Updated: 7:15 p.m. Friday, April 11, 2014 | Posted: 7:00 p.m. Friday, April 11, 2014

GE operations center location, 2,000 jobs ‘still anybody’s game’

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By Chelsey Levingston

Staff Writer

Now that General Electric Company has selected the Cincinnati-area to open its U.S. Global Operations Center, the question becomes where in Cincinnati the center and up to 2,000 jobs will go.

The decision facing the $146 billion manufacturer of jet engines, washing machines and medical scanners is a choice of the city versus the suburbs.

“We just now finalized the agreement with the state,” said Rick Kennedy, GE spokesman. “We know we’re going to be in this region.”

The next step for GE is to enter serious conversations with Cincinnati-area developers and local governments, Kennedy said.

“This process now has just kind of started. It’s still early in the game,” he said.

Speculation is that potential sites include The Banks riverfront development in downtown Cincinnati; Oakley Station, also in Cincinnati; and Mason, in Warren County.

However, any sites under consideration need to fit GE’s fundamental criteria — an attractive building that can handle up to 2,000 people, room to park on the property, easy access in and out, and somewhere cost competitive — and company leaders have not ruled out other locations than the ones mentioned, Kennedy said.

Considering the fact that GE wants to open a shared services center to lower its costs, the company will leverage communities for the best deal, Kennedy said.

“It’s still anybody’s game. It still has not been decided,” he said.

Fairfield, Conn.-based General Electric on Thursday announced plans to open a U.S. Global Operations Center in Greater Cincinnati, the fifth such center to open worldwide. The company will consolidate back-office functions such as finance and information technology at the Ohio center.

The win is being compared to Ohio winning a Fortune 500 headquarters, as the new service center will create 1,400 new jobs in the state. Some of the jobs will be positions transferred from other GE locations nationwide and consolidated to Cincinnati. The share of jobs to be transferred to Cincinnati, and the share of jobs for which the company will be hiring was not disclosed.

Some jobs will also be transferred from other sites in Ohio, bringing total employment at the center when it opens in 2017 to the range of 1,500 to 2,000, according to GE.

The center will expand GE’s already large presence in Ohio, home to the company’s aviation division headquarters in suburban Cincinnati and lighting division headquarters in the Cleveland area. Presently GE has nearly 16,000 Ohio employees.

GE officials said they expect to make a decision on the final shared services center location within 90 days, and start construction this summer. Plans are to open a temporary center in downtown Cincinnati on East Fourth Street also by July 1 to start operations in the meantime.

“They want a signature location” for the permanent building, Kennedy said.

Tax incentives are being lined up for the company at the state level.

“JobsOhio will recommend state incentives, which will be made public once they go through the appropriate approval body,” Matt Englehart, JobsOhio spokesman, said.

“Additionally, JobsOhio has offered assistance which will be made public on our website when the final agreement is executed,” Englehart said.

JobsOhio is the private nonprofit agency formed in 2011 by Ohio Gov. John Kasich’s administration to lead the state’s economic development efforts. The development organization signed in 2013 a 25-year lease, paying $1.4 billion for the rights to Ohio’s wholesale liquor profits. The lease generates a revenue stream from which JobsOhio can offer its own financial aid to companies.

In its arsenal, state government can offer Job Retention and Creation Tax Credits. The credits are calculated based on a company’s income tax withholding owed to the state on employee wages every year. The income tax revenues are multiplied by the percent tax abatement, and the credit is deducted from the amount of corporate taxes the company owes state government for the year.

Local governments are assembling accompanying packages that could include low-cost loans, property tax abatements and other incentives to negotiate a deal for why GE should choose their community to place the center.

“I think our record probably speaks for itself. We have a pretty strong history here on a number of projects that we’re very aggressive,” Eric Hansen, Mason city manager, said.

“I think the quality of life is what we probably lead with,” he said.

Mason has its own port authority that can help finance a project, and can offer preferential access for employees to a community wellness center and golf course.

“We customize these packages to fit the needs for the business, and sometimes that means infrastructure participation, tax increment finance districts, tax incentives,” he said. “We involve our corporate community.”

For any prospect Warren County tries to recruit, the northern Cincinnati county has “a great location because it has a great pool for workforce because you can pool from the Cincinnati and Dayton markets,” said Martin Russell, the county’s economic development director.

“You have the amenities of the hotels and the restaurants and the shopping,” Russell said.

“Warren County’s not just a suburb that’s a bedroom community. It also has the amenities the companies look for, for their staff,” he said.


KEY DEVELOPMENTS

  • General Electric Company plans to open a U.S. Global Operations Center in the Cincinnati-area, which was announced Thursday
  • The center will be GE’s fifth to open worldwide, and the only one to open in the U.S.
  • GE is opening the service centers to consolidate back-office functions such as finance and information technology
  • The future Cincinnati services center will bring 1,400 new jobs to Ohio, hailed as Ohio’s single largest announcement for new jobs in at least a decade
  • Total employment at the Cincinnati center will reach 1,500 to 2,000 positions
  • Some jobs will be transferred from other GE locations in the U.S. and in Ohio, and some will be new hires. But 1,400 jobs, new and transferred from elsewhere in the U.S., will be new-to-Ohio
  • A final location within the Cincinnati market has yet to be decided — local communities in the running are expected to present tax incentive packages
  • Meanwhile, GE said it will open a temporary services center in downtown Cincinnati by July 1 that will employ up to 700
  • Mason, in Warren County, is on the short list of locations for the permanent site, the Mason mayor confirmed
  • GE, with global headquarters in Connecticut, says it has more employees in Ohio, nearly 16,000, than any other state
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