Officials worried GE might donate its headquarters to university

The new Frank and Marisa Martire Business & Communications Center, home of the Jack Welch College of Business at Sacred Heart University in Fairfield, Conn. on Wednesday, May 13, 2015. The new Frank and Marisa Martire Business & Communications Center, home of the Jack Welch College of Business at Sacred Heart University in Fairfield, Conn. on Wednesday, May 13, 2015. Photo: Brian A. Pounds / Brian A. Pounds Buy photo Photo: Brian A. Pounds / Brian A. Pounds Image 1 of / 11 Caption Close Officials worried GE might donate its headquarters to university 1 / 11 Back to Gallery

As if worrying that General Electric might leave Connecticut and take its well-paying jobs with it weren’t enough, some are now concerned about the fate of company’s sprawling campus.

If GE decides to leave, it could donate its global headquarters in Fairfield 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 Michael Tetreau, the town’s Democratic first selectman. “If they deeded it to a nonprofit, then (we’re) worried that the property tax dollars would go away.”

GE is the town of Fairfield’s largest taxpayer, generating $1.9 million this 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 will decide in January whether to relocate to Massachusetts, New York or another state.

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 r elations win of being regarded as a benevolent corporate citizen. Then there are the underlying tax write-offs that could reach into the millions.

More Information GE headquarters by the numbers Location: 3135 Easton Turnpike, Fairfield Acreage: 68.46 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 Building 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

“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 conglomerate has been frequently linked in recent months to nearby Sacred Heart University, where the business school is named for former GE CEO Jack Welch.

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.

“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.

Tax savings

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.

Fairfield’s top office holder, 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,” Tetreau 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.”