Procter & Gamble sells Fort Point land for GE project
December 15, 2016 : The Boston Globe, by Jon Chesto
|The property off Necco Court has been divided in two. MassDevelopment bought part of it and the company bought the remaining portion. David L. Ryan/The Boston Globe|
Procter & Gamble has completed a deal to transfer 2.4 acres alongside the Fort Point Channel for General Electric’s new headquarters. In return, P&G will pocket $83 million.
The property off Necco Court has been divided in two. State agency MassDevelopment bought more than an acre, including two vacant brick buildings on that land, for $57.4 million, according information provided by GE. The company, meanwhile, spent $25.6 million for the remaining portion, where the industrial giant plans to build a 12-story headquarters structure overlooking the channel.
The reason for the split: MassDevelopment is using state grant money to buy its portion and to redevelop the two brick buildings. The grant program can only distribute funds to public agencies. Governor Charlie Baker pledged $120 million in state funds for the headquarters project, as part of an effort to persuade GE to relocate its headquarters to Boston from Connecticut. State officials recently increased the amount to $125 million, to include $5 million for legal fees and other transaction costs.
Mayor Martin J. Walsh also dangled a sweetener to bring GE here: the promise of $25 million in property tax breaks from the city, over a 20-year period.
The land sits at the northern edge of P&G’s sprawling Gillette campus. Much of it, aside from the old brick buildings, is currently part of a bigger parking lot.
GE has leased the space in the two buildings, which together total slightly more than 100,000 square feet, from MassDevelopment. GE spokeswoman Susan Bishop said her company will assume much of the costs related to rehabbing the two buildings in lieu of lease payments, and will be responsible for their operations and maintenance costs.
“It was a very complex deal with a lot of moving pieces,” GE vice president Ann Klee said. “This is GE and the commonwealth investing together. The commonwealth will own a fantastic asset that will already have appreciated significantly by the time we lease the building.”
Citizens Bank offered MassDevelopment a roughly $90 million revolving loan to complete the deal.
“It’s not often that a major company moves its headquarters to a place like Boston,” said Steve Woods, head of corporate banking at Citizens. “It’s a precedent-setting, history-making event, and Citizens got to be in front of this thing.”
Once complete, the complex will include nearly 400,000 square feet of space across the three buildings. GE estimates that the entire project will cost $200 million to build. That figure doesn’t include the $83 million price tag for the property but does include state-funded renovations in the two old Necco buildings, Bishop said.
GE moved its headquarters to temporary space in Fort Point in August, and about 200 people work there today. Eventually, as many as 800 people will work in the new headquarters complex within several years of its completion.
GE executives say they still hope to move in to the two older buildings in early 2018 and they hope to complete the new 12-story structure by the end of that year. Construction is expected to start in early 2017.
The new headquarters won’t just be used by GE employees. GE executives envision it as a place to bring together clients with GE programmers, and to host startups in incubator space.
“For us, this is not your grandmother’s headquarters,” Klee said. “We think it’s going to be a real draw and a catalyst for the entire neighborhood.”
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