Will GE bring good things to SHU? HQ donation rumors spark concern
Updated 6:42 am, Tuesday, January 5, 2016
As if worrying that General Electric might leave Connecticut and take well-paying jobs with it weren’t enough, some are now concerned about the fate of company’s sprawling Fairfield campus on Easton Turnpike.
If GE decides to leave, it could donate its global headquarters here to a nonprofit institution, state and local officials say. Just the idea of the $84.4 million property being taken off the tax rolls is enough to keep officials up at night.
“It’s certainly something citizens in Fairfield are concerned about,” said First Selectman Michael Tetreau. “If they deeded it to a nonprofit, then (we’re) worried that the property tax dollars would go away.”
GE is Fairfield’s largest taxpayer, generating $1.9 million last year from its real estate and personal property taxes.
A spokesman for GE, which has been smarting over Connecticut’s tax climate, declined to comment. The company has indicated that a decision will be made in January whether to relocate to Massachusetts, New York or another state.
GE: FAIRFIELD GIANT
Headquarters location: 3135 Easton Turnpike
Real estate value: $84,412,900 in 2015, compared to $94,937,900 in 2010
Real estate and personal property taxes: $1.9 million in 2015, excluding cars
Buildings’ area: 526,406 square feet
Office equipment value: $13,876,200
Notable amenities: Television studio; corporate guest facility with 28 hotel rooms; tandem helipad; fitness center; medical facilities
The motivation to donate the 68.46-acre property, which includes a television studio, hotel rooms for visiting executives and a helipad, could be twofold for GE.
First, there is the public relations win of being regarded as a benevolent corporate citizen. Then there are the underlying tax write-offs that could reach into the millions.
“If that were to be the case, I would not be surprised,” said state Sen. L. Scott Frantz, R-Greenwich. “I would see it as something that is very typical of General Electric.”
A university connection
The nexus between GE and Sacred Heart was highlighted by a gift of at least $5 million to the university by Welch in 2006. At the time, it was the largest gift ever to the Catholic institution.
The GE headquarters is a short distance from SHU’s main campus, with Jefferson Street providing a direct link between the two properties.
“We have no reason to believe that talk of a gift by GE to the university is anything more than a rumor,” said Deb Noack, a Sacred Heart spokeswoman. “More importantly, the departure of GE would be a devastating loss to the state, to Fairfield and to SHU.”
Efforts to reach Welch, who led GE from 1981 to 2001 and has a residence in Boston, a potential landing spot for the company, were unsuccessful.
State Sen. Tony Hwang, R-Fairfield, said there is a buzz over the potential transfer of the property, but nothing concrete.
“It is a possibility. I hope it’s all for naught,” said Hwang, who has been part of a lobbying contingent of Connecticut politicians trying to keep GE. “It really is something that is going to take us 10 to 15 years to recover from if they do leave.”
A spokesman for Gov. Dannel P. Malloy, who has made multiple pitches to GE to stay, declined to comment.
The savings from a property transfer could be lucrative for GE, which has been roundly criticized by tax watchdogs for its muscular tax-sheltering operation both at the state and federal levels.
The IRS allows corporations to deduct up to 10 percent of their taxable income in a given year for charitable donations, including property transfers to approved nonprofit institutions such as colleges and universities. That could reap millions for GE, which made $35 billion in U.S. profits over the last five years. Deductions can be carried over by companies for up to five years if they exceed the 10 percent threshold.
GE would also avoid paying conveyance tax to the state and town on the sale of its property. The state’s cut would be about $1 million and Fairfield’s would be about $200,000.
“For the sake of saving $1 million, I seriously doubt GE would do that,” Frantz said. “I think they would do that out of the kindness of their corporate heart.”
Between its two main office buildings and a corporate guest facility that includes 28 hotel rooms, the footprint of GE’s headquarters is 526,406 square feet. From 2010 to 2015, when the town went through a property revaluation, GE’s real estate had been appraised at $95 million. That value plummeted by $10 million in the revaluation, a reduction that the town’s assessor, Donald Ross Jr., said was based on a sales and rental analysis of similar office parks in Connecticut and neighboring Westchester County, N.Y.
Tetreau said it would be out of character for GE to leave the town with a tax void. “I don’t think they would jump to something like that very quickly,” he said.
Noack, the Sacred Heart spokeswoman, said GE is an invaluable part of the community.
“The presence of GE makes Fairfield an inviting place for families to live and students to come for an education,” she said. “GE has been a wonderful neighbor to us, which is why our business college is named in honor of former CEO Jack Welch. Among the many gifts that GE provides for our students are guest speakers, internships and jobs once they complete their degrees.”