Boston Officials More Than Doubled Their Initial Offer to General Electric
The saga of General Electric’s move to Boston continues.
According to newly released documents obtained by the Boston Globe, city officials initially thought about offering the company a significantly smaller tax break prior to bumping up the offer to $25 million.
The documents, released by the Walsh administration on Wednesday, showed that City Hall planned to offer a property tax abatement deal worth between $8 million and $12 million back in November. However, the upper limit of the abatement was increased substantially over the subsequent weeks, first to $15 million and then to $20 million, a figure which was included in a memo sent to a GE official. The offer has since been pushed up to $25 million over the course of 20 years.
Mayor Marty Walsh’s chief of staff Daniel Koh told the Globe that the offer was increased because of GE’s interest in building a larger complex than what was initially planned. Another factor behind sweetening the deal was to beat out competition from other cities like New York and Providence.
“We didn’t want them to walk away,” Koh told the Globe. “At the end of the day, we wanted to make sure we closed the deal.”
The documents also showed that officials in Governor Charlie Baker’s administration decided to up their offer as well when the company announced it was moving its headquarters to Boston. The state’s incentive package was initially in the $60 million to $80 million range, but was increased to $120 million in January. In total, GE was able to ink a $145 million deal from the city and state.
Gov. Baker explained on Wednesday that using state funds for the new GE buildings in Fort Point—which the company may be able to use rent free for up to 20 years—would end up being a benefit for Boston as the city would receive more in taxes from the property.
“I actually think, compared to the way most of these deals typically get done, which is straight checks or straight cash or straight credits for a certain number of jobs you create, I think this is a much better deal,” Baker said. “It’s a much better deal for us — the Commonwealth and the city — and it’s also the right kind of deal for what GE is looking for.”
The Governor revealed at a business lunch on Wednesday that being near Logan Airport was another factor that lured GE to pick the Fort Point location for its new headquarters.
Democratic presidential hopeful Bernie Sanders also recently called out GE for avoiding taxes during an interview with the New York Daily News.
“General Electric was created in this country by American workers and American consumers. What we have seen over the many years is shutting down of many major plants in this country. Sending jobs to low-wage countries,” Sanders said. “And General Electric, doing a very good job avoiding the taxes. In fact, in a given year, they pay nothing in taxes. That’s greed.”