.

A changing business model Tetreau said the fact that Boston was chosen shows that, in the end, the corporation’s move was not all about state taxes. Massachusetts’ business taxes are consistently ranked as high — or higher — than those in Connecticut. “As much as it started with taxes, I think it actually started before that,” Tetreau said. “Massachusetts is not a low-tax environment, so all of the comments made around the tax issue as the driver don’t hold up.

The biggest driver, I think, is GE is transforming itself into a high-tech digital company.” The key employees in that field, he said, are millenials, who, at least until they get married and start families, want to live in large cities, not suburbs. “Fairfield’s thing is we’re family friendly,” the first selectman said. According to GE’s release, it “has been considering the composition and location of its headquarters for more than three years. The company began its formal review in June 2015, with a list of 40 potential locations.

Boston was selected after a careful evaluation of the business ecosystem, talent, long-term costs, quality of life for employees, connections with the world and proximity to other important company assets.” Officials failed to try hard enough Selectman Chris Tymniak, a Republican who was unsuccessful in an effort to unseat Tetreau, panned the town’s efforts to retain GE in an email in response to a request for comment. “I don’t have the feeling we fought for GE,” Tymniak said. “We didn't hold a rally in support of them,we did not paint the town blue in honor of them, we just didn't do enough.”

Tymniak said he thinks there is plenty the town could have done to try to entice GE to stay, and should have done, though he admitted he didn’t know if it would have changed the outcome. “For over 40 years, GE has been a part of our community and I saw no public outreach from the town to show GE we cared,” he said. “This would of been a great opportunity to re-sell GE on why they moved here 40 years ago. This would of been a great opportunity to sell Fairfield to the entire country as a town that is passionate about its taxpayers and its reluctance to allow them to leave with out a fight. Show them the beaches, the schools and our special neighborhoods. No other town in the country can compete with what we have and its proximity to New York. We are a great town with a lot to offer.” The town’s state legislators weighed in on the news of GE’s departure, with some Republican members of the delegation voicing particularly harsh criticism of state Democratic officials.

State Sen. Tony Hwang, said Fairfield’s community is strong. “I know we will all work hard with one another to build back what we are losing,” Hwang said. I know we will come together to support the employees losing their jobs, the local companies that will lose business, and the many nonprofits and community organizations that benefited from having GE’s headquarters as a major philanthropic force in our town.” He said he plans to work closely with stat and local leaders to make sure the state is taking the steps needed to generate jobs and “create an environment where businesses want to move in, not out.

State Rep. Brenda Kupchick, R-132, had a more critical assessment. “For anyone to say GE is leaving because of anything other than years of punitive business polices and poor fiscal management by one party rule is kidding themselves,” she said. “Bottom line, they blew it!" The news, said state Rep. Laura Devlin, R-134, is devastating for Fairfield and surrounding communities. “GE means so much to our community and is a direct hit to our state’s economy,” Devlin said. “Leaders at the state Capitol refused to listen to GE and other companies who have repeatedly said Connecticut is doing more harm than good in keeping businesses in state.”

The lone Democrat in the delegation, state Rep. Cristin McCarthy Vahey of the 133rd District, said, “Although I’m deeply disappointed that GE chose to move to downtown Boston, I remain committed to working together with my colleagues and our community to showcase the world-class business, residential and cultural opportunities in Fairfield ... Here in Fairfield, we remain open for business.” GE move couldn’t have been stopped by town For GE retiree Bob Frigo, a town resident, the blame lies with state leadership. “I don’t think it’s a function of what Fairfield should have done or has done,” Frigo said. He moved to Fairfield in 1974, when the company relocated its headquarters from New York City. At the time, Frigo said, many of the executives already lived in Fairfield County.

Back then, he said, a company did not move its headquarters around on a regular basis, and especially not GE. Now, though, many tasks, like clerical “gruntwork” are done at remote sites. Corporations no longer need all their employees in one place. For a company looking to transform into a high-tech, digital giant, Boston makes perfect sense, said Frigo, who spent more than 40 years with GE in the accounting end of financial management. He is, he said, sad to see GE leave town. “The impacts are not going to be good,” he said. “It’s been a good relationship between the town and GE ... I can’t think of anything the town could have done, it’s much bigger than that.”

Meanwhile, Tetreau said he is working with the town’s Economic Development Director Mark Barnhart on a “large number of economic development projects, including the Exide property, which is pretty much done. We’re working with the Fairfield Metro Center’s new leadership.” He said a business team put together last summer will be brought back into play, as the town looks to quantify and mitigate the impact of GE’s exodus. Other losses hard to measure And while Tetreau said he believes the town is in good enough shape to take the blow, he’s not so sure about local charities that may rely on GE’s charitable foundation for support.

