Corporate headquarters relocating to the center city: GE chooses Boston

I've written about this for awhile, especially in terms of a report produced by Smart Growth America on the subject ("A lesson that seeing is believing: Panasonic's new building in Newark, NJ as an example, positive and negative, in businesses coming back to the city center") although the issue is a bit more nuanced than has been reported by the advocacy groups.

Some corporations are moving back to the city, others are moving into better locations than they had been previously located, even adjacent to transit, but the sites are still very much automobile-centric, or into what are better termed "conurbations," which are more concentrated and urban but are likely to be suburban locations.  And some companies are living the city for the suburbs still ("TCF Bank to Move 1,700 Employees to New Corporate Campus in Plymouth," KSTP-TV (ABC)).

State Farm is a company moving to transit adjacent locations in Greater Dallas ("State Farm adds fourth building to Richardson campus project," Dallas Morning News) and Atlanta, but for the most part, the sites primary advantages are proximity to freeways.

In terms of suburban conurbations, one recent example is Baltimore County-based McCormick Spices, which after threatening to move to Pennsylvania or other distant locations, is relocating by just a couple miles ("McCormick & Co. will keep headquarters in Baltimore County," Baltimore Sun), but away from a cul-de-sac to a more directly connected location on York Road, and closer to the end of the light rail system.  (The company long ago moved away from Baltimore City.)  This could help recenter business location and development around the Hunt Valley end of line light rail station.

Current headquarters building for General Dynamics in Falls Church, Virginia is quite bucolic.

Another is how General Dynamics has announced they are moving to Reston, Virginia, which is 20 miles from DC, but an edge city in its own right, separate from Tysons ("General Dynamics moving HQ to Reston," Washington Business Journal).  Currently located in Falls Church, Virginia, they are trading one suburban location for another, but the new site will be just over one mile to a Metro station while the current site is about 4 miles from Metrorail.

But the big story that is unfolding concerns General Electric.  They have been looking for a new site for the past few months, spurred out of a complaint that Connecticut's business climate is unfavorable.

GE is located in Fairfield, which is pretty suburban.

After a search that has eliminated various sites, including Atlanta, as of yesterday GE was down to two choices, the waterfront in Boston, or a suburban location in Westchester County, New York--more convenient to NYC, especially by transit, compared to Fairfield, but still suburban.

Note that neither New York nor Massachusetts are considered particularly friendly to business, so the statements about the failure of Connecticut's business climate may have been a chimera.

-- "What GE's Search Says About 21st Century Business, And About Connecticut," Hartford Courant

If they choose Boston, we'll have strong evidence that major companies are choosing urban locations.

GE chooses Boston.  ... and GE announced within the last few hours that they are moving to Boston ("GE said to pick Boston for headquarters,"Boston Globe) in response to speculation in the media ("GE decision on Seaport move expected this month" and "Why Boston makes sense as a home for GE," Globe) that had been published yesterday.

According to today's article:

“We want to be at the center of an ecosystem that shares our aspirations,” CEO Jeff Immelt said in a statement. “Greater Boston is home to 55 colleges and universities. Massachusetts spends more on research and development than any other region in the world, and Boston attracts a diverse, technologically fluent workforce focused on solving challenges for the world.” ...

GE’s choice cements Boston as a hub of innovation in technology and life sciences. The city’s concentration of high-powered universities and tech firms proved to be a big draw for the company. Under chief executive Jeffrey Immelt, GE is selling most of its finance businesses to focus on industrial lines such as power and clean energy, oil and gas, aviation, and health sciences, which are all increasingly reliant on advanced technology.

It will be interesting to track the impact of this decision on other companies.  For example, this recent blog post. "Businesses moving back to the center: not a universal trend" links to a Philadelphia Inquirer article which reports on the difficulties that Philadelphia is having in attracting corporate headquarters.  So clearly, certain kinds of cities are better positioned to re-attract larger business operations than others.

Boston in particular is a special location given the huge number of universities there, anchored of course by MIT and Harvard University, its strong information technology and health care and biotechnology sectors, especially in Cambridge, and its relatively strong--but underfunded--transit system.