September 25, 2015
With economic momentum building in Tampa’s downtown, Channelside District and port, developers and government officials alike are increasingly setting their sights on luring a corporate headquarters to the city.
And thanks to recent budgetary moves in Connecticut, Florida stands a better chance than ever at landing a massive headquarters’ relocation: General Electric Co.
Executives at the mammoth manufacturing, infrastructure and technology company have expressed frustration over the past year that Connecticut’s governor has attempted to hike corporate taxes and cap tax losses that might offset gains.
Though GE reportedly pays less than $1,000 annually in corporate taxes, it could face a big hit in the future if the tax change occurs because it is working to sell its GE Capital Corp. subsidiary, which could generate a huge gain — and a huge tax bill — without the offset.
The company’s corporate tax bill, however, excludes property taxes on its Fairfield, Conn., headquarters, as well as employees’ personal income taxes and other fees that would make it a valuable addition to Florida or another state.
GE, with about $150 billion in annual sales, employs roughly 800 workers at its world headquarters.
In addition to Tampa, the company has reportedly been considering offers and sites in New York, Atlanta and a host of major U.S. cities.
For now, company officials are saying little about a possible relocation.
“We have formed an exploratory team to assess the company’s options to relocate corporate headquarters,” GE spokesman Dominic McMullan says in a statement.
“The team is currently engaged in the process and is taking many factors into consideration.”
GE, which has been headquartered in Connecticut since the 1970s, hopes to make a decision on whether to stay put or move by the end of the year. In Tampa, meanwhile, real estate developers and economic development officials are actively pursuing GE, among other prospects.
“I’m talking to leaders throughout New England,” Tampa Bay Lightning owner and Channelside developer Jeff Vinik said following a Sept. 18 Tiger Bay Club of Tampa meeting.
“They know Tampa’s story, and they’re thinking differently about the Tampa Bay area now,” Vinik told reporters. “We are on the radar of virtually every company thinking about relocating their headquarters.”
Vinik may have an inside track: As head of Boston-based Fidelity Investments’ highly successful Magellan Fund in the mid-1990s, he became acquainted with numerous company heads in that part of the country.
At the same time, economic development officials say they are continuing to tout the area’s benefits, including its workforce, low tax rate, relatively affordable cost of living, transportation systems, climate and other factors to a variety of corporate prospects.
“Success begets success,” says Steve Morey, director of business recruitment at the Tampa Hillsborough Economic Development Corp. “Tampa and Hillsborough are fantastic areas to sell right now.” While neither Morey nor Bea Bare, the EDC’s senior director of business development, would comment specifically on GE, both officials say the process of recruitment and relocation takes months or years and typically requires companies to sift considerable data and to weigh multiple factors.
“It’s often a process of elimination,” Bare says. “Companies and their consultants are looking to eliminate communities from consideration, and our primary goal, conversely, is to stay in the running.”
Commercial real estate executives add that recent corporate relocations can only help Tampa’s chances of landing GE or another major headquarters.
In the past two years, both pharmaceutical giant Bristol-Myers Squibb and, more recently, Johnson & Johnson’s North American shared services operations have relocated to Tampa.
Chase Pattillo, managing director of commercial brokerage firm CBRE Inc.’s Tampa office and a member of the Tampa Hillsborough EDC’s headquarters task force, says those two moves illustrate the region is capable of winning a major relocation contest.
“We’re not only getting invited to the dance, we’re getting some dances,” he says.
By: Kevin McQuaid | Commercial Real Estate Editor