GE Delays Completion Of Boston Headquarters
General Electric broke ground in May on a $200M headquarters in Boston with the hope of completing it by 2019. Employees will have to wait another two years.
GE Vice President Ann Klee sent a memo to the company's Boston employees Tuesday saying the company's new headquarters would now be completed in two phases. The first phase, which includes the restoration of two older Necco candy warehouses, is intended to be complete by the first half of 2019.
The second phase, which includes a new 12-story building along Fort Point Channel, is expected to open in mid-2021.
“As with any construction project of this scope and complexity, we have been periodically reviewing the schedule and budget,” Klee wrote in the memo first obtained by the Boston Globe. “Based on that review, we have decided that it makes more sense and is more cost-effective to construct the campus in two phases.”
The staggered construction schedule arrives just as GE has taken a new leader. John Flannery officially took over the CEO role Aug. 1 from Jeff Immelt. Investors have put pressure on the company to slash expenses, as its stock price has tumbled nearly 20% over the last year.
“The original, accelerated schedule of constructing the buildings simultaneously over two years would have added a premium to the construction cost,” GE spokesman Jeff Caywood told Bisnow. “Taking a more traditional approach of constructing in phases is more cost-effective.”
Construction costs have been rising nationally, and the company has consistently reviewed the schedule and budget of the Fort Point campus. It was reported in February the project had already been delayed to 2019 from a June 2018 completion, but company officials maintained that was still on schedule.
The campus will be called Innovation Point. North Point, the first phase, will include enhancements to a public dock on Fort Point Channel as well as improvements to the Harborwalk. State officials provided $125M in funds, largely in the form of grants, to acquire and renovate the North Point buildings for the new campus. In exchange for providing $25M in tax incentives to the company, Boston has a commitment from GE that 800 people will be working on the campus by 2024.
“For GE, opening a new headquarters is a ‘once-in-a-40-year’ decision,” Klee said in a statement. “We are committed to Boston and look forward to moving to GE Innovation Point, which will be a hub for innovation and the industrial internet.”