“One of the biggest issues is the charities and non-profits” Tetreau said. Will GE’s support go with them to Boston, the first selectman said, or will it continue to help fund local groups. The GE Foundation provided $6.2 million through a matching gift program to eligible Connecticut groups, and $3.5 million to the state’s United Way in 2013, according to the foundation’s website. The town’s Police Department has been the recipient of gifts from GE’s corporate arm, through its security division, Police Chief Gary MacNamara said.

The department recently received $10,000 to test and purchase body cameras and received a multi-year commitment to help fund the local police dog program. “I think, from a financial perspective, the partnership we have with GE, and the equipment and programs they helped support over the years was very beneficial,” MacNamara said, and seeing it end causes concern. “We had a great relationship with GE security, on both site level security and corporate security,” MacNamara said. “And aside from a small, financial partnership we also had a professional relationship,” he said, with GE offering the use of conference rooms and grounds for police training. “It’s always been beneficial.”

GE also donated 40 acres of open space to the town that became known as the Cascades property abutting Lake Mohegan, and has provided funding for training, rescue and fitness equipment to the Fire Department. Many of the furnishings in Sullivan-Independence Hall are hand-me-downs from GE offices. GE was not supposed to be here What some might not know is that GE wasn’t supposed to be here at all, at least, not originally.

The expansive property abutting the Merritt Parkway was slated to play host to St. Vincent’s Medical Center, which was looking to replace its aging Bridgeport facility, according to the hospital’s website. “During the mid-1970s a decision was made to move the hospital from the City of Bridgeport to a tranquil suburban setting in the adjacent town of Fairfield,” according to St. Vincent’s website. “Unexpected building and land development costs and concern over inner city patient access to the hospital, especially the elderly and families using services at the clinics, caused the Daughters of Charity and Board of Directors to rethink their decision to move the hospital out of Bridgeport. After much deliberation, the decision was made that St. Vincent's would remain in Bridgeport. “

At that point, the property was sold to General Electric. Unlike the fight that happened when Exxon considered building its corporate headquarters in Fairfield in the 1980s, GE was apparently welcomed with open arms in a move master-minded by legendary First Selectman John J. Sullivan. According to Rita Papazian’s “Remembering Fairfield, Connecticut:” “Compatibility and cooperation were the key words to describe General Electric’s move to new corporate headquarters in the suburban acreage abutting the Merritt Parkway at Route 59. Not one single resident opposed the proposed facility in the early seventies and its plan became a reality 1974.” GE brought with it 700 employees, and Sullivan and then-Gov. Thomas Meskill were on hand for the ribbon cutting of the corporate headquarters on Oct. 4, 1974.

Sullivan called GE’s decision as “the most significant and meaningful event in the annals of community development in the decade of the ’70s,” according to Papazian’s book. Sullivan is further quoted, saying, “We, in Fairfield, are proud and happy that our community was selected as its new home. This is a great moment in our history and we look forward to a long, pleasant and cordial relationship with our new addition to our family and in this moment of beginning, we pledge our best as a community to make it work.” Area businesses, residents weigh in “GE has been a good neighbor, customer and friend to our business,” said David Saad, who owns and operates Sport Hill Service Station, just down Easton Turnpike from GE. “Let’s wait until they make this official tomorrow, (but) if they do leave, yes, they will be missed. They are a good customer to us and a good neighbor to us.” “I’ll be sad to see them go, if they do go,” he added. “I think it’ll be more devastating to the town of Fairfield, depending on what they do with the property.”

His employee, Sam Nobile, hasn’t had direct dealings with the company, but is worried about his younger brother, an employee of Sodexo, which provides the in-house food service for GE. “My little brother might be out of a job,” he said. “GE is the biggest taxpayer in Fairfield and I’m worried that my property tax will go up unless somebody else moves in there,” said Mary Jane Fast, a resident of the town’s Stratfield area since 1958. “I think everybody’s worried about that.” Fast said she noticed a lot of people moving from her neighborhood this summer and wondered if it had anything to do with the company’s move. “I’ve never seen so many people leave the neighborhood so quickly,” she said, noting at least six sales over a brief period.

“We get a lot of GE customers,” said Sandro Rotella, owner of Maione’s Pizza Kitchen in Stratfield Center. “We do a lot of their caterings, like when they have a Christmas party.” “We always hate to see a company go, a business go,” he said, “especially now that we deliver,” and Maione’s deliveries to the GE campus had recently picked up considerably. “Their employees order for GE, but then they also order for their homes.” “We hate to see them go,” Rotella said. “They will be missed.” “What a way to ruin the town,” said a woman who identified herself only as Lena G. of Easton, at Jo-Jo’s News Stop in Stratfield Center. “For what, just because the governor wants to gouge them on money? … It’s ridiculous. It’s just sad.” “I just hope the governor goes to Boston with them,” said Tom Quinn, a Fairfielder who also stopped in at Jo-Jo’s Wednesday. “I just hope they take the governor with them.”

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