GE, however, is not leaving Boston. The struggling company said it will still move in August into two brick buildings on the same site at Necco Court after renovations are completed, but won’t come close to creating the 800 jobs it originally promised in return for receiving generous incentives. The board of MassDevelopment — a quasi-public agency that owns part of the property — approved a plan Thursday to jointly market the 2.7-acre site with GE. The sale proceeds will reimburse the agency for the $87.4 million in state money that has been used to acquire and prepare the Fort Point parcel. General Electric said Thursday that it plans to sell its future Fort Point headquarters property and reimburse the state for $87 million in incentives the company received to move here, signaling a major step backwards from the ambitious plans it unveiled in 2016. Advertisement RELATED: Photos of GE’s Fort Point property GE also confirmed what has been widely assumed for a while: It has no plans to proceed with construction of the striking 12-story tower next door that it originally envisioned. The company owns the portion of the property where its nearly 300,000-square-foot tower would have gone, while MassDevelopment owns the two existing buildings. A rendering of the headquarters General Electric planned to build along Fort Point Channel. Gensler Architecture/File GE said it will work with Boston officials to scrap a separate property tax incentive that could have been worth as much as $25 million. A significant portion of that package depended on the number of new hires, but the company could have still reaped some tax benefits without building the tower or hitting the hiring targets. City officials said GE’s presence has generated an additional $2 million in tax revenue over the past two years — without any tax incentives being awarded. “I’m really happy that GE is continuing to make Boston its headquarters,” said John Barros, Mayor Martin J. Walsh’s economic chief. “They’re plugged into the city, and we’re glad they’re not leaving.” Advertisement The property sale is a natural extension of the aggressive belt-tightening that new chief executive Larry Culp has led since taking charge in October. The company was a much bigger operation when it moved to the neighborhood with much fanfare from Fairfield, Conn., in 2016. But it has been besieged by a plunging stock price, problems in its power-turbine business, and accounting issues. As a result, GE has aggressively been divesting various business lines, big and small, to streamline its business and shore up its profitability. Instead of a grander headquarters with at least 800 workers, GE now expects to employ about 250 people in the 95,000-square-foot Necco complex. That’s slightly more than the number of people who already work at GE’s nearby rented corporate offices. “GE has gone through a significant transformation,” said Ann Klee, a company vice president who has been the point person for negotiations with the state and city. “It is a fundamentally different company from when we moved here more than two years ago, a smaller and more focused company.” For Culp, the downsizing mirrors the playbook he followed when he ran Danaher Corp., the Washington, D.C.-based conglomerate that has a nondescript headquarters. “It’s keeping with that vision of a much leaner corporate body,” said Joshua Aguilar, a Morningstar analyst who tracks GE. Lizzy Guyton, a spokeswoman for Governor Charlie Baker, said the administration looks forward to GE’s “ongoing contribution to the growing innovation economy.” Advertisement The original incentive agreement with the Baker administration was worth as much as $120 million in state funds, but GE stopped submitting for reimbursements a few months ago as it began to work out the deal that was unveiled Thursday. GE, the Baker administration, and MassDevelopment negotiated a plan to put the property on the market. The agreement requires that the state be made whole before a property transfer takes place, state officials said, although GE expects the sale price will easily exceed what is owed to the state. State officials and GE decided they could get a better return by selling the two Necco buildings, along with the open land. To pull that off, GE would need to reimburse the state for its expenses. GE officials say they’re also trying to maintain their strong relationships with the Baker and Walsh administrations, and with the community. “We want to maintain that positive relationship for decades,’’ Klee said. “That’s one reason when we unwound the incentives package — we wanted to make sure we made the state whole.” After they’re sold, the buildings would then be leased back to GE for its headquarters, guaranteeing revenue for the future owner. Meanwhile, the new owner would receive the permits for the 12-story building. The land and existing buildings were previously a part of Gillette’s massive South Boston campus, until the property was sold in late 2016 for GE’s headquarters. Since that time, Gillette parent Procter & Gamble has sold a few other pieces of land along the campus perimeter, responding to the neighborhood’s heated market. Most notably, developer Related Beal is poised to acquire 6.5 acres next door, and would likely give the GE property a look. Advertisement “In many ways, GE has unlocked a part of our city that was sitting dormant, even during the real estate boom,” Barros said. GE executives said they still plan to complete the open space work and renovations to a pedestrian bridge that the company promised. GE also said it will not waver from a commitment to give $50 million, over time, to local charitable organizations. “From where I’m standing today, where we are is a good place for GE,” Klee said. “We love being in Boston. We’re proud to have our headquarters in Boston.” City Councilor Michelle Wu said the changes in GE’s corporate strategy underscore the need for new rules governing business tax breaks, such as those she proposed to the City Council this week. Wu wants the process to be more transparent, and to incorporate more stringent standards. “We should be expecting more out of the packages or deals that are struck,” she said. State Senator Jamie Eldridge, a longtime critic of tax breaks, said he hopes to renew his push for reforms at the state level this year. “Whomever is governor, there’s this pressure to show, ‘Hey, I brought General Electric or the Olympics . . . to Massachusetts,’ ” said Eldridge, an Acton Democrat. “I just don’t think it’s a sound model.” Advertisement Peter Cohan, a lecturer at Babson College, said GE’s star had already been falling when state and city officials inked their incentives with former chief executive Jeff Immelt three years ago. “They kind of thought General Electric was a luminous name when they lured them to Boston,” Cohan said. “But that wasn’t a good assessment.” Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.