University buys GE property for $31.5 million

General Electric's former corporate headquarters from Fairfield. Sacred Heart University has purchased the General Electric Co. property for $31.5 million. General Electric's former corporate headquarters from Fairfield. Sacred Heart University has purchased the General Electric Co. property for $31.5 million. Photo: Associated Press / Associated Press Photo: Associated Press / Associated Press Image 1 of / 21 Caption Close University buys GE property for $31.5 million 1 / 21 Back to Gallery

FAIRFIELD — In recent years, Sacred Heart University has expanded its original 56-acre campus by buying a property here and there.

But with the acquisition Monday of the 66-acre General Electric property on Easton Turnpike for $31.5 million, the university’s growth plans took a leap forward.

“We are experiencing remarkable growth, and the need for state of the art facilities,” SHU President John J. Petillo said. “And frankly, the one thing they don’t make more of is land. The proximity and quality of the facilities is something we were unable to resist.”

There had been plenty of speculation about what would happen to the GE property since the global company announced its move to Boston earlier this year.

In August, GE officially moved company headquarters from Fairfield into temporary space in Boston. Most of its 800 staffers, however, were relocated to office space in Norwalk. More recently, the company received approval from Boston officials to build a new headquarters building there.

With an assessment over $70 million, GE had been Fairfield’s largest property-tax payer for years. Its most recent tax bill was $1.5 million for real estate property and another $291,000 in personal property taxes.

‘New challenge’ for town

According to Fairfield Chief Fiscal Officer Bob Mayer, the current real estate tax bill is set and will be required to be paid, either by the buyer or the seller, depending on their sales agreement.

But with Sacred Heart’s acquisition, the property will no longer be subject to the same property tax payments, due to the university’s nonprofit status — a fact that concerns Fairfield First Selectman Michael Tetreau.

Instead, the property will qualify for the state’s payment in lieu of taxes, or PILOT, payments.

The town’s most recent PILOT payment from the state was for $2 million, to cover Fairfield University, SHU and state-owned property. Mayer estimates that amount is about 30 percent of what the tax revenue would be if the properties were to pay taxes based strictly on an assessment.

“While I certainly appreciate the benefits to Sacred Heart for future growth and expansion — I am concerned about the tax impact on our town,” Tetreau said. “This creates a new challenge moving forward.”

The property is scheduled to transfer into Sacred Heart’s ownership on Dec. 16. The university’s College of Business is named after former GE CEO Jack Welch.

“We are pleased to sell our property to a world-class local university and are happy that the campus will continue to be used for learning and innovation, two hallmarks of both GE and Sacred Heart,” Harri Singh, GE’s global properties leader, said in a statement.

State Sen. Tony Hwang, R-Fairfield, said he thought the deal was a “great fit.”

“It all boils down to jobs, jobs, jobs,” Hwang said in a statement. “SHU is a higher education success story, a growing incubator for the innovative jobs of the future and a place where technology is embraced.”

Michael Kinney, senior vice president for finance and administration at Sacred Heart, said the acquisition made financial sense. Officials were already looking to build a roughly 70,000-square-foot academic building and parking garage on a current parking area on campus — a project that could have cost anywhere from $35 million to $40 million, Kinney said.

With the purchase of the GE property, the university gains 550,000 square feet of space and 800 parking spaces.

Kinney said he expects the acquisition to attract more students to the university, which now has roughly 4,800 undergraduates.

“This is transformative for this institution,” he said. “We’re acquiring the headquarters of one of the most iconic companies in the world. There is an image that all of this will bring.”

Growing programs

In the past, Kinney has estimated that the university has invested more than $100 million in Bridgeport and a similar amount in Fairfield to expand its campus.

On the GE property, the university plans to further expand its programs, to create new ones and relocate those now operating in leased space, like the SHU’s College of Education in Trumbull.

The university also plans to expand its new School of Computing, which is focused on computer engineering, computer gaming and cybersecurity, at the GE property.

And SHU plans to move certain elements of its Jack Welch College of Business to the new campus, such as a new hospitality management program that will make use of an existing hotel on the GE site.

With the acquisition, the university’s total acreage grows to nearly 200 acres, not including the golf club property.

“The growth we will experience as a result of this purchase will increase consumer spending in the community by Sacred Heart students and parents — a number that already stands at close to $56 million in the state,” Kinney said.

He added that programs developed by SHU in the next four years could add 450 students and about 55 new faculty and staff jobs. It could also generate about $30 million annually in direct and indirect spending, according to the university.

“During the holiday season it usually slows down here,” Kinney said. “Now we’ve stirred it all up.”

Staff writer Genevieve Reilly contributed to this report.

ktorres@hearstmediact.com; 203-330-6227