<doc-sep>General Electric said Thursday it will reimburse the state nearly $87.4 million for incentives it received to move its headquarters to Boston, as details emerged about the sale of the company’s Fort Point Channel property. The company and MassDevelopment, a quasi-public agency, reached a deal to sell the property on Thursday, which includes two Necco Court brick buildings owned by the state and an adjacent parcel, owned by General Electric, where a 12-story office tower was planned. “We are looking forward to moving into our permanent headquarters space in the refurbished Necco brick buildings later this year,” said Ann R. Klee, GE’s vice president for Boston development and operation, in a statement to the Herald. “While changes in the Company’s portfolio and operating model will lead to a smaller corporate headquarters, we are fully committed to Boston and proud to call it home.” General Electric recently told the state that the office tower no longer fit the company’s needs, according to a memo from MassDevelopment to its board of directors. The company intends to remain in Fort Point, however, and will house its senior executive team and about 250 employees in the two rehabilitated Necco buildings. In a sit-down with the Herald on Thursday, Boston Mayor Martin J. Walsh said GE’s headquarters in Boston still benefits the city, despite Thursday’s announcement. “GE was kind of the first move out of Connecticut that was happening when companies were exiting or looking at exiting out of Connecticut. We reached out to GE and I think that we found we were able to attract GE to Boston along with the state,” said Walsh. “And we were able to do an incentive package that was if the expansion happened, $25 million on the city part and $150 million on the state part. It wasn’t tied to jobs, it was tied to buildings and expansion.” “At the end of the day, two years later, they decided because of their own internal issues they decided not to do the new building so we get the $25 million back, technically, but we never gave it away so that’s resolved,” Walsh told the Herald. “We also over the last two years have gotten $2 million in real estate property tax that we wouldn’t have gotten because one was an abandoned building, one was the site that was future development, so I think at the end of the day the city worked out OK on it.” Lizzy Guyton, communications director for Gov. Charlie Baker, said the administration looks forward to General Electric’s “ongoing contribution to the growing innovation economy” and to “working with GE as the company grows its world headquarters here in Boston.” The $87 million repayment will cover MassWorks grant funds used to finance MassDevelopment’s original purchase of the property, as well as the costs of rehabilitating the brick buildings. Any proceeds from the sale above the $87 million will be split equally between the state and General Electric. “GE’s been around for over 100 years, I think they’re going to reinvent themselves in other ways,” Walsh said. “Went from the light bulb company to all other aspects, they’ll reinvent themselves. Having the fact that their corporate headquarters here in Boston, five years from now, GE could be back being the superpower of the business world … nothing lost there by us pursuing them here and what was the spinoff of that was a lot of other companies came into our area on it.” Lisa Kashinsky contributed to this report.<doc-sep>
Hide Transcript Show Transcript WEBVTT state. Now, the company has scrapped plans for that new HQs-- and with the help of MassDevelopment , will sell the property to reimburse the state for 87 million in tax incentives. GE announced their massive expansion plan 2 years ago.. Broke ground in May 2017-- but since Then company has struggled.. Dropped from the DOW JONES after more than a century. A new CEO took the helm last October.. And has been aggressively streamlining the corporation. For Boston-- that means a revised plan of 250 jobs.. moving into 2 brick buildings- the former Necco candy factory. That's slightly more than the number of GE employees already based here. In a statement-- GE officials said "While changes in the company's portfolio and operating model will lead to a smaller corporate headquarters, we are fully committed to Boston and proud to call it home." GE has not and now will not receive any incentives from the city.. Mayor Walsh putting a positive spin on the situation .. Saying "General Electric chose Boston because it is a thriving city with a talented and diverse workforce,,, I look forward to our continued Partnership" The Governor's office.. Whic helped negotiate the plan to put the Fort Point property on the market .. Says it expects the sale price will easily exceed the money owed to the state. Advertisement General Electric scraps plans for new headquarters building, will reimburse state for incentives State to receive $87 million or more Share Shares Copy Link Copy More than two years after General Electric announced plans to move to Boston, the struggling company is scrapping plans for a new headquarters building. It plans to sell the property and use the proceeds to reimburse the state for grants and incentives used to lure the company to Massachusetts.GE and MassDevelopment have reached an agreement to sell the Fort Point Channel property, including the two former Necco buildings and the parcel on which GE had planned to build a 12-story office tower. Board members for MassDevelopment unanimously approved the plan Thursday. GE will be staying in Boston, however. The company said it plans to become a tenant in the two Necco buildings and move approximately 250 employees into the space. That's down from the 800 jobs GE had planned to bring to Boston. The company also pledged to continue its work on the planned public spaces on the property, which include the Harborwalk and a public dock. “We are looking forward to moving into our permanent headquarters space in the refurbished Necco brick buildings later this year," said Ann R. Klee, GE's vice president for Boston development and operations. "While changes in the company’s portfolio and operating model will lead to a smaller corporate headquarters, we are fully committed to Boston and proud to call it home.”Sale of the Fort Point Channel property is expected to net at least $87.37 million. According to Gov. Charlie Baker's office, that money will reimburse the state for MassWork grant funds used for the original purchase of the property and other investments in the refurbishment of the existing buildings. Any additional revenue from the sale will be split evenly between the state and the company, Baker's office said. GE's stock was worth about $28 in January 2016, when the company announced plans to bring its headquarters to Boston. The stock value dipped below $10 during trading Thursday. “The Baker-Polito administration is proud that General Electric chose to relocate the company’s world headquarters to Massachusetts and looks forward to GE’s ongoing contribution to the growing innovation economy," said Lizzy Guyton, Gov. Baker's communications director. "The administration together with MassDevelopment reached an agreement with GE for the company to fully reimburse the commonwealth for the cost and expenses associated with the Necco Street project and the administration looks forward to working with GE as the company grows its world headquarters here in Boston.”GE currently has about 5,000 employees in Massachusetts, which is roughly the same number it had before the move was announced in 2016.